John Williams is the legendary watchdog of the true state of the U.S. economy -- as opposed to the continuously fudged official numbers. For example, the Consumer Price Index (CPI) has held the price of beef to be unchanged in recent years ...by assuming that when the price of T-bone stake rises, people will switch to top sirloin, and when top sirloin becomes out of reach people will switch to top round, etc. Due to this sort of fudging, the national debt supposedly fell from $1.3 Trillion to $1.1 Trillion in 2012 ...whereas John Williams counts the true national debt to be $6.9 Trillion! Although concealed from the American people, this stupendous number is well known to America's creditors such as China, who John Williams believes will be forced to begin selling off their dollars within 4 months, leading to a dollar devaluation.

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http://youtu.be/O8kBDUw45uY

Dollar Sell Off Within 4 Months - John Williams

Greg Hunter
Published on Jan 27, 2013

http://usawatchdog.com/may-2013-end-of-the-road-john-williams/ If Congress does not get its financial house in order by the new deadline in mid-May 2013, John Williams of Shadowstats.com contends, "It will be the end of the road . . . . They are not going to have another opportunity . . . they are pushing the limit as it is now." Williams says he expects, ". . . a negative reaction in the next 3 or 4 months to the dollar." Williams adamantly continues to predict hyperinflation to the U.S. dollar by the end of 2014. Join Greg Hunter of USAWatchdog.com as he goes One-on-One with economist John Williams.

Robert Reich's Blog:

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Why Consumers are Bummed Out

TUESDAY, JANUARY 29, 2013                                                                                 Original Here

The Conference Board reported Tuesday that the preliminary January figure for consumer confidence in the United States fell to its lowest level in more than a year.

The last time consumers were this bummed out was October 2011, when there was widespread talk of a double-dip recession.

But this time business news is buoyant. The stock market is bullish. The housing market seems to have rebounded a bit.

So why are consumers so glum?

Because they’re deeply worried about their jobs and their incomes – as they have every right to be.

The job situation is still lousy. We’ll know more this coming Friday about what happened to jobs in January. But we know over 20 million people are still unemployed or underemployed.

Personal income is in terrible shape. The median wage continues to drop, adjusted for inflation.

Most people can’t get readily-available loans because banks are still cautious about lending to anyone without a sterling credit history. (Eliminate student loans and you find Americans aren’t borrowing any more than they were a year ago.)

And the payroll tax hike has reduced paychecks for the typical American by about $100 a month. That’s just about what the typical family spends to fill up their gas tanks per month. Or half what they spend for groceries each week.

Contrast the current pessimism with consumer sentiment last October. Then, a majority polled by the Conference Board expected their incomes to rise over the next six months.

Now just 14 percent expect their incomes to rise, and 23 percent expect them to fall.

That 9 percent gap of pessimists exceeding optimists is the largest since the spring of 2009 when the Great Recession was almost at its worst.

The stock market is bullish because corporate profits are up, costs are down, the “fiscal cliff” agreement has locked in low taxes for most of the upper-middle class and wealthy, and there’s no sign of inflation as far as the eye can see.

But corporate profits can’t stay high when American consumers – whose spending is 70 percent of the U.S. economy – are this pessimistic about the future. They’re just not going to spend.

American companies won’t be able to make up the difference in foreign markets. Europe is careening into a recession. Japan is still in deep trouble. China’s growth has slowed.

Profits are the highest share of the U.S. economy on record. Wages are the lowest. But this imbalance can’t and won’t last.

Investors: beware.

Politicians: Don’t do any more deficit reduction. When consumers are this glum, austerity economics is particularly dangerous. 

If the next showdowns over the fiscal cliff, government appropriations, and debt ceiling result in more deficit cuts this year, we’re in a recession.

http://youtu.be/LCDufY-nKQw

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ROBERT B. REICH, Chancellor’s Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers “Aftershock" and “The Work of Nations." His latest, "Beyond Outrage," is now out in paperback. He is also a founding editor of the American Prospect magazine and chairman of Common Cause.

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Stephen Lendman: "Austerity reflects predatory capitalist harshness. Bankers, other corporate favorites, and super-rich elites are enriched at the expense of most others." "Washington's fiscal cliff duplicity conceals class war. Bipartisan complicity wants America's social contract destroyed. By 2023 or sooner, it may no longer exist."

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New York Times Supports Austerity Harshness
By Stephen Lendman (about the author)                                                            Permalink
OpEdNews Op Eds 1/8/2013 at 01:23:40

opednews.com

New York Times Supports Austerity Harshness

The NYT notoriously supports wealth, power and privilege.

by Stephen Lendman

Austerity reflects predatory capitalist harshness. Bankers, other corporate favorites, and super-rich elites are enriched at the expense of most others.

Force-fed policies are destructive. Disadvantaged households are harmed most. Capital's divine right is prioritized. It profits by cutting wages and eroding social spending en route to eliminating it altogether.

Washington's fiscal cliff duplicity conceals class war. Bipartisan complicity wants America's social contract destroyed. By 2023 or sooner, it may no longer exist.

Robbing poor Peter to pay rich Paul is policy. It's happening across Europe. The worst of times are planned. Banker rights are prioritized over popular ones. They're on the chopping block for elimination.

On January 1, The New York Times headlined "Used to Hardship, Latvia Accepts Austerity, and Its Pain Eases."

It's hard imaging rubbish this unconscionable gets published. The Times featured it.

Latvia "provide(s) a rare boost to champions of the proposition that pain pays," said The Times. Hard times continue. "But in just four years, the country has gone from the (EU's) worst economic disaster zone to a model of what the (IMF) hails as the healing properties of deep budget cuts."

IMF policies wage financial war on humanity. They're hugely destructive. They debt-entrap nations. They impoverish millions. They force-feed structural adjustment harshness. They mandate:

• privatization of state enterprises; many are sold for a fraction of real worth;

• mass layoffs;

• deregulation;

• deep social spending cuts;

• wage freezes or cuts;

• unrestricted free market access for western corporations;

• corporate-friendly tax cuts;

• tax increases for working households;

• trade unionism crushed or marginalized; and

• harsh repression against opposition to a system incompatible with social democracy, civil and human rights.

