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Friday, 25 May 2012

Austerity-Schmerity!




Enough is enough. This austerity mania has one obvious outcome – downward spirals!

There is a logic in the argument that Governments must get their fiscal houses in order but it cannot be denied that the slashing of public payrolls, at a time when private enterprises have been outsourcing job for decades, does little more than reduce the size of Economic activity. Monies spent on public employees rarely ends up in Swiss Banks accounts and is more likely to be a portion of Consumer Spending – the real driving force in most economies.

I have followed the arguments from all sides and yes, I see a certain logic in each.

But I also remember the arguments around economic expansion being a good thing – Jobs and Prosperity for all!

Much of recent Government debt, particularly in my home country of Ireland, was the result of the failures of Private Enterprises and Governments efforts to insulate against those. The ‘Wall Street bail-out’ also springs to mind. Elsewhere, Governments released funds to stimulate or maintain economic activity in a time of great uncertainty.

For the totally un-elected forces of the ‘Market’ to now denounce this is questionable given their silence during the decades of Private Enterprise madness that led us into this mess.

Likewise, the long term decline in actual incomes, and the efforts to compensate with cheap and easy credit, maybe be brought into question – after the fact!

We, the people, are in a mess. Through our Governments, we bailed out Capitalistic failure and now have to face the chiding of the those who were quick to avail of Public Funds. It’s enough to make you think that it is all a game, just like derivatives and sub-prime skullduggery!

One of the tenets of Capitalism in that Wealth can be expanded and is not a limited thing.

If that is true then a very obvious solutions presents itself – print more money and hit the reset button!

Money is such a relative thing anyway and it’s true value in a very nebulous thing. Print enough to set the world to right and let’s get on with it.

Unless, of course, there is a different game afoot. Some would claim that regressive forces are availing of the uncertainty to forward their political ideologies and rollback all social advances – returning us to the levels of poverty and insecurity that were prevalent for the majority as recently as the 1930’s.

Broken down and grasping for any chance, we will be less likely to interfere with the new elites running of the world – much like the old elites who were so difficult to get rid of.

But let’s not forget, the 1930’s were followed by the War of Ideologies – aka WW2.