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Bernanke: We Must Raise Taxes and Cut Services • Sane People: No, We Need to Stop Endless Bail Outs, Imperial Adventures and Fraudulent Schemes

George Washington's picture





 

Washington’s Blog

This week, both Bernanke and Volcker called for tax increases. Bernanke has also raised
the possibility of reductions in entitlements such as Medicare and
Social Security.

As I pointed out last June:

When
the International Monetary Fund or World Bank offer to lend money to a
struggling third-world country (or "emerging market"), they demand "austerity measures".

As Wikipedia describes it:

In economics, austerity is when a national government reduces its spending in
order to pay back creditors. Austerity is usually required when a
government's fiscal deficit spending is felt to be unsustainable.

 

Development
projects, welfare programs and other social spending are common areas
of spending for cuts. In many countries, austerity measures have been
associated with short-term standard of living declines until economic
conditions improved once fiscal balance was achieved (such as in the
United Kingdom under Margaret Thatcher, Canada under Jean Chrétien, and
Spain under González).

 

Private banks, or institutions like the
International Monetary Fund (IMF), may require that a country pursues
an 'austerity policy' if it wants to re-finance loans that are about to
come due. The government may be asked to stop issuing subsidies or to
otherwise reduce public spending. When the IMF requires such a policy,
the terms are known as 'IMF conditionalities'.

Wikipedia goes on to point out:

Austerity
programs are frequently controversial, as they impact the poorest
segments of the population and often lead to a wider separation between
the rich and poor. In many situations, austerity programs are imposed
on countries that were previously under dictatorial regimes, leading to
criticism that populations are forced to repay the debts of their
oppressors.

***

The IMF has already performed a complete audit of the whole US financial system, something which they have only previously done to broke third world nations.

Al
Martin - former contributor to the Presidential Council of Economic
Advisors and retired naval intelligence officer - observed in an April
2005 newsletter that the ratio of total U.S. debt to gross domestic
product (GDP) rose from 78 percent in 2000 to 308 percent in April
2005. The International Monetary Fund considers a nation-state with a
total debt-to-GDP ratio of 200 percent or more to be a "de-constructed
Third World nation-state."

Martin explained:

What
"de-constructed" actually means is that a political regime in that
country, or series of political regimes, have, through a long period of
fraud, abuse, graft, corruption and mismanagement, effectively
collapsed the economy of that country.

***

Given that experts on third world banana republics from the IMF and the Federal Reserve have said the U.S. has become a third world banana republic (and see this and this), maybe the process of turning first world into the third world is already complete.

But
raising taxes and paring social services are necessary to dig us out of
the debt hole, right? And we needed to spend that money to stabilize
the economy, right?

Well, while the economy has admittedly stabilized for billionaires, it hasn't for anyone else. And see this, this and this.

And as I wrote last month:

House majority leader Steny Hoyer - a close ally to President Obama - says the U.S. needs to raise taxes and cut spending .

As Agence France-Presse reports:

The
United States must embrace a blend of tax increases and spending cuts
to rein in its deficit or face a potentially crippling debt crisis like
the one in Greece, a top US lawmaker warned Monday.

 

"It is enough
to look across the Atlantic at Greece's extreme economic crisis and
understand: It can happen here. If we don't change course, it will
happen here," said Democratic House Majority Leader Steny Hoyer...

 

"It
seems to me that the only solution that can win the support of both
parties is a balanced approach: one that cuts some spending and raises
some revenue while avoiding extremes in either direction," he said.

Of course, many others have warned of the massive debt overhang in the U.S. as well.

 

But why aren't our government "leaders" talking about slashing the military-industrial complex, which is ruining our economy with unnecessary imperial adventures?

 

And why aren't any of our leaders talking about stopping the permanent bailouts for the financial giants who got us into this mess? And see this.

 

And why aren't they taking away the power to create credit from the private banking giants - which is costing our economy trillions of dollars (and is leading to a decrease in loans to the little guy) - and give it back to the states?