Kleptocrats are empowered. Bankers and other corporate predators strip mine countries of material wealth and resources. Crown jewels are sold off at fire sale prices. Poverty, unemployment, hunger and homelessness grow.

People lucky enough to have jobs become serfs. Debt peonage substitutes for freedom. A race to the bottom follows. Force-fed austerity is neo-Malthusaianism writ large.

Its holy trinity mandates no public sphere, unrestrained corporate empowerment, and abolition of social spending. It's the worst of all economic/financial worlds.

They're financialized into hollow shell dystopian backwaters.

Bravo, said The Times. After seeing its economy shrink 20% from peak levels, Latvia dead-cat bounced a smidgen. Its exports rose.

"We are here to celebrate," said IMF head Christine Lagarde. She's a world class scoundrel. She was Washington's top choice to run things. Her support for neoliberal harshness won her the job.

Her mandate is austerity harshness, mass impoverishment, neo-serfdom, and extracting wealth for giant banks and other financial favorites. Her background showed she's up to the challenge.

She held previous high-level financial, trade, and other government and business posts. She didn't disappoint. She's a walking conflict of interest.

She's a longstanding hardline neoliberal insider. She's well rewarded for inflicting pain. She calls Latvia a success story. Its government sacked a third of its civil servants.

Wages were severely slashed. Benefits largely disappeared. Economic deprivation left vast numbers "severely materially deprived."

For ordinary people, crisis conditions persist. Anyone out of work on earning subsistence or sub-poverty pay understands what's going on better than talking-head economists.

Many people left and won't return. They include some of Latvia's best and brightest. Why endure IMF harshness.

Riga-based Stockholm School of Economics Professor Morten Hansen said Latvia's unusually open economy enabled relentless wage and benefit squeezing.

"You can only do this in a country that is willing to take serious pain for some time and has a dramatic flexibility in the labor market," he said.

In other words, it's only possible where workers have no rights, those most vocal and angry leave, and others know resistance faces stiff crackdowns. It's also easier perhaps in tiny countries. Larger ones are harder to control.

Hansen added that "The lesson of what Latvia has done is that there is no lesson."
Jeffrey Sommers and Michael Hudson addressed Latvia. Their article is titled "Latvia's Economic Disaster as a Neoliberal Success Story: A Model for Europe and the US?"

Latvia is today's "most highly celebrated anti-labor success story," they said. It's called a country "where labor did not fight back, but simply emigrated politely and quietly."

Workers endured austerity instead of resisting, it's claimed. Many voted with their feet and left. Most remained and suffered. Tax burdens are "decidedly on (their) backs"."

Latvia is praised for being "business friendly." It comes at a high price. It reflects 19th century harshness. It's a cruel unacceptable social experiment.

The New York Times article is discussed. Human misery is called the "Latvian Miracle." The newspaper of record "has fallen in line with the surrealistic Orwellian attempts to depict Latvia's austerity and asset stripping as an economic success"."

Wages and benefits are stripped to the bone. Workers endure unconscionable tax burdens. Real estate interests get off lightly. So do capital gains and other business-friendly initiatives.

Latvia became "de-industrializ(ed), depopulat(ed) and de-socializ(ed)." It's a model dystopian state. It became a "Protestant morality play."

"(S)toic Balts confront(ed) crisis" by avoiding "histrionics (and) getting busy with work." These type notions appeal to "smug middle-class prejudices and stereotypes in countries whose populations have not had to suffer economic experiments in neoliberal horror."

"Anyone with actual experience in Latvia will see the dissonance between myth and reality regarding the government's response to the crisis." "Latvians most emphatically did protest both the corruption and proposed austerity following the fall 2008 crash."

Neoliberal regimes condemn resistance. Harshness was force-fed. Many people emigrated. Protests abated. People most vocal and angry sought better times elsewhere.

Latvia's post-Soviet population dropped from 2.7 million to "an official" 2.08 in 2010. "Demographic reports originally (said) 1.88 million in 2010. Some Latvian demographers" say totals were inflated.
Latvian "success" reflects "neoliberal Potemkin Village illusion." The country's 2008 economic collapse "was the deepest of any nation when the financial bubble burst."

The depth of its crisis permitted a dead-cat bounce. Officials and media scoundrels claim recovery. Privileged few alone benefit.

Success reflects population and capital flight, clear-cutting forests, de-industrialization, neoserfdom, unprotected workers, poverty-level wages, and addressing underdeveloped agricultural and transit sectors.

"Neoliberals call austerity and emigration 'stability' and even economic growth and recovery, as long as people don't complain or demand an alternative."

Is Latvia's model heading for America? Bipartisan complicity to destroy popular benefits suggests the worst of hard times ahead. They'll arrive incrementally over time.

The America older generations grew up in doesn't exist. Worse times loom. Younger ones face dystopian harshness. They'll be no place to hide.

                                                                ----------

Stephen Lendman lives in Chicago and can be reached at Email address removed .
His new book is titled "Banker Occupation: Waging Financial War on Humanity."
http://www.claritypress.com/LendmanII.html

Visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.
click here

Economist Bill Black: "The fundamental insanity at all times was that [Obama and the Congress] put together, one, we must avoid the fiscal cliff because that's austerity and it'll throw us into recession, and two, therefore we must make far greater budget cuts, adopt far greater austerity. Now, obviously, that's insane logic.

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 theREALnews                                                                               Permalink

January 3, 2013

Cliff Deal a "Moderate" Betrayal

Bill Black: Compromise on tax hikes on rich and allowing payroll taxes to rise sets the ground for a "grand betrayal" yet to come


Bio

William K. Black, author of THE BEST WAY TO ROB A BANK IS TO OWN ONE, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics. Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement. Black developed the concept of "control fraud" frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.

