Some thoughts on the stimulus package. First of all, it is a proven maxim of mainstream economics that government spending must go up in a recession. If not, you run the risk of a depression. During a depression, the state for sure needs to spend more money. Otherwise the depression never ends. I assume that these Chicago School freemarketeer morons have thrown all this out, and believe insane things like in a recession or a depression, you should slash government spending. That’s simply madness. The Friedmanites are the equivalent of religious fundamentalists. I would say that what they are preaching is unscientific, except that the dismal science is not much of a science in the first place. So the stimulus is a great idea. That the Republicans oppose it on the grounds of excess spending just shows how insane they are. All sane economists agree that a stimulus package is needed right now, and most think that this package is too small, if anything. As far as the tax cuts are concerned, I am getting really tired of all this tax cut crap. According to Republicans, tax cuts are always necessary. In good economic times, we need to slash taxes. We can’t possibly raise taxes in an economic boom! That would ruin the expansion. Truth is that all sane economists agree that an expansion is the one time that you can successfully raise taxes without causing problems. The Republicans are right that raising taxes in the middle of a recession or depression is a bad idea. So you don’t do it. Liberal economists agree with this too. So how to you increase government spending in bad economic times? Well, the state is supposed to borrow the money. The tax cuts in this plan are ridiculous. As a socialist, I have little interest in tax cuts. if you defund the state, there will be little money for the socialist programs that we socialists love so much. It’s impossible to promote any kind of reasonable socialist project while one is continuously cutting taxes willy-nilly. There won’t be any funds to pay for the project. Defunding the state via tax cuts is a de facto anti-socialist project. My main beef with this stimulus thing is that there needs to be a massive debt write-down. That’s all there is to it. This debt, in all of its forms, is simply unpayable. Some readers may not understand what a debt write-down is. Say you bought a home for $500,000. With the collapse of housing prices, it is now worth $300,000. Ballooning mortgage payments mean you can’t pay your mortgage and you are going to lose your home. In a debt write-down, the amount you owe on your home would be written down from $500,000 to $300,000. True, the bank loses money, or at least does not get as much money in the future as it would have otherwise. So the banks take a hit on any write-down of debt. So the debt now afflicting our society, in all of its multiple and nefarious forms, needs to be written down, particularly the mortgage debt. The banks hate writing down debt. They fight it with tooth and nail and never quit. They lose money in debt write-downs and banks have corporate charters that demand that they function as profit-maximizing organisms. Failure to do so can lead to stockholder revolts and replacement of the bank’s top management. So this stimulus, in not writing down debt, lets the banks off the hook. And unless a debt write down occurs, I’m afraid that the economy is going to go down hard. And take the world economy with it. So really, these bankers are maybe going to take down the US economy and after that, the world economy. And no, I don’t believe bankers = “Jews”. On the old blog we went over the notion of whether or not the Jews run the banks anymore. They no longer run the banks in Europe, where they ran them for 100 years or so. The Holocaust, horrible as it was, insured that the Jews no longer ran the banks of Europe. European banks are now run by a deracinated corporate class of European citizens, with no ethnic group predominating. Asian banks, also big players, are run by Asians. The Jews in the US did make a run for commercial banking in the 1920’s, but Gentile solidarity (anti-Semitism) stopped that plot in its tracks. Gentile bankers simply got together and decided to refuse to sell their banks to Jews. When Jews practice ethnic warfare in a society, the only way to fight back is Gentile solidarity, or anti-Semitism. I do not think that the anti-Semitism should go beyond the ethnic warfare of the Jews. If the Jews are not killing or physically harming Gentiles, Gentiles may not kill or physically harm Jews. So US banks are now a deracinated corporate mishmash of ethnic groups, with no group predominating. Why does the debt need to be written down? Because it is unpayable. And when people are busy paying down frankly unpayable debt, there’s no money left over to buy things, invest, etc.
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