Here are a couple of neat pointers: The first goes to a article at a good blog, which points to an interactive feature at the EPI (Economic Policy Institute) website.
http://crookedtimber.org/2011/02/10/income-growth-shares-over-time/
A commenter at CT links to:
http://www.youtube.com/watch?v=akVL7QY0S8A
a lecture by Elizabeth Warren titled: “The Coming Collapse of the Middle Class: Higher Risks, Lower Rewards, and a Shrinking Safety Net.” This is a good and informative lecture. Well worth the time.
Thursday, February 10, 2011
Thursday, February 3, 2011
Upside Down: Who the Government Really Gives To
Here's a nice little paper that ties in with my recent post "Our
Government is Captive of the Wealthy"
http://cfed.org/assets/pdfs/UpsideDown_final.pdf
Here's the little blurb on the CFED site pointing to the paper:
"Among the most compelling findings included in the report is that of the nearly $400 billion spend by the federal government in 2009, most funds went toward tax breaks. However, more than half of these breaks went to the wealthiest five percent of taxpayers, who averaged a net benefit of $95,000 each. On the other hand, less than 5% of the federal expenditures benefitted the Americans earning the least. The bottom 60% of taxpayers averaged just $5 each.
This finding and a series of others likely evoke immediate frustration, pointing to yet another barrier keeping low- and moderate-income Americans from getting ahead and achieving the American dream. Yet, with this information comes unprecedented opportunity. As CFED Founder and Board Chair Robert Friedman elucidates, “Taken together, this suggests we have a monumental opportunity not only to save by curbing existing ineffective tax incentives, but to increase net savings significantly by extending effective incentives to the asset-poor majority.”"
The government taketh away. The government giveth.
Government is Captive of the Wealthy"
http://cfed.org/assets/pdfs/UpsideDown_final.pdf
Here's the little blurb on the CFED site pointing to the paper:
"Among the most compelling findings included in the report is that of the nearly $400 billion spend by the federal government in 2009, most funds went toward tax breaks. However, more than half of these breaks went to the wealthiest five percent of taxpayers, who averaged a net benefit of $95,000 each. On the other hand, less than 5% of the federal expenditures benefitted the Americans earning the least. The bottom 60% of taxpayers averaged just $5 each.
This finding and a series of others likely evoke immediate frustration, pointing to yet another barrier keeping low- and moderate-income Americans from getting ahead and achieving the American dream. Yet, with this information comes unprecedented opportunity. As CFED Founder and Board Chair Robert Friedman elucidates, “Taken together, this suggests we have a monumental opportunity not only to save by curbing existing ineffective tax incentives, but to increase net savings significantly by extending effective incentives to the asset-poor majority.”"
The government taketh away. The government giveth.
Monday, January 31, 2011
Equal Opportunity
The Right says it favors equality of opportunity rather than equality of outcomes. But equality of opportunity requires equality of capitalization, which the Right is not really in favor of. Opportunity requires the availability of resources.
Equal opportunity is impossible with a mal-distribution of wealth. The OECD notes “:…lack of equal opportunity may affect the motivation, effort and, ultimately, the productivity of citizens, with adverse effects on the overall efficiency and the growth potential of the economy."
Opportunity is (statistically) proportionate to wealth. Therefore, a greater equality in distribution of opportunity requires a greater equality in distribution of wealth.
Indeed, the distribution of resources producing equality of opportunity and that producing equality of outcomes are the same distribution, and is not particularly desirable: All outcomes are equal, and there is no opportunity.
So what we are looking for is that distribution of physical and social resources and opportunities, which most enables society to take advantage of its human resources. This is also the one that allows the greatest opportunity for individual advancement.
Individuals with superior abilities are born at all levels of society. For a society to prosper and compete, it must take advantage of these individuals. To do this, society must invest in these individuals. It must capitalize them. This requires different capital inputs at different stages in individual development.
The most important investment in human capital is in childhood, when the individual must be convinced of the desirability to capitalize himself: To invest time and effort into his own future, as a valuable and valued individual and citizen. First he must have the example of parents and neighbors, which means they themselves must receive adequate reward for effort and initiative. They must have opportunity for, and there must be examples of, advancement. Opportunity, to be taken advantage of, must first be perceived. This depends on the wealth of the community in which the individual is raised. A poor community will have few examples of success, many examples of failure.
The quality of the schools depends on the wealth of the community. In general, poor communities have poor schools: Undercapitalized institutions trying to instruct under-acculturated children. This is especially the case where there is no mixing of funds from other, wealthier communities, as through state wide tax support for education. Many superior individuals in inferior schools will be discouraged.