Economist Michael Hudson explains how sovereign governments of, by, and for the People have only to print more money to achieve a soft landing when passing over any kind of "fiscal cliff," real or contrived. In contrast, the present government of, by, and for the wealthiest 1% has created a social safety net for the 99% that requires the 99% to pay for this "largess" by means of a users' fee (called the payroll tax) ...and this 1% is now preparing to steal this $2.7 trillion trust fund because of a "fiscal cliff" contrived explicitly to cover up this intended theft. On the flip side, governments of, by, and for the super rich, require no users' fees from the 1%, yet this same 1% can expect to be bailed out by We the People when their seafront homes are destroyed by a hurricane or the too-big-to-jail criminal banks run up gambling debts they can't pay off. When are We The People going to perceive this asymmetry and rise up against it?

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MONDAY, DECEMBER 31, 2012
 
Michael Hudson: America’s Deceptive 2012 Fiscal Cliff, Part II – The Financial War Against the Economy at Large
 

By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is “The Bubble and Beyond.”

Today’s economic warfare is not the kind waged a century ago between labor and its industrial employers. Finance has moved to capture the economy at large, industry and mining, public infrastructure (via privatization) and now even the educational system. (At over $1 trillion, U.S. student loan debt came to exceed credit-card debt in 2012.) The weapon in this financial warfare is no larger military force. The tactic is to load economies (governments, companies and families) with debt, siphon off their income as debt service and then foreclose when debtors lack the means to pay. Indebting government gives creditors a lever to pry away land, public infrastructure and other property in the public domain. Indebting companies enables creditors to seize employee pension savings. And indebting labor means that it no longer is necessary to hire strikebreakers to attack union organizers and strikers.

Workers have become so deeply indebted on their home mortgages, credit cards and other bank debt that they fear to strike or even to complain about working conditions. Losing work means missing payments on their monthly bills, enabling banks to jack up interest rates to levels that used to be deemed usurious. So debt peonage and unemployment loom on top of the wage slavery that was the main focus of class warfare a century ago. And to cap matters, credit-card bank lobbyists have rewritten the bankruptcy laws to curtail debtor rights, and the referees appointed to adjudicate disputes brought by debtors and consumers are subject to veto from the banks and businesses that are mainly responsible for inflicting injury.

The aim of financial warfare is not merely to acquire land, natural resources and key infrastructure rents as in military warfare; it is to centralize creditor control over society. In contrast to the promise of democratic reform nurturing a middle class a century ago, we are witnessing a regression to a world of special privilege in which one must inherit wealth in order to avoid debt and job dependency.

The emerging financial oligarchy seeks to shift taxes off banks and their major customers (real estate, natural resources and monopolies) onto labor. Given the need to win voter acquiescence, this aim is best achieved by rolling back everyone’s taxes. The easiest way to do this is to shrink government spending, headed by Social Security, Medicare and Medicaid. Yet these are the programs that enjoy the strongest voter support. This fact has inspired what may be called the Big Lie of our epoch: the pretense that governments can only create money to pay the financial sector, and that the beneficiaries of social programs should be entirely responsible for paying for Social Security, Medicare and Medicaid, not the wealthy. This Big Lie is used to reverse the concept of progressive taxation, turning the tax system into a ploy of the financial sector to levy tribute on the economy at large.

Financial lobbyists quickly discovered that the easiest ploy to shift the cost of social programs onto labor is to conceal new taxes as user fees, using the proceeds to cut taxes for the elite 1%. This fiscal sleight-of-hand was the aim of the 1983 Greenspan Commission. It confused people into thinking that government budgets are like family budgets, concealing the fact that governments can finance their spending by creating their own money. They do not have to borrow, or even to tax (at least, not tax mainly the 99%).

The Greenspan tax shift played on the fact that most people see the need to save for their own retirement. The carefully crafted and well-subsidized deception at work is that Social Security requires a similar pre-funding – by raising wage withholding. The trick is to convince wage earners it is fair to tax them more to pay for government social spending, yet not also to ask the banking sector to pay similar a user fee to pre-save for the next time it itself will need bailouts to cover its losses. Also asymmetrical is the fact that nobody suggests that the government set up a fund to pay for future wars, so that future adventures such as Iraq or Afghanistan will not “run a deficit” to burden the budget. So the first deception is to treat only Social Security and medical care as user fees. The second is to aggravate matters by insisting that such fees be paid long in advance, by pre-saving.

There is no inherent need to single out any particular area of public spending as causing a budget deficit if it is not pre-funded. It is a travesty of progressive tax policy to only oblige workers whose wages are less than (at present) $105,000 to pay this FICA wage withholding, exempting higher earnings, capital gains, rental income and profits. The raison d’être for taxing the 99% for Social Security and Medicare is simply to avoid taxing wealth, by falling on low wage income at a much higher rate than that of the wealthy. This is not how the original U.S. income tax was created at its inception in 1913. During its early years only the wealthiest 1% of the population had to file a return. There were few loopholes, and capital gains were taxed at the same rate as earned income.

The government’s seashore insurance program, for instance, recently incurred a $1 trillion liability to rebuild the private beaches and homes that Hurricane Sandy washed out. Why should this insurance subsidy at below-commercial rates for the wealthy minority who live in this scenic high-risk property be treated as normal spending, but not Social Security? Why save in advance by a special wage tax to pay for these programs that benefit the general population, but not levy a similar “user fee” tax to pay for flood insurance for beachfront homes or war? And while we are at it, why not save another $13 trillion in advance to pay for the next bailout of Wall Street when debt deflation causes another crisis to drain the budget?

But on whom should we levy these taxes? To impose user fees for the beachfront reconstruction would require a tax falling mainly on the wealthy owners of such properties. Their dominant role in funding the election campaigns of the Congressmen and Senators who draw up the tax code suggests why they are able to avoid prepaying for the cost of rebuilding their seashore property. Such taxation is only for wage earners on their retirement income, not the 1% on their own vacation and retirement homes.

