We've been hearing rumblings since before the overthrow of Yanukovych last February that the IMF/EU would be delighted to refinance Ukraine's debts on favorable terms -- provided Ukraine adopts severe austerity measures like those of Greece -- or even twice as harsh as the terms imposed on Greece.
Yanukovych was overthrown in large measure because he refused to accommodate those terms -- once he fully understood what those terms meant. The problem with negotiating EU/IMF bailout terms is that the actual terms are not disclosed until the moment comes for signing the documents. And then, oh my goodness. The terms are much harsher, the consequences for not abiding with them are much more severe, and the determination of the EU/IMF negotiators to have their way, no matter what, is shocking.
Yanukovych was expected to sign away Ukraine's patrimony and sovereignty at the Vilnius conference last November, but he balked, said "No!" and turned to Russia for aid. Russia offered a much better deal on terms that did not unduly interfere with either Ukraine's sovereignty or the welfare of its people. Compared to IMF/EU demands for harsh and immediate austerity measures on the people of Ukraine in exchange for a "bailout" that required extremely harmful and unpopular economic "reforms," (reforms that potentially included some "good" measures along with the bad) the Russian deal allowed a much more moderate economic transition and the integration of Ukraine's economy with those of the Russian led Eurasian Economic Union -- apparently as well as that of the EU, but on terms that would protect Ukraine's people from the abuses so customary from the EU toward the Periphery.
The anti-Yanukovych demonstrations in Kiev and elsewhere in Ukraine began immediately when Yanukovych refused to sign in Vilnius, as if they had been organized prior to the conference. What struck me about the research I did into New Citizen and Center UA, the NGOs Pierre Omidyar funded in Ukraine, was the fact that the dozens of orgs under them, some of which, in turn, were umbrellas for dozens or even hundreds of other NGOs and individuals, like Russian matryoshka dolls, was their obsessive focus on EU integration and 'education' (propaganda) on behalf of Europe. This was a long term project. Some of the orgs and NGOs had been promoting the EU cause in Ukraine for decades, since independence from the Soviet Union. Many of the orgs were focused on youth, which meant that over the decades, Ukrainians grew up knowing little or nothing besides pro-EU propaganda.
Many of the NGOs under New Citizen and Center UA's wing (New Citizen is a "project" of Center UA, which appears to be the master org) were also funded by NED (National Endowment for Democracy) and USAID (US Agency for International Development), both of which are considered CIA fronts, though NED has so far been able to abjure the label and claim independence from CIA control.
My point has never been that the US precipitated the revolt in Ukraine against Yanukovych. If it had, I don't think the rightists in this country would be parading around screaming about "weakness." Instead, it looks like there was a coalition of pro-EU interests in Ukraine who were prepared to go to the streets should the Yanukovych regime balk at EU/IMF demands for austerity and other "reform" measures. Up to the point of the Vilnius conference, the Yanukovych government had been working closely with the EU and IMF toward the goal of European integration. There was very little indication prior to Vilnius that Yanukovych would balk and take the Russian offer.
For its part, the US seems to have been most concerned with the US corporate sector and its interests in exploiting the resources of Ukraine. I haven't written much about that, but there were and are major US corporate interests involved in the Ukrainian issue, some of which are highlighted in the triumphal Vicky Nuland-Kagan video posted previously. But there are many more. A number of people have looked into the corporate interests involved in Ukraine's current unpleasantness, and they read like a who's who of American corporate greed. While their corporate interests are being protected and fostered by the US government, they do not appear to be the ones who precipitated the revolt. The revolt seems to have arisen locally if not spontaneously, driven by the many EU integration currents fostered by the multiplicity of NGOs -- hundreds and hundreds of them -- which had been promoting EU interests in Ukraine for many years.
Now that the interim "government" of Yatsenyuk has signed onto the IMF/EU "reform" demands, some of the details of just what is being provided and required are coming out, and it is becoming clear what a duplicitous two-step has been underway all along.
According to the UK Telegraph, what the deal amounts to is paying off Russian banks and Western hedge fund creditors at 100% while forcing increasingly dire levels of austerity on the Ukrainian people, austerity measures that will lead to misery and despair, death and depopulation, much as happened in Latvia, and much more severe than the measures imposed on Greece. The fact that Russian banks and US and European hedge funds are being paid off at the expense of Ukraine's people is interesting and gives a clue to the thinking behind the various maneuvers that have taken place.
