This pro-austerity mythology [which animates orthodox economics and economic policy in the United States and elsewhere] aims to distract the public from asking why peacetime governments can’t simply print the money they need. Given the option of printing money instead of levying taxes, why do politicians only create new spending power for the purpose of waging war and destroying property, not to build or repair bridges, roads and other public infrastructure? Why should the government tax employees for future retirement payouts, but not Wall Street for similar user fees and financial insurance to build up a fund to pay for future bank over-lending crises? For that matter, why doesn’t the U.S. Government print the money to pay for Social Security and medical care, just as it created new debt for the $13 trillion post-2008 bank bailout?
The answer to these questions: Banks and other financial institutions want to keep as much of their income as they can. Transaction fees, regulations, oversight, taxes, etc. — these consume profits. America’s banks want to transfer these costs to others, namely, to those individuals who lack the political power to defend their standard of living. This cost transfer project amounts to a hidden and sometimes obvious tax the government levies on the 99%. When coupled to a system of risky and fraudulent financial transactions, elite looting and private debt creation, this cost transfer project amounts to little more than a predatory political economy.
The ridiculous fiscal cliff debate which now dominates America’s public life is but a crude expression of this predatory political economy.
- People Tell Me to Go Look at Bridgewater’s Highly Successful Ray Dalio on How He Looks at the Economy (delong.typepad.com)
- ‘Give criminal bankers’ money to homeless people’ (dearkitty1.wordpress.com)
- What happens to Americas global image if it defaults on the debt? (zynkinnews.com)
- Should Big Banks Be Broken Up? A Debate (transcript) (reform-wall-street.org)
- Monetary Malpractice: Moral Malady (safehaven.com)
- Japan (metafilter.com)
- Jim Willie: The Coming Isolation of the US Dollar (silverdoctors.com)
- Why Insane Deficits and Insane Money Printing Will Continue (economicpolicyjournal.com)