Akvod said: I don't see how the current financial crisis has anything to do with "stealing from the rich". In fact, people have been likening to the sub-prime mortgage crisis as a scam made by the rich...
I'm not knowledgeable enough to comment on wealth distribution, income disparity, etc. I do know from basic macroeconomics though, that the austerity drive going on the world is simply counterintuitive. What is it going to do? Businesses invest in order to increase production capacity, and you increase production capacity when there is demand for your products that create the need for extra capacity. In short, you buy machines to make stuff, when you think more people want to buy stuff. I don't see how reducing our GDP is going to increase investment (which is going to further lower GDP, by a lot). Do you understand that countries going for more austerity are doing it because they cannot afford to keep propping up the economy like you want them to? The easiest thing to liken it to is a person with an unlimited balance credit card. You still have to pay the interest off, but you can spend as much as you want. The problem is with all of your suggestions is, that there is no knowing for certain when a country will gain its economic footing back for consumer confiedence. The government could be running deficits of 100, 150, 200% of GDP before it happens...And if that happens, so much of the tax monies would be going to pay off interest, there would be little else done with tax revenues. Its not counterintuitive, because much of the government stimulus programs aren't going to help consumer confidence, or help the means of production out. A huge amount of the bailout and stimulus went to crooks and stupid people...It hasn't helped, because the money went nowhere that it should of been. So austerity is the only way out - balance the budgets, and when it they reduce their interest payments, either lower taxes to increase consumer confidences (more money for them to put into the market place, increasing consumption) or giving out more benefits. I don't see what abandoning the unemployed is going to do. The laziness argument can't hold, because 6% of the 10% were employed recently, and it's hard to believe that they were the types that just leached off benefits. Maybe they honestly can't find jobs, due to macroeconomic circumstances, out of their hands? Could it be that the 10% may have been in jobs that were unfit to even be there in the first place? Rampant overspending has caused the problem(s). Look at the savings rate in America over the past 70 years - people have been spending more than they earn, yielding an economy that was simply unsustainable. You keep purporting the CING graph like its the be-all-end-all. Suppose it is. If consumers, via debt and overspending, buy more, it will create a glut of jobs in many industries. When such consumers have to finally deal with reality, it will cause what has happened - a recession. The housing bubble can be looked at that way - a glut of loans were given to people that couldn't afford them, via incentives offered by CRA 1999...We have skyrocketing prices for houses, only to be shattered by reality that the housing market was overvalued and lots of people really couldn't own houses. People want to balance the budget, but don't want to raise taxes, want to keep their own benefits, don't want to reform medicare (which is a huge part of spending), etc. Fucking contradictory. I agree. We should cut spending from virtually everything to balance the budget, then when its balanced (within 10% of GDP), look at tax cuts, and reforms. |
Back from the dead, I'm afraid.