Wednesday, February 16, 2011

Putting "Austerity" In Perspective

Via Max Keiser, we find this link to a piece by an Irish journalist named David McWilliams who distills the truth masked by the term "austerity":

So let’s get things straight: the Irish citizen is being asked to take on the debts of the European banks and pay for this by selling our assets for half nothing to the same banks so that we can bail them out. We take on debts without a discount and sell assets without a premium. At the moment these loans that we are being asked to pay are trading at a deep, deep discount because the “assets” they were supposed to back have collapsed in value. Yet we are being asked to pay for these loans at par.
The only reason the American people are facing calls for "austerity" is the fact that we "borrowed" money from insolvent financial institutions who had no money to lend us in order to save them from extinction.  Our punishment for this good deed (performed in our name but not by us) is not only to pay interest on the fictional money we created by borrowing it, but to dismantle the social safety net that was established the last time these financial institutions screwed the world.

Seriously, from a moral perspective, do we owe anything to bankrupt institutions that lent us money they didn't have (with interest) in order to bail them out?  But for the accounting fiction created by the bailouts, those institutions would still be dead.  And we're beholden to them why, exactly?

The powers that be clearly view this as some kind of Milton Bradley board game, but their insistence on keeping their monopoly money is killing people around the globe, including people in the United States.