DEFICIT TERRORISTS STRIKE IN THE UK – USA NEXT?

Last week, England’s new government said it would abandon the previous government’s stimulus program and introduce the austerity measures required to pay down its estimated $1 trillion in debts. That means cutting public spending, laying off workers, reducing consumption, and increasing unemployment and bankruptcies.

Read more here –
http://www.webofdebt.com/articles/deficit_terrorists.php

17 Responses

  1. Excellent overview.

    It is true that banks advance the principle, but not the interest, and this works if the economy is growing at a rate that reflects the rate of interest charged. But when was the last time our economy grew at 5%, or even 3%, in real terms?

    We grow and pay the interest on principle, or we die. Interest is the whip the investor class uses to drive the mass of people to work harder. Hedge funds occasionally achieve 20% rates of return in an economy that is not even growing at 1%. This is possible only because the debt burdens of millions is increased through the amazing machinations of the debt machine, the private banking system and its manipulation of interest rates.

    But we have hit the wall. David Cameron will not last even two years. To satisfy the requirements of the investor class and provide them with the return on their capital they feel entitled to have, it is necessary to rape the world, which we have been doing since the industrial revolution began.

    We must develop a new theory of economics that takes “externalities” into account and recognizes money as a public utility, or we die. As waves of stinking crude hit the beaches where the investor class likes to live, it will not be immediately recognized that this is the inevitable outcome of high interest rates and policies of relentless economic expansion….that this is the return on capital to which they are entitled….

    • Thanks and I agree. We all feel our money must “make money”, because social security is too little to live on: we don’t have real security. But the system of money-making-money is making our economic system mathematically unsustainable. I think it could be shown by computer models that for the government to simply issue the money outright to provide adequate social security, higher education and health care for all would actually be more sustainable and more cost-effective than our current system.

      • Strongly agree! One of the “externalities” of this malign pseudo science of economics is human suffering.

        Thank you for your continuing dedication to the cause of a new economics.

        We CAN have it all. It’s not economic realities that hold us down, but ancient religious and moral ideas…….well, that’s not entirely true…..there are limits to growth. That is an economic reality. Otherwise, though, we use economic theory to enforce ancient prejudices…….

        • I think the economic elite are using ancient prejudices and misinformed morals to maintain their unsustainable economic models.

        • Yes that’s what we need, a new economics. We’ve been brainwashed into an upside down view of economic reality.

      • There is one amazing assumption here that I cannot leave unaddressed – that government is somehow more trustworthy than the private banking system. Why should we trade one system of tyranny for another? Government certainly has a role to play in the solution – but first it must be accountable to the voters – how long has that been untrue? For a very long time. I say we push for term limits for Senators first and then Representatives – although we seem to cycle them more often.

        Until this happens, giving ‘Government’ complete control of money and banking is centralizing all power of a nation into their hands.

        How is that a solution?

        For this solution to work government must be accountable FIRST – not afterward.

        BTW, I agree that the money supply is centralized in private hands – and that a solution is needed. I do prefer the solution presented here at the time being – but this is a very complex and IMPORTANT topic and for that I thank you.
        http://economicedge.blogspot.com/2010/02/face-of-freedoms-vision.html – this advocates a government issued (non-debt backed) money solution similar to what you suggest, but with a political solution wrapped in.

        In my view – you can’t achieve one, without the other.

        Best!

        • You’re correct, both the monetary and political systems must be reformed for either reform to last long.

          However, I still think the American Monetary Act (http://www.monetary.org/amacolorpamphlet.pdf) is the best way to achieve the correct monetary reform.

          As for political reform we need to specifically disallow non-natural “persons” from political participation. That means no more corporations using their vast economic power to ensure their favored candidates have the most and best advertising. We would also have to disallow paid lobbyists. Instead, anyone who wants to lobby a government official would have to lobby in person, themselves – no hiring someone to do it for them!

          This is still just a tiny step in the right direction – we still have to address situations where a person has a legitimate need to have someone speak on their behalf. And we must also account for groups of people trying to work together to get across a message none of them could do alone – such as buying billboard space, radio or TV ads – specifically for political purposes.

          A step towards transparency: require all non-natural “persons” to be owned only by natural persons. No more corporation A owns LLC B which owns 2/3 of trust C which owns 40% of corporation D… And then place all corporate ownership information into the public domain – name, address, phone number, portion of voting control, and portion of gross ownership. Then, when a corporation hurts the public, we will all immediate know who is ultimately responsible!

    • Joseph Danison,

      I’m not quite sure what exactly you mean when you define money as a “public utility”. I respect her ideas of reforming the federal reserve, but I do not agree with you when you claim that at some point only further economic growth can be obtained by raping and pillaging the planet’s existing resources. Productive work can be done in virtually any field, and the only thing stopping more productive work is the government, with its intensive regulations and economic destabilizing currency deficit spending and interest rate artificial debasing. No producer can survive in an environment where his savings are evaporated every year with taxes and he cannot invest his money in even a bank because rates are so artificially low. In a completely free market, if there was such a crash as there has been now, interest rates would be high and cash would be hard to come by. This is obviously not the case. The Great Depression only lasted several years, and our depression has lasted over a decade. Why is this? Is it because we are running out of terrain to rape and pillage? I don’t think so. I think the main focus of Ellen’s work is right on target- and that is reforming the federal reserve and the government. I cannot see your point, though.

      • CJ Williams

        Can you live without water, or electricity, or a system of highways & etc? Is it permitted that people live in the dark or die of thirst? Government regulates utilities in order to prevent the “free market” from pricing them beyond the capacity of most people to afford. Just as you are entitled to have your utilities provided at reasonable and affordable rates, so should you have access to money at affordable and reasonable rates. Hence, money as a public utility.

