Indebted To Lies

LIVING IN DENIAL ABOUT DEBT A PLUTOCRACY MAKES:
Abstract: Too many illusions governing, and a civilization dissolution guaranteed. A vast conspiracy extending from the financial right to the self conscious “liberal” elite, including the honorable conscientious liberal, Paul Krugman, claims that there is not that much of a debt problem in the USA.

Yet, a careful examination of the numbers and concepts involved shows that the esteemed pundits who howl urbi et orbi that there is no debt problem, coolly propose to steal Medicare and the Social Security Trust Fund.

This is pretty typical of the eerie manipulations that the powers that be engage in. Official progressives living in mansions end up in total solidarity with the plutocracy. One shudders at the possibilities.

Servicing Our Lords

Servicing Our Lords


Servicing too much debt is servicing plutocracy too much, and denial is its prophet.
***

UNDERESTIMATING DEBT IS AN ECONOMIC DRAG:
Why did the presidency of Obama bring only change that we can’t see? Bush has been gone more than 4 years. Yet, the giant tax loopholes for the hyper rich are still in place (including “carry interest“!).

Not to worry, say many of the self proclaimed liberals and progressives opinion makers. In their latest tactic, they claim that there is no debt problem in the USA. They observe contently that interest rates have never been so low, that the deficit has disappeared from places such as the state of California, and that Obama’s reforms have been the “f… big deal“, as the robust Biden said, and Krugman confirmed.

What that self satisfied elite omits is that interest rates are low because the economy is not recovering. In a self amplifying loop, total debt (also called “leverage”), so easy to acquire with low interest, so stifling to serve later, is obviously a factor.

Because debt is accompanied with interest, too much debt means too much interest paid. At the limit, the debtor owns nothing, the debtor pays interest all day long, and the debtor becomes a serf.
***

WHEN DEBT EXPLODES INTO SLAVERY:
Servitude from debt did not just happen in the Middle Ages. And it does not just happen to individuals.

In 2011 and 2012 Italy’s real economy was doing rather well: a bigger industrial sector than Great Britain, and no PRIMARY deficit (the USA primary deficit is 7% of GDP). Yet, Italy was engulfed in a catastrophic debt crisis.

How come? International investors asked for unsustainable interest to renew Italian debt.
Why they got in that mood, pouncing on Italy instead of Britain, say, is very complicated; but one of the factors is the madness of crowds; another, of course, is that the plutocracy has had a multi-generational conflict with France, and the Eurozone, or even the EU, is viewed as a dangerously French amplification machine.

During that crisis, Italian deficit (that is how much debt is added each year) came to be caused entirely by added interest on very old debt. (Total Italian debt was 121% of GDP when the interest rates charged to that country exploded.)

Greece went through something similar, just way worse (some Hellenic interest rates went above 100%).
Long ago, I advocated that Greece should default. This is what was done, in the end, because there was no other choice (although the default involved most of the governmental debt, Greece still owes hundreds of billions of euros, something that will have to be reduced further).

The European debt crisis abated in the second part of 2012 thanks to three factors. The most important factor was that unambiguous signals were given that France and Germany would do whatever it took to preserve the European banking system.

Thus the European Central Bank (ECB) was given a green light to stretch its mandate, and resort to USA style “Quantitative Easing” (QE). (The Europeans use another term than “QE”, in the hope that one does not feel they are just Americans infeodated to private finance as the government of the USA is!) QE consisted into sending a trillion euros to private banks, in the hope that they will show a profit. In the USA, QE has given to the banks more than 8 trillion dollars (about half of the yearly GDP). (See note on liabilities.)

The other cause of the abatement of the European debt crisis has been a ferocious crack down on deficits. Italy has no primary deficit, Germany has no deficit whatsoever. Even France is breaking hard to try to bring her deficit around 3% in 2013. Spain’s unemployment, now at 26%, keeps climbing, but the government helps ever less (after years of a delirious construction binge).

