What is Austerity?

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Hobbes' Choice
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What is Austerity?

Post by Hobbes' Choice » Sun Sep 20, 2015 8:16 pm

definitions vary. Merriam-Webster defines it as:
A situation in which there is not much money and it is spent only on things that are necessary
Or:
Enforced or extreme economy

Following 2008 an international policy was enacted by the so-called Western Democracies to solve the massive problem (it was claimed) that was caused by yet another banking crisis.
What has happened since that time is the poorest and most vulnerable members of society have been asked to pay for the failure of the rich, so it would seem.
But, aside from cutting benefits and resources from the people, what else has been done to alleviate the problem?
In the light of there supposedly being too little money for the 'wasteful' benefits and 'giveaways' to the poor and vulnerable what else?

If money is a limited resource the governments have simply magicked money into existence, and rewarded the banks for their failure by handing out shedloads of cash. QE or Quantitative Easing (printing money) call it what you will, in the UK alone has amounted to £385billion. whilst at the same time penny pinching but tragic cuts have been hitting the poorest, with a massive rise in FOOD BANKS, suicides and unexplained deaths following the withdrawal of especially disability benefits.
4000 people have died with the six weeks following the refusal of benefit on the grounds of being 'declared fit for work". Some from suicide, but generally because people on their deathbeds have been declared 'fit for work'.

Hopefully someone will be able to offer a meta-explaination why QE and "austerity' is not simply a mechanism by which the rich get richer?

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Re: What is Austerity?

Post by Obvious Leo » Sun Sep 20, 2015 9:43 pm

QE was adopted as a policy by the US Federal Reserve to prevent the share market from collapsing after the GFC, not to stimulate the economy as claimed. Nevertheless after several years of sluggish growth the dollar printing does seem to have had a modest effect towards economic stability. However QE sets up an arms race in the form of currency wars and Europe, Japan and China have now all gone on money-printing sprees of their own to counter-balance this artificial manipulation by the US of the international exchange rates. This leaves smaller economies at the mercy of those who seek to profit from this international currency arbitrage and as always the weakest individuals at the bottom of the economic food chain must bear the cost. A computer in the city of London can wipe out the economy of a small village in Asia in a millisecond simply by converting some of its Euros into renminbi or its yen into pounds and harvesting a commission on the transaction.

In fact the world is awash with cash but it is far safer and more profitable for banks to use it in such currency speculation than it is to invest it in wealth-generating business. The banks are indeed to big to fail and they know it. Because of this they have every government in the world by the balls and show no inclination to let go any time soon. The next major collapse might do the job of convincing the hoi polloi that the system is broken and that they're being shafted.

Skip
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Re: What is Austerity?

Post by Skip » Sun Sep 20, 2015 9:50 pm

Originally, it was a lifestyle chosen by highly principled religious orders, wherein they eschewed comfort, wealth, luxury and self-aggrandizement, in favour of simplicity and purity of purpose.

Dictionaries change. Christians change.

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Re: What is Austerity?

Post by Obvious Leo » Sun Sep 20, 2015 10:13 pm

Hobbes' Choice wrote:Hopefully someone will be able to offer a meta-explaination why QE and "austerity' is not simply a mechanism by which the rich get richer?
Wouldn't you agree that this is simply the "tragedy of the commons" story being writ ever larger and we are squandering the inheritance of our grandchildren? I realise that this has become a modern cliche but the reason why cliches become cliches is generally because they're true. I am of the baby boomer generation in an affluent society and have thus never personally known the meaning of economic hardship. My parent's and grandparent's generations had to deal with two world wars and a massive economic depression and yet they still managed to build a society in which my generation could prosper with relative ease. What did we do with this undeserved gift? We sold the farm and spent the money on useless shit and the generations who follow will get to reap what we have sown. For perhaps the first time in human history a generation of humans will leave the world in a worse state that the one they inherited and future history will not portray us kindly. Mea culpa.

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Re: What is Austerity?

Post by Hobbes' Choice » Mon Sep 21, 2015 1:25 pm

I realise that gross comparisons are of limited value, but...

1. Austerity doesn’t work. In the aftermath of the Great Recession, the United Kingdom and the United States carried out the closest thing you can get to a scientific experiment in economics. On this side of the Atlantic, the Obama Administration took measures to extend its stimulus program, and then, under pressure from Congress, slowly applied some spending restraint. In Britain, the Conservative-Liberal coalition, after coming to power in May, 2010, immediately slammed on the brakes, introducing a package of spending cuts and tax increases, amounting to more than five per cent of G.D.P., that were intended to reduce the deficit quickly. So how did this experiment turn out? In 2009, the United States government was running a deficit of 9.8 per cent of G.D.P., and the United Kingdom had a deficit of 11.1 per cent. In 2014, the U.S. budget deficit was 2.8 per cent of G.D.P., and the U.K.’s deficit was 4.9 per cent of G.D.P. The country that followed a moderate approach, the United States, cut its deficit by considerably more than the country that imposed strict austerity policies.http://www.newyorker.com/news/john-cass ... -has-right

The other big difference is the increase in Inequality here in the UK, which leads me to think this might be the main reason for the policy of austerity.

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Re: What is Austerity?