The claim is made that Yanukovych absconded with tens of billions (up to $70 billion) in his flight from Kiev, and that's why such severe measures are "necessary" to prevent Ukraine's economic collapse. Yet prior to the overthrow of Yanukovych -- and his alleged theft of funds -- the same measures were being demanded.
In other words, the issue of how much has been "stolen" by the Ukrainian oligarchs and the Yanukovych government is beside the point. The money which is being offered by IMF and EU (which includes a little bit from the US) has nothing to do with that issue. It's propaganda to say it does, propaganda that is supposed to make Ukrainians more compliant with their suffering now by blaming Yanukovych for it.
It seems to me that Yatsenyuk's belligerence during this period is also part of a propaganda campaign to ensure popular submission to these highly destructive measures being imposed by the IMF and EU, and to ensure that the resource exploitation by American and EU companies is not interfered with.
And if I'm reading the beads right, Russia has no problem with any of this as long as their interests and oligarchs get paid. Jesus, what a cockup.
Quite a show when you think about it.
Showing posts with label austerity. Show all posts
Showing posts with label austerity. Show all posts
Saturday, March 29, 2014
Wednesday, April 3, 2013
Austerity for Thee
More and more people seem to be coming to the realization that Our Betters in Washington are selling us a bill of goods regarding the viability of various social programs, specifically Social Security ("if we don't do something right now, now, now! we're all gonna die!"), that is plenty familiar -- and wrong.
Of course it will still be a while before many of those who are opposed to -- say -- pilfering Social Security revenues for -- say -- yet more tax cuts for the rich, but even they'll come around after many more years of pounding.
Social Security is not really off-budget like Our Glorious Wars, not at all. As I understand it, until the recent payroll tax "holiday," it was paying out about as much as it brought in, so it was at least revenue neutral. Prior to The Permanent Recession (which happened simultaneously with the start of Baby Boomer retirements, isn'tthatinterestingthough) Social Security was collecting a substantial surplus, all of which was secured by (I wouldn't say "invested in...") special Treasury bonds.
Since the payroll tax "holiday," however, and even now with full payroll taxes being collected in incomes once again (which amounts to a 2% tax hike on working people) Social Security has been paying out somewhat less than (or quite a bit less than, depending on your point of view) it has been receiving in revenues.
This has meant "tapping the Trust Fund" -- except it doesn't really. The people who say the Trust Fund isn't real are right in that sense. There is no special place where the Trust Fund Trillions are stored for safekeeping. Payments from the Trust Fund come out of the government's General Fund -- which means they are either taxed or borrowed into being.
Because of the incessant jiggering that's been done to the Fund and the budgets and such, it ultimately means that all the money that's being paid out to Social Security beneficiaries comes from the General Fund, though SS continues to maintain nominal independence, what with its dedicated revenue stream and so on and so forth (the law, as it were).
Social Security is no more "going broke" than the Government itself is "going broke" or the Imperial Storm Troopers are "going broke." The Federal Government has a highly creative ability to keep itself from "going broke," as well as the ability to determine who will actually go broke in the Casino of Life.
Thus all the yakking and yabbering about Social Security being unsustainable or what have you is really little more than rhetoric for the yobs and entertainment for the Higher Ups as they decide (on Our Behalf, of course) who will and will not benefit from this or that decision or action they take and implement.
In the case of Social Security, the High and the Mighty have decided they want to cut Social Security payments to beneficiaries "going forward." And they have decided they will do it, no matter what the People think about it, though they will sell it as a "strengthening" or "improvement" or what have you, "to ensure that Social Security is there for the next generations, yadda yadda," as if they actually care one way or another about you and yours. (For the record, they don't.)
They have decided in their Wisdom to re-prioritize Government spending; they don't want to spend so much on the old, the halt, the blind, and the lame as they would otherwise be spending given the priorities set a generation or so ago. They aren't seeking to reduce the amount of Government spending in the aggregate -- no, they'll increase it into the dim mists of the Future Unknown. They just don't want to spend as much on you for the well being of you and yours.