As Europe imports much of its energy, the climb of the euro, a consequence of these healthier finances, is viewed positively (it forces European industry to excell, a ball Switzerland and Germany got rolling, to great success.)
***

WHEN DEBT CUTS INTO THE BONE:
Many countries are overdoing the austerity: Germany has no deficit, but it’s interior demand has long been very weak, as it rested on the likes of Greek and Iberian madness. Now the German economy is contracting. In Great Britain, savage cuts are proving self defeating: the deficit is still above 7%, the country is rolling again in recession, with long term GDP numbers worse than in the depression of the 1930s.

David Cameron, an extremely rich scion, Britain’s chief, thinks smart to duplicate the degeneracy that afflicts the USA, ever since Reagan imposed Voodoo economics. Thanks to Cameron, it can cost 10,000 euros to attend public university in the UK. Such cuts, should they stick, guarantee that the historical strength of the West, intellectual power, will sink in England, as surely as the Titanic.

California does not have a deficit, Paul Krugman boasted. Sure. Because of horrendous cuts, through the muscles, into the bones. Say in education: the, supposedly public, University of California charges California residents more than $12,000 in tuition, about a quarter of the median USA family income. Another sneaky deficit fighting measure is to let children enter primary school a year later. Meanwhile health costs considerably more to the public, thanks to genial Obamacare.

No more education, no more health, while Paul Krugman, self proclaimed “conscience of a liberal”, extols California as an example. The hyper rich have something to celebrate, many of the richest of the elite still pays no taxes, thanks to loopholes that the media never talks about (while the working stiff pays nearly as much tax as in France, without any of the free stuff there).
***

LET’S LIE ABOUT FEDERAL DEBT: WHAT COULD GO WRONG?
Paul Krugman, much of the New York Times and much of the official left, claim that there is no debt problem in the USA: the debt is only 73% of GDP (less than France or even Germany). This chorus has recently been joined by the Congress Budget Office (CBO) and the Wall Street Journal.

And yet… The debt ceiling has been broken through. The ceiling was at 16,4 TRILLION. Total debt is now crossing $16.5 trillion. The USA GDP is around 15 trillion. Thus the debt is 111% of GDP, as the IMF says, it’s not 73% as many democrats claim.

USA Debt/GDP Worse Than During WWII

USA Debt/GDP Worse Than During WWII

(The green line above depicts what would have happened if Reagan had balanced his budget instead of practicing the Voodoo Economics that debt did not matter.)

If one tried to point to that fact, the 111% debt, the New York Times censorship bureau was long in the habit to find such news unfit to print, and would censor them immediately. They did this to me, dozens of times. I amused myself seeing the liberally correct establishment crack down on this apparently anti-liberal notion. the real extent of the debt. Another trick was to publish unfavorable comments informing me that I “did not know what I was talking about”, and should “do [my] homework“.

The Economist, apparently recognized that there was something good in this conspiracy to underestimate the debt. So it nebulously recognized that the debt was “actually 25%” higher than 73%. That is 100% of GDP.
But, as I said, the total USA debt is above 111% of GDP, and growing by 1% every two months. Not exactly a viable proposition. Those who deny this are, on the face of it, just sycophants of the present economic-financial system. As it is, the USA cannot apply to the European Union, on financial grounds alone. Ironical.

Debt is not computed in the same way in Europe and the USA. First, one has to distinguish “gross” public debt and net public debt. Net public debt subtracts fiscal assets (cash, bonds, shares) owned by the government.

When Europeans talk about the debt their states owe, they talk about the gross debt. That makes a huge difference due to the many assets owned by European states.

The French government could argue French debt is not that bad, because it owns shares in Renault, EADS, etc. The Greek government is busy selling various assets it owns to reduce its debt (countless islands, etc.).

But this is not the mentality ruling the bean counters in the USA. There those who want to under-estimate the debt of the government of the USA, far from being rigorous as the Europeans, go to the opposite extreme. They do NOT take into account the money borrowed FROM Medicare and the Social Security “Trust” Fund. Those who want to underestimate the debt of the USA do not count government bonds owned by the Social Security Fund since it is seen as one arm of government having a claim on another arm of the government.