If we did these things, we wouldn't have to raise taxes or cut core services to the American people.

And
if there's any shortfall, all we have to do is claw back the ill-gotten
gains from the fraudsters working for the too big to fails whose
unlawful actions got us into this mess in the first place. See this, this, this, this and this.

 


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Fri, 04/09/2010 - 08:49 | Link to Comment verum quod lies
verum quod lies's picture

Benanke and others make these statements and you just think Twilight Zone, yet when you open your eyes they are still on CNBC, in front of the Congress, or wherever and for the umpteenth time the moderator declares that furry faced Ben is right to treat Ron Paul as a senile uncle.

Yes, he subsidizes failed and failing banks, effectively props up real estate and other markets by printing public money (thus screwing up basic price signals, and by extension the economy), then effectively demands we take real resources to pay for it (as several here have pointed out, from taxpayers). I think Argentina did something quit useful when debt repayment began to be talked about there. Essentially my understanding is that they declared all debt taken out by the government to be illegal. The reasoning is ethics at its most basic; to whit, if my government does things in my name (i.e., as a citizen/taxpayer) yet does it in a way that is corrupt, dishonest, misleading, or all of the above, then I am not obligated to pay for it. Ethically, I have no obligation to pay for it, and even the IMF has at times (like in the Argentinian case) becomes a bit reluctant to collect (and also not having any military force currently doesn't help their collection efforts).

Imagine I take out a loan on behalf of all the people to have ever posted a comment on ZH and give the proceeds to my friends mostly, then turn around in righteous indignation and demand that each of you pay for it? What is wrong with that picture? With respect to 'representative government', or even dictatorship, you must honestly represent the interests of those paying the bills, or the whole thing tends to fall apart, like now. The problem with the Federal Reserve (or in this case, it's chairman) recommending that stern measures need to be taken, is that they have already incurred many of the costs and now are debating the payment of the bill as we (i.e., the bill payers) watch in horror at the prospect of paying for something we never would have voted for ourselves (e.g., TARP and related, and also mixing it in with future things many think they will still get), especially if we had known or been told this day would come. In short, parasites (and non-elected ones at that) dictating terms to the host is not only an ugly sight, but is ethically just wrong and distasteful on so many levels.

 

Fri, 04/09/2010 - 09:59 | Link to Comment trav7777
trav7777's picture

Every single measure enacted in the last 1.5 years has been to help the BANKS.

TARP was the Senate going alone to put taxpayers DIRECTLY on the hook for giving the banks MONEY with which they paid themselves MASSIVE bonuses.

They told us the REAL economy would collapse...oh really?  You mean my car wouldn't have started on that morning?  The electricity would have shut off?

These motherfucking bankers and economists act like the SUN ITSELF would not rise if it wasn't for their jew confetti (that is a Weimar term).

Thu, 04/08/2010 - 22:04 | Link to Comment 1fortheroad
1fortheroad's picture

Hell people, we have been paying the banks since the personal income tax was enacted

way back when. The federal reserve is the biggest bank ever. They are just asking

for more now, why, because they can and their risk is higher as they see it.

Congressman McFadden 
on the Federal Reserve Corporation 
Remarks in Congress, 1934 
AN ASTOUNDING EXPOSURE 

 

An interesting read.

http://hiwaay.net/~becraft/mcfadden.html

Thu, 04/08/2010 - 21:35 | Link to Comment QQQBall
QQQBall's picture

Is it November yet?

Thu, 04/08/2010 - 20:03 | Link to Comment Raymond K Hassel
Raymond K Hassel's picture

I say lets do it - raise the income tax, put in the VAT, cut the services - lets see what happens, lets evolve... let the chips fall where they may. 

http://www.myvideo.de/watch/2868371/Fight_Club_Ending

Thu, 04/08/2010 - 22:19 | Link to Comment 1fortheroad
1fortheroad's picture

My understanding is they already have detention camps built for resisters. Google detention camps haliburton or see link
http://www.google.com.br/search?hl=en&ei=VYu-S87eMIKkuAfA3LT6Cg&sa=X&oi=...

