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Prudence


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When Gordon Brown took over the treasury Britain's external debt stood at around $3 trillion. A large figure certainly, but manageable in one of the worlds largest economies. In the third quarter of last year, UK external debt stood at $11.1 trillion, the second largest external debt figure in the world. This is how the top four debtors look:

 

USA $12.5

UK $11.1

Germany $ 4.9

France $ 4.6

 

Now Gordon's "Golden Rule" has been broken (it was broken a long time ago but the treasury has managed to massage the figures up until now)

 

We pay more taxes than in 1997.

 

So where has all the money gone? And please don't parrot the old lie about the NHS being the envy of the world or our children all leaving school as geniuses. :roll:

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There was a British economist in the 20th century who became famous for saying government spending can prime the pump of the economy, creating wealth and jobs.... well, I can't quote him. Maybe you've heard of him? John Maynard Keynes. But his point was it's sometimes OK for the government to spend.

 

The US gov't has spent enormous sums of money for the war in Iraq, for munitions, supplies, for bribes, for reparations, for salaries of private contractors, for infrastructure construction --

 

My question is -- shouldn't SOMEONE'S ECONOMY BE BOOMING FROM ALL THAT SPENDING? Where is the money going? Is China getting it all from both Anglo and American spending? Is Switzerland secretly hoarding those dollars and pounds? Are the Jews.... well, it's a question. Who are the usual suspects?

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Watched an interesting history prog about "the great depression" in the USA; where President Hoover believed everyone should sort themselves out (with no doubt many doomed to poverty and starvation), and eventually the "capitalist" economy would sort it'self out. :roll: Fortunately, along came FDR with the "new deal"; which ploughed tax money into public works, creating employment, allowing folk to spend, which revitalised the economy. :) However, ironically, the real end to the depression came with WW2 and the mass production of weapons of war :shock: What I find perplexing is; that if an economy can be stimulated by the production of bullets and bombs, that end up exploding into nothing; why can't the same kind of investment achieve the same objective and produce lasting improvement and constructive benefits for society? :wink:

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But R. Reagan promised that the rich getting richer would trickle down to us ordinary folk. They would buy the yachts we manufacture, for example, or buy our jewelry etc. Some body has a finger in the dike and there's no discernible trickle so far.

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In my younger days I was an auditor, working with bank examiners to see if banks kept enough liquid reserves, if the assets they had as collateral were true, if their loans were spread around in single family homes, apartments, businesses, duplexes with margins of safety (80% of the value of the property).

 

Then R. Reagan was sworn in as president and he decreed bean counters must get out of the way of business tycoons. They must be unfettered to make REAL investments to create boom times. Naturally, soon enough, a half trillion dollars was LOST in bad loans (mysterious loans to friends and relatives of the bank owners, where money had gone for large scale 'development' and then collapsed with no development).

 

Not to worry, though, the taxpayers funded the amounts over $100,000 that savers lost when the banks closed their doors. It brought a sulphuric stench to my nose. And now, Senator McCain who was implicated but not indicted (why not?) in the failure of those banks is running for president. A brother of Bush president #41 was 'loan officer' at one of those banks. (sigh)

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One hundred and more years ago we called them Robber Barons. The new phrase is Predatory Capitalists. All of our legislators are dependent on their good graces. Incumbent legislators have 'safe' districts so that twenty years ago, our seated candidates had a higher (in the 90s) percentage of keeping their jobs than the one party Communists in their Duma.

 

The Corporate Media and Money elects our Senate and House.

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Thanks Jezz; you've summed up a belief I've held for some time; which poses the question; is their ever going to be the possibility of a Utopian Society or are we doomed to continue in a world of superficial civilisation and mutual exploitation. :?:wink:

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