This is still somewhat abstract for Americans, because it's not altogether obvious how this re-prioritization is supposed to work. A lot of people seem not to realize that many benefit payments have been severely cut as it is, that eligibility for benefits has been restricted, and that millions and millions of people have been cut off from benefits altogether. This has come at the cost of a stunning increase in poverty, hunger and homelessness in this country -- yet it's largely invisible or goes unrecognized.
It's happening not because of any "lack of money" -- there's plenty of money. It's happening because Our Betters see their opportunity and they are taking their opportunity to ensure their perpetual happiness while incrementally enmiserating everyone else. What could be better -- for them.
If they are not actually going to reduce aggregate government spending (don't be silly, they won't) but they are insistent on reducing the amount spent for "benefits" -- or anything else that doesn't provide an immediate bottom line enhancement to them and their cronies -- what do they want to spend the money on?
Well, wars, for one thing. Another one -- could get nasty -- brewing on the Pacific horizon involving Korea. Oh, that's the ticket. Let's blow things up Over There, and let's use some Nukes, too, eh? But see, that's how Our Betters think. If you take a moment to ponder what's going on Over There, it's hard to escape the notion that L'il Kim the Bad Boy got his ideas about How To Deal with the Rest of the World not from Mao or Stalin or his Old Man but from Gee Dubya and the ilk he surrounded himself with -- whose ideas and ideals still infest the Government. (Of course, my theory has long been that the Busheviks were the very subversives we, as little ones, were incessantly warned about in the routine Anti-Communist Propaganda lectures we were exposed to. But that's another topic for another day...)
Wars can be extremely profitable for certain connected interests, as was demonstrated in breathtaking fashion in Iraq and Afghanistan. In Iraq, it was partly a matter of literally looting the people and the country of anything of value and destroying the rest, and partly it was a matter of looting the American Treasury, some of it in the form of billions of dollars (shrink-wrapped $100 bills) airlifted over on pallets, never accounted for. Endless defense spending for warriors and materiel, endless no-bid contracts, amounting to trillions more in money for nothin' -- not to pay for anything blown up or killed or conquered, not for repairs and maintenance, not for anything at all, except for the contractor's being. The closest parallel to what was happening might have been during the American Indian Wars in the 19th Century, an extraordinary period of handing out favors and payments -- often for nothing at all in concrete terms -- indeed ensuring that favored recipients would enjoy endless Government rewards for... being. All charged to War. What a racket.
The bloated National Security State has proved immensely profitable to certain connected interests -- sometimes the same ones who profit from War, sometimes others -- and they want to see those profits continue and increase until hell freezes over if they have their way. State security is a byproduct, if it occurs at all. The point, after all, is not to secure the state, it is to secure the profits of connected interests, and Americans have only the slightest glimmer of recognition that these enormous profits are actually coming at the People's expense. But that's the point.
One of the cleverest favored interests is the Medical-Industrial Complex that profits in myriad ways and seeks to ensure the perpetuation of that profit through the tender mercies of Obamacare and the forced extractions from The People that go along with it. It's not just a matter of ensuring profits for the insurance industry forever, oh no. There is more, much more, including all the many ways the Complex can profit directly from the many extractions yet to come, such as higher (and ever-higher) Medicare co-pays, premiums, and potentially the privatization of the entire program. There is no thought -- at all -- of reducing the scandalously high medical care prices in this country (another source of looting and profit). No. All the thinking among policy makers is about how to get more money out of the pockets of the old, the halt, the blind and the lame to pay for ever-growing medical costs. Clearly, the M-I Complex is one of The Most Favored Interests.
Of course the Banking Interests seem to be the most favored of all. Whereas War, the National Security State, and the Medical-Industrial interests have managed to extract trillions from the People during the last decade and a half or so, the Banking Interests managed a heist of hundreds of trillions practically overnight. Nothing like that has happened before in human history. It's a stunning achievement. Even Enron couldn't do it.
One of the little noticed factors of both the boom and the bust that has led to the current Permanent Recession (for the rest of us, not for Our Betters) was that there was an enormous amount of theft going on (much of it out in the open) and that the bulk of this theft was by the rich from the rich. That's where the money was after all, and in some ways, it was surprisingly easy for clever dicks to get.
