An ABC news article is an example of how European bankers and their puppet politicians and media pundits call for austerity to be cut in half today, so that austerity will inevitably be tripled tomorrow.
The Portuguese Socialist government is advocating an end to Europe’s years of budget austerity by increasing spending and cutting taxes. Even the president of the European Central Bank says governments should do more to support growth.
Increasing spending and cutting taxes is great for countries whose governments create their spending money out of thin air (like the U.S. government), but it is lethal for some of the euro-zone countries.
The U.S. government does not borrow its spending money, but euro-zone governments do, if their nations do not have large trade surpluses. Borrowing means debt, which means more austerity, which means mass privatizations.
Privatization is what the euro-scam is all about: using debt to force governments to give public assets to the rich.
So, euro-zone politicians please the masses by calling for an end to austerity today. In doing so, those same politicians set up the masses for radically increased austerity tomorrow.
The situation is similar in many of the economically weaker parts of the 19-country euro-zone. Italy is challenging Germany’s focus on debt reduction head on, arguing that spending more would help the economy.
Italy exemplifies the scam. Starting in February of 2013, Italy enjoyed consistent trade surpluses because of a reduction in imports and an increase in exports. In the year 2015, about four billion more euros flowed into Italy each month (on average) than left Italy.
Toward the end of 2015, however, Italy’s trade surplus evaporated….
Despite having stored up a mountain of euros from 2013 to 2015, the Italian government has the second highest debt in the euro-zone, after Greece. Italy’s debt is 135% of Italy’s GDP, which means that if every euro that changed hands in Italy in one year went straight to the banker criminals, it still wouldn’t pay off the Italian government’s debt to the bankers. If the Italian government embarks on a spending increase and tax cuts right now, the result will be a whopping increase in debt, plus a recession and a lot more austerity.
That’s the plan. It’s intentional. With an increase in government spending right now, Italian politicians can please the masses. “The end of austerity!” Then in a couple of months the politicians will announce that the resulting debt load will require more austerity, plus more privatization, in which public assets are given to the rich.
Italian Prime Minister Matteo Renzi pointed to the example of the United States, whose economy is profiting from a focus on growth and innovation and where Obama said last year he wanted to “replace mindless austerity with smart investments.”
And there it is: the concealment of the euro scam by falsely comparing the Italian government (which cannot create its spending money out of thin air) with the U.S. government (which can). I was beginning to worry that Matteo Renzi would forget to repeat this lie. Renzi is young (age 39) and he is eager to please the money masters by doing away with laws that protect Italian workers.
The euro-zone economy needs growth any way it can get it.
Except for dumping the euro, which is the chief obstacle to growth, since the euro maintains a permanent debt load for all euro-zone nations that do not have large trade surpluses.
The Paris-based Organization for Economic Cooperation and Development, a respected policy group that represents the world’s most developed economies, has thrown its weight behind a move away from austerity as soon as the opportunity arises.
Yes, they want governments like those of France and Italy to embark on a binge of tax cuts and spending increases, in order to increase their government debt, which will in turn necessitate more austerity in the form of privatizations.
Remember that the debt-to-GDP ratio is meaningless for countries whose governments create their spending money out of thin air (like the USA), but it is crucial for countries (like France) that must borrow all their money because they have huge trade deficits.
France in particular has been deep in the red zone for the past decade, but you don’t hear the screams (yet) because France had the euro-zone’s second largest economy (after Germany) going into the nightmare. With so many billions of euros flowing out of France year after year, the mass layoffs and privatizations get worse all the time.
“What has changed is that over the past year, euro-zone governments have started to openly question” the wisdom of Brussels and Berlin’s policy strictures, said Simon Tilford of the Centre for European Reform, a think tank in London.
Nonsense. No one is questioning the euro scam. This is like saying “U.S. economists are questioning austerity as the best means to bring about necessary deficit reduction.” In other words, economists all agree with the lie that the U.S. government is “bankrupt,” and needs to impose austerity. It’s just that economists question whether austerity is the best way to impose austerity.
Portuguese officials hope tax cuts coming into force this month will put more cash in people’s pockets, generating a spurt of domestic demand and firing up the wider economy.
That could lead to debt problems. Portugal has spent a lot of time in the red zone.
In Portugal, Finance Minister Mario Centeno, who has a PhD in Economics from Harvard University, is introducing income tax and sales tax cuts, tax rebates, new subsidies for household energy bills and restoring government workers’ pay that was cut. Those steps, he says, will stimulate consumption.
In the short term, yes, but if the debt gets out of control, there will be more austerity.
Portugal borrowed 78 billion-euros in 2011, and its debt is already 130% of its GDP.
Banks lend to the Portuguese government. When the government can’t pay, the ECB in Frankfurt bails out the banks, and forces Portugal to pay the debt (plus interest) in the form of austerity and privatization. This attack on Portugal is called a “bailout.”
Portuguese banks are already sitting on close to 18 billion euros of bad debt. They are waiting for the next bailout from the ECB, which will be another debt bomb for Portugal.
“Portugal alone can’t really do that much” to hasten a recovery. It really needs Italy, France and Spain to put up a united front and demand fundamental change in the way the eurozone is run.”
Yeah. It’s called dumping the euro.