By not raising taxes on the wealthy or using the central bank to monetize spending on anything except bailing out the banks and subsidizing the financial sector, the government follows a pro-creditor policy. Tax favoritism for the wealthy deepens the budget deficit, forcing governments to borrow more. Paying interest on this debt diverts revenue from being spent on goods and services. This fiscal austerity shrinks markets, reducing tax revenue to the brink of default. This enables bondholders to treat the government in the same way that banks treat a bankrupt family, forcing the debtor to sell off assets – in this case the public domain as if it were the family silver, as Britain’s Prime Minister Harold MacMillan characterized Margaret Thatcher’s privatization sell-offs.

In an Orwellian doublethink twist this privatization is done in the name of free markets, despite being imposed by global financial institutions whose administrators are not democratically elected. The International Monetary Fund (IMF), European Central Bank (ECB) and EU bureaucracy treat governments like banks treat homeowners unable to pay their mortgage: by foreclosing. Greece, for example, has been told to start selling off prime tourist sites, ports, islands, offshore gas rights, water and sewer systems, roads and other property.

Sovereign governments are, in principle, free of such pressure. That is what makes them sovereign. They are not obliged to settle public debts and budget deficits by asset selloffs. They do not need to borrow more domestic currency; they can create it. This self-financing keeps the national patrimony in public hands rather than turning assets over to private buyers, or having to borrow from banks and bondholders. 

More from economist Bill Black on the "fiscal cliff," austerity, the "Grand Bargain" (more correctly termed the "Grand Betrayal") ...and Obama's role in inventing the cliff as an excuse to inflict on the American people austerity (which would result in more and deeper recessions and give rise to higher unemployment and national debt) and the Grand Betrayal (which would cut social programs and safety nets just when Americans would need them the most).

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 theREALnews                                                                               Permalink

December 28, 2012

Fiscal Cliff: Going Nuclear and the Grand Betrayal

Bill Black: GOP threatens to use debt ceiling as leverage, creates conditions for more austerity measures by Obama


Bio 

William K. Black, author of THE BEST WAY TO ROB A BANK IS TO OWN ONE, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics. Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement. Black developed the concept of "control fraud" frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.

 rsn    (Reader Supported News)                                                            Subscribe to free newsletter

President Barack Obama speaks at a campaign rally in Fayetteville, North Carolina 10/19/08.
(photo: Jim Young/Reuters)

Obama Should Listen to Obama

By William K. Black, Reader Supported News

27 December 12

n Friday, December 21, 2012, President Obama announced:

"As of today I am still ready and willing to get a comprehensive package done," Obama said, specifically urging lawmakers to craft a deal that would protect middle-class Americans from a tax hike set to be implemented if no deal is met.

Obama said he spoke with GOP House Speaker John Boehner and Senate Majority Leader Harry Reid (D-Nev.) Friday, asking the congressional leaders to come up with a smaller fiscal package in the next 10 days.

"Now is not the time for more self-inflicted wounds, certainly not coming from Washington," Obama said.

What is the "self-inflicted wound" that Obama warns us we must avoid?

According to the AP, "'Everybody's got to give a little bit in a sensible way' to prevent the economy from pitching over a recession-threatening fiscal cliff, he said."

Austerity is the weapon that is about to inflict the self-inflicted wounds on our nation. The fiscal cliff is the ammunition about to be used to inflict austerity on the nation. One of the wounds is a recession, which would increase unemployment and the federal budget deficit. The other terrible wounds are cuts to social programs and the safety net that would add greatly to human misery.

Reporters need to ask Obama two series of questions. Who insisted on creating the fiscal cliff, threatened Republicans in Fall 2011 when they wanted to eliminate or reduce it, and after the "failure" of the November 2011 "super committee" to reach a deal to inflict even greater austerity on the nation, made a veto threat to block a Republican proposal to eliminate or delay the fiscal cliff? The answer is: Obama. "The White House wanted a 'trigger' that would automatically raise taxes on the wealthy and cut health spending, an idea the Republicans opposed." Obama's "trigger" became the "fiscal cliff." I have explained how he then kept the "fiscal cliff" alive by blocking Republican efforts to eliminate or delay it.

Obama's driving role in creating and maintaining the "fiscal cliff" makes his warning of the necessity of avoiding "self-inflicted wounds" (recession by austerity) imposed by the fiscal cliff another proof of our family rule that it is impossible to compete with unintentional self-parody. We need to convince Obama to follow his own advice and eliminate the self-inflicted wound (recession) by eliminating, not delaying, the fiscal cliff and safeguarding the safety net.

The second question Obama should be asked is: given your warning that the fiscal cliff's austerity would cause a recession, why are you demanding a Grand Bargain (sic, actually the Grand Betrayal) that would inflict austerity for a decade and likely cause multiple recessions and larger deficits?

Consider the incoherence of Obama's statement: "'Everybody's got to give a little bit in a sensible way' to prevent the economy from pitching over a recession-threatening fiscal cliff, he said." That statement makes no sense. Austerity is the problem. Obama and the Republicans agree that it is a self-destructive policy that would cause a recession, just as it did in the eurozone. The solution is (1) not to raise overall taxes and (2) not to cut overall spending.

Obama, however, immediately after warning that it is essential to prevent the "fiscal cliff's" austerity from causing the "self-inflicted wound" of a recession, calls for austerity. He wants a Grand Betrayal that (net) raises taxes, cuts social spending and cuts the safety net. The Democrats are supposed to "give a little bit" by making roughly a trillion dollars in cuts in social programs and the safety net and the Republicans are supposed to "give a little bit" by allowing roughly a half trillion dollars in "revenue enhancements." Obama's austerity policy is so incoherent that in the same sentence he says that austerity (in the form of the fiscal cliff) must be prevented because it would cause a recession -- and that the nation must embrace austerity not only today but for at least a decade. An austerity deal of that nature and length cannot be "sensible." It would force us back into a recession and could cause or deepen several recessions. We need to stop Obama and the Republicans from causing the "self-inflicted wounds" of the "fiscal cliff" and the Grand Betrayal.

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Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.