This sleight of hand reduces the debt/GDP of the USA from 111% down to 73%. In other words, according to this subterfuge, the government general fund does not have to reimburse the five trillion dollars it owes to Medicare and Social Security. Paul Krugman and many at the New York Times and the CBO find this conscientious and liberal.
***

LITTLE DEBT, IF WE STEAL SOCIAL SECURITY & MEDICARE:
The debt situation shows that many of the many prominent American liberals are actually not liberal at all. They just play one on TV. Because the most important message they have about the Federal debt of the USA is that, the money owed to Medicare and the Social Security TRUST Fund is actually ZERO.

It’s cool with the New York Times, Krugman and company, if the government stole five trillion dollars to We The People. How conscientious and liberal is that?

But why should we be surprised? Did not the same crowd embrace Obamacare’ public subsidies to private healthcare plutocrats?

Some say that there is no danger. They assume that government bonds will stay as worthy in the future as they are now. Yet this will happen if, and only if the Greater Depression we are in extends indefinitely. If the economy happens to improve significantly, there is no way that the present bonds, with their extremely low returns, would interest investors. So the bonds would lose most of their value.

As the money those bonds used to represent would still be due to Medicare and Social Security, it could either be stolen outright, from The People, or it could be raised from taxing The People once again, for the same thing as they taxed for, before.

Hence ignoring the part of public debt held by the… public, through public institutions is sustainable, if, and only if, the economy keeps on sinking. How progressive.
***

TAX FREE RIDERS, TAX CARBON, SPURN UNPRODUCTIVE DEBT, EMBRACE JOBS:
So? Are the loud progressives dominating the media actually regressive? Would that be, by any chance, entangled with their membership in the plutocracy serving oligarchy?

By underestimating the debt problem, the problem of the present economy can keep on being underestimated. A huge deficit can insure that money can keep on been thrown at the People. And that the free riders will keep on riding for free.

Whereas what we The People need, to be fully satisfied, is jobs. Jobs don’t just bring money, but empowerment, pride, satisfy the instinct of utility, mental, and physical activity. A society where People work is fully human, a society where People don’t work, is not.

By realizing how severe the crisis is, jobs can be brought over to bear on the peoblem. Just to make sustainable energies work, millions of jobs have to be created.

Because those jobs would be profitable by definition, they are worth getting indebted for.

Take for example power lines. Power lines are needed because sustainable energy tends to jump around in space and time; lots somewhere sometimes, and then somewhere else, another time. Germany has wind in the north, sun in the south. Washington State has much hydro power in early summer, and not enough power lines to get it out. Much power line work is needed all over.

Windmills work. Especially the latest types, offshore. A problem, though, is that the wind does not blow all the time, or when needed. The same problem affects solar energy. Power lines cannot solve it all. But dams can remedy the rest.

In the case of offshore wind, the solution is obvious: artificial, multibillion dollars islands, to turbine up water in artificial reservoirs, when demand is slack. To build all these islands will surely be a lot of work.

Mandated weatherization of homes and buildings is another obvious target (that is done in some European countries such as France, but not in the USA, where the Obama administration just gave subsidies to weatherize one million homes; a completely different activity, as it redistribute taxpayer money, instead of leveraging private economic activity… without using any taxpayer money).

So here we are: face the debt problem. It’s enormous. Debt ought not to be used for everyday expense, but only for worthy investments, as used to be the case.

And if there is too much debt, the solution is not crushing taxes on salaried people (top tax margin in California is 52%, although the truly hyper rich still pays nought, as they are not salaried…) Nor is the solution savage cuts. Instead the tax system ought to be overhauled: make the richest individuals and corporations pay tax, and make the richest economic activity pay tax too (for example financial transactions ought to pay tax, like all other transactions do; 11 countries of the Eurozone have decided to do so.

Another obvious revenue generator is a worldwide carbon tax. If the USA cooperated with the European Union there, instead of opposing it ridiculously, the tax would become reality so fast it would have a positive economic effect right away. Verily the least carbon burners can do is to pay for the damage they are causing to the biosphere.
***

SERVICING CAPITAL IS LESS IMPORTANT THAN SERVICING NATURE:
On the most macroscopic scale, debt services the most wealthy persons, those who have the capital. That’s OK, civilization needs capital. For worthy investments. It’s not OK, when it gets out of control, and debt becomes a way of life.

