Welcome to the second in a brief series of posts I have called ‘Anarchy blogs’ – posts that present an alternative look at the present ‘recession’ and its accompanying ‘austerity measures’ that can perhaps shed some light on (and provoke some debate about) the current financial crisis.
Today’s post considers the nature of the attempts to “reduce the deficit” and the ideology behind the “austerity measures” and asks – (a) is any real reduction in the deficit actually possible given the means currently being pursued? (b) are the austerity measures actually necessary? At face value, most people are conditioned to simply answer ‘yes’ to both questions – but…read on amigos!
Firstly; can the deficit actually be reduced in any meaningful way by the means various Western governments are currently pursuing? The answer is an emphatic NO! It is a total impossibility and a pointless exercise. Take the UK as an example. (Greece would be a more obvious example). The so-called “deficit” is what is also known as “the National Debt”. The UK’s National Debt consists of the following – the cost of bailing out the bankers for their recent globally unprecedented levels of corruption and cock-up PLUS the cost of World War One (albeit with those particular payments currently suspended) PLUS the cost of the Napoleonic wars PLUS various other loans (that carry sizable interest rates) from foreign nations (e.g. China) and yet more loans (at even higher rates) from various international investment banks. [NB Yes, we are still paying for the enormous cost of various wars – having finally paid off the Americans in December 2006 for helping us out in WW2]. So, if you add all of these things together it’s an enormous, unimaginable sum. And how is the government attempting to make these payments and ‘reduce’ the deficit? Not through contributions from the rich, the banks/finance sector or the large and still-profitable companies (eg utilities companies – who continue to make year-on-year astronomical profits in this supposed recession…er…what recession if you’re one of them by the way?!). So…not from the people and organisations who can actually afford to contribute. No – that would be far too fair and sensible. Instead, these debts are being funded by squeezing the tax payer and the little guy (i.e. anyone who earns £40k or below pa) and by diverting any and every kind of public funding towards these debt/interest payments through cuts (…cuts in education, healthcare, welfare, jobs, investment, housing, resurfacing the roads, lighting the streets – you name it). All of that money is being diverted from wider society and those in need to pay the debts of the bankers AND the pre-existing monumental levels of earlier unpaid debt. And – guess what – the amount being raised by squeezing Joe Public is barely enough to cover the costs of the interest being charged…never mind getting anywhere near ‘reducing’ the principal sum owed (which, you’ll recall, is supposed to be the reason for introducing all of these ‘austerity measures’ in the first place). The simple fact is that the average person simply does not (collectively or otherwise) have enough money to keep meeting these payments. So, the stated aim (a significant reduction of the National Debt) is actually unachievable – and all of us in wider society are suffering cuts and deprivation purely as a futile gesture in a doomed attempt to perform a fiscal miracle that isn’t going to happen anyway because it’s a mathematical impossibility! The fact is that – both morally and logically – these debts should either be met by those who created them (and who are the only ones who can, as it happens, actually afford to pay them) or they should be written off. It’s really that simple. So, why would a government (that must know all of this stuff already) deliberately and needlessly make millions of ordinary people’s lives miserable in the pursuit of something they already know to be totally unachievable? Could it really just be a case of stubborn, pig-headed, mean-spirited ideological grandstanding in favour of trying to pretend that modern capitalism still works?
Secondly; are the ‘austerity measures’ actually necessary? Well, as outlined above…only as a gesture to demonstrate ‘faith’ in the present gone-off-the-rails version of casino capitalism that is causing such widespread misery on a global scale…and to protect our national AAA credit rating – otherwise…the answer is another emphatic NO! And what does maintaining your credit rating as a nation within the present capitalist system actually mean? (Once again, you could ask the Greeks!) Keeping a AAA credit rating in fact only means you can borrow even more money at a slightly lower (and yet still enormous) interest rate than you could if you had ‘only’ a AA credit rating (at which rating level you would only be allowed to borrow less money at even higher rates of interest). And..er…that’s it! That’s the only reason to force us all to scrimp, scrape and suffer to make these huge debt repayments and undergo these socially damaging cuts – purely so that those who speculatively lend money (for profit) will keep on lending that money and so that various puppet politicians can keep telling us that capitalism is a better and fairer system than any possible alternative! And who exactly are we borrowing the money from (and continuing to owe the money to) that is causing these ‘austerity measures’ to be implemented? Answer: people and organisations that are already so rich they wouldn’t even notice if the debts were cancelled! Not exactly a great advert for the fairness (and common sense practicality) of modern capitalism methinks!
So, NO – the austerity measures are not actually necessary and the National Debt cannot be reduced by the method the government is now pursuing. Everyone knows it – the pity is that those in charge won’t admit it. Perhaps if they did we could at last seek a new way to fairly spread the world’s considerable wealth and improve the standard of living and quality of life for all of the people rather than simply continuously feeding and subsidising the seemingly unending greed of a financial elite operating within an out-of-control system.
No wonder people are protesting – through Occupy Wall Street, Occupy London etc. And despite what the mainstream media will tell you – the vast majority of these protestors are NOT radical anarchists, Communist recidivists, the lunatic fringe, hippies (or whatever other supposed pejorative the Establishment repeatedly tries to use against ordinary people as cheap smears to caricature their valid concerns). The fact is, in these various ‘Occupy’ protests, the protestors are simply ordinary (often liberal, educated and largely mild-mannered) citizens who know blatant unfairness when they see it – and who are simply calling for long overdue positive change. The last time I saw mass protest against blatant injustice on this scale (in the UK at least) was the Poll Tax Riots. Despite everything, the average person still instinctively recognises injustice and still bravely takes a stand against it. That is something that still gives me faith in humanity – investment bankers and politicians do not.