Economist Bill Black: "Everyone involved in creating the fiscal cliff acted irresponsibly and inhumanely in seeking to inflict austerity, cause a recession, and unravel the safety net." "The fiscal cliff was an act of idiocy in pursuit of a policy of depravity called 'the Grand Bargain' that was actually the Grand Betrayal." "President Obama wants to begin to unravel the safety net and cut social programs even though an overwhelming majority of Democrats oppose it and even though doing so will inflict even greater austerity. That will cause a deeper recession and likely make the deficit larger, so it is as nonsensical as it is cruel."

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President Obama and House Speaker John Boehner. (photo: Saul Loeb/AFP/Getty Images)

 

 

 

 

 

 

Kill the 'Fiscal Cliff' Instead of the Economy

By William K. Black, Reader Supported News

24 December 12

veryone now agrees that the so-called "fiscal cliff" is a stupid policy that threatens our economy and our people. Everyone agrees why the "fiscal cliff" is stupid -- it inflicts austerity at a time when it is likely to throw the nation into a gratuitous recession. Causing a recession leads to increased unemployment and a larger budget deficit. We have all seen austerity force the Eurozone into a gratuitous recession in which Italy, Spain and Greece have Great Depression levels of unemployment.

Here's the short version of why austerity is a self-destructive response to the Great Recession. A recession occurs when demand to purchase goods and services falls and the economy contracts, causing increased unemployment. This simultaneously causes tax revenues to fall and government expenditures for programs like unemployment compensation to increase. The fall in revenues and increase in expenses causes the federal budget deficit to grow rapidly.

Austerity is a policy of raising taxes and/or cutting governmental spending for the purported purpose of cutting the deficit. If one raises overall taxes in response to the Great Recession the result is a reduction in private sector demand. If one cuts governmental spending the result is a reduction in public sector demand. The result of reducing private and public sector demand in the recovery phase from the Great Recession, where overall demand is already grossly inadequate, is to throw the nation back into recession or even a depression. That causes the budget deficit to grow. A policy of austerity undertaken under the claim that it will reduce the deficit causes a gratuitous recession that leads to a massive loss of wealth, far higher unemployment, and in increased deficit. That is why austerity is a policy that is the self-destructive economic analogy to the medical insanity of bleeding patients.

We have known that austerity is an idiotic response to a severe crisis for 75 years. The U.S. was in the midst of a strong recovery from the Great Depression until FDR's neo-liberal economists convinced him in 1937 that is was essential that the U.S. adopt an austerity program to reduce the federal deficit. Austerity forced our economy back into a Great Depression.

It was only the stimulus of federal spending in World War II that brought the U.S. out of the depression. During World War II and for the remainder of that decade the ratio of debt-to-GDP was at or near historically record levels. The result was the greatest industrial expansion in history, full employment (including a massive influx of women), strong economic growth, and sharply declining deficits and debt-to-GDP ratio because the growth led to large increases in revenue and the low unemployment greatly reduced spending on the unemployed. We also defeated the Axis powers, created Social Security and the GI Bill, and began an extraordinary expansion of our housing stock to house the baby boom.

We learned many lessons from the catastrophic failure of austerity and the extraordinary success of stimulus in this era. The U.S. adopted a fiscal system of "automatic stabilizers." These are counter-cyclical (they push in the opposite direction of the business cycle) fiscal effects that are designed into the system and do not require new legislation once the recession or inflation begins. The result of these automatic stabilizers has been to reduce the severity and duration of recessions. Indeed, studies show that the larger the national governmental role in the economy, the less volatile the economy. This makes sense because the stabilization function should be more effective if the stabilizers are larger relative to the economy.

Unfortunately, these sensible counter-cyclical policies that make theoretical and common sense and have repeatedly worked in the real world were forgotten by many due to a campaign of deficit hysteria funded by Pete Peterson, a Republican billionaire financier who has made it his mission in life to destroy the safety net. His ultimate goal is to privatize social security so that Wall Street can receive hundreds of billions of dollars in fees investing our retirement funds.

I've explained in a prior column how the fiscal cliff was created through an insane bipartisan deal in August 2011. The fiscal cliff was always a terrible job-destroying idea that also began to unravel the safety net by cutting Medicare. Everyone involved in creating the fiscal cliff acted irresponsibly and inhumanely in seeking to inflict austerity, cause a recession, and unravel the safety net.

What is forgotten, however, in discussions of the idiocy of creating the fiscal cliff is that it was part of a broader bipartisan deal intended to inflict even more self-destructive austerity and even greater damage to the safety net. The fiscal cliff was an act of idiocy in pursuit of a policy of depravity called "the Grand Bargain" that was actually the Grand Betrayal.

The bipartisan madness has increased since the August 2011 budget deal. Today, the parties are simultaneously screaming (1) that the fiscal cliff is a disaster because it imposes austerity and will cause a recession and (2) that it is essential that we agree to a Grand Betrayal that will inflict even greater austerity and cause an even more severe recession. Indeed, the Grand Betrayal mandates austerity over a decade so it is likely to cause and/or deepen multiple recessions. The Republican and Democratic variants of the Grand Betrayal are doubly destructive and inhumane because they cut the safety net. President Obama wants to begin to unravel the safety net and cut social programs even though an overwhelming majority of Democrats oppose it and even though doing so will inflict even greater austerity. That will cause a deeper recession and likely make the deficit larger, so it is as nonsensical as it is cruel.

During this this entire financial farce I have been unable to get the dominant media to make the most obvious point. Since we all agree that austerity (the fiscal cliff) is a terrible idea that will cause a recession and likely increase the deficit, we must logically conclude that all variants of the Grand Betrayal are austerity programs that must be defeated in order to prevent a recession that is likely to increase the deficit. We should all be opposing any cuts in the safety net because they would inflict austerity. An overwhelming majority of Democrats and a majority of Republicans also oppose cuts in the safety net as inhumane.

So why don't the Democrats and Republicans stop trying to do a deal that will inflict austerity? Why not simply repeal the Budget Act of August 2011? That would kill the fiscal cliff. Repeal would kill austerity, prevent the recession, save the safety net, increase growth, and shrink the deficit. All versions of the Grand Betrayal (Republican and Democratic) inflict austerity, are likely to cause a recession, begin to unravel the safety net, destroy growth, and increase the deficit.

