Another Economic Update Coming from Government

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Sean in Ottawa

JKR-- I do not mean literally bankrupt since a government of a country such as Canada can't be literally bankrupt.

However, it is possible to damage the government's finances such that future programs are no longer possible.

If we accept that immediate massive tax hikes are not possible (indeed the reductions in taxes came over many years) and running deficits not possible, I believe that the Cons intend to leave the government in such a state that major social programs will not be possible in the short term and a government runnign a long program of tax hikes may not be viable over a long term.

In other words if we reduce the fiscal capacity of the government to the point where it would take more than one term of progressive tax hikes you have made it no longer possible to enact much in the way of new programs. This is not a literal bankruptcy but it is in the sense that the government would be intentionally driven in to a place where it could no longer make decisions to enact programs.

I do not believe that we have ever had a party target the national finances with an eye on the viability of future government decision-making before but I am arguing that this is exactly what we are seeing. As outlandish as this accusation may seem it is a more simple and reasonable explanation that the chronic series of mistakes we would have to credit a bunch of people we have every reason to assume both know better and have a motive for pretending they don't.

Sean in Ottawa

I don't believe we have seen any Canadian government so purposely drive the national finances over a cliff before.

Fidel

Apparently in the next two and half years, the last eight years' worth of federal debt service payments will be wiped out. Banksters love high quality debt like Canada's with 33 million co-signers, lax environmental laws, oils sands from here to eternity, and a government that doesn't believe in full employment or competitive economies in order that their parasitic creditor friends continue bleeding the country slowly but surely without actually killing the host.

JKR

Sean in Ottawa wrote:

I am arguing that we do need to all understand that this government has moved from a battle over the current government to a future one.

I think many governments are able to tie the hands of future governments. Progressive governments do this by establishing programs like medicare and social security that conservative governments dare not touch.  This is why Harper and company were so opposed to the national day care program that was almost implemented by the provinces and federal government.

The next government will be able to tie the hands of future Conservative governments by establishing programs such as enhancing medicare to include pharmacare, home care, optometry, dental care, national daycare, mass transit, etc...

 

Fidel

We'll tie our stooges' hands with expanded social programs that have existed for years and years in a gaggle of other rich capitalist countries!

JKR

Sean in Ottawa wrote:

If we accept that immediate massive tax hikes are not possible (indeed the reductions in taxes came over many years) and running deficits not possible, I believe that the Cons intend to leave the government in such a state that major social programs will not be possible in the short term and a government runnign a long program of tax hikes may not be viable over a long term.

If we accept those things, we are doomed. But we don't have to accept them. This is especially true concerning deficit spending.

I think the taboo of running deficits has been broken during this "great recession." Ottawa and the provinces have all taken on deficit spending to spur economic growth and the world has not come to an end. I think governments in Canada have the political capital to implement new programs and run mid-size  deficits until the economy grows enough to cover the deficits.

The problem in the US is that their economic stimulation package was too small. It should have been for $2 trillion instead of $1 trillion. If they had added $1 trillion to their rescue package, unemployment would be way down from where it is now. More people would be working and paying taxes to reduce the deficit. Paul Krugman has done a wonderful job explaining this.  Keynesianism is back.

The next government could spur economic activity by implementing new social programs and new infrastructure programs. This would bring unemployment down and increase government revenues in the long term that would bring us back to surplus budgets. A strong economy can turn huge deficits into surpluses in a very short time as we saw 10 years ago. As long as unemployment is high and inflation is low, governments should make huge investments to spur the demand side of the economy. This will provide long-term economic growth.

Tax increases can wait until the economy is going strong again.

thorin_bane

I think deficit will still be taboo if you don't have the pedigree of the cons...for some damn reason?

I know I have brought it up, but like many things on babble it does often take a back seat. Of course I AM a conspiracy theorist so I am not taken serious on some of this stuff. Unfortunately it sounds more tin foil hat to those that don't see this onion of devilish details. How could something so complicated be enacted without it falling apart? For that reason alone-people don't believe it could happen so it easier to get away with. It seems too grotesque for it to happen in our own country even if it is true.

KenS

Sean in Ottawa wrote:

If we accept that immediate massive tax hikes are not possible (indeed the reductions in taxes came over many years) and running deficits not possible, I believe that the Cons intend to leave the government in such a state that major social programs will not be possible in the short term and a government runnign a long program of tax hikes may not be viable over a long term.

JKR wrote:

If we accept those things, we are doomed. But we don't have to accept them. This is especially true concerning deficit spending.

I think the taboo of running deficits has been broken during this "great recession."

Of course it will still be possible to break the taboos of raising taxes and short term deficits for program spending. But it vastly overstates to sy the taboo has been broken. Tax increases are still a third rail. Look at the Liberals: we're past the extreme hysteria about deficits and obsession with tax cuts, but the Liberals will still not go near tax increases.

And thats what the Harper government is doing, not making program spending impossible. But hobbling it at least Liberals through the Chetien years up to the present as opposition were only willing to propose program enhancements when there was a cookie jar of contrived surpluses [foscal slack built into budgets short and long term] in the Martin years, or when there was a short term cookie jar around [Ignatieff last year]. When programs can only be paid for with a tax increase- even a very modest one like a point back on corporate tax- the Liberals just wont go there [Ignatieff this year]. And they wont change when they are governing, frightened of the Cons shadow.

The Cons changed the landscape by structurally removing from the Liberals the only way they are willing to fund any new or enhanced program spending. That doesnt make it impossible to achives, but it is a big pile of new boulders in the road.

KenS

A related thing is that I dont think intentianality- what different parties/governments- intend to do is not the real issue.

I dont have time to get into this now, but this means there is in fact less difference with the Liberals. The Chretien/Martin team did not just do what someone had to do. They deliberately reduced the scope of overall government [prov and fed] spending. Like good Liberals they kept a little fiscal capacity for themselves only, to do some modest program spending when they deemed it [politically] necessary.

This reduced the fiscal capacity, and made it easy for the Conservatives to squeeze a little further. so what that the Cons took it to lengths the Libs never would? Especially since now the Libs are predictably living with where the Cons have sfurther quezzed fiscal capacity to.

remind remind's picture

You know along this same vien, of starving future governments Sean, we  have watched it happen with our local government body.