If the slope of wealth and opportunity is too steep, only the very best will be able to navigate it. And they likely will not get to the most suitable places for themselves. And even these will require some opportunity. Since opportunity is distributed, many of the best with inferior opportunity will not succeed within the parameters of their society, but will find themselves trapped at the bottom. This happens in the best of circumstances, but is aggravated with a mal-distribution of wealth and opportunity. Where there are inadequate avenues of advancement, the management of society will be left to the children of the previous generation of the successful, who will tend to have regressed to the mean. Thus, the society will begin to be managed increasingly by the average and mediocre. This will put it at a disadvantage with respect to other societies. The alternative is to find superior agents, who will then be expected to labor without commensurate reward, on behalf of an aristocracy they cannot join, and who thus will have their own motives for mismanagement. They will also increasingly be opposed by superior individuals from the bottom. Many will be criminals, who will have found paths to legitimate power blocked.
The Right considers redistributive taxes as redistribution of rightful gain, whereas the Left should consider it redistribution of capital. The right would then claim that those with the income have shown they know where to invest capital, since they have received the gains from it. The left would maintain that much of those gains come from the common capital, and must be reinvested in common capital for the common welfare of society, of which the individual is a part.
The whole point of the wealthy sequestering their wealth, isolating it from redistribution, is to secure opportunity for themselves and secure for themselves and their children the effective hereditary privileges of an Aristocracy. This necessarily reduces opportunity available to the non- wealthy. From their point of view, this is reasonable, since opportunity is necessarily also the opportunity to compete with the wealthy. Indeed, the inheritance tax could be called an opportunity tax., since it’s purpose is to prevent the perpetuation of a Plutocracy, and to open up the paths of power to others.
The Right is not really interested in the survival of their society as a society. They pursue the interests of persons as individuals, in particular the wealthy.
So society for its survival, must find the proper gradient of wealth and power, that those individuals all along the power spectrum are continually replaced by those of appropriate ability.
Equal opportunity is impossible with a mal-distribution of wealth. The OECD notes “:…lack of equal opportunity may affect the motivation, effort and, ultimately, the productivity of citizens, with adverse effects on the overall efficiency and the growth potential of the economy."
Opportunity is (statistically) proportionate to wealth. Therefore, a greater equality in distribution of opportunity requires a greater equality in distribution of wealth.
Indeed, the distribution of resources producing equality of opportunity and that producing equality of outcomes are the same distribution, and is not particularly desirable: All outcomes are equal, and there is no opportunity.
So what we are looking for is that distribution of physical and social resources and opportunities, which most enables society to take advantage of its human resources. This is also the one that allows the greatest opportunity for individual advancement.
Individuals with superior abilities are born at all levels of society. For a society to prosper and compete, it must take advantage of these individuals. To do this, society must invest in these individuals. It must capitalize them. This requires different capital inputs at different stages in individual development.
The most important investment in human capital is in childhood, when the individual must be convinced of the desirability to capitalize himself: To invest time and effort into his own future, as a valuable and valued individual and citizen. First he must have the example of parents and neighbors, which means they themselves must receive adequate reward for effort and initiative. They must have opportunity for, and there must be examples of, advancement. Opportunity, to be taken advantage of, must first be perceived. This depends on the wealth of the community in which the individual is raised. A poor community will have few examples of success, many examples of failure.
The quality of the schools depends on the wealth of the community. In general, poor communities have poor schools: Undercapitalized institutions trying to instruct under-acculturated children. This is especially the case where there is no mixing of funds from other, wealthier communities, as through state wide tax support for education. Many superior individuals in inferior schools will be discouraged.
If the slope of wealth and opportunity is too steep, only the very best will be able to navigate it. And they likely will not get to the most suitable places for themselves. And even these will require some opportunity. Since opportunity is distributed, many of the best with inferior opportunity will not succeed within the parameters of their society, but will find themselves trapped at the bottom. This happens in the best of circumstances, but is aggravated with a mal-distribution of wealth and opportunity. Where there are inadequate avenues of advancement, the management of society will be left to the children of the previous generation of the successful, who will tend to have regressed to the mean. Thus, the society will begin to be managed increasingly by the average and mediocre. This will put it at a disadvantage with respect to other societies. The alternative is to find superior agents, who will then be expected to labor without commensurate reward, on behalf of an aristocracy they cannot join, and who thus will have their own motives for mismanagement. They will also increasingly be opposed by superior individuals from the bottom. Many will be criminals, who will have found paths to legitimate power blocked.
