Editorial
IMF Austerity Is Headed to America – Watch Out!
The current arguments – much in the news – about cutting spending in the US are not exactly what they seem. They are likely aimed at imposing an IMF-style austerity on the US of the sort that developing nations throughout the world have found both onerous and ineffective. If you want to understand what the IMF and Western powers-that-be have in mind for America, take a look at this interview we ran a few weeks ago with John Perkins, author of Confessions of an Economic Hit Man.
This is America's future, one of government-induced privation and societal misery. Study the dominant social themes of the elite, its recent fear-based promotions, and one begins to get a sense more fully of what is being prepared. The signs are increasingly visible. Throughout last week Western markets and media focused on a warning from Standard and Poor's (S&P), which downgraded the US debt outlook from stable to negative for the first time in 70 years. Will maintream financial media still continue to use the ludicrous term "risk-free Treasury paper?"
Late last week, London's prestigious Financial Times carried an editorial on the subject entitled Easter Parade of Worries. According to the FT, "S&P's aim plainly was political. US politicians must agree on a policy to reduce the deficit. This must involve cutting spending, reducing entitlements and raising taxes. Who exactly bears the brunt of these remedies is a political question, not an economic one. No politician wants to be responsible for such things, so it is no surprise that they avoid the problem."
Notice the telltale language in the article: "This must involve cutting spending, reducing entitlements and raising taxes." This language is directly out of the IMF playbook. Rather than question the fundamental alignment between the public and private sector – the basics of regulatory democracy – the IMF treats a country like a business and prescribes cost-cutting, privatization and other methodologies that address the symptoms instead of the cause.
The FT article was only one of many, perhaps thousands written last week on the issue, but it is interesting because it admits that S&P's intention was to "send a message." That message was echoed throughout the mainstream media and amplified by other reports focusing on how far the US had strayed from financial probity.
CNN Money and Fortune Magazine carried an interesting post along these lines by one Colin Barr who has written for TheStreet.com and Dow Jones Newswires in addition to his current position writing about finance for Fortune. The post, entitled, "Lost decade? We've already had one," basically pointed out what the alternative press has been suggesting for years, that the US economy has gone off the rails and the statistics are useless when it comes to telling the truth about how rotten the US economy really is.
The article focused on an analysis by Rob Arnott of Research Affiliates, "a Newport Beach, Calif., investment management firm with some $50 billion under management." Arnott, who writes a monthly newsletter, claims that the US economy hasn't been providing additional prosperity for at least a decade or longer. He believes the reason this isn't more widely understood is because the government produced Gross Domestic Product (GDP) is offering false signals. "[It] actually tracks consumption, irresponsible or otherwise, rather than real wealth generation."
Barr reports in detail on Arnott's findings and then offers his own conclusion. "While the solution to that problem surely lies in more responsible policy – lower spending, a less ridiculous tax code – Arnott says it's imperative we start using more meaningful economic statistics, lest politicians miss the message S&P tried to send this week."
The idea is that US policy-makers ought to focus on Structural GDP and Private Sector GDP – numerical indicators that strip out misleading government spending – to get a better sense of the US's underlying economic situation. But the real message in Barr's article, like the FT's, has to do with IMF-style remedies in my view. The phrase "less ridiculous tax code" seems to bear that out.
Barr concludes his article by warning that the if the US doesn't get its economic house in order, "The worst case result could include the collapse of the purchasing power of the dollar, the demise of the dollar as the world's reserve currency, the dismantling of the middle class, and a flight of global capital away from dollar-based stocks and bonds."
This perfectly tracks the larger fear-based promotion now being put into place by Western power elites. One needs a problem in order to provide a solution. And the move is on, most obviously, to create ever-closer global governance and perhaps an alternative currency. Modern central banking has done its work, throwing Western economies into confusion and disarray. Europe is already suffering from IMF-style austerity tactics and Britain is implementing them now. The US is next on the list.
Yet it is at least something of a false paradigm. The IMF austerity message being "prepped" by the S&P warning and subsequent mainstream news articles seem logical but is not the only choice for the US. There is another kind of economy, a truly free-market one that has little to do with the technocratic ruin brought on by central-banks and the West's current command-and-control economies. The trouble is that alternatives to the current fiscal and monetary systems supported by the West's regulatory democracy are rarely discussed. The mainstream media has its marching orders.