And it was planned.

The former mayor, who was retiring, supposedly in a vacuum/whim decided to enter into all these private enterprise contracts of surface (read cosmetic) revitalization, as opposed to infrastructure spending. So now, the finances  of the community are so tied up  that nothing can be done for at least 5 years. And the tax base is now so high that should something befall the community, they can't even raise taxes to pay for it.

Even right down to privatizing garbage pick up, we have followed the destruction of government model proposed and now undertaken by the CONs. One wonders how many other cities and communities have  had the same thing done?

 

Micro and macro really.

 

KenS

In the same way, when all is said and done it doesnt matter whether or not the Conservatives intend specifically for the failure of stimulus funding.

Just by doing whatever they please regardless of future costs [the jets] and by cutting revenues, they are deliberately hobbling the choices of future governments.

KenS

Sean in Ottawa wrote:

 This is not a literal bankruptcy but it is in the sense that the government would be intentionally driven in to a place where it could no longer make decisions to enact programs [without touching the third rail of significant tax increases].

I do not believe that we have ever had a party target the national finances with an eye on the viability of future government decision-making before but I am arguing that this is exactly what we are seeing.

We agree on this.

And I'm not sure what to make of you continuing to say, 'show me where people have been talking about this'.

Above I distinguished this thesis which has been around and which I've been saying since the first half of 2007, then there is your thesis saying among other things that the stimulus spending is designed to fail, etc. [post#46]

I already said your specific thesis- sort a sub-species of the other one- I have not seen here.

I asked, and you have not clarified, whether recognition of what is in the quote above here is sufficient.... or whether you think people also have to 'wake up' to the reality you see that planned failure and waste in the stimulus spending??

I.E: not that you can support your idea that it the Cons go so far as to have planned failure of spending, and that it is solely/mostly for wrecking purposes. But whether you think its a minimum neccesity that people understand this is happening? Becasue I dont agree it goe that far. But I also dont think it matters. Because what I agree happened and is happening leads to the same conclusion as your quote above.... which I think is "all" people need to understand.

JKR

KenS wrote:

Of course it will still be possible to break the taboos of raising taxes and short term deficits for program spending. But it vastly overstates to sy the taboo has been broken. Tax increases are still a third rail. Look at the Liberals: we're past the extreme hysteria about deficits and obsession with tax cuts, but the Liberals will still not go near tax increases.

There are two different taboos here. One is the taboo on deficit spending and the other is the taboo on raising taxes. The deficit spending taboo is relatively weak now while the taboo on raising taxes is as strong as ever. Since the taboo on deficit spending is weaker then the taboo on raising taxes, governments can implement programs by first going into deficit. Once these new programs are implemented and made a fait accompli, subsequent governments will have to find the funds to sustain them. If the economy grows enough, higher taxes may not even be required to sustain them. Otherwise taxation levels will have to be raised. This is what has happened in social democratic countries like Sweden, Norway, Denmark, and the Netherlands. In these countries, social democratic parties had a clear idea of what kind of country they wanted and implemented the programs needed to achieve it. Afterward they found the taxes required to support these programs. Now even right-wing governments in these countries have to maintain these established programs.

What's most important for progressive parties is that they have a clear vision of what programs they feel society should have and not fear going into deficits in order to implement them. This requires a clear concept of what society should look like. The NDP and Conservatives seem to have a clear idea of what society should look like. The Liberals don't. The NDP envisions a country like Denmark or Sweden. The Conservatives also have a clear vision. They want to erode social programs as much as possible and look to the US as their model. The Liberals have no real vision of what Canada should look like. They take their cue from the NDP and Cons and then try to find a middle ground that gives them as great a political advantage as possible.

But the good news here is that progressive polices will be implemented if the NDP can come up with a compelling vision of Canada.

Instead of focusing so much attention on the misdeeds of the Conservatives and Liberals, NDP'ers should fashion a vision of Canada so compelling that Canadians buy in to their program. I would like to see a day on Babble where there was no mention of how terrible the Liberals and/or Conservatives are. The only thing mentioned on that day would be ideas of what Canada could look like in the future and how we could get there.

KenS

JKR wrote:

The deficit spending taboo is relatively weak now while the taboo on raising taxes is as strong as ever. Since the taboo on deficit spending is weaker then the taboo on raising taxes, governments can implement programs by first going into deficit. Once these new programs are implemented and made a fait accompli, subsequent governments will have to find the funds to sustain them

Bluntly: wont wash. [the highllighted part]

Because the other political environmant shift is that you have to say how you are going to pay for what you propose.

For example, last year: the Liberals said they would pay for EI enhancements [extensive but temporary] with a delay in the corporate tax cuts they had set in motion when they were governing. The NDPs proposals were more sweeping and permanent, and they were linked to the permanent cancellation of the scheduled corporate tax cuts.

It is not tenable for anyone to simply say will finance that out of deficts, and move to sustainable financing 'later'. You just cant do that. [And in the hypothetical if you tried, it would mean tax increases... that third rail.]

I think its possible to lay out a new vision that ultimately includes the "possibility" of tax increases. But we arent there now.

More to the point- you know the Liberals will not consider going there. They have already fallen into line with the reduced possibilities set up by the Harper government.

That is a substantial change brought in by the Harper government. It is more pernicious.

And while the NDP is not enslaved by the taboo of tax increases to the degree of the Liberals- witness last years NDP initiative... the NDP is going to have to go further than that at some point. Its not as easy as people around here think [just need the "guts"], but it has to be done.

KenS

The current manifestation of this narrowing of possibilities on future governments done under the radar is that now that those corporate tax cuts have come, the Liberals would not consider rolling them back. And despite some mumbling to the left side of the audience, nor will they consider bring back a point of the GST/HST.

At least the NDP would say "cancel the corporate tax cuts". But that was last year.

Will they this year say that we'll roll back the tax cuts by increasing corporate taxes to where they were? Or some other means of recouping tax revenue cut by the Conservatives [and Liberals]?

We shall see. I think it will take some advance prep before going there- and we have yet to see that kind of leadership from the NDP.