By the way these camps were built at tax payers expense.

Resistance Is Futile. You Will Be Assimilated

I would say, we are so fucked but I am out of the matrix for
the time being and still feel so fucked.

Fri, 04/09/2010 - 20:22 | Link to Comment Raymond K Hassel
Raymond K Hassel's picture

You may be right - the link is eye opening - but in the end I have deep respect for my fellow man - in no small respect due to ZH.  This country has backbone - and if I'm wrong, well I'd rather be in the camp.

Thu, 04/08/2010 - 20:22 | Link to Comment Raymond K Hassel
Raymond K Hassel's picture

We are in the military-industrial complex, in the armed forces, in the FBI, in the CIA, in the Banks and in Congress; we are in the IRS, in the Democrat and Republican and Indepedent parties - we are here and in Europe and in China and everywhere else.  We are in churches and not in churches.  We are straight and gay, and black and white and yellow and brown.  We are not mgmt, but push us hard enough - do I dare say pretty please?  

Thu, 04/08/2010 - 19:32 | Link to Comment mchandler@ameri...
mchandler@ameritech.net's picture

Is this another - DO it Congress or we'll crash the economy demand?

Thu, 04/08/2010 - 19:29 | Link to Comment caconhma
caconhma's picture

Problems with masses are

  1. They are stupid.
  2. They cannot handle the truth.
  3. They love to get something for nothing.
  4. After all is said and done, they need a master.
In America, for too long, politicians were elected and kept in their offices only because they promised a lot for nothing, and people love it. Well, it could not last for ever. All discussions of whether Greece will default on its national debt are pathetic. Greece will definitely default. Greece will be just a first fallen domino. Nothing less and/or more.

Thu, 04/08/2010 - 18:33 | Link to Comment Cammy Le Flage
Cammy Le Flage's picture

Thank you very much people at ZH.   At least you have a sense of humor in this complete mess.  

Thu, 04/08/2010 - 17:50 | Link to Comment Ripped Chunk
Ripped Chunk's picture

Citizen X: Bernanke must shut the fuck up and we must cut government spending, legalize weed and tax the shit out of it.

It works with liquor.

Thu, 04/08/2010 - 18:46 | Link to Comment sgt_doom
sgt_doom's picture

No way, Ripped Chunk, no way.

They will never legalize weed or other drugs without a major physical battle,  as they ARE untaxed, which means all those drug-laundered monies also go untaxed, which is EXACTLY how the banksters prefer it.

 

Thu, 04/08/2010 - 17:37 | Link to Comment 3ringmike
3ringmike's picture

you can now proceed to kiss my ass. i chose to not participate any longer. no guns. no screams. i'm just going to sit down. jail? big fucking deal. treason? who the fuck cares. gonna sit down.

Thu, 04/08/2010 - 17:20 | Link to Comment Traianus Augustus
Traianus Augustus's picture

You have to love it.  The guys who caused, profited and gained more power from the looting of the American economy are now dictating payment from their victims!!!  May these people get their just desserts.  Sooner rather than later.

Thu, 04/08/2010 - 17:09 | Link to Comment trav7777
trav7777's picture

Let me translate Bernanke's statement for everyone:

You need to pay us back real things for the imaginary dollars we lent you which was "collateralized" by capital we did not have.

I'm going to enjoy Madmax.  I'll go into a village and proclaim myself a goldsmith with a massive hoard.  Then I will flood the region with paper "loans" against my 0 reserves and then jack rates to force everyone into default and say it's time for austerity, now give me your land, cattle, and daughters.