Under the same logic we should be able to agree on two related actions -- renew the extension of long-term unemployment compensation and renew the moratorium on collecting the payroll tax. These policies are superb counter-cyclical programs and have the added advantage of reducing human misery and inequality. Republicans and Democrats have agreed in the past on the desirability of both actions.

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Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.

Economist Bill Black: "...since everybody agrees now that the fiscal cliff is incredibly stupid and really dangerous, in the sense that it's designed to impose austerity, and they're saying that if we were to continue this austerity for very long, we would throw the nation back into recession, I went back and looked. How did we come about—you know, who's the moron that created this fiscal cliff that they're talking about? And it turns out it's President Obama."

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 theREALnews                                                                               Permalink

December 23, 2012

Black: Too Big to Prosecute and It's Obama's Fiscal Cliff

Bill Black: Criminal money laundering goes unpunished and Fiscal Cliff was created by Obama
Watch full multipart The Black Financial and Fraud Report:
 

Bio

William K. Black, author of THE BEST WAY TO ROB A BANK IS TO OWN ONE, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics. Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement. Black developed the concept of "control fraud" frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management. 

THIS IS MY 959th POST SINCE JANUARY 2007, WHEN I FIRST BEGAN BLOGGING AMERICA'S CONCEALED DESCENT INTO FASCISM AND THUS THE U.S. GOVERMENT'S BECOMING OF, BY, AND FOR THE BANKSTERS, GIANT CORPORATIONS, AND THE KLEPTOCRATS THAT HEAD THEM -- CONCEALED FROM "WE THE PEOPLE" BY THE HEAR-NO-EVIL, SEE-NO-EVIL, SPEAK-NO-EVIL "MAINSTREAM" MEDIA. I BELIEVE THAT MY LONG SEARCH FOR THE TRUTH QUALIFIES ME TO VET AS TRUE THE DISMAL PREDICTION YOU WILL READ BELOW ...UNLESS WE THE PEOPLE TAKE TO THE STREETS IN VERY LARGE NUMBERS.

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Headlined to H3 12/21/12
Obama/Boehner Two-Step

By Stephen Lendman (about the author)            Permalink
OpEdNews Op Eds 12/21/2012 at 01:26:14 

opednews.com  

Obama/Boehner Two-Step
Both parties on board to destroy America's social contract.

by Stephen Lendman

Previous articles explained fiscal cliff duplicity in detail. At issue is destroying America's social contract. Both parties agreed early in Obama's first term. They plan killing it incrementally by a 1,000 cuts.

Class war rages. Private wealth and power are pitted against essential public needs. Property rights, individualism, and free-market mumbo jumbo hammer ordinary people mercilessly. Neoliberal harshness reflects it.

Warren Buffet once said, "There's class warfare, all right, but it's my class, the rich class, that's winning."

Obama, Boehner and complicit congressional leaders agree. Plans are to give corporations and America's privileged class more. Unprecedented wealth extremes will widen. 

Public needs will grow. Shared sacrifice is one-way. Both parties concur. Obama and Boehner publicly dance around what both leaders agreed on months or years ago. Media scoundrels pretend otherwise.

On September 19, 2011, economist Richard Wolff headlined his Guardian op-ed "The truth about 'class war' in America," saying:

"Republicans claim (Obama's) millionaire tax is 'class war.' The reality is that the super-rich won the war" long ago.

Tax hike fear-mongering claims:

(1) raising them "amount(s) to un-American 'class warfare,' pitting" ordinary Americans against corporations and super-rich elites; and

(2) tax hikes negatively affect productive investment and job creation.

Evidence proves otherwise. Post-WW II, every personal income dollar raised was matched by $1.50 on business profits. Now it's 25 cents.

Ordinary households bear today's burden. Social justice are four-letter words. Corporations pay increasingly less. Nominally from 1989 - 2007, they paid 24.7% of profits. Since 2010, they averaged 12.4%. In reality, many pay much less.

Obama/Boehner's grand bargain assures new cuts. Obama's on record favoring lower corporate taxes. Expect nominal reductions from today top 35% rate to 28%. What's paid, of course, is much less.

Sometime next year, major tax code revisions will be quietly announced. Discussions about them are concealed. Otherwise, major social benefit cuts would look like double-dealing duplicity to fund corporate largese. More on what's coming below.

Wolff said US taxes over the last half century saw "a massive double (burden) shift from the richest individuals to everyone else."

Corporations and super-rich elites won America's class war. Everyone else lost out.

On December 13, Wolff revisited the topic. His Guardian op-ed headlined "Class war redux: how the American right embraced Marxist struggle," saying:

Republicans and conservatives used to say little about "classes and class warfare." America is a "classless" society, they claimed.

Most Americans are "wondrously comfortable and secure consumers," they say. Harsher views now prevail. Unguarded moments reveal them.

Prime targets are called "moochers." Romney called them "the 47%" always voting Democrat.
"Moochers" depend on government handouts, they claim. They include contractual federal obligations. They're for qualified eligible recipients. 

Social Security and Medicare aren't entitlements. They're not welfare. They're insurance policies. They're funded by worker/employer payroll tax deductions. 

Social Security provides retirement, disability, survivorship, and death benefits. It's America's most effective poverty reduction program.

It's worked remarkably well since inception. It once provided secure inflation-adjusted retirement or disability income. Manipulated CPI numbers erode annual amounts received. 
It protects personal savings. It avoids risky private investments. 

It's not going broke. When properly administered, it's sound and secure. Over time, it needs only modest adjustments. Doing so properly keeps it viable in perpetuity.

Medicare is America's largest health insurance program. Tens of millions are covered. Everyone over 65 and some younger disabled people qualify. So do others of all ages with end-stage renal disease.

Obama/Boehner/complicit congressional leaders/and corporate America want both programs privatized and eroded en route to ending them in their present form. They want Medicaid and public pensions treated the same way.