Election cycle agendas are harder/slower to turn on and off than people around here think. So I dont expect to see anything new- even tentaive- on the tax front from the NDP before the next election. But if not then, its high time to be getting down that road.

alan smithee alan smithee's picture

The Harpercons are geniuses.

So far,everything is going as planned.

Canada's priorities are exclusively military,police and prisons--war and crime and punishment.. And with this record deficit this sets the stage for the gutting,dismantling and destruction of the Canadian state.

Didn't Harper say that we wouldn't recognize Canada when he got through?

And here's the sheer beauty of it all.....The Cons are GAINING support.

BIGGEST DEBT IN CANADIAN HISTORY and these guys are the stewards of the economy?....This is the government Canadians trust most with the economy?

So congrats to our esteemed leader,his minnions and to the Canadians blinded by selfishness,greed and complete idiocy who are propping up these bastards and having them flirt with a majority.

We are fucked.

KenS

Baloney.

They arent gaining in popularity.

They are stalled. And particularly with people who have never stopped wondering whether they can be trusted. You may think thats obvious. But it isnt to lots of swing voters who are open to them. But after 4 years they cant move the numbers of people who might vote for them but continue to see them as at least kind of scary.

They arent geniuses. Want they are doing by stealth is not rocket science. And what they try to do out in the open tends strongly to blow up on them... so that theat eleusive majority gets more out of their reach.

And now after years of this hardball nasty politics, if they dont get a majority, they are unlikely to govern another time as a minority.

There are sufficient political openings out there. Not easy. But available.

Sean in Ottawa

Actually it was Mulroney.

And you can't.

alan smithee alan smithee's picture

A new EKOS poll has the Cons with a 7 point lead over the Libs....The interesting thing about this poll is supposedly the Cons are down 3 points in Quebec so make with that as you will.

I try not to pay attention to polls but you'd figure with a record deficit,the country's lost respect on the world stage,the blatant lies,the wedge politics etc...that the Cons would be MUCH lower in the polls.

They are not.

If one was to pay attention to polls,for the last 4 years Canadians supposedly think Harper is the best leader in Ottawa.

Fact is,right wing,EXTREME right wing parties are gaining popularity in the Western world.

I don't know why but it may have to do with economics and a growing intolerance of immigration.

This is the same political climate that gave birth to fascist governments in Europe following the Great Depression.

If this trend continues,we as progressives,are screwed. 

thorin_bane

Its brainwashing from media and education(only capitalism will work socialism will lead to the death of everything-boo) and lack of political awareness from voters and non voters alike. I know some non voters that are just fed up with the whole ball of wax.

thorin_bane

Weird been a lot of double post lately, not sure if its babble or bell.

siamdave

alan smithee wrote:

Fact is,right wing,EXTREME right wing parties are gaining popularity in the Western world.

I don't know why ......

- there are a lot of things involved. More here - They're Building a Box - and You're In It - http://www.rudemacedon.ca/dlp/box/box-intro.html .

JKR

KenS wrote:

And while the NDP is not enslaved by the taboo of tax increases to the degree of the Liberals- witness last years NDP initiative... the NDP is going to have to go further than that at some point. Its not as easy as people around here think [just need the "guts"], but it has to be done.

The NDP seems to be going ahead.

http://www.straight.com/article-353041/vancouver/jack-layton-takes-inequality

KenS

excerpts from that Jack Layton interview, and my comments below:

Quote:

As he prepares to lead his party into his fourth federal election, Layton declared that the NDP has a "matrix of initiatives" to address the problem. He cited Vancouver East NDP MP Libby Davies's private member's bill calling for a national housing strategy. Then Layton mentioned a private member's bill by his wife Olivia Chow, NDP MP for Trinity-Spadina, for a national childcare program. The NDP has another goal to increase the child tax benefit to $5,000 per child per year for the country's lowest-income residents.

....

The NDP's plan is to require the federal government to have a role in postsecondary education, just as the Canada Health Act ensures that Ottawa plays a role in shaping the delivery of health care. "There is nothing like that for postsecondary education," Layton said. "We believe that is the first step."

Then the question becomes: what form will this assistance take? "We think you've got to move away from these loan programs and put money into grants," the NDP leader said. "Because when you look at how much money a student pays back-taking into [account] the interest and the number of years they're paying it back-they're paying more in interest for the original up-front money. That's ridiculous. So, you know, it's a program that's producing revenue from students rather than a program making it possible for students to get an affordable education."

One of the NDP's most ambitious plans to tackle inequality is to double payments under the Canada Pension Plan. This will occur over a "period of time", according to Layton. He pointed out that more than 250,000 seniors in Canada live in poverty.

"They raised us all," Layton said. "They fed us all. They built our communities. They shouldn't be living below the poverty line and going to food banks when they're in their 70s or 80s."

This is the right kind of stuff.

But there is a difference between having initiatives like this, and talking it up in interviews like this that are 'dog whistles' for the base [us].... and talking it up as part of a coherent main platform plank that all Canadians will hear.

They have to do it this way first. And as well as starting to get it out there for people in general to hear.... as less ambitious does first, you smoke out the ineviatble reactions from the usual suspect, and gradually work on insulating from them having the effect they can reasonably expect to have on the people the NDP wants to reach.

If you just get up on a soapbox and blurt it out, the critics will win. They have to be finessed.

And maybe Layton and the NDP is on the road to doing that. But it could also be no more than the 'dog whistles' for the base.

KenS

 

And speaking of the predictable opposition, the Straight solicited some comments on the CPP doubling idea.

Not that doubling the CPP is a trivial thing for employers, and no one should just wave it off.

Brian Bonney Director of provincial affairs, Canadian Federation of Independent Business wrote:

"CFIB has taken a position opposed to an increase in payroll taxes at this time. The main reason is that many small businesses are just now starting to come out of the recession....They're using their homes and their retirement savings to hang on to their businesses and to keep people employed."

Literally right next to his smiling face, was this more familiar one:

Elizabeth May Green Party of Canada leader wrote:

"I'm not sure why Jack would propose that. I think that's a very poor idea. It would constitute an additional burden for each employer for carrying employees. If I understand correctly, what he's put forward would actually have a negative impact on employment overall because that would create an additional burden for small business and it would reduce the paycheque of every employee."