Once that easy money was "redistributed" (among the rich) however, many of those who lost in the game wanted -- demanded -- their losses be made good from you and me. In other words, "austerity" for the rest of us, profits without end for the High and the Mighty.
The banks were the first in line, and their banditry was and is stark and stunningly successful. Not only were they made whole for their casino losses, they were apparently granted what amounts to a permanent subsidy to not only cover any future losses but to ensure an endlessly growing profit stream.
"Austerity" is perhaps the purest form of theft from the People to enhance the revenues and profits of favored interests, but in the United States, as I mentioned earlier, "austerity" is still something of an abstraction. The connections between cuts in benefits and services that have already been enacted, together with those to come, and the concomitant rise in poverty, hunger, homelessness among all sectors of the Lower Orders, along with the decimation of the middle class, aren't yet clear enough for widespread recognition.
But overseas, in Europe and Britain, those connections couldn't be clearer, as one after another, the peripheral countries and marginal population segments are quite openly looted and impoverished for the benefit of the "core" -- but more specifically for the benefit of the rising European Bankers and the Neo-Aristocracy. Parasites, in other words.
The already too meager benefits of Social Security in this country must be further reduced in order to ensure that the favored few receive the endless profits they believe they are entitled to.
But as we've seen with the banks most clearly, nothing -- at all -- need be reduced to provide the Entitled Class with endless profits. No pallets of $100 bills need be airlifted, no extractions need be taken from the pockets of workers and the elderly. All it takes is jiggering a few numbers on a screen, and Voilà: beaucoups de bucks! It's magic!
Wars and the National Security State, all the social benefits one could want, infrastructure spending out the wahzoo, all of it and more can be funded and more, with merely a jiggering of the numbers on a screen.
This tells us that the point of all the benefit cuts and austerity measures is simple: to inflict pain and suffering sadistically, because it can be done and the victims can do nothing about it.
Power.
For the sake of it.
Monstrous.
Of course it will still be a while before many of those who are opposed to -- say -- pilfering Social Security revenues for -- say -- yet more tax cuts for the rich, but even they'll come around after many more years of pounding.
Social Security is not really off-budget like Our Glorious Wars, not at all. As I understand it, until the recent payroll tax "holiday," it was paying out about as much as it brought in, so it was at least revenue neutral. Prior to The Permanent Recession (which happened simultaneously with the start of Baby Boomer retirements, isn'tthatinterestingthough) Social Security was collecting a substantial surplus, all of which was secured by (I wouldn't say "invested in...") special Treasury bonds.
Since the payroll tax "holiday," however, and even now with full payroll taxes being collected in incomes once again (which amounts to a 2% tax hike on working people) Social Security has been paying out somewhat less than (or quite a bit less than, depending on your point of view) it has been receiving in revenues.
This has meant "tapping the Trust Fund" -- except it doesn't really. The people who say the Trust Fund isn't real are right in that sense. There is no special place where the Trust Fund Trillions are stored for safekeeping. Payments from the Trust Fund come out of the government's General Fund -- which means they are either taxed or borrowed into being.
Because of the incessant jiggering that's been done to the Fund and the budgets and such, it ultimately means that all the money that's being paid out to Social Security beneficiaries comes from the General Fund, though SS continues to maintain nominal independence, what with its dedicated revenue stream and so on and so forth (the law, as it were).
Social Security is no more "going broke" than the Government itself is "going broke" or the Imperial Storm Troopers are "going broke." The Federal Government has a highly creative ability to keep itself from "going broke," as well as the ability to determine who will actually go broke in the Casino of Life.
Thus all the yakking and yabbering about Social Security being unsustainable or what have you is really little more than rhetoric for the yobs and entertainment for the Higher Ups as they decide (on Our Behalf, of course) who will and will not benefit from this or that decision or action they take and implement.
In the case of Social Security, the High and the Mighty have decided they want to cut Social Security payments to beneficiaries "going forward." And they have decided they will do it, no matter what the People think about it, though they will sell it as a "strengthening" or "improvement" or what have you, "to ensure that Social Security is there for the next generations, yadda yadda," as if they actually care one way or another about you and yours. (For the record, they don't.)
