Friday, December 28, 2012

On Austerity For Nations VS Households

The following is an excellent explanation on austerity which may help some people understand what's going on.





Austerity is good for individual families and households - indeed, it is 
essential. What's spent by a household goes out of that household and very 
little of what gets re-spent out of that household into and beyond the 
community finds its way back to that household. Wealth becomes correspondingly 
more scarce for the individual or household which spent it and spent for one 
service or commodity is no longer available to that individual or 
household to spend on something else. Austerity is a good strategy for individuals 
and households, keeping back some of that wealth to spend on needs or to 
use on better opportunities and investments.

Austerity is disaster for nation-states. 

Here is why programs of austerity are wrecking Europe and threatening to 
destroy the American economy. Wealth spent within the community gets 
re-spent and re-re-spent within the community and some of that re-spending finds 
its way back to products or services offered by that household, enterprise 
or family. That moves products and services, signals and pulls people and 
resources into productive activity and keeps them productive so that more 
wealth is being produced. This is the "Multiplier Effect" economists talk 
about - how a dollar does the work of several dollars as it passes from hand 
to hand in the exchange of goods and services. The more work that a dollar 
does - let's say, its passage pulls into play five dollars' worth of goods 
and services - the higher is that particular infusion's "money velocity," 
in this instance a value of 5.0. 

Austerity means less money in circulation, less wealth being created, less 
wealth pulled into play, fewer people and resources being pulled into 
productive activities to create that wealth. One hardly needs to be a follower 
of the leading economist John Meynard Keynes to understand and appreciate 
his analysis of what happened in the Great Depression: that if you take 
away people's ability to buy your goods and services, you are not expanding 
your market very well! 

Austerity programs in Europe have taken away the ability of most people 
and enterprises there to buy products and services from each other. Thus the 
wealth is not being created there the taxes and revenues from which would 
retire the overload of debts which was the reason given for the austerity 
demands in the first place. The austerity we have been practicing here in 
the States is a large part of why our recovery from the panic of '08 has 
been so slow and painful. The austerities forced by our (the USA's) fall over 
the fiscal cliff, combined with those forced by our immediately pending 
collision with the statuatory debt ceiling, for all that both situations are 
artificial having been caused by our short-sighted and reckless political 
maneuverings, are likely to do far more damage than anything we have seen 
to date. Some Congressmen and some millionaires can play their games and 
then move their monies to variously sheltered accounts elsewhere in the 
world - the rest of us pay for whatever mistakes are being made.

Nation-states DO need fiscal restraint and responsibility- otherwise, they 
soon find that they can't purchase much for their promises. But the 
Multiplier Effect also runs in reverse. If the money you withhold and take out 
of the economy has a velocity of 5 and you take $100 billion out of the 
economy, other things equal, you have reduced the wealth of that economy by a 
half trillion dollars. The grocer and his employees can no longer afford 
to buy from the baker, the baker and his employees can no longer afford to 
buy from the grains and flour wholesaler, who can no longer afford to buy 
from the miller, and the farmer likewise, etc. And so the withdrawal of the 
dollar whose infusion into the economy does the work of many dollars, 
creates the absence also of many dollars when it is withdrawn, and that many 
people involved are no longer receiving the returns and signals and 
inducements for the productive activities which create wealth. 

Prediction: Inflation is going to strike heavily at Europe before, and 
much more strongly than, it hits the American economy. Prices spiraling 
upward is the result of too much money chasing too few goods and services. A 
scan of the media or of the Net has by now shown you dire predictions by 
various economic pundits of major inflation hitting the States. Maybe so, but 
if so Europe will be much harder hit, because austerity there has rendered 
many more of its people and businesses unable to buy products and services 
from each other, thus Europe, now in the second "Dip" of the Double-Dip 
Recession, is producing far fewer products and services. The third "Dip" will 
be when further interruption of productive processes will occur from 
resulting social disorders like we saw in the Great Depression. The pity of all 
that is that as we head into the new crash, the latest economic reports 
were showing that both unemployment and the housing market were finally 
healing at a much-improved pace of recovery from the wounds inflicted in 2008, 
so that sanity - so often the last thing to recover - would soon have had a 
chance to result in rational economic and political decisions and 
behaviors. The darkness into which we appear to be headed may instead last for a 
very long time.

The more that austerity ruins a nation's economy, the more unsound that 
economy appears, and the greater impetus there is toward imposing more 
austerity. The outlook for Europe could stand some improvement. If the States 
go over the "fiscal cliff" this December 31, or if the USA shuts itself down 
in its collision with the statuatory debt limit, our own outlook here can 
also stand some improvement.