Sean in Ottawa

I'm with the CLC on this -- working people need this

May is out to lunch. Interestingly she is taking a position that is fundamentally anti-environment. Here is why: When you fail to secure your population and provide social justice then the only way they will try to find security is by inflating the size of the economy-- finding what they cannot achieve through equality through growth which destroys the environment. (The idea is if we allow excess for some and more, more and more then even the poorest will have enough.) The "raising the tide lifts all boats" argument is also about perpetual growth rather than social justice. This is of course the fundamental weakness in May's environmentalism and why her party is a failure intellectually not understanding that social justice and environmental sustainability are mutually dependent -- only the NDP understands this and May displays her ignorance here for all to see. A proper pension is nothing more or less than a measure for social and effectively environmental sustainability.

I like May as a spunky individual but this is in a nut-shell why I would never, ever, ever support her politically. You have to get these relationships and she unfortunately does not. And for the most part neither does her party.

JKR

KenS wrote:

But it could also be no more than the 'dog whistles' for the base.

It's music to my ears.

Conservative canines are always getting stroked by Harper and Company.

The mutts on the left deserve some attention too.

 

KenS

I'd gladly trade the stroking of my fur for even a watered down version where it is made sure all Canadians hear the message.

Evening Star

KenS wrote:

In the same way, when all is said and done it doesnt matter whether or not the Conservatives intend specifically for the failure of stimulus funding.

Just by doing whatever they please regardless of future costs [the jets] and by cutting revenues, they are deliberately hobbling the choices of future governments.

Yes.  I think it could be a workable strategy for the NDP to simply stress the Conservatives' fiscal irresponsibility and its impact on future governments, particularly when it comes to popular programmes like universal health care, that may now need to be funded by tax raises in the future.  (Perhaps they are already doing this and I am unaware?)  It doesn't even matter whether it is a deliberate strategy of the Conservatives or simple incompetence and/or irresponsibility since the effect is the same.  Focusing too much on whether it is the former could come off as conspiracy theorizing whereas just focusing on the financial impact might play better.  At the time of the last budget announcement (July?), when the Conservatives announced our worst-ever deficit and also announced that it would be paid off with spending cuts in the next five years, I trembled a little, although it didn't occur to me that spending so stupidly could be a deliberate strategy.

But why do you think that what used to be the party of LBP and PET, which currently boasts people like Bob Rae, Gerard Kennedy, and Ujjal Dosanjh, has been so willing to let the Conservatives set the agenda and play by their rules??

siamdave

Evening Star wrote:

KenS wrote:

In the same way, when all is said and done it doesnt matter whether or not the Conservatives intend specifically for the failure of stimulus funding.

Just by doing whatever they please regardless of future costs [the jets] and by cutting revenues, they are deliberately hobbling the choices of future governments.

Yes.  I think it could be a workable strategy for the NDP to simply stress the Conservatives' fiscal irresponsibility and its impact on future governments, particularly when it comes to popular programmes like universal health care, that may now need to be funded by tax raises in the future. 

(Perhaps they are already doing this and I am unaware?)  It doesn't even matter whether it is a deliberate strategy of the Conservatives or simple incompetence and/or irresponsibility since the effect is the same.  Focusing too much on whether it is the former could come off as conspiracy theorizing whereas just focusing on the financial impact might play better.  At the time of the last budget announcement (July?), when the Conservatives announced our worst-ever deficit and also announced that it would be paid off with spending cuts in the next five years, I trembled a little, although it didn't occur to me that spending so stupidly could be a deliberate strategy.

But why do you think that what used to be the party of LBP and PET, which currently boasts people like Bob Rae, Gerard Kennedy, and Ujjal Dosanjh, has been so willing to let the Conservatives set the agenda and play by their rules??

* I suppose I'm going to get accused of spamming again, but I have talked about all of these things, their origin, and what they mean, and why I think most people don't really understand what is happening here, here - What Happened? http://www.rudemacedon.ca/what-happened.html . And it really does matter whether it's simply "incompetence' or something else - if they are doing this intentionally, which I believe is pretty undeniable, then they are stealing not only trillions of dollars, but our country too. And they won't be stopped until people start to understand what is really happening, and get out on the streets and *take* our democracy back from these usurpers - while we still have a chance. The window is not going to be open much longer, I think.

George Victor

Sean in Ottawa wrote:

I'm with the CLC on this -- working people need this

May is out to lunch. Interestingly she is taking a position that is fundamentally anti-environment. Here is why: When you fail to secure your population and provide social justice then the only way they will try to find security is by inflating the size of the economy-- finding what they cannot achieve through equality through growth which destroys the environment. (The idea is if we allow excess for some and more, more and more then even the poorest will have enough.) The "raising the tide lifts all boats" argument is also about perpetual growth rather than social justice. This is of course the fundamental weakness in May's environmentalism and why her party is a failure intellectually not understanding that social justice and environmental sustainability are mutually dependent -- only the NDP understands this and May displays her ignorance here for all to see. A proper pension is nothing more or less than a measure for social and effectively environmental sustainability.

I like May as a spunky individual but this is in a nut-shell why I would never, ever, ever support her politically. You have to get these relationships and she unfortunately does not. And for the most part neither does her party.

 

And replying to Ken S. , Evening Star says:

"But why do you think that what used to be the party of LBP and PET, which currently boasts people like Bob Rae, Gerard Kennedy, and Ujjal Dosanjh, has been so willing to let the Conservatives set the agenda and play by their rules??"

 

Sean continues to promote a central fact in Canadian political economy, that people are not about to take up sackcloth and ashes in the name of environmental or social causes. And this survival instinct is exactly what the Cons rely on to persevere in power (Alberta minister of Finance and Enterprise, Ted Moron, is quoted in the Globe today saying "I think the romanticism of the Kyoto era has passed," and he can meditate on a "30-year, a 60-year, a 90-year" process of adapting economic needs and envitonmental. With a straight face. Before a public that has nowhere else to turn except to the Wild Rose folks whose time-frame of adaptation would be something like forever.

Evening Star points to the narrowness of the economic room left for two parties of the right that are not about to ignore the developments in the world of finance capital that now anchor the common people - and unions - to their own market investments. So that they might avoid an impoverished old age.