Death by a 1,000 cuts is policy. Expect it to play out over the next decade.

Both parties support class warfare. They want people most in need denied help. They want government reduced to militarism, national defense, homeland security, and defending corporate and super-rich privileges.

They want everyone else spurned, on their own, sink or swim. At issue is destroying America's social contract by neoliberal austerity.

Democrats feign resistance. It's cover for what they agreed on years ago. Obama's fully on board. He's corporate America's point man. 

His people-friendly persona masks his diabolical dark side. No pun intended. He's contemptuous of popular needs. He heads the fight to destroy them.

Battle lines are drawn. Ordinary people are in the crosshairs. Political theater conceals what's coming. 

Both sides agreed on $4 trillion in largely domestic cuts over the next decade. It's for starters. Quietly they're on board for much more.

Deficit cutting urgency is a ruse. Whatever amounts are cut, annual deficits will rise exponentially. Cutting them depends on sound policies both parties spurn.

They include ending permanent US wars, cutting defense spending sharply, shutting down overseas bases, reinstating progressive taxes, and making corporations and large investors pay their fair share.

Most important is putting money power back in public hands where it belongs. Doing so ensures long-term, inflation-free prosperity. It's possible with minimal taxes on ordinary people.

Good policy isn't rocket science. It's time-tested effective. What worked in other countries and colonial America can be replicated now. Both parties reject it. They have other fish to fry. 

Their plans involve thirdworldizing America. Political theater will unveil it step by step. Obama agreed to $1.2 trillion in largely domestic yearend cuts.

Boehner raised his initial $800 billion to $1 trillion. Expect agreement on around $1.1 trillion. Simpson-Bowles recommended it two years ago for starters. All parties have much more in mind.

Boehner's on board for modest tax increases on incomes of $1 million or more. Obama suggests $400 million. Expect compromise around $600 million. On average it's what America's 1% earns.

Word awaits on expected tax revenues raised v. bracket manipulation and specific spending cuts. Expect Medicare and Medicaid to be hit hard. 

Final deal terms may mandate around $500 million cut from Medicare alone. Expect it mostly in higher Part B and Part D deductibles and copays.

Defense increases, not cuts, are planned. War profiteers rest easy. Reductions will come from weapons systems Pentagon officials don't want, overseas troop drawdowns, and veterans benefits most of all.

Retirees will pay higher healthcare premiums and co-pays. Overall benefits will be cut. Promises made were broken. Neoliberal harshness targets them like other Americans. Even wounded and disabled vets increasingly are on their own.

"Broadening the tax base" is code language for major code revisions coming. Ordinary people will be hit hardest. 

Expect mortgage deduction caps, state and local tax deduction limits, less allowed for charitable and medical insurance deductions, lower education credits, raising the Social Security retirement age to 67 or higher, and other ways to squeeze America's middle class and least advantaged.

Obama and Boehner feign negotiations. They're on board in principle. Public two-stepping is deceptive. Deal parameters and terms were agreed on long ago.

Corporate bosses are on board. Obama's been meeting with them multiple times weekly. Tax relief, greater handouts, and other incentives bought their support. What they back becomes policy.

Key bosses matter most. They're lobbying Congress for Obama. Heavy lifting is done. Final details await announcement. Most planned cuts are backloaded. They'll begin in 2014 or 2015. Others will kick in later.

December 31/January 1 are fictitious deadlines. Cuts can come any time. They can be made retroactive to yearend.

March 27, 2013 is a real deadline. America runs out of money when its debt ceiling is reached. US law requires Congress  authorize borrowing limits to fund federal programs. 

Doing it means raising the ceiling by late March or sooner. Expect agreement in principle by year end. Details come later. Two-stepping continues. 

Media scoundrels provide background music. Corporate approval sealed a done deal. Neither side of the isle dares disagree. 

Campaign contributions depend on going along. Money talks. In Washington it buys influence. It demands consigning America's social contract to history's trash bin. 

Middle class and disadvantaged households are increasingly on their own. Harder than ever hard times await them.

A Final Comment

In 2009, the Nobel Committee continued its long/inglorious tradition. Another war criminal got its peace prize. 

Obama followed Henry Kissinger, Shimon Peres, Yitkak Rabin, Menachem Begin, Al Gore, Kofi Annan, three other US warrior presidents, and other candidates deserving harsh condemnation.

On December 19, Time magazine added another award. Obama became its person of the year for the second time. It called him "both the symbol and in some ways the architect of this new America."

It omitted saying he helped make it unsafe and unfit to live in. 

It ignored his war on humanity, his police state governance, his kill list, his self-appointment as judge, jury and executioner, and his self-designating himself power to have any US citizen arrested and imprisoned uncharged indefinitely for life. 

It forgot about numerous other violations of international, US statute and constitutional laws. So many exist, it's hard remembering them all. Instead of denouncing his rogue governance, it praised what causes so much harm to so many.

It shouldn't surprise. In 1938, Time named Hitler person of the year. In 1939, Stalin followed. Future Nazi collaborator Pierre Laval won in 1931. So did Nazi sympathizer Charles Lindbergh in 1927. 

In 1937, facist Chinese leader Chaing Kai-shek was Time's choice. Kissinger, Nixon, GHW Bush, Bill Clinton twice, Newt Gingrich, GW Bush twice, and Bernanke were future inglorious choices among others.

Perhaps Netanyahu will win next year. Qualifying depends on colonizing all valued parts of Palestine he doesn't yet control. Perhaps he's pushing overtime to meet Time's deadline.