By insisting that Federal debt of the USA is only 73% of GDP, one lives in denial. One more denial in a web of illusions. Too many illusions governing, and a civilization dissolution guaranteed.

At this point, we can emulate the immense Khmer empire around 1300 CE. We can refuse to change so long, that we cannot change when we are forced to. With one million inhabitants, the capital, Angkor, was perhaps the world’s largest city, larger than China’s Hangzhou. However, the Khmer devastated their ecology, precisely by doing as we do now: using up all the carbon around. That deforestation caused a massive drought, combined with intense floods, and the combination killed the capital of Angkor.

Maybe the Khmer were paralyzed by the debt they were servicing, and, certainly, they were paralyzed by the plutocracy that they were servicing.
What they needed to do was to repair the giant reservoirs they depended upon, that were fillong up by debris from the floods. And stop the deforestation. And they needed to do this in timely manner, when they still had the power. They waited too long, weakened, and were invaded.

The Maya also waited too long in a huge ecological crisis they contributed to, along the same lines. So it was with Sumer: deforestation, drought, salination, biblical (literally!) flood…

Rome went through something similar, long enough to debate the problem. However, the plutocracy barred the way to go further than that.

It’s always the same pattern: not working hard on the ecological problems, when they could still be solved, because one is paralyzed by a self obsessed plutocracy.

Why underestimate the debt difficulties of the USA, while maximizing bad rhetoric about those of Europe? Is there a pro-American cult out there? Not really. It is more a cult of capital, and underestimating the debt one owes to capital is part of it.
***
Patrice Ayme
***

Note on liabilities: Liabilities are more general than debt. Although this is too arcane to deal with here, QE extends the liabilities of the central banks, and one can view it as augmenting considerably, maybe 50%, German or French debt… But of this no one never talks. For example although USA debt is nearly $17 trillion, all the liabilities of the government of the USA go beyond $62 trillion…

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26 Responses to “Indebted To Lies”

  1. hedgefundguy Says:

    To Tyranosopher:
    You are correct sir!
    The reason economists and politicians use public debt and not total debt is that they know there is no way in hell they are going to pay off the bonds Social Security owns.

    Look at what the author in The Economist just wrote on austerity.
    Basically: The $16 Trillion of debt was caused by Social Security so we must punish the average guy.
    NPWFTL
    Regards

    • Patrice Ayme Says:

      Hedgefundguy: Your angle is interesting! I did not realize that they had given all hope, and that’s why they wrote the debt OWED TO Medicare and Social Security off!

      Ironically, applying this spirit to Greece would mean that there is no Greek debt, as there is obviously no hope to repay said debt…

      (Greek debt is still a spur to Greece; it is mostly used as an on-going motivation to change Greek ways and means.)

      A question for so called “liberals” though, such as dear Paul Krugman, is what is the “liberal” interest to take for granted that debt to SS and Medicare shall never be reimbursed?
      PA

  2. debt thoughts Says:

    [...] Indebted To Lies « Some of Patrice Ayme's Thoughts http://patriceayme.wordpress.com/A vast conspiracy extending from the financial right to the self conscious “liberal” elite, including the honorable conscientious liberal, Paul Krugman, claims that there is not that much of a debt problem in the USA. Yet, a careful … [...]

  3. Old Geezer Pilot Says:

    Excuse me Mr Hedgefundguy.

    I actually PAID for my SS benefits by working for 40+ years. Hedge fund operators (who pay taxes at the Romney rate of 13%) will take in 7 or 8 percent on 3 TRILLION DOLLARS without manufacturing a single widget. That works out to a few hundred billion bucks, which is entirely extractive from the economy and will have to be paid by…

    ME.

    Or rolled over into more debt.

    THAT, not SS, is the reason why the debt keeps rising.