 

There are technological innovations that a party of the left can recommend while respecting the need of the people to make a living and save for their future (no, it's not just about solar and wind, as we are coming to see), but the LEFT that is mired in pure politics, bereft of economic reality, would never allow such association with realities such as pension-dependent corporate entities with social goals.   Associating with corporations except through an appointed pension board is still considered amoral (and certainly not wise, politically).

 

This thread has been a marvelous breakout from dogmatic and moralistic orthodoxy and Sean is to be thanked for his continuing attempts to show that, indeed, the babble Emperor is naked without understanding economic life out there in the burbs and condos - as well as the apartments.

 

 

KenS

At least in a general sense, I would also agree that whether the HarperCons are being intentional/wilful is important.

How can you say that they are hobbling future governments without saying its intentional? Rationally, you could do it. But ut would it make sense as a political argument?

But, that said, it still leaves the question of how much is intentional. I dont agree with Seans thesis that the stimulus spending is designed to fail. And you can point to evidence of setting up the hobbling of future governments without that thesis. Because Sean's thesis to my mind has the burden of sounding like a conspiracy thesis- with the difficulty to sound credible that goes with it- is there some reason you think we need to go there? [Bearing in mind that there is plenty of evidence of a deliberate hobling without going there.... and that like minded allies dont agree that the thesis is grounded.]

George Victor

As the neo-con once said, he works toward the diminution of government until it has reached the size that its remnant could be drowned in the bathtub. 

Does not need a Grand Theory of Conspiracy, just another conspiracy in history.

Lard Tunderin Jeezus Lard Tunderin Jeezus's picture

...and when a Straussian says 'government', always read 'democracy'.

George Victor

Googling up the "drowned in a bathtub" scenario (attributed, I see, to a Grover Norquist in Bush's time) one comes across more hardnosed assumptions as a result of the economic hole dug for us all - and promoted by the cons and populist clowns like Clinton.

Back in September, for instance, the observation:

The Global Systemic Crisis: Towards a Serious Breakdown of the World Economic and Financial System, Spring 2011

There is a very depressing widespread reality, a real trip to the heart of darkness, which is that tens of millions of Americans who no longer have a job, no longer have a house, no longer have any savings, are wondering how they will survive in the years to come. The young, retirees, African-Americans, workers, service employees...they constitute this mass of angry citizens who will speak violently next November and plunge Washington into a tragic political impasse. Supporters of the Tea Party and new secessionist movements... want to break the Washington Machine (and by extension that of Wall Street) without having feasible proposals to solve the country's myriad problems. The November 2010 elections will be the first opportunity for this suffering America to express itself on the crisis and its consequences. And, won back by the Republicans or even the extremists, these voters will help to further cripple the Obama administration and Congress (which will probably swing to the Republicans), only pushing the country into a tragic gridlock just when all the signals turn red again.

George Victor

Lard Tunderin Jeezus wrote:

...and when a Straussian says 'government', always read 'democracy'.

Yeah, I'm afraid that when the "citizen" is turned into "taxpayer" and "consumer" without understanding their entrapment,  it reduces to being led around by the Straussian Philosopher King. Steve counts on this (Jeez, maybe someday an old classmate of his at university will blow the whistle on the bastard).   And it's  all been so much easier to understand "citizenship" from time to time in human history.

KenS

Does anyone actually say you are spamming Dave, or is it just something that [understandably] concerns you?

I must see you plugging your work as often as anybody, and it never strikes me that way.

Evening Star

siamdave wrote:

 

* I suppose I'm going to get accused of spamming again, but I have talked about all of these things, their origin, and what they mean, and why I think most people don't really understand what is happening here, here - What Happened? http://www.rudemacedon.ca/what-happened.html . And it really does matter whether it's simply "incompetence' or something else - if they are doing this intentionally, which I believe is pretty undeniable, then they are stealing not only trillions of dollars, but our country too. And they won't be stopped until people start to understand what is really happening, and get out on the streets and *take* our democracy back from these usurpers - while we still have a chance. The window is not going to be open much longer, I think.

Thanks for the link.  I will look into the monetary policy issue further.  I don't know that I totally see answers to my questions here though.  The NDP is certainly not a corporate-sponsored party.  While the Liberals are, corporate funding is much more strictly restricted than it is in the US.  Plus, it is clear to me that not everyone in the Liberal party is or has been a corporate shill, particularly the guys I mentioned, all of whom are major figures in the party.  Trudeau was a fan of Galbraith while he was PM.  So, if the situation really is this simple, why do you think they are willing to go along with the conservative agenda?  Presumably, they also have access to top scholars and economists.

KenS

The institution known as the Liberal Party of Canada stamps the individuals, not vice versa. Thats even true of PET- let alone the clowns you mention as todays hopes.

PET, and others of the time, could be who they were in that time because it was different. And not just the 'righward drift' since then. They aere willing to talk about spending when that was not a limit. The reason the Libs ALL go along with the Conservatives now is because they buy into the same limits- and always have. The 'limits' [as if they are immutable] are just narrower now, and so goes there social program vision such as it is. Dion wouldnt breach it either, and was ready to bring in what in practice were to be hard limits on spending. It isnt just Iggy, Manley, Martin, et al.

Whether they do not 'beleive in the Conservative agenda' makes absolutely no difference if they are institutionaly prgrammmed to never consider tax increases. 

siamdave

Evening Star wrote:

siamdave wrote:

 

* I suppose I'm going to get accused of spamming again, but I have talked about all of these things, their origin, and what they mean, and why I think most people don't really understand what is happening here, here - What Happened? http://www.rudemacedon.ca/what-happened.html . And it really does matter whether it's simply "incompetence' or something else - if they are doing this intentionally, which I believe is pretty undeniable, then they are stealing not only trillions of dollars, but our country too. And they won't be stopped until people start to understand what is really happening, and get out on the streets and *take* our democracy back from these usurpers - while we still have a chance. The window is not going to be open much longer, I think.