The conversation, as we can see in the above articles, is constricted. The problem is always defined as too much government spending. The solution is to demand more revenue from the citizens' affected and to slash the public services that many have grown to depend on. The result is a controlled social implosion that the powers-that-be can capitalize upon to introduce a new system, presumably a more globalized one, complete, perhaps, with a global central bank administering a new currency.
This is not merely theoretical. We've regularly tracked various elite solutions to the West's sovereign debt crisis here at the DB. We've reported on elite suggestions for a global central bank and a new world-currency developed from IMF SDRs. What's been lacking however is a firmer sense of the problem. But now that's coming into perspective as well with the S&Ps latest warning. The West's largest economy, we learn, is headed down the slippery path to the bottom of the hill where Greece, Portugal and Ireland reside.
The paradigm is, in fact, a phony one. One doesn't merely need "less" of what is currently offered. What is needed is a discussion featuring the fundamental freedoms that gave Western-style democracies their strength to begin with. The US 's vibrant economy in particular was built without a graduated income tax and without a central bank. There were no centralized regulatory authorities and no over-arching military-industrial complex. These are all evolutions of the 20th century and far from being effective ones, they have paved a path toward insolvency.
IMF provisions featuring privatization, tax hikes and public sector "austerity" are designed in my view to provoke the very public anger that Western elites are counting on to fuel a conversation about yet MORE centralization and MORE governmental control – of a "transparent" and "disciplined" type. The conversation is constantly to be focused on "better" government, not less of it. We can see the problem coming into focus now for the US, and the solution shall not be far behind. Expect the same sort of civil unrest that is currently afflicting Europe to visit the US if this conversation continues to be pushed along its current track.
The real solutions have to do with a radical downsizing of government authority, not just government spending. We have carried editorials and interviews with Nelson Hultberg that have suggested some practical solutions to the fix that the US (and the West) finds itself in. While an even more radical downsizing might be preferred, Hultberg's proscriptions are at least a start and go far beyond the IMF-style conversation now being prepared for the US. Hopefully, the Internet will make a difference in this regard, moving the dialogue beyond the preferred dialectic – more of the same, only less of it – and toward a more valid discussion of what is necessary to realistically return prosperity to the West's ravaged middle classes.
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Posted by John Danforth on 06/08/11 08:16 AM
Ingo,
Sorry I'm coming back to this a month later.
As to getting my rights from a supernatural entity, I can't find any evidence of that. Regardless of what anyone thinks of nature or the supernatural, rights derive from the nature of what we are and are a precondition for peaceful existence.
As to the rest; can't find any evidence of that either. Surely what you describe must be in the metaphorical sense, an analogy.
I work with electromagnetic energy. There is nothing in it that says I should not be able to own a piece of land. Nothing.
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Posted by Bischoff on 05/25/11 02:00 AM
"We are stuck with the reality, that if we want peace and prosperity, we have to use our minds to survive, and we have to live in a society where people don't violate each other's rights."
Ah....rights !!! Yes, where do we get those rights...??? Don't we get them from God...??? Doesn't the bible also tell as that we are made in the image and likeness of God...???
How about approaching the subject of human rights from this angle....
The basis of the universe and any material thing in it is due to the existence of electro magnetic energy. The bible calls it "God" or "Love".
Humans can create micro voltages of this electro magnetic energy through the potential (electric) that exists between the human brain and the human heart. Positive micro voltage is created by certain behavior and action which furthers peaceful existence of humans in an environment for which nature did not provide them with requisite genes.
So.... The right of a human is to be "free" to act and behave to provide for his sustenance and that of his family, creating positive voltage of electro magnetic energy in the process. That means "free markets" and the "use of land" (earth), and not the "ownership of land". That will provide for a society where respecting human rights comes easily.
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Posted by refuge2012 on 05/24/11 01:39 PM
I have been telling people for a while now that they need to get ready
You'll need
FOOD
WATER
A PLACE TO LIVE OUT OF THE WAY
and here is the important part, YOU NEED THESE THINGS NOW!!!
Sheila
Click to view link
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Posted by John Danforth on 05/05/11 07:32 AM
Thanks, Ingo.