The Right considers redistributive taxes as redistribution of rightful gain, whereas the Left should consider it redistribution of capital. The right would then claim that those with the income have shown they know where to invest capital, since they have received the gains from it. The left would maintain that much of those gains come from the common capital, and must be reinvested in common capital for the common welfare of society, of which the individual is a part.
The whole point of the wealthy sequestering their wealth, isolating it from redistribution, is to secure opportunity for themselves and secure for themselves and their children the effective hereditary privileges of an Aristocracy. This necessarily reduces opportunity available to the non- wealthy. From their point of view, this is reasonable, since opportunity is necessarily also the opportunity to compete with the wealthy. Indeed, the inheritance tax could be called an opportunity tax., since it’s purpose is to prevent the perpetuation of a Plutocracy, and to open up the paths of power to others.
The Right is not really interested in the survival of their society as a society. They pursue the interests of persons as individuals, in particular the wealthy.
So society for its survival, must find the proper gradient of wealth and power, that those individuals all along the power spectrum are continually replaced by those of appropriate ability.
Tuesday, December 21, 2010
Our Government is the Captive of the Wealthy
We no longer live in a democracy.
Our government is the captive of the wealthy. Such is their power, so complete the government’s servitude, that it is by many not even seen for the prisoner it is. The people are blinded to the evidence, though this captivity is the cause of their distress.
The elections, as they have proceeded, did not change this. Hidden money has flowed into the coffers of the candidates, cementing the hold the wealthy and influential have over them. The candidates did not speak to it. Our elected officials do not speak of it. The Congress is now seeded with the lackeys of the wealthy, who do as they are told. It will get worse for the people. Our government, no longer a government of the people, will remain the captive of the wealthy.
As their captive, our government does their bidding:
It allows the manipulation and degradation of its money, forcing the people into debt, and servitude to the wealthy.
It lowers the taxes of the wealthy, and the taxes of their corporations. At the same time, it borrows from them, and accumulates a ruinous debt, an unseen burden on the people, to the great gain of the wealthy.
It reduces its regulation of the activities of the wealthy, allowing them to exploit the people.
It rescues the corporations of the wealthy when they squander their assets. It places the burden of these debts upon the backs of the people.
It subsidizes their corporations when they cannot compete on their own, and guarantees their profits.
It defends and subsidizes an inefficient and inadequate system of healthcare, one increasingly ruinous to the people, and immensely profitable to the wealthy.
It neglects the assets of the people, and allows them to crumble. It refuses to capitalize and invest in the people's future.
It allows its educational system to deteriorate, that the people may be more easily manipulated and restrained.
It refuses to effectively defend the nation’s borders against unfair trade, and illegal immigration, driving down the wages of the people, and for the profit of the wealthy.
It sells the property of the people to the wealthy, at less than its true value.
It buys things from the wealthy at exorbitant prices.
It allows and encourages the destruction of the nation’s natural resources, to the profit of the wealthy.
It prosecutes an undeclared war in a distant country, squandering the people’s assets, and thousands of the people’s lives, as well as the lives of innocents. A war from which the wealthy derive unjust profit.
It raises the specter of Terror against the people, where little is seen. It makes enemies in distant places, to the profit of the wealthy.
It enforces laws that are harsh against the people, yet excuses the wealthy.
It compromises the people’s right to due process.
It placates the people with the people’s own money, and deflects the people’s anger away from the wealthy.
It allows the press to also become the captive of the wealthy, to speak with their voice, and to distract the people with the inconsequential.
It obfuscates the nature of its actions, and the actions of the wealthy, to the confusion of the people.
It silences the discourse of the people, with insinuations of unpatriotism.
It enacts laws which perpetuate and rationalize its captivity
It enacts laws which increase its powers to do these things, to the greater harm of the people.
The government does all this in servitude to the wealthy, to the harm of the people, and the nation.
And finally, the wealthy cause this to their own harm. The wealthy gild their plumbing with their plunder, with what they gnaw from the true foundation of their wealth, which is the people, for it is by the people’s toil and sweat, and forbearance, that the wealthy live their lives of privilege.
The recent elections have strengthened the grip of the wealthy on our government: The government will enact policies that further aggravate the disparity of wealth and income between the wealthy and the people. It will inflict hardship on the people, and further insulate the wealthy from the consequences of their misrule.