The fucking Fed deals with IMAGINARY MONEY backed by NOTHING.  Why should ANYONE respect their loans?  They lent what they did NOT HAVE.  All the banks do that.

What we should DO is repay the banks IN-KIND.  IOW, print up our OWN money based upon NO CAPITAL and lend it to ourselves at a mandatory exchange rate and call it a done deal.  Fuck them and their usury.

Thu, 04/08/2010 - 19:43 | Link to Comment hayleecomet
hayleecomet's picture

You nailed it.

Bernanke:

Federal Reserve Chairman Ben S. Bernanke warned Wednesday that Americans may have to accept higher taxes or changes in cherished entitlements such as Medicare and Social Security if the nation is to avoid staggering budget deficits that threaten to choke off economic growth.

"These choices are difficult, and it always seems easier to put them off -- until the day they cannot be put off anymore," Bernanke said in a speech. "But unless we as a nation demonstrate a strong commitment to fiscal responsibility, in the longer run we will have neither financial stability nor healthy economic growth." 

He is a lying sack of m-f'ing rat shit.  (That felt good.)

 

Thu, 04/08/2010 - 19:56 | Link to Comment Cistercian
Cistercian's picture

 I would only add that he and his pals need to be removed from power and punished.

 Harshly.

 They are all villains, and justice requires they be dealt with.Before it is too late.

Thu, 04/08/2010 - 16:58 | Link to Comment JohnG
JohnG's picture

 

I sometimes think that tax rates should just be raised to 100% of income just to prove to themselves that IT DOES NOT WORK.

And please, Volker, have a more serious stroke.  Greenspan shut the fuck up.  Bernanke, try him for perjury.

Assholes, fucking assholes all.  Goddammit this country is going to hell so fast.  Faster and faster.  Time to leave.  Shit.

Thu, 04/08/2010 - 19:08 | Link to Comment Shameful
Shameful's picture

I think the goal is around 90%.  Like I said there is a reason for them making that banking law and advertising the assassination of Americans overseas. They want to stop us from running so they can loot us here.

Thu, 04/08/2010 - 16:57 | Link to Comment MarketTruth
MarketTruth's picture

NATIONAL STRIKE
April 15 to April 18TH
Tell Everyone You Know
POST THIS ON EVERY DISCUSSION BOARD
www.taxfree15.com

Thu, 04/08/2010 - 16:48 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

There is a flip side to the average American here that I think people may be missing.  Just as there will be no tax increase to pay for public pension benefits, the average American will be aroused from their slumber, and in a terrible mood to boot, if anyone tries to impose large tax increases on the middle class to pay for all this governmental spending. Guys, I'm afraid that just isn't going to happen.  I'm not talking tea parties or any of that nonsense, I'm talking real civic unrest, and public hangings (in effigy) of any politician who votes for it.   There will be nibbling around the edges (extension of age to receive SS benefits, reduction of cost of living increases, that sort of thing) but no tax increase to actually pay for all this.  You will see. Noway, aint' gonna happen. We will behave badly if someone tries it, and the IMF, last I checked, is not heavily armed.

Thu, 04/08/2010 - 18:49 | Link to Comment sgt_doom
sgt_doom's picture

Dude, you sound like a fighting Thai (especially given their current events) or a fighting Krygistani (especially given their current events).

Evidently people can still read in those two countries?

And never talk badly about the IMF or they will turn you into a securitized, public-private partnership, big guy.

Thu, 04/08/2010 - 16:42 | Link to Comment Hatshepsut7
Hatshepsut7's picture

Like what Gertrude Stein had to say about this back in the 30ies:

 

Is money money or isn't money money. Everybody who earns
it and spends it every day in order to live knows
that money is money, anybody who votes it to be
gathered in as taxes knows money is not money. That
is what makes everybody go crazy.... When you earn
money and spend money every day anybody can know the
difference between a million and three. But when you
vote money away there really is not any difference
between a million and three.

