wall street’s War against main street america

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investorzzo's picture
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Joined: Nov 7 2008
Posts: 1182
wall street’s War against main street america

Moving in for the kill, Mr. Paulson explains that the Treasury is bare, having used $13 trillion to bail out high finance in 2008-09. So he warns the government not to run a Keynesian-type budget deficit. The federal budget should move into balance or even surplus, even if this accelerates the rise in unemployment and decline in wage levels as the economy moves deeper into recession and debt deflation. “We must also tackle what is by far our greatest economic challenge — the reduction of budget deficits — a big part of which will involve reforming our major entitlement programs: Medicare, Medicaid and Social Security.” The economy thus is to be sacrificed to Wall Street rather than reforming finance so that it serves the economy more productively. It is simple mathematics to see that if the government cannot raise taxes, it must scale back Social Security, other social welfare spending and infrastructure spending.
What is remarkably left out of account is that today’s financial crisis centered on public debts is largely fiscal crisis. It is caused by replacing progressive taxation with regressive taxes, and above all by untaxing finance and real estate. Take the case of California, where tears are being shed over the dismantling of the once elite University of California system. Since American independence, education has been financed by the property tax. But Proposition 13 has “freed” property from taxation – so that its rental value can be borrowed against and turned into interest payments to banks. California’s real estate costs are just as high with its property taxes frozen, but the rising rental value of land has been paid to the banks – forcing the state to slash its fiscal budget or else raise taxes on labor and consumers.


pinecarr's picture
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Joined: Apr 13 2008
Posts: 2259
Re: wall street’s War against main street america

It's pretty sad, isn't it?   The country's irresponsibility, coupled with bank and government malfeasance, is finally coming back to bite us.

Laurence Kotlikoff and Scott Burns' book, "The Coming Generational Storm", has a great term for the impact of this on our children and grandchildren;  "fiscal child abuse". 

sjmvideo's picture
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Joined: Feb 2 2010
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Re: wall street’s War against main street america

Yes pinecarr,

I find that It's only "Fiscal Child Abuse" if you think that our children deserve more of the same system that got us to this mess in the first place. When the only system you have known, and can imagine, is falling apart, of course things would be scary. I would be so bold to say that to leave our children to the system of lies and illusions that we call "the global economy" is a far worse form of abuse. But that's all speculation and theory. And I will be up front in saying that I do not have any children, and can't possibly know what it really feels like from a parent's perspective.

It can be very sad to think about what is going on currently. When I put too much attention there I can feel hopeless. And then when I try to talk about it from a real concern, people either want to gripe with me, or they think I'm a Chicken Little kook. Remember Chris says in the CC that the belief that the next 20 years will not look the same as the last is only a problem if you think that it has to look the same. (Paraphrased of course.)

We have the opportunity to design our communities from the ground up to provide what we need and stop relying on "the government" to take care of everything for us. Our children could have a legacy from us that is must more fulfilling and rich than what they would have with more of the same. And there are people doing such things with the Transition and Community Currency Movements. 

I'm under no illusion that it will be all pretty and flowers. People will have to be willing to really look at what is important to them as the world of excess falls away. And yes there are a huge number of people who will experience unfair situations in the US. But that has been going on all over the world for a long time.



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