What economists should have done…
Via @UndercoverMutha
Government economists should have pointed out that these (see below) were the predictable costs of Troika-austerity in Greece and to spell out, again and again, that the unemployed are not particularly good at paying back debts. What government economists did was of course designing this kind of austerity which caused the damage. Mind that the independent weekly ‘The Economist’, not know for its left leanings, promoted a real debt write down for Greece in a very early phase of the crisis (the actual debt write down was somewhat of a scam, as the Greek government almost immediately had to re-borrow the money to prop up the banks which owned a lot of the debt). Aside – at this moment nominal income of Greece is going down because of deflation, which means that the burden of debt tends to become larger even when no new debt ia added and the economy is growing.
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—– look inside —– $5.94 / $20.00
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—– look inside —– $15.99
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—– look inside —– $5.93 / $12.99
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—— Ugarteche, Puyana and Madi ——
Gerson Lima / Maria Alejandra Madi
Edward Fullbrook and Jamie Morgan
————— Michael Hudson ————–
Maria Alejandra Madi / Jack Reardon
————- Edward Fullbrook ————-
—————— Steve Keen —————–
————— Richard Smith —————
————– Gustavo Marques————
– Victor Beker and Beniamino Moro –
————– Lars Pålsson Syll ————-
—————– Stuart Birks —————-
Edward Fullbrook and Jamie Morgan
———— Armando Ochangco ———-
Shimshon Bichler / Jonathan Nitzan
————— Mauro Gallegati ————–
————— Herman Daly —————-
————— Asad Zaman —————
—————– C. T. Kurien —————
————— Robert Locke —————-
Real-World Economics Review Blog 
The tendency towards inflation/deflation in our economic system is a characteristic of a fundamentally flawed system, like an aircraft whose center of gravity and center of lift are
spaced far apart, creating the need for constant control compensation at varying airspeeds.
Humanity has suffered for several hundred years as passengers in this aircraft.
A complete redesign is needed
Similarly, the tendency of weather systems to chaotically bounce around inside the climate zone without high predictability is also indicative of flaws. It is not clear to me that our chaotic economic system is any more reduce-able to strong determinism than our weather. Unless you have an idea on that?
Our economy has a structural need for spasms of debt repudiation, since we let total debt grow faster than the economy can grow to pay that debt off, and since we control inflation, which is slow, gradual debt repudiation. This is what leads to the up-and-down swings of business cycles. To reduce or eliminate them, we need to control the growth of debt (which is a claim on the future production of the economy), limiting to the amount that economic growth can be expected to pay back. The way to do this, in turn, is to end the production of debt-based money by ending the fractional reserve system; require 100% reserves, and have the economy’s need for monetary creation be met by government instead of private banks. (This, by the way, returns seigniorage–the profit that comes from issuing money–to its rightful owner, the sovereign.)
It’s pretty simple, really.
Well, Helge Nome: any idea to begin with? A new gold standard, perhaps?
Fund economies with at least 50% debt-free sovereign money instead of 97% commercial bank funny money created out of thin air as credit [debt to themselves] by commercial banks; hike up bank capital reserves to 30%; progressively abolish treasury bonds as the new system develops and run a balanced low personal taxation budget with capital and infrastructure spending funded with new debt-free sovereign money. If currency traders and bond vigilantes try to trash currencies then call their bluff: just accelerate QE and buy back more gilts at their lowered price.
In the West we now live in mature consumer economies in which success is not compatible with skint customers! You cannot create wealth by producing goods or increasing productivity if no-one has the funds to buy them. Shed-fulls of produce do not create wealth unless customers have the money to buy the produce. It is the responsibility, indeed duty, of sovereign states to supply their economies with enough debt free money to function.This has been forgotten globally! However too much causes inflation or worse stagflation, financial collapse and/or war; whilst too little causes recession, depression, deflation and ultimately financial collapse and/or war. Not easy to manage but vital to at least attempt to get it right! Sadly Eurozone states lost their sovereignty through Maastricht. there’s a message there: repeal Maasstricht or disband the Eurozone.
Just in case you hadn’t worked it out yet, ‘Debt Free Sovereign Money’ is the new PR influenced name for ‘government deficit spending’.
I really wish people would be honest.
” run a balanced low personal taxation budget with capital and infrastructure spending funded with new debt-free sovereign money”
Ronald Reagan inadvertently taught us that it is not enough to continue spending at required levels. You also have to sop up the extra capital dollars to maintain balance. You can see this in the large trade deficits that started in the mid-1980s.
Or a new humankind, very much better!
See http://www.dailykos.com/story/2011/12/09/1043627/-They-aren-t-solving-the-European-Debt-Crisis?showAll=yes
Here’s the plan. Run a write in campaign for none of the above that is exciting enough to attract all those intelligent people who refuse to vote. Design an irrefutable exit poll system using phones and etc. Win the election; even though scores for none of the above will be a national security secret, the people will know victory. Contemplate a new, seven branch democracy but don’t try to figure out what happens next.