To your statement, I will add only that most areas of the world don't offer any more than a short and brutal existence to hunter-gatherers, and won't support very many of them. We are stuck with the reality that if we want peace and prosperity, we have to use our minds to survive and we have to live in a society where people don't violate each other's rights. (Rights as defined at the link I provided to Adam.)
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Posted by John Danforth on 05/05/11 07:25 AM
Adam,
I'll give that a listen when I get a moment, I'm a little preoccupied right now on a big project that's got me working until I drop every day.
Your claim to exclusive use of certain property is a claim to ownership, that claim is a demand that others respect a very specific kind of right. Ownership is the right to use and disposal. Does Stephan dispute that?
I think you will enjoy this article:
Click to view link
I'd like your opinion on the ideas expressed in it.
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Posted by Bischoff on 05/05/11 01:57 AM
@ John Danforth
"Second, people can survive very well by learning how to manipulate and live off the proceeds of the first type."
You are definitely on to something here. I'll just say this about one basic instinct of Man. "Man has a natural instinct to eat. He does not have a natural instinct to provide for his sustenance."
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Posted by Adam on 05/04/11 08:47 AM
"A contract is an agreement between two humans, by mutual consent."
I agree and I would add that mutual consent does not have to be achieved verbally. See implicit contracts/tacit agreements.
I retract this from my comment at 04/28/11 12:59 PM:
'The idea of an implicit contract explains why when you mix your property (labor) with other resources/properties, you are creating property and that property is yours. You've created an implicit contract with the property you've created; the implicit contract you have with yourself has been extended to include what you create. Who could argue against that without an explicit contract (e.g. employment contract) that says otherwise? The same idea applies to homesteading.'
You could have potentially created an implicit contract that you have a superior claim on the exclusive use of the created property with whomever witnessed your creation of property -- but you have NOT created either an implicit or explicit contract with the objects (both inanimate and animate (excluding humans)) used in the creation of property. I exclude humans because you will likely require an explicit contract to decide who has the superior claim on the exclusive use of property where more than one man is involved in creating that property.
As before, I cannot continue with any discussion of "rights".
For an examination of "rights", I highly recommend:
#664 Rights: 'What are 'rights'?' (MP3)
Click to view link
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Posted by John Danforth on 05/04/11 07:21 AM
A contract is an agreement between two humans, by mutual consent.
You can help by explaining how it could be otherwise.
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Posted by Adam on 05/03/11 01:56 PM
"Just can't grasp that concept."
How do you think I can help?
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Posted by John Danforth on 05/03/11 09:14 AM
Seems a lot of the code was written from scratch.
Boy, do I know how that works. It'll take some patience. If you lose posts, I suggest using Firefox as a browser with the Lazarus extension. Never lose a post composed in an html form again. (Plus use noscript and never catch a virus off a website, either.)
Today I'm having to refresh several times to get the posting widget to even show up. Heh. They'll get it. It always takes four times the budgeted time to get any code degubbed. Err, debugged.
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Posted by John Danforth on 05/03/11 09:07 AM
"See what I mean?"
Yes. But it does not distract me. That just brings a different argument up, one on which you and I do not disagree. On that argument (darn, I wanted to avoid it) I start from here: existence exists, a thing is what it is, it cannot be what it is and something else at the same time. Matter and energy can be neither created nor destroyed as far as I know (only transformed), and my lifetime is short compared to the timespan of all existence as any conception of it must go, so based on the evidence I don't have any problem figuring that the timespan of matter and existence is infinite. Theories propounding otherwise seem to have to be continually made more complicated in order to 'splain new evidence (there are several industries devoted to it), so I remain skeptical about them. We are born and we find ourselves in an existence which seems to have immutable rules and some knowledge of them is necessary for survival. Therefore it is important for those who care or who want to extend their knowledge to be careful about what they consider to be knowledge -- to check their premises so as not to be led astray. And that's why we discuss here.
I question the idea of contract or lease between myself and I or between myself and inanimate matter as the other party. Just can't grasp that concept.
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Posted by John Danforth on 05/03/11 08:52 AM
@Ingo,
I agree with your assessment.
"Humans exist and survive in an environment for which they were not created by genetics. The basic instincts which served the arboreal ancestors of Man well, and still determine human behavior today, are instincts which are in conflict with the requirement for Man to survive in the terrestrial setting.
Therefore, before talking about "rights", I think it is best to be clear about the nature of humans."
