[Marxism] From Global Research: America's Fiscal Collapse

sabocat59 at mac.com sabocat59 at mac.com
Tue Mar 3 04:32:08 MST 2009

I think this is a more representative quotation than that proffered by J. Wells:

(This is a "War Budget". The austerity measures hit all major federal spending programs with the exception of:  1. Defence and the Middle East War: 2. the Wall Street bank bailout,  3. Interest payments on a staggering public debt.  The budget diverts tax revenues into financing the war. It  legitimizes the fraudulent transfers of tax dollars to the financial elites under the "bank bailouts".  The pattern of deficit spending is not expansionary. We are not dealing with a Keynesian style deficit, which stimulates investment and consumer demand, leading to an expansion of production and employment.  The "bank bailouts" (involving several initiatives financed by tax dollars) constitute a component  of government expenditure. Both the Bush and Obama bank bailouts are hand outs to major financial institutions. They do not not constitute a positive spending injection into the real economy. Quite the opposite. The bailouts contribute to financing the restructuring of the banking system leading to a massive concentration of wealth and centralization of banking power.  A large part of the bailout money granted by the Us government will be transferred electronically to various affiliated accounts including the hedge funds.  The largest banks in the US will also use this windfall cash to buy out their weaker competitors, thereby consolidating their position. The tendency, therefore, is towards a new wave of corporate buyouts, mergers and acquisitions in the financial services industry.  In turn, the financial elites will use these large amounts of liquid assets (paper wealth), together with the hundreds of billions acquired through speculative trade, will be used to buy out real economy corporations (airlines, the automobile industry, Telecoms, media, etc ), whose quoted value on the stock markets has tumbled.  In essence, a budget deficit ( combined with massive cuts in social programs) is required to fund the handouts to the banks as well as finance defence spending and the military surge in the Middle East war. ) 

Looks like Chossudovsky and David Harvey are in agreement on the continuity of neoliberal economic policy.  We're facing a restructuring with increased consolidation and concentration of capital in fewer hands at the top. 

And the democrats are providing cover for this. I wonder what percentage of left liberals who voted for Obama still believe we are in for a new new deal?

Greg McDonald
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