Austerity. We heard a lot about that since the Masters of the Universe blew the bloody doors off the world economy in 2008. It’s sold to us minions, us majority of human beings as being the only solution to balancing the books again; a “we’re all in it together” effort to compensate for the years when “we all it too good”. You know as if we’d all pigged out over Christmas and were now needing to eat diet meals and go jogging at 06:00 hours.
Except those bastards at the top of the financial food chain never really paid anything post 2008. We bailed them out. If you are earning €100K a year and you are out of work for some months and take a 20% pay cut, that’s not pain. Oh sure, you may need to skip some holidays to Tuscany and maybe even downsize a little bit. But you’re not going to end up in a sodding food bank or choosing between “eat or heat” for the kids this weekend because DWP has outsourced your claim to a French computer company whose CEO is mats with a UK minister and it’s all gone pear shaped.
Austerity is two things: convincing the ratings agencies you are serious about controlling spending and therefore keeping your AAA credit rating. And control of people through fear and hopelessness.
Austerity is NOT a means of re-emerging from recession. No country ever “saved” its way back to success.
And does austerity even work? What does it involve? It means primarily reducing welfare and public services. And doing it at the convenient time when banks are refusing to lend money which of course dumps more people on to the lines of jobless. It also means cutting back on investments in infrastructure and maintenance.
Step back a bit and think it through, folks. Say you and your family are at home, all out of work and sitting on the couch. The dole money did not appear on time and it’s Saturday morning and the fridge is empty and the house is a tip. But you have an allotment full of vegetables. And you’ve got some cloths and mops. Now, you can sit there and say we have no money or you can send a couple of you to the allotment while the others clean the place up.
Both options required absolutely no money. Now I am an experienced engineer and programmer so perhaps I do not qualify for master of the universe status even if I can
program the damn Black-Scholes model, but I fail to see how the hell inflicting austerity on a nation’s internal expenditures can ever salvage a country from recession. Maynard-Keynes joked about having people dig holes and fill them up again as being a valid model. He qualified this by saying we’d be better off doing something more valuable.
How did the completely bankrupt Nazi Germany manage to build the world’s largest single war machine? They did it internally. If a country has the natural resources, the education, aptitude to be self-sufficient as far as makes sense and then exports enough to pay for importing what it cannot or chooses not to do for itself, then you have the option of being a wealthy country. The country can be exactly as wealthy as it chooses to be.
The UK has imported more than it exports for 30 years in a row. This means we must essentially borrow foreign currency to keep doing this. The rate at which we can do this is determined by the ratings agencies. You know the likes of Moody’s and S&P. You know the same guys who slapped AAA ratings on toxic sub-prime shit and so long as no one asked the value of the underlying assets the whole charade went on. Yes those same bastards determine the credit worthiness of countries. How do they do this? Simple, the
governments show they are serious about controlling spending. And what better way of doing this than putting some prick like Iain Duncan Smith up front and proudly proclaiming how he’s slashed payments to elderly, sick and disabled.
The second purpose of austerity is control. By keeping us in constant fear of our very survival and threatening the reasonably comfy middle class with: “Be good, keep your head down, just accept your massive financial debts. Do that and you won’t end up on a council estate in some mould strewn hovel fending off yobs.”
You get the point. Trust your own thinking when it comes to finance and economics. Chances are what you know is far more realistic.