Humans have intelligence (arguably, hehe) and do not have tooth, nail and fur to survive naked in the wilderness (except maybe in places where nature serves up food everyday and it never gets cold). Our genetics dictate, 'use your mind or die'. So our minds are our basic tools of survival. That's about as basic as I can get without bringing a bunch of ambiguous concepts into the discussion.
Obviously, it is what people do with their minds to further their survival that forms the basis for most of our discussions.
My own perhaps skewed observation is that there are two primary strategies employed, maybe aligned with one or another set of aptitudes people develop.
First, people can survive by mastery of nature, natural law, manipulation of materials to alter their environment to make it suitable for easier survival. Invent things, make them, trade with other specialists peacefully, forming a division of labor economy, and all that.
Second, people can survive very well by learning how to manipulate and live off the proceeds of the first type. Perhaps by performing some service or satisfying some need, perhaps by fraud, perhaps through force, but essentially dependent on others to provide for their material needs.
Anyway, this is interesting but somewhat tangential (or maybe not, if you were leading up to something else) to the point I was leading to. If there are no more objections to the idea that a man has a right to his own life, because he owns himself absolutely, then sometime tonight, I'll attempt to make the case for the extension of rights to property in terms we can all agree on. I'm working on a big project right now but am enjoying the discussion. Thanks for your patience.
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Posted by clark on 05/02/11 09:37 PM
Adam said, "See what I mean?"
I purposely phrased that just for you.
Objectively, something provides the spark of life.
Maybe your reply was lost in the ether but I was disappointed you have chosen to ignore the lease theme and lack of contract to show how you have self-ownership.
I guess it's all due to a big bang from nothing... As if.
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Posted by Bischoff on 05/02/11 06:09 PM
@ John Danforth
"Man is a social animal. As nobody would be looking to kill him or steal from him or enslave him if he were alone, the subject of rights wouldn't arise because he would enjoy the freedom to take the actions necessary to survive in the absence of the potential for anyone to prevent him from doing so."
I think it is unfortunate that our education system has failed to explain human nature. We talk about "rights" without ever understanding human nature. In writing the U.S. Constitution, the founders formed the provisions based very much on Natural Law and Human Nature. However, just writing the Constitution didn't change human nature. The Constitution provides a blue print as to how certain behavior must prohibited in order to allow the greatest amount of freedom for the largest number of people.
Humans exist and survive in an environment for which they were not created by genetics. The basic instincts which served the arboreal ancestors of Man well, and still determine human behavior today, are instincts which are in conflict with the requirement for Man to survive in the terrestrial setting.
Therefore, before talking about "rights", I think it is best to be clear about the nature of humans.
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Posted by Bischoff on 05/02/11 05:40 PM
@ DB
The new format does create some trepidation. I compose replies, and I send them never to see them posted.
Is there a filter which screens certain opinion? With the old format there was at least a notice that the reply would be checked before posting.
Any explanation?
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Posted by Adam on 05/02/11 08:08 AM
"If only truth derived from objective, empirical reality matters, then self ownership is based on a right granted by the creator..."
See what I mean?
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Posted by John Danforth on 05/02/11 07:28 AM
Man is a social animal. As nobody would be looking to kill him or steal from him or enslave him if he were alone, the subject of rights wouldn't arise because he would enjoy the freedom to take the actions necessary to survive in the absence of the potential for anyone to prevent him from doing so. The subject only arises when there are more than one. But that requirement of the freedom to take the actions necessary to survive are as innate as the requirement to breathe. So I disagree on the most fundamental level with the communists.
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Posted by clark on 05/02/11 01:30 AM
This is a tough subject. While I tend to like the self-ownership idea, a lot, I see what appears to be a flaw in that line of thinking:
Adam said, "To my ears, talk of "rights" always suggest privileges granted and I immediately think to myself: If you claim you have a "right", show me the contract that says you have such a "right"."
Is that the same contract that shows you have ownership of yourself? The one that ends when you expire? I mean, if you truly own yourself then how can your possession be ended without your say-so? Life is a lease... granted by the creator of the spark of life.
To me, it seems like you are confusing rights and privileges. Rights expire or are oppressed, they are not revoked or granted by men, unlike privileges.
If only truth derived from objective, empirical reality matters, then self ownership is based on a right granted by the creator,... for a limited time only. What kind of ownership is for a limited time only with no option to renew? A lease, a.k.a. material reality.
