Wall Street vs. Main Street

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Rodger Mitchell’s blog…

http://mythfighter.com/2010/08/13/monetarily-sovereign-the-key-to-understanding-economics/

The U.S. government’s fiscal year for 2016 began on 1 Nov 2015.

The U.S. Office of Management and Budget says that during FY 2016 the U.S. government expects to spend 3.999 trillion, and tax back (and destroy) 3.525 trillion, leaving a deficit of 474 billion.

The Trading Economics web site says the USA has an average monthly trade deficit of 43.6 billion. Multiplied by twelve months, that becomes a yearly trade deficit of 523 billion.

If all these figures are correct, then a net $49 billion will be removed from the U.S. economy in FY 2016. Some money will be added to the economy as loans, but I am not counting that, since loans carry interest, which will suck money out of the lower classes and channel it upward. Other money will be added by the U.S. government through “off-budget” means (such as spending on the wars), but these monies will not be enough to ease our national recession.

Divided by a population of 322 million Americans, the net loss for FY 2016 will be $152 for each individual (unless we include “off-budget” dollars). That is in government dollars alone. Loss from interest payments on loans will further impoverish average Americans.

Therefore our recovery recession will continue to worsen. The recession will reduce tax “revenues” to the IRS. This will keep the federal deficit from dramatically shrinking further. Republicans will use this to claim that average Americans need even more austerity until the deficit disappears and the US government has a “balanced budget” (and America is reduced to a dystopian wasteland).

Meanwhile “the markets” (Wall Street etc.) remain bullish. Main Street dies while Wall Street thrives.

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This is an example what I mean when I say the USA has moved from industrial capitalism to financial capitalism. Today the hottest action is in the financial casinos, not in the industrial production of goods and services. U.S. manufacturing has largely moved abroad, and politicians keep hammering us with gratuitous austerity.

The sole purpose of austerity is to widen the gap between the rich and the rest, and between Wall Street and Main Street.

P.S. – Because of the net loss of dollars from the U.S. economy, a balanced U.S. federal budget causes a severely imbalanced U.S. economy. But that’s okay with right-wingers, since the imbalance widens the Gap between the rich and the rest, and between Wall Street and Main Street.

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