    • Patrice Ayme Says:

      Dear OGP: I did not understand what Mr. Hedgefundguy wanted to say exactly.
      It’s clear that, as the government “borrowed” 5 trillion dollars from Social Security and Medicare, using them as revenue sources, those are not in deficit, far from it (the French Medicare For All, called Securite’ Sociale, is run as a Pay As You Go program, not from a Trust Fund, so that form of thievery cannot happen in France).

      The reign of hedge fund guys has been the reign of parasites. Those sort of people are the ones who made world War two possible; they were actually hedging between fascism and democracy. Enabling fascism, so doing. After soldiers and engineers won the war for them, they regained power after Reagan finished the down climbing from Eisenhower punishing 92% top tax margin. So now hedged fund guys think they own the world again. And they are hedging (again) between off shore fascism (tax heavens, industrial dictatorships) and democracy. While being careful to weaken the later as much as possible.

      A financial transaction tax, plus a worldwide carbon tax (that can be imposed unilaterally by the EU and the USA, as they control most of the world economy), plus punishing tax rates on the hyper rich, plus no more loopholes for the hyper rich (the latter two as under crazy leftist republican president Ike), would completely transform the deficit into a surplus. enough of a surplus to re-industrialize the world quickly in a sustainable way, providing with more than ten million jobs riight away between the USA and the EU (because enough new tech exists, that just has to be deployed).
      PA

      • Old Geezer Pilot Says:

        Apple’s money is not even stored in the USA; it is in the global financial cloud.

        That cloud is owned by Goldman et al.

        And I fear that Goldman et al in turn owns the USA.

        • Patrice Ayme Says:

          Dear Old Geezer Pilot: I agree with you. Most incredibly expensive homes in places such as London, Paris, the French cote d’Azur, are owned by international plutocrats…
          As Blomberg (ironical!) relates in
          http://www.bloomberg.com/news/2012-07-22/wealthy-may-hide-as-much-as-32-trillion-offshore-report-says.html:

          Wealthy individuals may have been hiding as much as $32 trillion offshore at the end of 2010, according to Tax Justice Network, a U.K.-based organization that campaigns for transparency in the financial system.

          The estimate is almost three times the organization’s last estimate of $11.5 trillion in 2005. Fewer than 100,000 people own $9.8 trillion of offshore assets, according to the research, carried out by former McKinsey & Co. economist James Henry.

          There is a “huge black hole in the world economy” of untaxed private wealth, Henry said in a statement. “The lost tax revenue implied by our estimates is huge.The amount held offshore means that 139 countries with external debts of $4.1 trillion at the end of 2010 would be creditors to the world, if as much as $9.3 trillion of cross- border holdings of their wealthiest citizens were taken into account, according to the research.

          The Tax Justice Network study drew on data from the World Bank, International Monetary Fund, central banks, the United Nations and company reports.”

          However, what I read (I forgot where, but it was recent, I thought it was the WSJ, but I searched back in vain!) is that some of the Apple cash, supposedly overseas, is not even overseas, but hid actually in the USA.

          The Treasury Department flew to the rescue of plutocrats today, slamming into the 11 countries, led by big bad France, which are in the process of imposing a Financial Transaction Tax.

          The repulsive French republic is already imposing its own FTT, and the proposed European one is aping it in all its gory details…

          What is going to happen to plutocrats if they have to pay tax? France taxing Americans? Even when they sit pretty in Manhattan? Gee!
          PA

    • Old Geezer Pilot Says:

      Also, the USA has to tax US corporations (like Apple) who store their profits in off-shore tax havens. (Apple’s 140+ billion dollars has evaded US tax collectors). There needs to be a tax based on WHERE the goods are sold.

      • Patrice Ayme Says:

        Dear OGP: Yes, getting taxed according to where the money is made is a necessary change to be made to tax codes, worldwide. As it is right now the tax structure allows to extract wealth from the core, same as was done in imperial Rome. The advantage is to weaken the core, absolutely and relatively, and thus prevents revolution.