I'm not clear on who said this, "a right is a moral principle defining and promoting man's freedom of action in a social context" it reminded me of the passage below from Wikki.
"...we base rights in man as a social product, not man as an abstract with innate rights." - Communist Party of Peru, Sobre las Dos Colinas
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Posted by John Danforth on 04/30/11 03:53 PM
@Ingo,
You state that knowledge is not necessarily hierarchical. I raised the point because some concepts are necessarily dependent on others, the definition of the primary concept is assumed in the subsequent concept. For instance, any concept which is proposed that violates the law of identity would rightly be called into question. The purpose of this is not to establish which 'reality' is to be forced on anyone. The purpose of it is for us to decide for ourselves whether it makes sense or not. If we agree, then we have a basis for communication because we have a groundwork to work from.
The idea of intuition as a way around hierarchical knowledge seems suspect to me. Or I should say more accurately, I can not understand it. To me, intuition has a slippery definition in the first place, and the experience we usually relate that term to contains a different summation of prior knowledge, not some new revelation, though it might seem that way. But it might just be my tin foil hat effectively blocking thought rays from giving me revelations without the effort of learning. If others experience it, I envy them. I have to work very hard for the knowledge I gain and be very careful to separate what I count as knowledge from what I should not. Yes, I do have "Aha" moments, but usually followed by "Doh!" as I wonder why it was not obvious beforehand.
Leaving Einstein aside for the moment, because I work with electromagnetic energy for a living and so my opinion might be skewed, I don't understand where you differ with the idea that 'material property is a subset of matter', nor with any of the other ideas I postulated in the previous post. What makes any material property (not just land) different from other matter? Isn't it that an ownership claim is made for it? Isn't the ownership claim a claim to a certain, specific kind of right? Do you disagree that the basis of rights is man's right to his own life, and that this right is his because it is part of him, that this is the fundamental tie between rights and matter?
When you say the origin of matter, termed 'land' in economics, is the basis for the existence of all human beings, it seems to me that land is only one thing forming the basis for the existence of humans. There are many others which are central to existence of humans (but land is easier to control, isn't it?). But this is jumping ahead. Before we go there, I'd like to know if there is any objection to the concept that a man has a right to live for his own sake, and whether there is any objection to the assertion that his right to his own life is part of him, inseparable, springing from the nature of what he is and what all need to respect in others in order to survive.
Thank you for your thoughtful reply.
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Posted by Bischoff on 04/30/11 02:08 PM
@ John Danforth
"Knowledge is hierarchical and must stem from reality, I'm sure we agree."
I am not sure that I do agree that knowledge is necessarily hierarchical. A body of knowledge must be logical and consistent in its arguments, and if applied for practical use, it must work. While any body of knowledge may ultimately have the same basis, to insist that knowledge therefore is hierarchical to be verified for its correctness through application by a "one and only one" reality, is a fallacy.
"Whatever complicated theory we might hold, it can be made useless if the concepts it is based on are untrue. Concepts depend on other, more basic concepts."
With this observation, I think you are quite correct. There can be a body of knowledge gained not only as part of "scientific research" (hierachical), but also through sheer intuition (insight). What is important, is the logic and reason used in arguing the body of knowledge. When it is applied, the fact that it works or doesn't work, establishes "reality". That is how we must view reality, not the other way around.
"Say we start with matter. Material property is a subset of matter. What makes it property? Well, suppose I say it is property because it is in my possession."
"Matter" starts with Einstein's equation E=mc2(square). Electro magnetic energy transformed into mass. This mass then imbued with "Life" finally evolves into a human being which has the capacity to create micro voltages of electro magnetic energy, adding thereby to the overall amount of electro magnetic energy. There are some humans whose contribution to the available amount of electro magnetic energy is much greater than those of others. In history they are termed "enlightened".
The origin of matter, termed "Land" in economics, is the basis for the existence for all human beings. Can your mere "possession" of such matter, for your "exclusive ownership" be justified? Wouldn't it be much more just, if the competitive market allowed you to secure for youself an "exclusive use" right?
"Land value taxation" is all about decisions by local communities to assure equal access to the "Land". Equal access to "Land" is imperative for each individual human to have the opportunity to become "enlightened".
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