Debt And Taxation

[Appian]

Yes folks its time for yet another one of those videos! Doom porn or common sense I'll leave that up to you.

[Appian]

So in the first video we see that we can't cure the problem of too much debt by increasing taxation and now in this video we hear what happens if we try to cut debt by cutting spending.

[lorraine]

The link with unrest lies within the debt crisus, the debt crisus was only borne about by the EU as a controlling factor, however it weakens the EU, we are actually creating a situation, whether it be good or bad, to make the situation worse.
The lose, lose situation does not work, you need to have something in place to counteract what you are doing, the point being, the debt systen does not give you confidence to move forward, it has no acceptance going for growth.
The system to grow the EU, does not work, it damages the country within the system.
If the EU worked the EU would become stronger, and the countries within the EU would benefit, however because they work on the debt system., they will never catch the other countries outside the EU as they have more plans to make the EU weaker.
In fact they are reducing the countries within the EU to lower than they have ever been, and in doing so increasing the profitability of the countries outside the zone.
The EU should work on Trade, Trade alone will move the countries to compete and bring in strength, within each country, give them the opportunity to work what they know, don't hold them down with ficticious debt, that is caused by what is perceived is the right way to go.
The system is antiquated and needs adjusting.

[Appian]

[Roland]

[QUOTE=Appian;1363703]Yes folks its time for yet another one of those videos! Doom porn or common sense I'll leave that up to you.

I think it was dubbed as "pessimism porn" by the elite cheering MSM.

The video is brilliant. People just don't want to except where we are at and don't want to except what needs to happen if we are to get our selves out of this situation. To coin the phrase of Peter Schiff a man who was astonishingly correct about what is happening and why it's happening a long time before it all happen, with out the benefit of hindsight , a man also accused of "pessimism porn "the medicine don't always taste good".

[Plutonium]

Yes folks its time for yet another one of those videos! Doom porn or common sense I'll leave that up to you.

He spends 3 minutes shouting at the viewer, and what solution does he actually have to the problem? Er, he doesn't know.

[Appian]

He spends 3 minutes shouting at the viewer, and what solution does he actually have to the problem? Er, he doesn't know.

Plutonium,

I think you will find that the very act of shouting is in its self making a point. He does say that there are answers to the problem at the end of the video. But the problem is - and this the point of this thread - that there are only three solutions to dealing with it and only one of these is painless. We can either grow our way out of this, the painless if unlikely solution, or we either have to default and or cut government spending on a massive scale. Defaulting will wipe out the value of peoples pensions, amongst other thing, and large scale budget cuts which will lead, in my opinion, to social/economic chaos. Western societies are living far beyond their means and sooner or later something is going to have to change. The crux of the matter is how do you go about implementing such change - ie, a drastic cuts in living standards and services - in a society that has taken growth and prosperity for granted?

[Appian]

[QUOTE=Roland;1364168]

Yes folks its time for yet another one of those videos! Doom porn or common sense I'll leave that up to you.

I think it was dubbed as "pessimism porn" by the elite cheering MSM.

The video is brilliant. People just don't want to except where we are at and don't want to except what needs to happen if we are to get our selves out of this situation. To coin the phrase of Peter Schiff a man who was astonishingly correct about what is happening and why it's happening a long time before it all happen, with out the benefit of hindsight , a man also accused of "pessimism porn "the medicine don't always taste good".

Roland,

Agreed. But can a society such as ours take the medicine? Stability is an illusion, an illusion that has been maintained, in part, by our past prosperity. There are many underlying social tensions within our country and these will be brought to the surface as soon as we start to see any attempt to bring about genuine change.

[Plutonium]

Plutonium,

I think you will find that the very act of shouting is in its self making a point. He does say that there are answers to the problem at the end of the video. But the problem is - and this the point of this thread - that there are only three solutions to dealing with it and only one of these is painless. We can either grow our way out of this, the painless if unlikely solution, or we either have to default and or cut government spending on a massive scale. Defaulting will wipe out the value of peoples pensions, amongst other thing, and large scale budget cuts which will lead, in my opinion, to social/economic chaos. Western societies are living far beyond their means and sooner or later something is going to have to change. The crux of the matter is how do you go about implementing such change - ie, a drastic cuts in living standards and services - in a society that has taken growth and prosperity for granted?