They have decided in their Wisdom to re-prioritize Government spending; they don't want to spend so much on the old, the halt, the blind, and the lame as they would otherwise be spending given the priorities set a generation or so ago. They aren't seeking to reduce the amount of Government spending in the aggregate -- no, they'll increase it into the dim mists of the Future Unknown. They just don't want to spend as much on you for the well being of you and yours.
This is still somewhat abstract for Americans, because it's not altogether obvious how this re-prioritization is supposed to work. A lot of people seem not to realize that many benefit payments have been severely cut as it is, that eligibility for benefits has been restricted, and that millions and millions of people have been cut off from benefits altogether. This has come at the cost of a stunning increase in poverty, hunger and homelessness in this country -- yet it's largely invisible or goes unrecognized.
It's happening not because of any "lack of money" -- there's plenty of money. It's happening because Our Betters see their opportunity and they are taking their opportunity to ensure their perpetual happiness while incrementally enmiserating everyone else. What could be better -- for them.
If they are not actually going to reduce aggregate government spending (don't be silly, they won't) but they are insistent on reducing the amount spent for "benefits" -- or anything else that doesn't provide an immediate bottom line enhancement to them and their cronies -- what do they want to spend the money on?
Well, wars, for one thing. Another one -- could get nasty -- brewing on the Pacific horizon involving Korea. Oh, that's the ticket. Let's blow things up Over There, and let's use some Nukes, too, eh? But see, that's how Our Betters think. If you take a moment to ponder what's going on Over There, it's hard to escape the notion that L'il Kim the Bad Boy got his ideas about How To Deal with the Rest of the World not from Mao or Stalin or his Old Man but from Gee Dubya and the ilk he surrounded himself with -- whose ideas and ideals still infest the Government. (Of course, my theory has long been that the Busheviks were the very subversives we, as little ones, were incessantly warned about in the routine Anti-Communist Propaganda lectures we were exposed to. But that's another topic for another day...)
Wars can be extremely profitable for certain connected interests, as was demonstrated in breathtaking fashion in Iraq and Afghanistan. In Iraq, it was partly a matter of literally looting the people and the country of anything of value and destroying the rest, and partly it was a matter of looting the American Treasury, some of it in the form of billions of dollars (shrink-wrapped $100 bills) airlifted over on pallets, never accounted for. Endless defense spending for warriors and materiel, endless no-bid contracts, amounting to trillions more in money for nothin' -- not to pay for anything blown up or killed or conquered, not for repairs and maintenance, not for anything at all, except for the contractor's being. The closest parallel to what was happening might have been during the American Indian Wars in the 19th Century, an extraordinary period of handing out favors and payments -- often for nothing at all in concrete terms -- indeed ensuring that favored recipients would enjoy endless Government rewards for... being. All charged to War. What a racket.
The bloated National Security State has proved immensely profitable to certain connected interests -- sometimes the same ones who profit from War, sometimes others -- and they want to see those profits continue and increase until hell freezes over if they have their way. State security is a byproduct, if it occurs at all. The point, after all, is not to secure the state, it is to secure the profits of connected interests, and Americans have only the slightest glimmer of recognition that these enormous profits are actually coming at the People's expense. But that's the point.
One of the cleverest favored interests is the Medical-Industrial Complex that profits in myriad ways and seeks to ensure the perpetuation of that profit through the tender mercies of Obamacare and the forced extractions from The People that go along with it. It's not just a matter of ensuring profits for the insurance industry forever, oh no. There is more, much more, including all the many ways the Complex can profit directly from the many extractions yet to come, such as higher (and ever-higher) Medicare co-pays, premiums, and potentially the privatization of the entire program. There is no thought -- at all -- of reducing the scandalously high medical care prices in this country (another source of looting and profit). No. All the thinking among policy makers is about how to get more money out of the pockets of the old, the halt, the blind and the lame to pay for ever-growing medical costs. Clearly, the M-I Complex is one of The Most Favored Interests.
Of course the Banking Interests seem to be the most favored of all. Whereas War, the National Security State, and the Medical-Industrial interests have managed to extract trillions from the People during the last decade and a half or so, the Banking Interests managed a heist of hundreds of trillions practically overnight. Nothing like that has happened before in human history. It's a stunning achievement. Even Enron couldn't do it.