        The Wall $treet Journal (!!) recently (2013) revealed that there was a pattern with companies such as Apple claiming that they had all this off shore cash, which they do… except that it’s not offshore!!! It just has an offshore label, but it’s stashed in the USA. So non only are they unethical, but illegal, too, but nevermind, the more they are, the more they rule!
        PA

  4. Lenny, Australia Says:

    “Whereas what we The People need, to be fully satisfied, is jobs. Jobs don’t just bring money, but empowerment, pride, satisfy the instinct of utility, mental, and physical activity. A society where People work is fully human, a society where People don’t work, is not. ”

    Jobs arguably bring empowerment if accompanied by agency. The trouble is, most “jobs” require us to be passive actors: foot-soldiers for the plutocracy. One thing that should really concern plutocracy would be a rise of Bohemian mentality. I decided a few years ago to quit my full-time job, resentful of my lack of agency or “power”. Not working for me is empowerment. Financially disempowering, but psycholgically empowering. Just imagine how pissed the “establishment” would be if we all decided on “poverty by choice” thus breaking the back of plutocracy. Of course, I recognise the inherent contradictions in this – My right wing “liberal” friends ague it patronising to those forced into “poverty by no choice”. I can morally justify this through arguing that my taxpaying contributions were only going towards wars fought (not in my name).

    Plutocracy will collapse when we stop worshiping the God of Plutocracy Mammon. Sigh. Like that’s every going to happen?!

    Thanks, Patrice for your posts. I always enjoy reading them and look forward to them.

    • Patrice Ayme Says:

      Thanks Lenny! I enjoy your comments, all the more as they come from Australia! Australia is another interesting case. Gillard is an OK PM (not like Harper in Canada who I cannot stand, although he is a francophone, and can play French on TV… He reminds me of Sarkozy).

      In Antique Rome, unfortunately, most of the Populus of the City had disconnected (and they had no choice). That suited the plutocrats just fine. Plutocracy fears revolution, not devolution.

      It’s true I should have formulated what I said more craftily. I am not at all of the school that any job is a good job, and all jobs are equivalent.

      Implicitly I meant “Significant, empowering, jobs”. Such jobs were very frequent in the Western societies up to a recent past. The USa during WWII was a society of fliers and engineers, and that is what beat Japan. Japan had excellent engineers, fliers, sailors. But orders of magnitudes less. The US Army could find 10,000 WOMAN fliers for ferrying (often dangerous) cargo across the Pacific (always in dangerous situations). I don’t know if Japan had ONE woman pilot.

      Now of course we have pathetic Boeing playing hedge fund in Chicago, having farmed out most of their engineering to peons worldwide. OK, not exactly peons, but sure incapable of demonstrating in the Windy City… Apparently Boeing is intent on employing only chauffeurs, maids, secretaries, and janitors in the USA… The same phenomenon is happening in many other Western countries (even France, although it’s not happening in France in aerospace). It’s not happening in Germany because of the very nature of the German socio-economy: there the plutocracy is local, too tied up locally, for example with apprenticeship locally (an example USED BY OBAMA in his SOU speech), and too small to flay the People…

      True not working can be empowering. That’s what outsmarting is all about.
      PA

  5. EugenR Says:

    Dear Patrice i found this relevant article, i published in my blog few month ago.

    http://rodeneugen.wordpress.com/2012/10/15/how-bad-is-the-accumulated-us-debt-to-the-world-economy/

    When the day of the US debt repayment comes the government will have three ways to repay it, either to increase taxes, to cut budget or to print money. Eventually which way to go will depend on the situation, the economy will be in the day of the repayment. If the unemployment of production capacity prevails, the government will do it by printing money, if the economy will be at full employment or close to it, it will rise the taxes or cut the budget (probably both). This government step would be necessary anyway, without to consider if there is need to repay debts or not. So the problem how to repay the domestic debts in the future in reality doesn’t exists.

    As to the bonds owned by the foreigners, this is mainly the foreigners problem (about half of it is of Japan and China). If they stop to purchase the bonds, it will cause depreciation of the US dollar against their currencies, assuming that production capacities are unemployed, this will increase the US exports and employment. If the production capacity will be fully employed, the depreciation of the US dollar will cause inflation, with it reduction of domestic consumption and depreciation of the value of the US debts in real terms. Again the foreign bond holders are paying the price. If the foreigners not only stop to purchase new bonds but start to sell the old once in huge scale, the effect will be in the same direction, but with much bigger and immediate response. This could be very devastative to the whole world and not only to the US or the foreign bond holders economy. Let us all pray, they don’t come up with such a policy.