Thanks for the link.  I will look into the monetary policy issue further.  I don't know that I totally see answers to my questions here though.  The NDP is certainly not a corporate-sponsored party.  While the Liberals are, corporate funding is much more strictly restricted than it is in the US.  Plus, it is clear to me that not everyone in the Liberal party is or has been a corporate shill, particularly the guys I mentioned, all of whom are major figures in the party.  Trudeau was a fan of Galbraith while he was PM.  So, if the situation really is this simple, why do you think they are willing to go along with the conservative agenda?  Presumably, they also have access to top scholars and economists.

It's related to the creation of intentional debt, which can then be used as an excuse to cut social programs etc - implementing, in other words, the 'less government' agenda of the neocons - less government meaning a less strong democracy.

Once you understand the way money is created, there's no place else to go. Money is created out of thin air. We can allow banks to do this, and charge interest on the money they create out of thin air - or 'we the people' can just create what is, really, *our* money, in *our* country, exactly the same way, through *our* central bank (Bank of Canada, in Canada) - and charge no interest on it - why should we charge ourselves interest on our money? Certainly necessary government money could be created this way - but going further, why should you pay interest on your mortgage, if the money is just created out of thin air? If people deposit money in private banks, then there is no objection to allowing them to charge whatever interest the market will bear - but it is simply insane to let them create billions - or tens or hundreds of billions, as they currently do - out of thin air, and charge interest on that money they have created out of thin air. And then - when the government needs money (because it has cut taxes) - it allows private banks to create than money, and then borrows it from them - at interest! - and a few years later (going back to the 80s), with some double digit inflation and money borrowed just to pay interest - suddenly we have Mulroney claiming we have a huge national debt created by stupid greedy Canadians and we must start slashing everything!!!
- well, the very short version, expanded more in the essay - but once you understand how simple this process is, it is hard to believe that the top politicians and economists in the country are not aware of this - and thus when they intentionally create such debt, and then intentionally go around saying we must cut social programs in the name of this debt - when they MUST know full well they could use the Bank of Canada to create the money without the crippling interest payments - it is hard to think they are all 'innocents'.
With Trudeau, you cannot be sure - this was just getting underway in the 70s, and it is conceivable it was done without his knowledge, as few people would understand the full implications of turning the money creation power over to the banks. But, of course, he was a very smart guy too - and this is not rocket science. But back to the first hand, he may have trusted his advisors on this, as most people until recently have had no real interest in the money creation process, and he certainly had a lot of more interesting things on his plate during those years.
As to the last question, why are most politicians, even those we would consider otherwise well-intentioned people, willing to go along with this - that is, I suppose, between them and their gods. Some of the lower level pols are, no doubt, still ignorant of all this, but it is very difficutl to believe that the higher-level ones don't understand it all well, and have made whatever deals with the devil they have made.
And related, as to the NDP being corporate sponsored shills - if you think about 'deep politics' - given this obvious centrality of the money creation issue - why doesn't the NDP talk about it? Are they simply ignorant of this? Or are they part of some kind of deal - they get allowed to play with the big boys as long as they stay away from this? Or they can be like another political party called the CAP - and be completely frozen out of the media for trying to talk about things the people who control the country do NOT want talked about.
Once you understand the money creation process, a lot of things start to look quite different. I am sure it all sounds like some crazy conspiracy theory - but think about the money creation process. When you understand this, there's just nowhere else to go but conspiracy - not theory, fact. Conspiracy and massive, massive fraud, scam and crime. There's lots of references in the essay as a place to start doing more study.

 

George Victor

Evening Star wrote:

siamdave wrote:

 

* I suppose I'm going to get accused of spamming again, but I have talked about all of these things, their origin, and what they mean, and why I think most people don't really understand what is happening here, here - What Happened? http://www.rudemacedon.ca/what-happened.html . And it really does matter whether it's simply "incompetence' or something else - if they are doing this intentionally, which I believe is pretty undeniable, then they are stealing not only trillions of dollars, but our country too. And they won't be stopped until people start to understand what is really happening, and get out on the streets and *take* our democracy back from these usurpers - while we still have a chance. The window is not going to be open much longer, I think.

Thanks for the link.  I will look into the monetary policy issue further.  I don't know that I totally see answers to my questions here though.  The NDP is certainly not a corporate-sponsored party.  While the Liberals are, corporate funding is much more strictly restricted than it is in the US.  Plus, it is clear to me that not everyone in the Liberal party is or has been a corporate shill, particularly the guys I mentioned, all of whom are major figures in the party.  Trudeau was a fan of Galbraith while he was PM.  So, if the situation really is this simple, why do you think they are willing to go along with the conservative agenda?  Presumably, they also have access to top scholars and economists.

The Liberals in Canada and Democrats in the U.S. are required to walk the narrow path of a capitalism that has undergone a sea change, beginning in the 1970s - even as Trudeau (and Nixon as well) consulted Galbraith on how to break the hold of stagflation. It was the Chicago school that solved it, finally, by making credit easily accessible to all, and, politically, by requiring government at all levels and in all regions to lower corporate taxes...or the corporations would take up residence elsewhere.  It was the appearance of the economic imperative in business and its effect on politics, whereby all other considerations played second fiddle to the maximization of profit, and corporations that did not achieve acceptable showings on the market were gonzo. Suddenly all had to walk the line.  It was also the moment of decline for unions and social welfare generally (at least there was no more expansion...except where the neo-cons wanted to leave the state ever-deeper in the debt trap.

Robert Reich describes all of this in Supercapitalism: The Transformation of Business, Democracy, and Everyday Life.

KenS

At bottom, Trudeau and others were doing the same thing as the 'money creationists'... which is not so different as say engineer and financiers who wanted to build dams across the Bay of Fundy for tidal power. "Yes we know the siltation behind even smaller dams in the Bay is massive. We'll figure out how to deal with that when we get there. It will work"

The manifestation among 60s and 70s governments was to construct social programs without a resolve to do what it takes to fund them. Creating them and running them the first X number of years is the easy part.

The difference with the money creationists is that its a massive Ponzi scheme- but one that can run for a very long time on creating 'new financial wealth'. There actually are limits, but they arent as hard or near as the ones faced by governments.