 
(Gertrude Stein (1874-1946), U.S. author. Originally published in Saturday Evening Post (June 13, 1936). "Money," How Writing Is Written, Black Sparrow Press (1974).)

How true.  Except millions is small change nowadays.

Thu, 04/08/2010 - 16:07 | Link to Comment Mark Beck
Mark Beck's picture

So BEN puts all of the Nation's wealth in the hands of the Banks and doesn't like the returns? Perhaps a bad long term investment, in a non-contributing sector?

I find it hard to believe that anyone, who understands to amount of consumer de-leveraging in the US, would consider more taxation as a way to increase growth. Complete an utter BS.

The first thing that will be cut is SS. It is the lowest hanging fruit (cut) in federal services.

Mark Beck

Thu, 04/08/2010 - 16:26 | Link to Comment Bear
Bear's picture

One does not need to even 'cut' SS; just increase the income tax on it

Thu, 04/08/2010 - 18:53 | Link to Comment sgt_doom
sgt_doom's picture

I think Beck meant that they will privatize Social Security.

What few people have yet to grasp was that this so-called "healthcare reform" (really a private insurance subsidy program) is the privatization of taxation, that is, if the private insurance corps aren't paid, you will be fined and collected upon by the IRS (a tax collecting governmental agency, last time I heard).

This establishes the legislative legal precedent for privatizing everything else in the social services category.

Screwed......so very screwed....

Thu, 04/08/2010 - 16:01 | Link to Comment seventree
seventree's picture

Great. A banana republic with no bananas.

Thu, 04/08/2010 - 15:44 | Link to Comment Bear
Bear's picture

We are really in the "Truly Great Depression" ... of logic ... more tax more recovery

Thu, 04/08/2010 - 15:15 | Link to Comment JR
JR's picture

No more will we be plagued with Congressional middlemen and NY Times columnists suggesting that higher taxes are critical in this era of budget crisis. We now have the unbelievable spectacle of the banker as the taxman—Volcker, the banker calling for a VAT tax; Bernanke calling for a tax hike and the possibility of reductions in Medicare and Social Security.

At last, the pretense is gone.  First these bankers, posing as national leaders with a mission to rein in inflation, steal the money from the treasury, debase the currency, game the debt, and, now, take the lead in asking for more. 

Thu, 04/08/2010 - 15:07 | Link to Comment Shameful
Shameful's picture

America, soon to have Europe style taxes but without those pesky services!

This was known.  There is a reason the US taxes it citizens worldwide and it's hard to leave with money or dump citizenship if one has a lot of assets.  Hell we publicly announce that we will kill our citizens abroad with no trial. 

Where will it end, two classes.  The super rich who benifit from the governements largess and the poor who have to pay for it.

Thu, 04/08/2010 - 18:45 | Link to Comment Buck Johnson
Buck Johnson's picture

You are so correct, they do that because they can't let their people go period.  They know that we are truly a banana republic now and they haven't had the courage to pull that final trigger of taking this or that away or cutting this or that or denying stuff from the general public.  Joseph Goebbels said: "If you tell a lie big enough and keep repeating it,
people will eventually come to believe it. The
lie can be maintained only for such time as the
State can shield the people from the political,
economic and/or military consequences of the
lie. It thus becomes vitally important for the
State to use all of its powers to repress dissent,
for the truth is the mortal enemy of the lie,
and thus by extension, the truth is the
greatest enemy of the State."

And that is whats happening today, they have for years been able to shield the American people from the consequences of the inept leadership and foolish misadventures at the expense of our economy and military.  Now they can't do it anymore and are trying to find a nice way of saying that we are broke.  A nice way of saying that we will still be broke, until a few decades from now.  And all those pensions and retirement promises that we have been waiting to cash in isn't going to pay out as much or not at all.  We've been had, there's a reason why Bush wanted that martial law declaration on the books.  Because he and others know that eventually they will have to use them to squash the dissent in america.

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