Another fake fiscal crisis.

Our “republican” form of government, or our (representative) democracy, if you prefer, is inconsistent with neo-liberal economics.  You can have one or the other, but not both, simultaneously.

According to the MSM, “we’re facing another government shut-down.”

Is that so?  Why is that so?  Almost every member of Congress, all 535 members, is sworn to implement one or more of the principles of neo-liberal economics. Austerity measures are attempts to take a meat ax to government spending in an alleged effort to “control the deficit” and “pay down the national debt.”

A deficit nothing more than new (IOU) money that has been spent into the economy and has not yet been (IOU paid) taxed.  Congressional “budget concerns” as presented to the masses are essentially due to ignorance, or they’re knowingly lying to us, or some combination of both.

The whole shut-down crisis is more absurd theatre in my opinion.

We are not like Greece, or Spain. Euro-zone countries don’t have the ability to create new money.  In Europe, sovereign currency ended with the creation of the euro-zone.  As long as the U.S. retains its sovereign currency, the government can spend what is needed for our national interests and for our people.  Our fiscal policy is directed by Congress.  Congress must do its job: Decide where our national spending priorities lie.  In theory at least, we get to vote on fiscal decisions, holding our elected representatives accountable for spending that actually furthers the public interest.

The Federal Reserve, on the other hand, conducts monetary policy by controlling the interest rate and money supply.  Neo-liberals in Congress consistently abdicate their fiscal duties by trying to pawn off fiscal responsibility to the Fed.  No matter how hard Congress tries to dodge its duties, the Fed cannot conduct fiscal policy effectively using monetary policy.  This also tends to undermine democratic processes.  Citizens cannot vote directly for Federal Reserve board members.

It’s best to ignore Congress’s rhetoric, and the media’s arm-waiving.  A sovereign government with a sovereign currency does not fund anything with taxes.

Deficit reduction is just another cruel neo-liberal trick that combines “dollar religion” and some twisted Calvinist ethos that insists that self-sacrifice and suffering are good and necessary for the human spirit.  It’s no accident, however, that austerity is imposed from on high as atonement, or cleansing pain, consistently inflicted upon pensions for government workers, welfare programs, government-sponsored health care, and other programs that disproportionately affect low-income earners at a time when they’re most vulnerable.   Capital triumphs, democracy loses — every time.  It’s been this way since Reagan’s “supply-side,” upside-down economic “order” was imposes by both parties in the 1980’s.

To counter the voodoo, all people need to do, in mass, is demand that spending priorities focus on programs with strong public purpose, and help achieve full employment for all who seek work working.  The notion that we cannot afford national defense, and effective domestic spending programs, is baseless, bipartisan nonsense.

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6 Responses to Another fake fiscal crisis.

  1. CJD says:

    The US Federal Government is entirely a fiction. It’s policies are fictions. It’s left/right political divide is a fiction. It’s conflicts and intrigues are fictions. It’s budgets are fictions. The US Federal Government is an empty shell. It’s a line item on a master budget. It’s just a huge Kabuki theater employing actors, neer-do-well offspring of the elite, and an increasingly smaller number of zombie federal employees going through the motions until eventually all that is left of these huge bureaucracies will be a swanky HQ staffed by a few hot receptionists – where the political appointee actor who heads it will have his/her picture taken but otherwise never visit again.

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  2. One only need venture out a little bit to see the complete hold the propaganda system has. The American public is deeply indoctrinated so that when the Mighty Wurlitzer is played, people listen and believe. There is nothing to be done except chip away as best we are able and hope for erosion. Mass movements are nice to imagine, but how? Media? Schools? Megaphones? Street corners?

    For myself I have to be content in searching for truth, finding it now and then. This is otherwise a leper colony.

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    • fm says:

      Mass movements are nice to imagine, but how? Media? Schools? Megaphones? Street corners?

      I agree, not gonna happen. This country (the whole Western world, including Old Europe and former Imperial Colonies) is populated by hypnotized, brainwashed and drugged slaves.

      As a famous poet once said, happy slaves are the fiercest enemies of freedom. Even if that state of happiness” is just an induced hallucination …

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      • steve kelly says:

        Not the kind of mass movement anyone here at POM may have been imagining, but I’d say the mass movement has already happened. Exhibit A: Miss teen USA South Carolina 2007 youtube.com/watch?v=lj3iNxZ8Dww

        It’s a national epidemic.

        Symptoms: As the disease advances, symptoms can include problems with language, disorientation (including easily getting lost), mood swings, loss of motivation, not managing self care, and behavioural issues. As a person’s condition declines, they often withdraw from family and society. Gradually, bodily functions are lost, ultimately leading to death.

        You’ve got 30 seconds to tell us what we’ve got.

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  3. Joki says:

    The U.S. is not sovereign.
    Money is not created by the U.S. government.
    Money is created by the Federal Reserve, a group of private bankers.
    That money is then “loaned” to the U.S. gov’t., so that the gov’t can function. Since it’s a “loan” the Fed charges the gov’t interest on the loan.

    Question time: Where can the gov’t acquire the interest to pay back the loan?

    (insert Jeopardy theme here…..)

    Answer time: Nowhere, because it doesn’t exist.

    The Fed created the initial money. Call that X.
    It loans the money to the U.S., at interest. Call the interest Y.
    In a system where only X is created and thus only X exists, Y becomes an abstract concept as opposed to being any kind of physical reality. The U.S. economy is a giant swirling cauldron full of X. No amount of stirring will ever cause that cauldron to be full of anything other than X.
    The very fact that the government collects taxes at all makes sense only when you realize that the government is not the one creating the wealth. Think about it: if it were the U.S. government who created and distributed money into the system, why would they need to tax anything? If the gov’t needed money for something it would simply create it and allocate it directly to what it needed to pay for. Sending it out into circulation only to collect it again to pay for roads, etc., would make zero sense.
    Taxation is “necessary” to give the public the illusion that it is the government in charge of the economy and the creation of the nation’s wealth. Since the Fed, a private group, only creates X wealth, but demands X + Y in return, the government is justified in collecting taxes from its citizens, to “support government services” and “pay down the debt” and so on, when what is really being supported are the bank accounts of a rather small number of private individuals, most of whom we don’t even know the names of.

    So, you believe the shut-down crisis to be “absurd theatre”? I have bad news for you:

    The entirety of the world’s financial system is absurd theatre, from start to finish. This will not change unless and until people want it, really want it, to change, but be careful what you wish for. You cannot create something new without destroying the old.

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