Any idea or theory or practice or ideology, if extremely pursued to the 
exclusion of all other considerations, gives rise to monstrosities. If our 
doctrinaire economists and idealogues weren't so tunnel-vision, this lesson, 
which should have long since been driven home by our experience of the 
cascade of wealth-stream interruptions which gave us The Great Depression and 
eventually World War II, this lesson should have been painfully obvious to 
any of our experts who have been entrusted with handling such matters. 
Let's not be Keynesians or anti-Keynesians, let's simply recognize that in 
the affairs of great nations, the Multiplier Effect is a major factor 
compared with the situation of individual families and households where wealth 
once spent is much less likely to come back to pocket, that you need a 
different balance between austerity and investment and that both are needed 
together, not in exclusion of each other. "Balance" is the key.

The household that practices consumer restraint and austerity, will tend 
to survive, to have preserved some of its wealth for when need arises, and 
for when more advantageous purchasing opportunities arise. Where little or 
none finds its way back to you once you've spent it, there is no Multiplier 
Effect to help you, and practice of austerity - other things equal - is 
well recommended. In the affairs of nation-states, the Multiplier Effect is 
one of the main elephants in the room, and our doctrinaire and careless 
pursuit of austerity sets us up for some pretty severe trampling. wenger


History Of The GOP, The Dufflepuds & The Depth Of The State Of Denial

"Have not the parties of the Left as well as those of the Right been deceived by believing that the National Socialist Party was in the service of the capitalists and opposed to all forms of socialism?" The Road To Serfdom  by F. A. Hayek (Page 6)

What are dufflepuds? Answer = YouTube Clip (i.e. C.S.Lewis was the first to notice this and gets all the credit, also, not all dufflepuds have this general shape, though most seem to... and ALL have 2 legs.)

This is what Fox News and the GOP wanted in 2008/9....

They wanted downward adjustments in everything but war spending... AND STILL DO! (i.e. part of what Ron Paul calls 'militarism').

When trying to convince people not to do a Stimulus... this was the argument put forward by the Republican National Committee and Fox News i.e. spending leads to a depression... but that's not the best part, the best part is that they were arguing that SPENDING ON WAR (NOT ON PEACEFUL ACTIVITIES) leads to recovery (people seem to have forgotten about that crazy "debate"!)

Explanation: That spending is good for an economy shouldn't be debatable. If you have a business and nobody buys your stuff (i.e. if no spending occurs) you will make no money. This is basic economics, even George Bush wanted people to spend to boost the economy, he just wanted it to be ALL on consumer spending while the Government focuses it's spending on war in Afghanistan and Iraq. The debate should be instead on WHAT FORM OF SPENDING SHOULD BE CARRIED OUT. I support peaceful spending activities (done properly, transparently and efficiently), while the GOP and the Paul Ryan Plan goes the other way.

What happened before that...

The housing bubble was created by the FED and Bush, which led to the largest job loss in history UNDER GEORGE BUSH'S WATCH... Obama has almost got us back to where we were before Bush and his Wrecking Crew, i.e. ...


As for why jobs haven't come back in full from the largest job loss in history under Bush's watch... can be explained by JUST one Federal Policy which was SPED UP under Bush's Watch ( off-shoring/outsourcing)..."You have told the American people that you support a trade policy which is selling them out." ---Rep. Bernard Sanders to Federal Reserve Chairman Alan Greenspan on 7/16/03... (On sending PRIVATE SECTOR JOBS OUT OF THE US)

What are the Dufflepuds talking about? 

A summary of perspectives on "Socialism" in the GOP/Fox-News-Network...

"Have not the parties of the Left as well as those of the Right been deceived by believing that the National Socialist Party was in the service of the capitalists and opposed to all forms of socialism?" The Road To Serfdom - Page 6

Summary of "Socialism", Keynesian Economics & "Road to Serfdom" (by F.A.Hayek)

The average GOP Republican has the intelligence of the dufflepuds in Chronicles of Narnia part 3... except they use the word "oppressor" not "socialist".

Dufflepuds =

"It cannot be denied that there is yet little recognition of the positive ideals for which we are fighting. We know that we are fighting for freedom to shape our life according to our own ideas. That is a great deal, but not enough. It is not enough to give us the firm beliefs which we need to resist an enemy who uses propaganda as one of his main weapons not only in the most blatant but also in the most subtle forms." The Road To Serfdom - Page 5

One: On Socialism

1. Socialism by Robert Heilbroner (Article From Library of Economics): "Socialism—defined as a centrally planned economy in which the government controls all means of production"

2. What Is Capitalism?

3. Perspectives of the absurdity of the GOP's creation of Socialism from The Daily Show...

Socialism 1:

Socialism 2 (Mitt Romney's IN YOUR FACE hypocrisy!)