One of the little noticed factors of both the boom and the bust that has led to the current Permanent Recession (for the rest of us, not for Our Betters) was that there was an enormous amount of theft going on (much of it out in the open) and that the bulk of this theft was by the rich from the rich. That's where the money was after all, and in some ways, it was surprisingly easy for clever dicks to get.
Once that easy money was "redistributed" (among the rich) however, many of those who lost in the game wanted -- demanded -- their losses be made good from you and me. In other words, "austerity" for the rest of us, profits without end for the High and the Mighty.
The banks were the first in line, and their banditry was and is stark and stunningly successful. Not only were they made whole for their casino losses, they were apparently granted what amounts to a permanent subsidy to not only cover any future losses but to ensure an endlessly growing profit stream.
"Austerity" is perhaps the purest form of theft from the People to enhance the revenues and profits of favored interests, but in the United States, as I mentioned earlier, "austerity" is still something of an abstraction. The connections between cuts in benefits and services that have already been enacted, together with those to come, and the concomitant rise in poverty, hunger, homelessness among all sectors of the Lower Orders, along with the decimation of the middle class, aren't yet clear enough for widespread recognition.
But overseas, in Europe and Britain, those connections couldn't be clearer, as one after another, the peripheral countries and marginal population segments are quite openly looted and impoverished for the benefit of the "core" -- but more specifically for the benefit of the rising European Bankers and the Neo-Aristocracy. Parasites, in other words.
The already too meager benefits of Social Security in this country must be further reduced in order to ensure that the favored few receive the endless profits they believe they are entitled to.
But as we've seen with the banks most clearly, nothing -- at all -- need be reduced to provide the Entitled Class with endless profits. No pallets of $100 bills need be airlifted, no extractions need be taken from the pockets of workers and the elderly. All it takes is jiggering a few numbers on a screen, and Voilà: beaucoups de bucks! It's magic!
Wars and the National Security State, all the social benefits one could want, infrastructure spending out the wahzoo, all of it and more can be funded and more, with merely a jiggering of the numbers on a screen.
This tells us that the point of all the benefit cuts and austerity measures is simple: to inflict pain and suffering sadistically, because it can be done and the victims can do nothing about it.
Power.
For the sake of it.
Monstrous.
Saturday, January 5, 2013
The Austerity Confusion Continues
First, the notion that the measures just passed by the Congress are "not Austerian" is widespread and wrong, and this misperception would be hilarious if real people weren't being forced into poverty because of it.
Yet I've seen a lot of cant and rhetoric claiming that because "taxes were raised on the rich" -- yeah right -- the measures "can't be Austerian." Not only that, but there were some spending programs in the mix. (Like yet more corporate welfare?) AND unemployment benefits were extended! Yay!
Reducing the disposable income of the masses through increased taxation is Austerian pretty much by definition, and that's what's happened with the expiration of the payroll tax holiday. What makes it even more Austerian, by definition, is the fact that at least twice as much revenue will be raised from the increased payroll taxes on the masses as will be raised from increased income taxes on the rich. Isn't that wonderful? Isn't that the way it's supposed to be?
Second, the argument that the increased payroll taxes will be used to shore up Social Security is something of a crock. During the payroll tax holiday, the shortfall in Social Security revenue -- which is used to pay current benefits, not socked away for the future -- was made up dollar for dollar from the general fund, something like $110 or $120 billion per year. What it meant was that any shortfall in Social Security revenue to pay existing benefits was paid directly from the general fund, and guess what? That's exactly what happens all the time and will continue to happen for some time to come as the Baby Boomers retire in their multitudes. We can call it "cashing in" Social Security's Treasury Bonds if we want, but the effect is the same: any shortfall between SS revenues from payroll taxes and obligations to beneficiaries is made up from the general fund.
That's why there is such a push to curb, limit, cut, reduce, hack, and trim Social Security benefits now and going forward.
The Chained CPI being promoted as the "least bad" of options. The point is to reduce the amount SS draws from the general fund so as to avoid raising revenues from those who have the most in order to the benefits due seniors and other recipients of Social Security.
