26 October 2012

Bye Bye Democracy Hello Bond-Age

Greekistan: latest proposals leaked on how to deal with the troublesome colony German Finance Minister wants Greece’s Tax and VAT revenues place in an Escrow Account. 

So if Greece makes a primary budget surplus then a dedicated receipt (such as part of VAT income)  transferred monthly to the trust account. And if Greece doesn't make a surplus, then automatic budget spending cuts equally divided through all spending programs. If it Greece refuses bring in officials who will make them as democracy is a form of cheating.  And if all this is unpopular with the natives, throw in some sweeteners.

But not too sweet.  "Growth and job-enhancing measures" (or the further reduction of wages costs livings standards) and "the release of some structural funds dedicated to the 181 projects of high priority,” (feed the local Oligarchs - usual conditions of having funds to match EC funds will probably apply)

The Road to Serfdom or Bond slavery 

The debt / GDP ratio?
 It gets worse all the time.  As long as interest payments on public and private debt remains greater than the rate of investment and the ability to pay, the economy will be entrapped in a dynamic ‘vicious cycle’ of debt.  Debts are "excessive" due to the inability to pay (not size per se). Just throw in another forecast, who cares if they miss the targets?
“Yes, but shouldn't the arrows being getting closer?” asked Alice,
“Off with their heads!” roared the Queen
 "... Look, fewer misses"
So the external balance (Greek exports to imports) was positive. The poor are too poor to buy imports  and the middle classes are being eradicated  “In Greece right now, to be unemployed means death”  - less heads to be counted in the future unemployment statistics.  As for Youth employment, call it Youth-anasia.  An Export recovery? The latest Industrial orders statistics are not so pretty ("Are there signs of a turn in the Greek economy?")

"It is clear that Greece is off track and there is no chance they will cut the debt to 120 percent of GDP in 2020 as envisaged."  (a euro zone official, who insisted on anonymity).

Austerity undermines the ability to pay, driving more and more people into debt and poverty.  "Creating the 'conditions of growth"by doing the opposite.  Asset stripping is not economic development.  Turning bad debts into a (bad taxes) fiscal problem, and passing debt burdens on to taxpayers, means less income and revenues. A shrinking domestic market, rising cost of subsistence (wages) and an increasing ugly political environment for investment, are not exactly ideal conditions for making a local producer  more competitive in global markets.

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Euro crisis in a bin  - note the desperate advertising leaflets
photo via @asteris
Anyone really believing in this Austerity nonsense? Even IMF economists show that the damaging multiplier effect of austerity is very severe (The IMF and the End of Austerity)

Instead of growth, citizens are burdened and enslaved by debts, who are then told that they are not poor enough to be competitive, are cheats and are then asset-stripped.  Local oligarchies can then move their capital back in, buy everything on the cheap.  

A transfer of wealth from those not poor enough to those not rich enough. 'Perfect Markets' are only for the few with 'Rentiers' rather than producers

All this for our children's children's welfare? Younger generations suffer the most, can't afford children, and more and more families in Greece are forced to surrender their children to charities.  (One surplus that Greece is producing  - re: Swift's Modest Proposal)

Generation X debt reduction.  The present generation sacrificing supposedly for the next by sacrificing the next (jobless youth/at 58%). Taking away someone's future to secure someone else's today. Inverse / Perverse investment may secure today, but  no one safe tomorrow. 

There are three basic ways to reduce the debt-to-GDP ratio/ fraction
1) reduce the numerator e.g Debt forgiveness / default 
2) increase the denominator e.g. growth or/and inflationary increases in GDP or 
3) remove the statistic - remove the sovereign state. 

When debts cannot be paid or rolled over, foreclosure time arrives and Government is removed. Welcome to "More Europe - less democracy," Don't bother voting on this; you can't. 

Economic growth may come with pain, but the idea that pain (or torture) generates growth is perverse.

Medicine?  "Now the drugs don’t work; They just make you worse" Verve (via )

And the goals of economic policies are ?
Human Happiness? Welfare? Efficiency? Competitiveness?

RT : Efficiency is a highly developed form of laziness <<<--or an unit of output produced with the least effort.   To be 'efficient' at producing something that no one wants is meaningless. So whose wants/welfare are we referring to?

The 1% Pareto Optimal rule
Efficiency defined as where no gains can be made without making a very wealthy person worse off.

Does it now mean increasing the number of poor, reducing numbers of small business enterprises and increasing the relative power of oligarchs and monopolies?  Are we (with the help their media outlets) confusing "enhancing the conditions" for making abnormal / excessive profits with  'competitiveness'?

"Trying to makes ends meet, you're are a slave to money and then you die" Verve  - Euro's Bitter Sweet (drug related) Symphony
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