Trudeau was just lucky to be PM during the heyday of 'progress on free money'. When the mythology of the 'free' part evaporated, Liberals werent so eager about social programs any more. There would be no place for a Pierre Trudeau now- at least not the one of 30-40 years ago.

siamdave

George Victor wrote:

The Liberals in Canada and Democrats in the U.S. are required to walk the narrow path of a capitalism that has undergone a sea change, beginning in the 1970s - even as Trudeau (and Nixon as well) consulted Galbraith on how to break the hold of stagflation. It was the Chicago school that solved it, finally, by making credit easily accessible to all, and, politically, by requiring government at all levels and in all regions to lower corporate taxes...or the corporations would take up residence elsewhere.  It was the appearance of the economic imperative in business and its effect on politics, whereby all other considerations played second fiddle to the maximization of profit, and corporations that did not achieve acceptable showings on the market were gonzo. Suddenly all had to walk the line.  It was also the moment of decline for unions and social welfare generally (at least there was no more expansion...except where the neo-cons wanted to leave the state ever-deeper in the debt trap.

Robert Reich describes all of this in Supercapitalism: The Transformation of Business, Democracy, and Everyday Life.

- 'had to' is not  correct - chose to is what they did. They had options then, as they do now, options which would NOT have resulted in the massive national debts that all countries now claim dictates their actions. This would, of course, been against the wishes of the bankers and other wealthy elite which are the real rulers of the country, and trouble may have ensued - but if we had, then or now, some politicians with the courage to put the real options in front of the people - well, who knows. We'd probably lose, but at least we'd understand what was happening.

To say the Chicago school 'solved' anything is somewhat misleading - to say they solved the problem of how to make the dismantling of western democracies sellable, would be accurate, by turning the power of money  creation over to private banks, cutting taxes, and thus running up great debts that would soon justify slashing programs that give democracy strength (healthy, well-educated, well-informed citizens are pretty necessary in a democracy).

THe decline of unions could be attributed to either their failure to understand what was happening or, more likely, their selling out to corporate-banker power. Like all of our other quisling leaders then and since.

siamdave

KenS wrote:

The manifestation among 60s and 70s governments was to construct social programs without a resolve to do what it takes to fund them. Creating them and running them the first X number of years is the easy part.

The difference with the money creationists is that its a massive Ponzi scheme- but one that can run for a very long time on creating 'new financial wealth'. There actually are limits, but they arent as hard or near as the ones faced by governments.

- incorrect, I think. The social programs were begun in the 60s, and money was not a problem. The growing strength of democracy got the elite rulers worried, and they determined to roll these advances back (check out some Trialateral Commission stuff). This could not be done openly. So they bought some politicians - lower taxes, turn the money creation power over to private banks, and suddenly borrowing becomes necessary to support those social programs. But if the corporate taxes were maintained, and the minimal government money needs supplied by the Bank of Canada, as they had been previously - no massive debt. Did you know that the governments of Canada have paid over two trillion dollars in interest over the last ~30 years? Imagine if that money had of been used for social programs instead of padding the bank accounts of the already wealthy. Everything was, and is, affordable - if we want it. Obviously others want the wealth more than we do, and have taken it.

Money creation is only a ponzi scheme when run by crooks, for their benefit - as we have been seeing for the past 30 years. If the government created money, responsibly for the good of the country as a whole rather than the benefit of the elite - all would be fine.

siamdave

KenS wrote:

Does anyone actually say you are spamming Dave, or is it just something that [understandably] concerns you?

I must see you plugging your work as often as anybody, and it never strikes me that way.

- thanks for the support - spamming certainly is not my intention. I was just a couple of days ago accused of spamming on one of the other threads, and earlier this year I was told by Rabble admin to "stop spamming" their news stories when I was suggesting the same as I do here - if anyone is interested in a longer explanation of the things I am talking about, they could check out the full essay.

KenS

siamdave wrote:

The social programs were begun in the 60s, and money was not a problem. The growing strength of democracy got the elite rulers worried, and they determined to roll these advances back (check out some Trialateral Commission stuff).

Repeating my political economy assessment: money at and near the time programs were created was not the problem. Nor was availability of the funds to sustain the problem. But that is not what I said.

It wasnt just the elites campaigning against social programs. Sustaining the programs over the longer term- especially while more were being added- was more expensive than adding them on. and the Liberals- as very much an itegral part of the elites- were never willing ot go there. They didnt back down when explicitly conservative propaganda gained currency... they were only ever willing to go where they did without looking to the future consequences. Like I said earlier, when that looking at the government manifestation of 'free money' was discredited, and continuing the same approach was going to require steady ramping of taxes.... that was for the Liberals and obvious choice. And their choice was to refuse increasing government revenues [unlike in Europe even among conservative governments]... which was the first step down the road we find ourselves well down now.

siamdave wrote:

[Those government programs, plus more] were, and are, affordable - if we want it.

Yes, but not with your painless [for the people] recipe focused on a different role for the Bank of Canada. Continuing on the social program trajectory of the 60s and early 70s- and which continued in Europe and even Thatcher's Britain- required, and still requires, a fundamentally different taxation regime. More taxes for most people, not merely the foregoing of the corporate tax cuts that we got.

The Liberals did not change- they never went there.

The NDP is at least 'genetically disposed' to going there. But only keeps the possibility alive, 'in principle' [in rhetoric]. There is no examination of what is required, so of course there are no substantial steps taken.... and even the rhetoric slowly fades as the NDP gets more questions about how will we pay for those promises.

siamdave

KenS wrote:

It wasnt just the elites campaigning against social programs. Sustaining the programs over the longer term- especially while more were being added- was more expensive than adding them on. and the Liberals- as very much an itegral part of the elites- were never willing ot go there.

...

- I don't distinguish between the Libs and Cons since the 80s - two branches of the Bay St party, they play 'we really hate each other!!!!' games for the public circus, but they do the same stuff in power ....

siamdave wrote:

[Those government programs, plus more] were, and are, affordable - if we want it.

Quote:

Yes, but not with your painless [for the people] recipe focused on a different role for the Bank of Canada. Continuing on the social program trajectory of the 60s and early 70s- and which continued in Europe and even Thatcher's Britain- required, and still requires, a fundamentally different taxation regime. More taxes for most people, not merely the foregoing of the corporate tax cuts that we got.