    As mentioned above, the main problem with the huge US government debt is, that it was created to finance increased households consumption and government expenses, (mainly military), and not to finance investment to create additional potential capacity for future economic growth. To whom it is not obvious, increased government expenses used for education, health, infrastructure, are all investments with positive effect in the future potential economic growth, military expenses are not. (I don’t count the development of technology, that is side product of the military budget, since this aim could be achieved more effectively by investing directly into science and high education.)

    The main problem of the government debt is the growing interest rate, the government has to pay on its debts. This may negatively influence its fiscal economic policy flexibility. The solution to this is repurchasing government bonds by printing money, and if this step would cause inflation pressures, it can be corrected by increasing to the commercial banks the demanded minimum reserve requirement rate, that would cause credit squeeze, but also squeeze the relative size of the banking sector and relative size of public sector. To some it may seem a positive development, if judged the lately discovered lousy performances of the banks.

    • EugenR Says:

      I found an other relevant article

      https://rodeneugen.wordpress.com/2012/07/10/after-all-it-is-not-so-bad-with-the-us-economy/

    • Patrice Ayme Says:

      Dear Eugen: yes, it seems the banks are getting squeezed a bit, some of them at least… Since they were mostly lending to themselves and their accomplices, or co-conspirators, it’s no big loss…

      You explain well how to get out of the debt situation, but the trigger situation to enable it has to be … jobs. Profitable jobs, energy defined that way, otherwise the economy will just spin in vain, overheating without a grip… Right now there is plenty of money sloshing around, but it’s going nowehere interesting… So neither is the economy.

      My essay was targetting the hopeless position of the pseudo-progressives in the USA about debt. Instead of leveraging the notion, they deny it.

      At least Obama did pretty good in his state of the Union speech, he followed my line to the last dot on the last i. It was well done, even on Medicare/ACA situation he did well, as it’s possible to strike cost there… Not just possible, necessary and of the essence… The flaw of ACA was not to target cost.
      PA

      • EugenR Says:

        Dear Patrice, surprisingly i think i have some suggestion for a new economic development trend;
        The financial-economic system demanding continuous economic growth would have to be changed and economic growth demanding additional world resources would have to stop. New technologies that don’t demand additional economic resources, or even better reduce the need for such resources, have to be encouraged, but otherwise the brakes have to be put on economic growth. This means no more additional cars running on the world roads, no more energy-consuming Products, but more clean technologies producing energy, more industries supplementing the existing raw materials, more technologies supporting life styles with less demanding transportation systems.
        Even in food production, the emphasize should be on food produced in biological processes with a positive ecological footprint. A good example is supporting food production from algae, consuming CO2 out of the atmosphere, and not from livestock with its huge negative impact on the world environment. This goal can be relatively easily achieved by taxing the wasteful Products.
        Is every kind of economic growth ecologically damaging? definitely not. Growth that does not demand world resources, energy and raw materials is not damaging in this way. Examples include the business of recycling or producing alternatives to basic raw materials like nanotechnology materials carbon- and silicon-based that can substitute for metal materials, biotechnological processing that are saving natural process productions based on agriculture, alternative energies that do not have ecological footprints like wind energy, solar energy, fusion atomic energies, geothermal energies. Most of these new technologies are not yet available, and so the economic growth should be by investing to development of these technologies but definitively not by subsidising 80% of the consumer prices as happened with solar energy panel development (in Europe). Economically and also ecologically these products were counter-productive, and did not fulfil the expectations of development of new technologies, while scientists working on laboratory prototypes with as yet uncertain feasibility outcomes cannot raise funding for the further development of their ideas.