The increased payroll taxes are actually shoring up the general fund, making it less necessary to increase taxes on the rich in order to pay for Social Security and other benefits. But still, there is a drain on the general fund as SS Treasuries are redeemed, and any drain at all to pay for Old Farts is considered anathema by the Highest of the Mighty, so there will continue to be calls to cut benefits, no matter how much revenue is extracted from the masses. In the end, there is no dedicated Social Security money which cannot be taken for other purposes if Congress wants to do so and the White House agrees. If Congress and the White House want wars, for example, and need money to pay for them, they will get that money anywhere they can, and if that means raiding Social Security, they'll do it. In fact, Social Security has already been fully and repeatedly raided -- to pay for wars and tax cuts on the rich among many other things.
And there is nothing you and I can do about it.
But income tax rates were raised on the rich, né? Well, yes, slightly. And that increase -- which may not actually produce much revenue, we'll see -- is also by definition Austerian. Of course the effect of the income tax increase on the rich is nothing like the effect of the payroll tax increase on the working and middle classes. In fact, if the rich actually pay the increase the effect on them will be almost imperceptible. The increased payroll taxes on the working and middle classes, on the other hand, can have a devastating effect for those on the financial edge.
I've seen lots of commentary from people who say "It's only $50 a pay period! I can afford that! And it's going to Social Security, so it's a good thing!" Well, a lot of people can't afford it, especially not after their income has already taken such a battering from the Permanent Recession as it is. The revenue is not going to shore up Social Security, it's going to shore up the general fund so that taxes on the rich won't have to be raised to an appropriate level. Millions upon millions of Americans have already been forced into poverty during the course of this Perpetual Recession, and due to the increase in payroll taxes without any offset, millions more will be forced into poverty. Oh, it's lovely that some working and middle class households can afford to lose 2% of their disposable income, but many cannot.
The fact that there was no effort to provide an offset for the loss of working and middle class disposable income is the tell here. The Neo-liberal/Austerian point, after all, is to make the masses pay for everything and insofar as possible to relieve the rich and powerful from taxation, even provide them with handsome emoluments and subsidies -- paid for by extractions from the masses.
And we should note -- though without surprise -- the extraordinary levels of corporate welfare included in the Neo-liberal/Austerian measures just passed and signed into law. My, my, my. But then, corporate welfare is part of the Neo-liberal/Austerian program, after all.
There has been a lot of argument regarding the fact that "Austerity doesn't work." But that avoids the point. "Doesn't work" for whom? It doesn't work to the benefit of the masses, of course not. It's not meant to -- no matter how it's sold. It is meant to enable a diminishing cadre of super-rich to accumulate a greater and greater and still greater number of assets (not "wealth" so much as assets) through and by which they are able to exercise greater and greater levels of power. And for those purposes, Austerity works wonders.
Austerity is imposed in order to take assets from the masses at the lowest possible cost to the plunderers and predators, pure and simple. And it works.
The confusion about all of this is a factor of the propaganda that surrounds the imposition of the policies of Austerity (Shock Doctrine, Neo-liberalism.) Without the propaganda, these policies cannot be imposed. And the propaganda is everywhere. Surprisingly -- or maybe not -- it pervades the "progressive" new media, to the extent that it is almost impossible to avoid or in many cases to cut through the bullshit.
Under the circumstances, people by and large don't know what to believe. Confusion is inevitable (and desirable to the beneficiaries of these policies.) The People "go with their gut," and too often that means buying a lie. Grifters, hucksters and conmen have never had it better.
Yet I've seen a lot of cant and rhetoric claiming that because "taxes were raised on the rich" -- yeah right -- the measures "can't be Austerian." Not only that, but there were some spending programs in the mix. (Like yet more corporate welfare?) AND unemployment benefits were extended! Yay!
Reducing the disposable income of the masses through increased taxation is Austerian pretty much by definition, and that's what's happened with the expiration of the payroll tax holiday. What makes it even more Austerian, by definition, is the fact that at least twice as much revenue will be raised from the increased payroll taxes on the masses as will be raised from increased income taxes on the rich. Isn't that wonderful? Isn't that the way it's supposed to be?