Make no mistake, this land is ruled by the wealthy, and they rule for their own pleasure, and at the expense of the people. They become an ever greater burden on the people, and treat the people with ever greater contempt.
But the people are pillar on the top of which they prance.
Our government is the captive of the wealthy. Such is their power, so complete the government’s servitude, that it is by many not even seen for the prisoner it is. The people are blinded to the evidence, though this captivity is the cause of their distress.
The elections, as they have proceeded, did not change this. Hidden money has flowed into the coffers of the candidates, cementing the hold the wealthy and influential have over them. The candidates did not speak to it. Our elected officials do not speak of it. The Congress is now seeded with the lackeys of the wealthy, who do as they are told. It will get worse for the people. Our government, no longer a government of the people, will remain the captive of the wealthy.
As their captive, our government does their bidding:
It allows the manipulation and degradation of its money, forcing the people into debt, and servitude to the wealthy.
It lowers the taxes of the wealthy, and the taxes of their corporations. At the same time, it borrows from them, and accumulates a ruinous debt, an unseen burden on the people, to the great gain of the wealthy.
It reduces its regulation of the activities of the wealthy, allowing them to exploit the people.
It rescues the corporations of the wealthy when they squander their assets. It places the burden of these debts upon the backs of the people.
It subsidizes their corporations when they cannot compete on their own, and guarantees their profits.
It defends and subsidizes an inefficient and inadequate system of healthcare, one increasingly ruinous to the people, and immensely profitable to the wealthy.
It neglects the assets of the people, and allows them to crumble. It refuses to capitalize and invest in the people's future.
It allows its educational system to deteriorate, that the people may be more easily manipulated and restrained.
It refuses to effectively defend the nation’s borders against unfair trade, and illegal immigration, driving down the wages of the people, and for the profit of the wealthy.
It sells the property of the people to the wealthy, at less than its true value.
It buys things from the wealthy at exorbitant prices.
It allows and encourages the destruction of the nation’s natural resources, to the profit of the wealthy.
It prosecutes an undeclared war in a distant country, squandering the people’s assets, and thousands of the people’s lives, as well as the lives of innocents. A war from which the wealthy derive unjust profit.
It raises the specter of Terror against the people, where little is seen. It makes enemies in distant places, to the profit of the wealthy.
It enforces laws that are harsh against the people, yet excuses the wealthy.
It compromises the people’s right to due process.
It placates the people with the people’s own money, and deflects the people’s anger away from the wealthy.
It allows the press to also become the captive of the wealthy, to speak with their voice, and to distract the people with the inconsequential.
It obfuscates the nature of its actions, and the actions of the wealthy, to the confusion of the people.
It silences the discourse of the people, with insinuations of unpatriotism.
It enacts laws which perpetuate and rationalize its captivity
It enacts laws which increase its powers to do these things, to the greater harm of the people.
The government does all this in servitude to the wealthy, to the harm of the people, and the nation.
And finally, the wealthy cause this to their own harm. The wealthy gild their plumbing with their plunder, with what they gnaw from the true foundation of their wealth, which is the people, for it is by the people’s toil and sweat, and forbearance, that the wealthy live their lives of privilege.
The recent elections have strengthened the grip of the wealthy on our government: The government will enact policies that further aggravate the disparity of wealth and income between the wealthy and the people. It will inflict hardship on the people, and further insulate the wealthy from the consequences of their misrule.
Make no mistake, this land is ruled by the wealthy, and they rule for their own pleasure, and at the expense of the people. They become an ever greater burden on the people, and treat the people with ever greater contempt.
But the people are pillar on the top of which they prance.
Sunday, December 12, 2010
Links 12-11-10
Here's some data on total debt:
http://www.gfmag.com/tools/global-database/economic-data/10403-total-debt-to-gdp.html
Who is all this money owed to, hmm?
And this guy's a trip:
1. YouTube - Hans Rosling's 200 Countries, 200 Years, 4 Minutes - The ...
Dec 2, 2010 ... Explaining the last 200 years of 200 countries in 4 minutes.
http://www.youtube.com/watch?v=kTSxo3175ec
1. Hans Rosling shows the best stats you've ever seen | Video on TED.com
TED Talks You've never seen data presented like this. With the drama and urgency of a sportscaster, statistics guru Hans Rosling debunks myths about the ...
http://www.ted.com/talks/hans_rosling_shows_the_best_stats_you_ve_ever_seen.html
http://www.gfmag.com/tools/global-database/economic-data/10403-total-debt-to-gdp.html
Who is all this money owed to, hmm?