The Liberals did not change- they never went there.

....

- it *could* be relatively painless, in theory - in practice, of course, as I have noted, the Rulers are not going to give up their great privilege easily, so will certainly be very dog-in-the-manger-ish if 'we the people' ever try to depose them - but that's another story.

I think the restructuring of the entire economic system that would result from getting the banks out of the money creation game would have benefits many cannot even imagine yet. Taxes for one - along with the bankers, the capitalists will soon follow, as the support of the banks is required to establish and maintain large capitalist fortunes - when money is created for 'we the people' purposes, rather than maintaining capitalist power, the 'excess wealth' created by a very productive society will accrue to those who create it - we the people, not they the capitalists. This great fortune will, somehow, be collectively *ours* - and for that reason alone, taxes can probably be discontinued almost altogether. Also, a LOT of current tax money, going back 30+ years, has been collected for no other reason than paying interest on national/provincial debts - that can be forgotten once we get out of letting private banks create our money. As far as I can see, taxes are just a modern incarnation of titheing - and when we depose the kings, we no longer need to tithe them.

When I say a new world is possible, I really mean something so far outside the capitalist dystopia it is hard to imagine. We are in Plato's cave, and what we see is nothing more than shadows on the back wall, compared to what we could have.

KenS

I certainly agree with that goal.

I'll say again that I dont buy and will never buy the thesis about BofC and money creation and the role that changing that could play.

But I hope that is something we dont need to agree on to exit the capitalist dystopia.

Obviously, at some point on the exit ramp road, the money and BofC thing is a question that would have to be resolved. But in my books, we are nowhere near that point.

siamdave

KenS wrote:

I certainly agree with that goal.

I'll say again that I dont buy and will never buy the thesis about BofC and money creation and the role that changing that could play.

But I hope that is something we dont need to agree on to exit the capitalist dystopia.

Obviously, at some point on the exit ramp road, the money and BofC thing is a question that would have to be resolved. But in my books, we are nowhere near that point.

- we do appear to have the same ultimate goal, which is why, no doubt, we can continue to talk. But I myself am completely convinced that this money creation stuff is *the key* to getting rid of the capitalist dystopia - everything they do revolves around money, and allowing the banks to create and control the money is the key to everything. If you do not believe this, I would be curious to learn why you do not see any fault with the current money creation system.

If you have not done much research on this, as most people seem not to have, and might be open to a bit of new info without going to my essay, you might ask your local library to get you a copy of Ellen H Brown's 'Web of Debt', or check out a guy called James Robertson, a brit but he's around 70 and has been doing this a long time and has a lot of good stuff on his website - downloadable PDFs free - or a Cdn film called Oh Canada, or another called Money as Debt.

The thing is, to me, once you understand the money creation process, the theft of literally trillions of dollars is so obvious that I think even the average pretty apathetic Cdn citizen might be galvanized to action if they understood this - and also it is so obvious that the national debt is so unnecessary, that claiming the necessity of dismantling our country in the name of this unnecessary debt is also an obvious and blatant lie that can be used to expose these people completely for the criminals they are.

 

George Victor

siamdave wrote:

George Victor wrote:

The Liberals in Canada and Democrats in the U.S. are required to walk the narrow path of a capitalism that has undergone a sea change, beginning in the 1970s - even as Trudeau (and Nixon as well) consulted Galbraith on how to break the hold of stagflation. It was the Chicago school that solved it, finally, by making credit easily accessible to all, and, politically, by requiring government at all levels and in all regions to lower corporate taxes...or the corporations would take up residence elsewhere.  It was the appearance of the economic imperative in business and its effect on politics, whereby all other considerations played second fiddle to the maximization of profit, and corporations that did not achieve acceptable showings on the market were gonzo. Suddenly all had to walk the line.  It was also the moment of decline for unions and social welfare generally (at least there was no more expansion...except where the neo-cons wanted to leave the state ever-deeper in the debt trap.

Robert Reich describes all of this in Supercapitalism: The Transformation of Business, Democracy, and Everyday Life.

- 'had to' is not  correct - chose to is what they did. They had options then, as they do now, options which would NOT have resulted in the massive national debts that all countries now claim dictates their actions. This would, of course, been against the wishes of the bankers and other wealthy elite which are the real rulers of the country, and trouble may have ensued - but if we had, then or now, some politicians with the courage to put the real options in front of the people - well, who knows. We'd probably lose, but at least we'd understand what was happening.

To say the Chicago school 'solved' anything is somewhat misleading - to say they solved the problem of how to make the dismantling of western democracies sellable, would be accurate, by turning the power of money  creation over to private banks, cutting taxes, and thus running up great debts that would soon justify slashing programs that give democracy strength (healthy, well-educated, well-informed citizens are pretty necessary in a democracy).

THe decline of unions could be attributed to either their failure to understand what was happening or, more likely, their selling out to corporate-banker power. Like all of our other quisling leaders then and since.

David, your idea of reform from within the monetary system is exactly correct, I believe...except that it is not reachable without the prior dismantling of all capitalist institutions.   Which places your "solutions" up there with the second coming. 

The idea of an "economic imperative" was the most demoralizing revelation with the appearance of the Chicago School in the mid-70s.  From that moment the "ideas" of we reformers became only something to try to hold on to, to keep from destruction by the new forces that were giving people seemingly limitless credit, and workers could fly the family to the Dominican Republic in February.

The unions?  You can't have read of their destruction by private/public industries' movement of jobs around the world or within the country of their birth.  Your explanation:

"THe decline of unions could be attributed to either their failure to understand what was happening or, more likely, their selling out to corporate-banker power. Like all of our other quisling leaders then and since." ...comes from the purely romantic political assessments of people who are not familiar with the economic forces at work in recent history.

 

In your own case, the lack of understanding of the concept "economic imperative" seems strangely out of place for one so knowledgeable about the history of our monetary system. But then specialization will do that.

 

And of course, you are not alone in not understanding the causative effects of changes in capitalist institutions - particularly financial - and globalization's meaning for all those investment funds, with meaning for so many hereabouts. Some days, it's almost as though people are simply tilting at the windmills of an unreal world, something out of the past. That's when the morality machine takes over.

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