Can’t remember when I’ve seen a more powerful graphic. Thanks for posting it, merijn
Would USAmerica’s version look very similar?
In response to Miguel and Garrett:
A new humankind that doesn’t worship money would be highly desirable.
A new democracy wouldn’t do any harm and could be an even bigger joke than the present one.
The underlying problem, of course, lies in the mindset of the slaves that graze in the pasture of money and fully respect the electric fences erected by their masters. Their minds are incapable of visualizing a life without these fences.
Meanwhile, their masters are playing poker around the farm kitchen table.
(Credits to Eric Blair)
The “Masters” are terrorized by the thought that someone will come from behind and make them less on top. The few who are beginning to own more than is on earth become less secure with each new and bigger balance sheet report, the faster the wealth grows the less secure owner is, then stress leads to insanity and anything goes. The master will do anything to get more faster.
Those you refer to as slaves are cosmic powered biology manifest as human. Most are attempting to be as happy as possible in the unfolding bloom of their surprisingly amazing gift of life, they do not suspect there are psychopathic weirdos who are displacing people from their homelands so they can destroy the planet to extract resources that can be financialized into a stream of bets worth thousands of times the original resource people had to be destroyed and displaced to get.
Most people do not realize that insane wealth seekers are driven to destroying Earth by their own fear of losing what is not theirs to begin with.
Amen
THE SOLUTION can be viewed at :
http://www.positivemoney.org/2013/04/video-from-the-conference-fixing-the-banking-system-for-good/
although I don’t support Positive Money’s total ban on commercial bank created debt money – though 50%, as the UK was at in 1970, before “Big Bang” might work OK!
Has Ed Balls seen the light?
http://www.3spoken.co.uk/2014/12/how-to-eliminate-uk-deficit-trick.html
Also Adair Turner at the INET conference in Hong Kong:
http://www.positivemoney.org/2013/04/adair-turners-keynote-speech-at-inet-conference/
Reblogged this on Arjen polku and commented:
“the unemployed are not particularly good at paying back debts.” Indeed.
“….Their minds are incapable of visualizing a life without these fences….”
Not ‘incapable’… just currently unable to visualize a ‘picture’ of an alternative. A marketing guru once said the best way to change peoples’ minds is to change the picture they see… as is done with deadly success by advertising. Thatcher’s endlessly repeated ‘T.I.N.A’ had it’s effect, among the many others created by the 1% (‘death tax’, etc.)
A big part of this ‘inability to visualize’ is the (deliberate?) inscrutability of ‘economic-ese’. How many ordinary people understand how debt-money is created? Or that other feasible forms of money (including non-debt fiat) have worked in the past… in America, even. How to summarize the Chicago Plan? Even the Wall Street raiders used the quants’ opacity to hide behind.
As J.K. Galbraith said, “The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent.”
I propose a contest to create the most compelling ‘pictures’ of alternatives… historically tested, human-values-promoting, affordable, aimed at justice, irresistibly appealing, TRUE!, ;).. etc. BUT it has to be a pictures that are simple and effect, in short, a ‘marketable’, memorable, repeatable sound bite. We can thank the Occupy Wall Street movement for creating the most powerful one since T.I.N.A…. “1% vs the 99%”. One that makes the basics of money creation crystal clear would be most welcome. One that shows the idiocy of the 1%’s eagerness to kill the golden goose of limited resources comes to mind…let the 99% eat ‘innovation’. Well, the many geniuses here know what I mean :)
Perhaps with the rising inequality discussion, Piketty et al, the Greek election, the Pope’s upcoming trip, etc., there is a chance to give the common voter the ability to “visualize a life outside of the fences”. Let’s use the ‘opposition’s’ strategies against them :)
Regarding slogans. I think that a small business campaign “We are the 95%” has promise. Also, just a graph of US GDP growth from 1920-1932 and 1933-1945 juxtaposed on the same graph would be helpful.
Interesting, Nancy, How about?
The derivative key stroke or a kilocalorie eco –
Which measures best?
A wandering fool or a heart at rest …
whats wrong with that? all you have to do is turn the graph upside down and it looks good.(see negative temperatures in statistical physics). .let them eat jellybeans. i guess won is going to watch and wait; i’ve been to greece–hotel acropolis (stay for free, crete –i worked there-like 5$day).had a good time too. there are also some extreme right wing people there.
It’s becoming more and more obvious that the bulk of those now commenting on this site see the problem. With regard to the underlying cause, that’s not so clear. If this cause cannot be tied down with the surety, it will remain impossible to speak with a single voice. Undoubtedly, we are approaching a “tipping point” in human history. One whose result is hard to contemplate. And, it seems to be on setting with greater and greater immediacy. Therefore, something needs to be done, and it needs to be done quickly. Are we capable of rising to this challenge or not?