        One of the ecologically most devastating of human economic activities is agriculture. It occupies most cultivable land, leaving only marginal land (mountains, uninhabitable regions) to the natural world, and also widely uses pesticides and fertilisers which cause ecological disruption. The practices of growing mono-production , whether of cereals, maize, soya, rapeseed etc prevents the creation of natural ecosystems. Industries producing alternative food resources should be introduced and changes of dietary habits should be encouraged. Many see agrarian activity as part of the cultural heritage of the country, and even the agrarian fields as the countryside’s natural state, yet if agrarian land could be released from its agricultural usage, something more like a genuine natural state would return.

  6. Hazxan Says:

    Always like the way you show how our current woes are repeats of history, Patrice. It is almost surreal to be here, now, in the middle of a world repeating all the mistakes it made before. Yet unable to change.
    Part of the craving for growth is that it avoids the need for redistribution. Without growth, the economy is zero sum.

    Patrice, have you ever written about the psychology of plutocracy? Is it an aberration or inevitable outcome of a system? Is that system flawed? I’ve been reading your articles for many months now, but there were many you wrote before, so maybe you have some previous writings you could link to, thanks.

    • Patrice Ayme Says:

      Dear Hazxan: Yes, I wrote a lot about fascism (generalized), evil, etc. And thus, as it turns out the psychological roots of plutocracy. I have an earlier site called Tyranosopher (It was managed for me, so I had, and have, no control of it, and comments cannot be made). Then there are 436 essays on “Some Thoughts”, WordPress, for well above a million words (more than ten times the Qur’an!) The plutocratic mood is much represented throughout, as it shows up in all human organizations, and even science (and of course philosophy).

      I know I should provide links to older essays, and sometimes I do. But it’s difficult to do, especially as my main computer is obsolete, and publishing with it is time consuming.

      The fascist & evil instincts, in combination with capital, necessary for civilization, interest & exponential, hard to avoid, create the plutocratic phenomenon. it is a complex effect that has long been around, and so have been the ways to fight it. Primitive Vikings 12 centuries ago knew more how to fight it, that Bushama America!

      OK, I have to write an essay on the Quantum, revisited, one on the Dark Side, kind of saluted, and I should write down a clear essay on AWE. Meanwhile I am amusing me with a mix of meteorite and donkey lasagana chemically altered with poison… Somebody also wants me to write something for UC Berkeley (one of the rather plutocratic universities, hahaha)… Lots to do…
      PA

      • EugenR Says:

        Dear Patrice, i just saw the following representation on TED and seems to me very relevant to the subject of Plutocracy.
        I assume it is nothing new for you. Me, not coming from academy, but from the practical world at its margins touching the world of plutocracy, the presentation (not the reality) is entirely new,

        http://www.ted.com/talks/james_b_glattfelder_who_controls_the_world.html

        • Patrice Ayme Says:

          Thanks Eugen! Very interesting. I was aware of the studies, which have been (re)published in New Scientist, and I think I mentionned it on this site at the time when they first surfaced. But it was extremely interesting to read the talk (the video did not work for me, but i prefer to scan a text, which can be done at hyper speed!) Indeed he had other, specific elements.

          The basic observation is this: there is something called leveraging, and it does not happen just with levers. And it does not just happen with finance. it happens with influence. Those who are on the top of the world can roll a snowball down, and sweep us to oblivion in an avalanche. The solution? Not allow slopes to get overloaded with what could crush us.

          It goes without saying that this simple physics has not been integrated in today’s world. So too much power ends into too few hands. and it’s not just about ownership. It’s also true in politics. Or even academics.

          Anyway keep more information such as this coming, it’s very interesting.
          PA

  7. yurilee Says:

    Dear Patrice:
    I found your articles truly incisive and interesting to read.
    As a new to the site, I congratuates your cutting visions about the truth!

    • Patrice Ayme Says:

      Thanks a lot, Yurilee, and I hope to read questions or comments you have. If they are as nice as your compliments, I will be very happy! I have an essay on Cyprus coming imminently…
      PA

  8. Indebted To Lies Plutocracy Is | Some of Patrice Ayme's Thoughts Says:

    [...] economics. Its repercussions are horrendous: in conjunction with what i already denounced in “Indebted To Lies” (February 12, 2013), all you read about debt is false. As Paul Krugman puts it cogently in [...]

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