Second, the argument that the increased payroll taxes will be used to shore up Social Security is something of a crock. During the payroll tax holiday, the shortfall in Social Security revenue -- which is used to pay current benefits, not socked away for the future -- was made up dollar for dollar from the general fund, something like $110 or $120 billion per year. What it meant was that any shortfall in Social Security revenue to pay existing benefits was paid directly from the general fund, and guess what? That's exactly what happens all the time and will continue to happen for some time to come as the Baby Boomers retire in their multitudes. We can call it "cashing in" Social Security's Treasury Bonds if we want, but the effect is the same: any shortfall between SS revenues from payroll taxes and obligations to beneficiaries is made up from the general fund.
That's why there is such a push to curb, limit, cut, reduce, hack, and trim Social Security benefits now and going forward.
The Chained CPI being promoted as the "least bad" of options. The point is to reduce the amount SS draws from the general fund so as to avoid raising revenues from those who have the most in order to the benefits due seniors and other recipients of Social Security.
The increased payroll taxes are actually shoring up the general fund, making it less necessary to increase taxes on the rich in order to pay for Social Security and other benefits. But still, there is a drain on the general fund as SS Treasuries are redeemed, and any drain at all to pay for Old Farts is considered anathema by the Highest of the Mighty, so there will continue to be calls to cut benefits, no matter how much revenue is extracted from the masses. In the end, there is no dedicated Social Security money which cannot be taken for other purposes if Congress wants to do so and the White House agrees. If Congress and the White House want wars, for example, and need money to pay for them, they will get that money anywhere they can, and if that means raiding Social Security, they'll do it. In fact, Social Security has already been fully and repeatedly raided -- to pay for wars and tax cuts on the rich among many other things.
And there is nothing you and I can do about it.
But income tax rates were raised on the rich, né? Well, yes, slightly. And that increase -- which may not actually produce much revenue, we'll see -- is also by definition Austerian. Of course the effect of the income tax increase on the rich is nothing like the effect of the payroll tax increase on the working and middle classes. In fact, if the rich actually pay the increase the effect on them will be almost imperceptible. The increased payroll taxes on the working and middle classes, on the other hand, can have a devastating effect for those on the financial edge.
I've seen lots of commentary from people who say "It's only $50 a pay period! I can afford that! And it's going to Social Security, so it's a good thing!" Well, a lot of people can't afford it, especially not after their income has already taken such a battering from the Permanent Recession as it is. The revenue is not going to shore up Social Security, it's going to shore up the general fund so that taxes on the rich won't have to be raised to an appropriate level. Millions upon millions of Americans have already been forced into poverty during the course of this Perpetual Recession, and due to the increase in payroll taxes without any offset, millions more will be forced into poverty. Oh, it's lovely that some working and middle class households can afford to lose 2% of their disposable income, but many cannot.
The fact that there was no effort to provide an offset for the loss of working and middle class disposable income is the tell here. The Neo-liberal/Austerian point, after all, is to make the masses pay for everything and insofar as possible to relieve the rich and powerful from taxation, even provide them with handsome emoluments and subsidies -- paid for by extractions from the masses.
And we should note -- though without surprise -- the extraordinary levels of corporate welfare included in the Neo-liberal/Austerian measures just passed and signed into law. My, my, my. But then, corporate welfare is part of the Neo-liberal/Austerian program, after all.
There has been a lot of argument regarding the fact that "Austerity doesn't work." But that avoids the point. "Doesn't work" for whom? It doesn't work to the benefit of the masses, of course not. It's not meant to -- no matter how it's sold. It is meant to enable a diminishing cadre of super-rich to accumulate a greater and greater and still greater number of assets (not "wealth" so much as assets) through and by which they are able to exercise greater and greater levels of power. And for those purposes, Austerity works wonders.
Austerity is imposed in order to take assets from the masses at the lowest possible cost to the plunderers and predators, pure and simple. And it works.
The confusion about all of this is a factor of the propaganda that surrounds the imposition of the policies of Austerity (Shock Doctrine, Neo-liberalism.) Without the propaganda, these policies cannot be imposed. And the propaganda is everywhere. Surprisingly -- or maybe not -- it pervades the "progressive" new media, to the extent that it is almost impossible to avoid or in many cases to cut through the bullshit.
Under the circumstances, people by and large don't know what to believe. Confusion is inevitable (and desirable to the beneficiaries of these policies.) The People "go with their gut," and too often that means buying a lie. Grifters, hucksters and conmen have never had it better.
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