And this guy's a trip:
1. YouTube - Hans Rosling's 200 Countries, 200 Years, 4 Minutes - The ...
Dec 2, 2010 ... Explaining the last 200 years of 200 countries in 4 minutes.
http://www.youtube.com/watch?v=kTSxo3175ec
1. Hans Rosling shows the best stats you've ever seen | Video on TED.com
TED Talks You've never seen data presented like this. With the drama and urgency of a sportscaster, statistics guru Hans Rosling debunks myths about the ...
http://www.ted.com/talks/hans_rosling_shows_the_best_stats_you_ve_ever_seen.html
Tuesday, November 30, 2010
Links On American Jobs of the Future
I was just going to post this link:
http://econfuture.wordpress.com/2010/11/22/will-a-college-education-be-worth-the-investment-in-the-future/
But it merits further discussion: One consequence that he does not discuss, is that as the American college costs escalate, and returns to individuals stagnate, those seeking entry level management positions will be squeezed out by the cheaper foreign educated. The process is a little more complicated: More and more individuals will decline the expense of a college education as its returns decline, and thus fail to qualify for management positions. It will be cheaper to import foreign educated managers for the entry level positions, (who will then get promoted, etc…) and also to export other management functions, such as design and development. Thus American labor will increasingly consist of the underemployed and over qualified, and be increasingly managed by foreign nationals.
Advice for the college bound: Learn Hindi and get a passport.
This link too:
http://econfuture.wordpress.com/2010/08/27/outsourcing-jobs-that-cant-be-outsourced/
In fact, the entire blog is worth following. Scary though, considering who we are governed by.
http://econfuture.wordpress.com/2010/11/22/will-a-college-education-be-worth-the-investment-in-the-future/
But it merits further discussion: One consequence that he does not discuss, is that as the American college costs escalate, and returns to individuals stagnate, those seeking entry level management positions will be squeezed out by the cheaper foreign educated. The process is a little more complicated: More and more individuals will decline the expense of a college education as its returns decline, and thus fail to qualify for management positions. It will be cheaper to import foreign educated managers for the entry level positions, (who will then get promoted, etc…) and also to export other management functions, such as design and development. Thus American labor will increasingly consist of the underemployed and over qualified, and be increasingly managed by foreign nationals.
Advice for the college bound: Learn Hindi and get a passport.
This link too:
http://econfuture.wordpress.com/2010/08/27/outsourcing-jobs-that-cant-be-outsourced/
In fact, the entire blog is worth following. Scary though, considering who we are governed by.
Thursday, November 18, 2010
The Banks are Forcing Debt on the Rest of US
(Check out the videos in the previous entry.)
Government issues about 5% of the money that is in circulation. The rest of it is created by banks, when they make a loan.
When a bank makes a loan, it creates the money to loan out of nothing, just adding numbers on their computer. So the total money supply is the principal of all the loans outstanding, P, plus the amount issued by the government, G. This does not include money the government borrows, which, after all, is still just created by the banks.
The banks then charge interest on the loan, on money which they have created out of nothing.
Because of interest, the total money needed to pay off all loans will be greater than all the money loaned, ie greater than the money supply in ratio (P + G + I - E)/(P + G), where I is all the interest, (not the interest rate,) and E is all the expenditures of the financial industry, if I > E. (If I < E, the opposite will be true.) This implies (I - E)/(P + G + I - E) share of borrowers will always be unable to pay off their loans. Only when I = E is the system stable, and all borrowers able to pay off their loans. Where E is less than I, this leads to an exponential growth of both the money supply and debt. Only with an exponential growth in real consumption, and thus necessarily production, can this be maintained. Since this is ultimately impossible, this spiral has no (nice) ending.
What can the government do? From the equation, it would seem not much, since G appears in both numerator and denominator, and is only a small portion of the total money supply. However, if we consider that the interest comes due at the end of the time period we are considering, it would seem that if G were to increase by I-E over that period, the money supply would remain in balance. That is, the government, if it wishes to keep the economy from going bad, would ‘print‘ the quantity I-E, that is spend that quantity in excess of revenue, but not by borrowing it.
However, for the government to borrow that money it would also add to I. While this might be useful counter-cyclically, it would be less efficient than printing it. Further, it would add to the total debt burden, and thus fail to address the long range problem: It would still contribute to a debt spiral.