Post by bobevenson » Tue Sep 22, 2015 1:46 pm

Austerity is when governments are forced by reality to stop spending money they don't have or have fraudulently produced.

Skip
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Re: What is Austerity?

Post by Skip » Tue Sep 22, 2015 1:59 pm

.... except on lost wars, crowd control, espionage and bailouts for mega-banks ...

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Re: What is Austerity?

Post by Hobbes' Choice » Tue Sep 22, 2015 2:40 pm

bobevenson wrote:Austerity is when governments are forced by reality to stop spending money they don't have or have fraudulently produced.
Governments make all the money that exists.
Austerity is the means by which the rich gather more resources to themselves.
Monetarism is the system which place the power away from the government to the market.
Modern Monetary Theory is that which replaces the power back in the hands of the government.

The market does not 'make money'. The market simply changes where money exists, and changes the access to resources that can be exchanged for money.
The only insitution that can 'make money' is a national bank instructed by the government. Making money is simply a case of printing it. Money has no intrinsic value, but is fiat.
Wealth is not about the amount of money. Wealth is the sum of resources, commodities, infrastructure, and property.
Money is not a commodity like any other, and it has been the error of the myth of monetarism that it is so. And that myth has enabled the market to act like a predator.

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Re: What is Austerity?

Post by Hobbes' Choice » Tue Sep 22, 2015 2:41 pm

Skip wrote:.... except on lost wars, crowd control, espionage and bailouts for mega-banks ...
Yes, how odd that austerity seems to include printing £385billion in the UK alone, which is given out to banks in the hope of getting the economy back on track.

It begs the question: what is money?

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Re: What is Austerity?

Post by bobevenson » Tue Sep 22, 2015 3:15 pm

Hobbes' Choice wrote:
bobevenson wrote:Austerity is when governments are forced by reality to stop spending money they don't have or have fraudulently produced.
Governments make all the money that exists.
Quite true, but since money is a medium of exchange, if that money is not backed up 100% by the property it supposedly represents, the government has committed fraud, and the responsible officials should be indicted, tried, convicted and shipped to Australia.

Skip
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Re: What is Austerity?

Post by Skip » Tue Sep 22, 2015 6:09 pm

So then, the government, in practicing lopsided austerity, is giving the homes, lands, livestock, peach trees and plumbing supplies of average citizens to the Kock brothers and third world despots.
Don't send them to Australia until the Australians come to their sense and elect a better government.

It begs the question: what is money?
These days, it's 'a lick and a promise'. Most of it only exists in the virtual banks of computer accounting, or is in transit between financial institutions, or as lit-up moving numbers on a screen. Most of that is expected interest on loans that will almost certainly be defaulted. It's a clutch of balloons in the fist of a two-year-old.

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Re: What is Austerity?

Post by Pluto » Tue Sep 22, 2015 7:02 pm

Austerity is a political program of containment. We see within the neo liberal doctrine that money is being moved from the majority into the hands of the minority rich. Why is this happening now. As stated at the outset austerity is containment, in that it contains the populace, it is an economic doctrine just as the scrapping of social rights and social justice is a political doctrine of rendering a populace powerless. Both economic power and political power have been strengthened at the destruction of people power. This I believe is a historical political step to gather ones resources and strengthen ones power base in preparation for what it to come. Austerity is economic but also a political tool to prepare the ground so it is best suited to deal with the coming large war(s). Austerity is simply a step taken by those in power in preparation for a coming world war.

I would love it if you could say why this is not so, that austerity is simply a way to control over spending, etc. I here you say it is a paranoid and simplistic reading, but I think in its sweeping generality it uncovers core motives. I hope I'm wrong.

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Re: What is Austerity?

Post by Skip » Tue Sep 22, 2015 8:20 pm

Pluto --- Austerity is a political program of containment...... its sweeping generality it uncovers core motives. I hope I'm wrong.
I wish you were! No, you're quite right. What's more, the military elites all have contingency plans for several end-of-civilization scenarios. Mainly, it's the shortage of water that will drive masses of desperate people to migrate, and the water cartels http://www.globalresearch.ca/the-new-wa ... er/5383274 won't be able to protect 'their property'. The present refugee crisis around the Mediterranean is only the most preliminary harbinger of what's to come - and nobody seems to be coping well, even with this trickle. Between climatic and political upheavals, food and monetary crises, international frontiers drawn by blind-drunk European war lords and gun-drunk American oil barons, bigotry of every kind everywhere set on fire by zealots and cynical exploiters, what's to come ....
Well, let's just say 'containment' measures will prove insufficient.

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Re: What is Austerity?

Post by bobevenson » Tue Sep 22, 2015 8:30 pm

Pluto wrote:Austerity is simply a step taken by those in power in preparation for a coming war.
I guess the news media missed the fact that Spain's austerity program is simply a prelude to taking over Portugal.

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Re: What is Austerity?

Post by Pluto » Tue Sep 22, 2015 8:45 pm

bobevenson wrote:
Pluto wrote:Austerity is simply a step taken by those in power in preparation for a coming war.
I guess the news media missed the fact that Spain's austerity program is simply a prelude to taking over Portugal.
Austerity is a global doctrine, Spain is a part of the globality.

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