Let’s Call Their Bluff on the Hyped-Up Fiscal Cliff!
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Unshackle the Hostages and Let the Good Times Roll
The fiscal cliff has been said to be holding Congress hostage to conservative demands, but the real hostages are the debt slaves of our financial system. The demand for “fiscal responsibility” has been used as an excuse to impose radical austerity measures on the people, measures that benefit the 1% while locking the 99% in debt.
The government did not demand fiscal responsibility of the failed financial sector. Rather, Congress lavished hundreds of billions of dollars on it, and the Fed lavished trillions more. No evident harm from these measures befell the economy, which has fared better than the austerity-strapped EU countries. Another couple of trillion dollars poured directly into the real, productive economy could give it a serious boost.
According to the Fed’s figures, as of July 2010, the money supply was actually $4 trillion LESS than in 2008. (The shrinkage was in the shadow banking system formerly reported as M3.) That means $4 trillion could be added back into the money supply before general price inflation would be a problem.
The self-induced austerity crisis is a diversion from the real crises, including unemployment, the housing crisis, a bloated military, and unrepayable debt. Slashing services, selling off public assets, and raising taxes won’t cure these ills. To maintain a sustainable and productive economy requires a visionary leap into the new. A new economy needs new methods of public financing.