"This is a truth which most people were unwilling to see even when the similarities of many of the repellent features of the internal regimes in communist Russia and national-socialist Germany were widely recognised. As a result, many who think themselves infinitely superior to the aberrations of Nazism and sincerely hate all its manifestations, work at the same time for ideals whose realisation would lead straight to the abhorred tyranny." The Road To Serfdom - Page 4

Two: On Ronald Reagan (This part proves that the GOP-Conservatives are composed mainly of Dufflepuds, beyond a shadow of a doubt, for most people.)...

1. Introductory Video 1 - Moment of Zen - Ronald Reagan supports unions and collective bargaining in a speech from the 80s. (00:09) =

2. Introductory Video 2 - Moment of Zen - Public Employee Union vs. Wall Street Bonus Contracts:

3. The relationship between Republican governors and their states goes from cool new boyfriend to psychotic stepdad.

(Notice the elimination of social structure and jobs; By decreasing the social services available to lower incomes you have a break down of society at the social level of the lower to middle income class. This causes a great deal of stress on the economy and family structure of a country.)

[Originally published here =]

The subtle change in meaning to which the word freedom was subjected in order that this argument should sound plausible is important. To the great apostles of political freedom the word had meant freedom from coercion, freedom from the arbitrary power of other men, release from the ties which left the individual no choice but obedience to the orders of a superior to whom he was attached. The new freedom promised, however, was to be freedom from necessity, release from the compulsion of the circumstances which inevitably limit the range of choice of all of us, although for some very much more than for others. Before man could be truly free, the "despotism of physical want" had to be broken, the "restraints of the economic system" relaxed.

Freedom in this sense is, of course, merely another name for power or wealth." The Road To Serfdom - Page 25-26

Three: On Fox News (Sources of disharmony for personal gain, all right-wing social problems, - including the Norway Killer -can be traced to Fox News... these are their principal actors)...

1. Bill O'Reilly Defends His Nazi Analogies...

2. 24 Hour Nazi Party People...

3. Glen Beck's Nazi Tourette's Syndrome...

4. Glenn Beck agrees with the CIA... that Osama should attack America!!!! =

I would like to make it clear that Socialism is when ALL PRODUCTION IS HANDLED BY THE GOVERNMENT. Saving one industry because a bankruptcy with no private funding available would have destroyed the US auto-industry is admirable NOT "Socialism". This is just one more example of how the GOP and Fox News ARE waging a class warfare AND are LIKE a CULT of UNConstitutional Capitalists!

In other words, the new "conservatives" are actually Nazi type socialists using a propaganda network, very much like the Nazis, through corporations embedded in the Federal government to do basically what the Nazi's did. I know, History repeats itself. But this is crazy.


Proven: The Koch Brothers ARE Waging War On Obama & US Citizens!

Related F.A.Hayek Quote:

"Because of the growing impatience with the slow advance of liberal policy, the just irritation with those who used liberal phraseology in defence of anti-social privileges, and the boundless ambition seemingly justified by the material improvements already achieved, it came to pass that toward the turn of the century the belief in the basic tenets of liberalism was more and more relinquished.

What had been achieved came to be regarded as a secure and imperishable possession, acquired once and for all. The eyes of the people became fixed on the new demands, the rapid satisfaction of which seemed to be barred by the adherence to the old principles. It became more and more widely accepted that further advance could not be expected along the old lines within the general framework which had made past progress possible, but only by a complete remodelling of society. It was no longer a question of adding to or improving the existing machinery, but of completely scrapping and replacing it." The Road To Serfdom - Page 19

IMPORTANT NOTE: The GOP is confusing people by taking half of thier ideas and implementing them to get consensus... knowing that setting up a stool on two legs is doomed to fall.

"It cannot be denied that there is yet little recognition of the positive ideals for which we are fighting. We know that we are fighting for freedom to shape our life according to our own ideas. That is a great deal, but not enough. It is not enough to give us the firm beliefs which we need to resist an enemy who uses propaganda as one of his main weapons not only in the most blatant but also in the most subtle forms." The Road To Serfdom - Page 5

"The attitude of the liberal towards society is like that of the gardener who tends a plant and in order to create the conditions most favourable to its growth must know as much as possible about its structure and the way it functions." The Road To Serfdom - Page 18

To take action without research makes you dumb... NOT patriots.