So, barring government ‘printing’ at least the quantity I-E, the financial industry, by holding expenditures, E, less than the interest, I, on all loans outstanding, creates a shortage of money. There is simply not enough money to pay off all the debt and the interest. So they force the rest of the system into increasing indebtedness to them, in order to pay off the debts they already owe.. They force individuals, companies, and governments to take out more loans or default. They have simply created a shortage of money needed to repay the loans and the interest, in the real economy, while hoarding the rest of that money to themselves.
The financial industry has been doing this for years. That is why individuals, companies, governments and their countries' real economies, are gradually being ruined. That is why, in the US, for instance, total indebtedness has been climbing to over $50 Trillion, now about equal to all the US real assets. Great Britain, and many other countries are in worse shape.
http://www.comstockfunds.com/default.aspx?act=newsletter.aspx&category=SpecialReport&newsletterid=1504
(Check out the charts. The links are at the top of the page.)
The figures are incredible when you think that it’s most everybody that’s in debt. Indeed, is so called deleveraging (paying off debt) even possible, with so much debt? After all, annual interest on $50 Trillion, is about $2.5 Trillion, at 5%, which is more than the entire revenue of the federal government.
http://en.wikipedia.org/wiki/2010_United_States_federal_budget
Government austerity, by forcing all future increases in debt into the private sector, will inflict tremendous hardship and damage to the real economy.
This 'crisis' is just another step down the road, where the financial industry, in their eagerness to own it all, kill the goose that lays their golden eggs.
Government issues about 5% of the money that is in circulation. The rest of it is created by banks, when they make a loan.
When a bank makes a loan, it creates the money to loan out of nothing, just adding numbers on their computer. So the total money supply is the principal of all the loans outstanding, P, plus the amount issued by the government, G. This does not include money the government borrows, which, after all, is still just created by the banks.
The banks then charge interest on the loan, on money which they have created out of nothing.
Because of interest, the total money needed to pay off all loans will be greater than all the money loaned, ie greater than the money supply in ratio (P + G + I - E)/(P + G), where I is all the interest, (not the interest rate,) and E is all the expenditures of the financial industry, if I > E. (If I < E, the opposite will be true.) This implies (I - E)/(P + G + I - E) share of borrowers will always be unable to pay off their loans. Only when I = E is the system stable, and all borrowers able to pay off their loans. Where E is less than I, this leads to an exponential growth of both the money supply and debt. Only with an exponential growth in real consumption, and thus necessarily production, can this be maintained. Since this is ultimately impossible, this spiral has no (nice) ending.
What can the government do? From the equation, it would seem not much, since G appears in both numerator and denominator, and is only a small portion of the total money supply. However, if we consider that the interest comes due at the end of the time period we are considering, it would seem that if G were to increase by I-E over that period, the money supply would remain in balance. That is, the government, if it wishes to keep the economy from going bad, would ‘print‘ the quantity I-E, that is spend that quantity in excess of revenue, but not by borrowing it.
However, for the government to borrow that money it would also add to I. While this might be useful counter-cyclically, it would be less efficient than printing it. Further, it would add to the total debt burden, and thus fail to address the long range problem: It would still contribute to a debt spiral.
So, barring government ‘printing’ at least the quantity I-E, the financial industry, by holding expenditures, E, less than the interest, I, on all loans outstanding, creates a shortage of money. There is simply not enough money to pay off all the debt and the interest. So they force the rest of the system into increasing indebtedness to them, in order to pay off the debts they already owe.. They force individuals, companies, and governments to take out more loans or default. They have simply created a shortage of money needed to repay the loans and the interest, in the real economy, while hoarding the rest of that money to themselves.
The financial industry has been doing this for years. That is why individuals, companies, governments and their countries' real economies, are gradually being ruined. That is why, in the US, for instance, total indebtedness has been climbing to over $50 Trillion, now about equal to all the US real assets. Great Britain, and many other countries are in worse shape.
http://www.comstockfunds.com/default.aspx?act=newsletter.aspx&category=SpecialReport&newsletterid=1504
(Check out the charts. The links are at the top of the page.)
The figures are incredible when you think that it’s most everybody that’s in debt. Indeed, is so called deleveraging (paying off debt) even possible, with so much debt? After all, annual interest on $50 Trillion, is about $2.5 Trillion, at 5%, which is more than the entire revenue of the federal government.
http://en.wikipedia.org/wiki/2010_United_States_federal_budget
Government austerity, by forcing all future increases in debt into the private sector, will inflict tremendous hardship and damage to the real economy.
This 'crisis' is just another step down the road, where the financial industry, in their eagerness to own it all, kill the goose that lays their golden eggs.
Subscribe to:
Posts (Atom)