                                                                  ----*----

Stephen Lendman lives in Chicago and can be reached at Email address removed . 
His new book is titled "Banker Occupation: Waging Financial War on Humanity."
http://www.claritypress.com/LendmanII.html

Visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.
http://www.dailycensored.com/obamaboehner-two-step/

THE "FISCAL CLIFF" IS POCKET CHANGE WHETHER OR NOT CONGRESS DOES ANYTHING ABOUT IT, WHEREAS JUST FOUR "TOO BIG TO FAIL" U.S. BANKS HAVE DERIVATIVE EXPOSURE EQUAL TO 3.3 TIMES THE *WORLD* GROSS DOMESTIC PRODUCT. SHOULD THE AMERICAN POOR, STRUGGLING MIDDLE CLASS, AND ELDERLY HAVE TO FOREFIT THEIR SOCIAL SAFETY NET TO COVER ONE HALF OF ONE PERCENT OF THESE IRRESPONSIBLE BANKS' GAMBLING DEBTS?

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The Fiscal Cliff Is A Diversion: The Derivatives Tsunami and the Dollar Bubble

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December 17, 2012 | Original Here


The “fiscal cliff” is another hoax designed to shift the attention of policymakers, the media, and the attentive public, if any, from huge problems to small ones.
 
The fiscal cliff is automatic spending cuts and tax increases in order to reduce the deficit by an insignificant amount over ten years if Congress takes no action itself to cut spending and to raise taxes. In other words, the “fiscal cliff” is going to happen either way.
 
The problem from the standpoint of conventional economics with the fiscal cliff is that it amounts to a double-barrel dose of austerity delivered to a faltering and recessionary economy. Ever since John Maynard Keynes, most economists have understood that austerity is not the answer to recession or depression.
 
Regardless, the fiscal cliff is about small numbers compared to the Derivatives Tsunami or to bond market and dollar market bubbles.
 
The fiscal cliff requires that the federal government cut spending by $1.3 trillion over ten years. The Guardian reports that means the federal deficit has to be reduced about $109 billion per year or 3 percent of the current budget. http://www.guardian.co.uk/world/2012/nov/27/fiscal-cliff-explained-spending-cuts-tax-hikes More simply, just divide $1.3 trillion by ten and it comes to $130 billion per year. This can be done by simply taking a three month vacation each year from Washington’s wars.
 
The Derivatives Tsunami and the bond and dollar bubbles are of a different magnitude.
 
Last June 5 in “Collapse At Hand” http://www.paulcraigroberts.org/2012/06/05/collapse-at-hand/ I pointed out that according to the Office of the Comptroller of the Currency’s fourth quarter report for 2011, about 95% of the $230 trillion in US derivative exposure was held by four US financial institutions: JP Morgan Chase Bank, Bank of America, Citibank, and Goldman Sachs.
Prior to financial deregulation, essentially the repeal of the Glass-Steagall Act and the non-regulation of derivatives–a joint achievement of the Clinton administration and the Republican Party–Chase, Bank of America, and Citibank were commercial banks that took depositors’ deposits and made loans to businesses and consumers and purchased Treasury bonds with any extra reserves.
 
With the repeal of Glass-Steagall these honest commercial banks became gambling casinos, like the investment bank, Goldman Sachs, betting not only their own money but also depositors money on uncovered bets on interest rates, currency exchange rates, mortgages, and prices of commodities and equities.
 
These bets soon exceeded many times not only US GDP but world GDP. Indeed, the gambling bets of JP Morgan Chase Bank alone are equal to world Gross Domestic Product.
According to the first quarter 2012 report from the Comptroller of the Currency, total derivative exposure of US banks has fallen insignificantly from the previous quarter to $227 trillion. The exposure of the 4 US banks accounts for almost of all of the exposure and is many multiples of their assets or of their risk capital.
 
The Derivatives Tsunami is the result of the handful of fools and corrupt public officials who deregulated the US financial system. Today merely four US banks have derivative exposure equal to 3.3 times world Gross Domestic Product. When I was a US Treasury official, such a possibility would have been considered beyond science fiction.
 
Hopefully, much of the derivative exposure somehow nets out so that the net exposure, while still larger than many countries’ GDPs, is not in the hundreds of trillions of dollars. Still, the situation is so worrying to the Federal Reserve that after announcing a third round of quantitative easing, that is, printing money to buy bonds–both US Treasuries and the banks’ bad assets–the Fed has just announced that it is doubling its QE 3 purchases.
 
In other words, the entire economic policy of the United States is dedicated to saving four banks that are too large to fail. The banks are too large to fail only because deregulation permitted financial concentration, as if the Anti-Trust Act did not exist.
 
The purpose of QE is to keep the prices of debt, which supports the banks’ bets, high. The Federal Reserve claims that the purpose of its massive monetization of debt is to help the economy with low interest rates and increased home sales. But the Fed’s policy is hurting the economy by depriving savers, especially the retired, of interest income, forcing them to draw down their savings. Real interest rates paid on CDs, money market funds, and bonds are lower than the rate of inflation.
 
Moreover, the money that the Fed is creating in order to bail out the four banks is making holders of dollars, both at home and abroad, nervous. If investors desert the dollar and its exchange value falls, the price of the financial instruments that the Fed’s purchases are supporting will also fall, and interest rates will rise. The only way the Fed could support the dollar would be to raise interest rates. In that event, bond holders would be wiped out, and the interest charges on the government’s debt would explode.
 
With such a catastrophe following the previous stock and real estate collapses, the remains of people’s wealth would be wiped out. Investors have been deserting equities for “safe” US Treasuries. This is why the Fed can keep bond prices so high that the real interest rate is negative.
 
The hyped threat of the fiscal cliff is immaterial compared to the threat of the derivatives overhang and the threat to the US dollar and bond market of the Federal Reserve’s commitment to save four US banks.
 
Once again, the media and its master, the US government, hide the real issues behind a fake one. The fiscal cliff has become the way for the Republicans to save the country from bankruptcy by destroying the social safety net put in place during the 1930s, supplemented by Lyndon Johnson’s “Great Society” in the mid-1960s.
 
Now that there are no jobs, now that real family incomes have been stagnant or declining for decades, and now that wealth and income have been concentrated in few hands is the time, Republicans say, to destroy the social safety net so that we don’t fall over the fiscal cliff.
In human history, such a policy usually produces revolt and revolution, which is what the US so desperately needs.
 
Perhaps our stupid and corrupt policymakers are doing us a favor after all.