I don't think anybody has to shout in order to make a point.

The basic problem with the solutions being applied at present in most European countries - cutting back public expenditure - is that it tends to be self-defeating. Public expenditure gives people jobs, either directly through employment by the state, or indirectly as the state buys the goods and services offered by the private sector. Cutting back throws public sector employees out of work, and reduces business for the private sector, who also have to lay off staff. The people who become unemployed are no longer paying taxes, but are claiming benefits, so the state's income base falls at the same time that the claims on it for benefits spiral. That is why Greece has not been able to reduce its deficit, despite the austerity measures.

Current policies, if they continue, could push the world into a second great depression.

I am not offering any simple answer to the problem. In the long term, the deficit needs to be reduced. However, in the short term, the government needs to encourage growth, in order to generate government income through taxation; that means spending, and encouraging others to spend.

In the case of the southern European economies, they also need to leave the Euro, so that they can devalue their currencies and become more competitive.

I also personally believe that part of the problem is the growing disparity between rich and poor. After narrowing for 50 years or so, since the 90s it has widened again, throughout the world. People weren't so bothered when everyone was doing relatively well - allegedly the so-called 'trickle-down' effect - but now that we have no growth, it is a serious problem. The middle class is coming under increasing pressure, and more and more people are being forced down into a lower real income bracket. In the meantime, the rich get richer, and few of the bankers who led us into the current mess have suffered financially as a result.

We need policies that will cause income re-distribution. When rich people get more money, they tend to save it. When less wealthy people get more money, they tend to spend it. And it is higher spending that is needed to get the economy growing again.

Alas, there seems to be no political party that dares to suggest this idea. All they can offer is different shades of the neoliberal capitalism that has failed so disastrously.

[CB100]

The basic problem with the solutions being applied at present in most European countries - cutting back public expenditure - is that it tends to be self-defeating. Public expenditure gives people jobs, either directly through employment by the state, or indirectly as the state buys the goods and services offered by the private sector. Cutting back throws public sector employees out of work, and reduces business for the private sector, who also have to lay off staff. The people who become unemployed are no longer paying taxes, but are claiming benefits, so the state's income base falls at the same time that the claims on it for benefits spiral.

Given that the policy makers in every country with financial problems are cutting public spending they would appear to regard the downsides you refer to as the least worst option.

I am not offering any simple answer to the problem. In the long term, the deficit needs to be reduced. However, in the short term, the government needs to encourage growth, in order to generate government income through taxation; that means spending, and encouraging others to spend.

Maintaining spending will just lead to the lenders being unwilling to continue lending, causing bankruptcy.

I also personally believe that part of the problem is the growing disparity between rich and poor.

I disagree. The problem is that over the last 15 years, people and governments have been borrowing too much to fund consumption. Now the markets have said enough is enough.

After narrowing for 50 years or so, since the 90s it has widened again, throughout the world. People weren't so bothered when everyone was doing relatively well - allegedly the so-called 'trickle-down' effect - but now that we have no growth, it is a serious problem. The middle class is coming under increasing pressure, and more and more people are being forced down into a lower real income bracket. In the meantime, the rich get richer, and few of the bankers who led us into the current mess have suffered financially as a result.

That isn't particularly relevant to the country's wealth creating capacity. It's really more of a social justice point.

We need policies that will cause income re-distribution. When rich people get more money, they tend to save it. When less wealthy people get more money, they tend to spend it. And it is higher spending that is needed to get the economy growing again.

That won't increase the size of the cake. It just spreads the cake around.

The real question is how do we make the cake bigger.

Alas, there seems to be no political party that dares to suggest this idea. All they can offer is different shades of the neoliberal capitalism that has failed so disastrously.

Capitalism hasn't failed. It is a great success story.

Compare the lives of the average family in the 1900's with today and you will see that capitalism has improved their lives immeasurably. You just need to keep a sense of perspective on the financial problems of the last few years.