        The manufacturing of goods requires exploitation of natural resources. A productive service economy is built on a manufacturing base. No productive work we do is divorced from the exploitation of natural resources. Look to the Gulf, friend. That disaster is created for your benefit and in your name. It is the “free market” at work, pursuing rational self-interest and profits for investors who, like you, demand that they get a certain return on their money. The competitive “free market” created this disaster ( which we will all soon understand if of “Biblical” proportions ), for you, and all those like you who believe that interest rates should be high and money SHOULD make money.

        We are running out of resources to exploit. There may be plenty of oil left to exploit ( in super wells like Deep Horizon ), but we can no longer afford to exploit it.

        With respect, you need o think more deeply about your own economic theory. You don’t seem to know what an “externality” is. You don’t seem to make connections among factors like interest rates, economic growth, resources,markets, rational self-interest and the public interest.

        Our Constitution was designed to promote the public welfare. Our economic theory does not do that. Free markets, which have never existed, not even in the days of Adam Smith, do not do that, either. Only we can do that…..through the wise use of our power that we have by means of our government. Without government, we the people have no power. You, alone, are just a naked vulnerable babe in the jungle, a tasty snack for corporate predators. Government is not your enemy, it is your only protection……but only if you use it.

        Your enemy is in the Gulf of Mexico, a huge, unregulated, lightly taxed economic predator wreaking havoc in the name of profit. Pay attention to the 4 millions gallons of oil per day gushing into one of the world’s most bountiful marine eco-systems, killing all the life it touches. If you have friends or family in the Gulf states, be prepared to offer them shelter when they come knocking. THINK about why this is happening. It is your “free market” at work. It is in your interest, your right of return on investment, and in your name.

        Wouldn’t you really prefer a better economic system, one that will allow your children and all earth’s living creatures to live in security and good health in the coming generations?

  2. As one who has been following the writings of Ellen Brown and of the MMT proponents (LR Wray, Bill Mitchell, Warren Mosler, and others), I am amazed that there are relatively few of the economists who present the MMT concepts in a manner which can be comprehended by interested people who have no background in economics. I enjoy Ellen’s articles because they are usually well thought out, are generally consistent with current financial/banking practices, and are relatively easily understandible. It is encouraging that some of the political aspirants have come to understand that the only way a desirable culture/society can be created is to introduce easily understandible concepts which the voting public will be able and willing to act upon. That is a formidable condition which will require a lot more effort on the part of bloggers and writer/contributers to some of the mainstream media. The trick may be to design articles which will permit the unknowlegable to become more involved. If I understand the CAFR situation, it appears that Ellen’s suggestions should be followed up with approaches that would apply to almost all states in the USA.

  3. The language of economics was precisely created obscure and inaccesible. Most sciences (which economics, in its present form, is descidedly not) develop an exclusive lingo due to their specialization, but in economics it has been done pointedly to exclude anyone who has not been brainwashed by an economics degree from taking part in financial politics, policies, or even meaningful discussion.

    Ellen has done a wonderful job uncovering the lies that were burried in mere language. If we are going to make any headway against the bankers, we have to totally re-invent the language of economics, and antiquate the current dialect. Controlling language is the most powerful way to control thought and behaviour, and we’ve been duped big time. I do beleive that, no matter what the subject, if you can’t describe it to someone in plain language it is only because you don’t have a clear understanding of it yourself.

    Love the term ‘defecit terrorists’. Does that make austerity measures ‘weapons of monetary destruction’?

    BTW, I live in the far north of the Yukon Territory, north-east of Alaska – wayyyyy out in the middle of nowhere beyond the arctic circle, and I can attest the yes, we are without a doubt running out of stuff to rape and pillage. The power players are getting desperate.

  4. Just like Iceland, all the other nations citizens must say NO! to Wall St. recklessness and declare its scam, fraud and Ponzi Scheme ended. No longer should we gamble our future cultures away to anyone. International commercialism knows no homeland.

    If they want a global war, they will get it.

    It’s time to heal the Universal Mother that weaned us. This is a wake up call to humanity to respond to our ancient enemy, greed.

  5. I followed up the links from the “Terrorist” article and am most taken by

    SUMMARY OF SEIGNIORAGE REFORM
    Creating New Money
    http://www.jamesrobertson.com/book/creatingnewmoney.pdf

    This is a readily understandable exposition of the present and proposed means of creating money. I think that the authors’ proposal is well thought out and a suitably radicle solution to the problem it defines.

    The chief claim being made on this site in favor of state banks is that they can harvest the interest that presently accrues to the banks when they create money.

    It may still be a good idea to have state banks, of course, but I think that seigniorage reform, as Huber and Robertson term it, is more radicle and hence more desirable than giving state banks a piece of the “illicit” action involved with bank-created money.

    What are the thoughts of others in this respect?

    • Read the American Monetary Institute’s American Monetary Act. I know they tried to get sponsors to put it on this year’s congressional agenda – but I haven’t heard anything since.

      http://www.monetary.org/amacolorpamphlet.pdf

      If implemented, our nation’s money would be created by congress (or its designees) for the purpose of providing adequate, debt-free, money to fuel our economy.

      • It’s a great idea to move away from debt backed money system, but government must also be reformed – or we’ll go from tyranny to tyranny – and that’s no solution. Term limits would be a great place to start.

  6. […] Link: https://webofdebt.wordpress.com/2010/06/17/deficit-terrorists-strike-in-the-uk-usa-next/ […]

  7. […] under: Ellen Brown Articles/Commentary WEB OF DEBT BLOG                             […]

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