The UK’s double-dip recession has deepened sharply and unexpectedly in the second quarter leaving their economies smaller than they were when conservative governments took office. With the entire Euro Zone in recession,(Spain and Greece already in Depression territory),China building enormous inventories of everything from steel ($500 billion and counting) to snow globes, and now England slipping into contraction of their economy, the window of opportunity for the U.S. avoid an economic disaster is closing rapidly. If the GOP remains insistent on obstructionism and austerity (in the social or non-defense programs of course) instead of growth policies, there will be nowhere left on earth to provide the demand needed to quell the growing probability of another Great Depression.
Why Americans Should Care
A recession in the world’s third-largest economy ( Euro Zone), combined with the current slowdown in the world’s second-largest (China), spells trouble for the world’s largest (U.S.). Throw in the seventh largest economy (UK) which has confirmed a double-dip recession and whose economy shrank by almost 1% in the second quarter, and the forecast is going to be bleak no matter which candidate the mostly oblivious American public elects this fall. Any measure of GOP success in defeating Democrats could very well tip the scale into a global Depression at least twice as bad as the first one. The persistent de-regulation by Republicans, the stolen wealth from LIBOR, Housing Bubbles, and unfunded Neo-Con wars have finally accomplished the wringing out of all of America’s economic resources.
To make matters worse, for the first time in decades, the U.S. Federal Reserve is a toothless tiger. As it becomes clearer that the multiple gears of the worldwide economy are slowing in unison, pressure is mounting on the world’s largest central bank to spur growth. But with the cost of borrowing money already at historic lows, it’s far from clear whether further measures aimed at making money cheaper will do any good at all.
By the same token, corporations are sitting on trillions in cash. The GOP claims that tax cuts will prod them into spending, but that is patently idiotic to the point of being insulting. Corporations aren’t spending because there is no demand. They have cash!!! If you simply give them more cash they will just throw it on the pile they have until DEMAND forces them to expand, or a Depression that enables them to use their hoarded cash to scoop up more and more potential competition for their monopolistic pleasure.
HOW CAN AMERICANS BELIEVE THIS TIRED OLD REASONING FROM THE GOP WITH REAL-TIME PROOF TO THE CONTRARY?!!!
The GOP claims to be the free enterprise Party but continues to encourage monopolies. The GOP claims to be the conservative, small government Party, yet the last time the national debt declined under a Republican Administration, RICHARD NIXON was being impeached for covering up his paranoid, schizophrenic Watergate operation.
In 1981, the supply siders, commandeered the charismatic, albeit clueless and senile Reagan Presidency and employed their Voodoo economics, as George Bush senior correctly called it in 1980. As Bush was emphatically trying to talk sense into the Republicans proclaiming that tax cuts would never increase government revenues, the supply-side elites in the Republican Party were plotting the demise of Moderates. As you will see in graphic terms, the Voodoo failed just as Bush predicted, and the supply siders turned a 32-year winning streak into a debt disaster that continues to this day. For 20-years, under Reagan and Bush, the national debt increased compared to GDP every single year. In most other years it decreased. Twenty years in a row can’t be just an accident, but to understand you need to understand the voodoo strategy.
4 Deficit Causes:
- The biggest cause: Reduced tax payments
- Second: Automatic increases in unemployment insurance and food stamps, and people starting social security early because they can’t find jobs.
- Third: Military spending also increased, but is now fading.
- Fourth Bush’s TARP and Obama’s Jobs Stimulus (top layer) account for little of the deficit, and they are temporary.
Bush senior fought deficit increases, so the Republicans didn’t support him and he lost to Clinton, who put an end to it supply-side economics. G. W. Bush brought it back full strength, with V.P. Cheney saying “Reagan proved deficits don’t matter.” Currently supply siders are in full control of the Republican party.
The GOP claims that President Obama is the “tax and spend” President, but it was GOP expenditures and de-regulation, combined with the outright thievery by Wall Street that sent the economy over the cliff once already. But the TRUTH is that the last Republican Administration to lower the deficit was RICHARD NIXON, as shown below.
President Obama has spent literally only $800 billion of the $5 trillion “increase” the GOP claims he has “spent”. All of the remaining went to :
- Extra Child Income Tax Credits for All Americans (2009-2011)
- Making Work Pay Income Tax Credits ($400 per working American, $800 for a married couple)(2009-2010)
- Increased length of Unemployment passed by CONGRESS (2009-2011)
- 2% Social Security Tax DECREASE for all working Americans. (2011-2012)
So when the GOP calls President Obama a “tax-and-spend” liberal they are telling an outrageous lie. He’s actually been the biggest TAX-CUTTING LIBERAL in modern times. By GOP definition, these TAX REDUCTIONS are twisted and perverted into extra “spending”.
WHY DOES THE GOP WANT TO END UP LIKE ENGLAND AND THE EURO ZONE?
If the GOP is so disgusted by “European style” economics, why are they so intent on mimicking their Austerity failures? Truth is they aren’t. They are merely appeasing the Tea Partiers until they can put another Neo-Con in the White House to Manipulate like they did George W. Bush.
Because of Angela Merkel and David Cameron’s insistence on Austerity(drastic cuts in government spending), they are both in the grip of deepening recessions. The U.S. is limping along with the too-small stimulus running out of steam and the GOP obstructing any and every effort by the Obama Administration to put people to work, which creates demand, which entices businesses to hire, etc.
Yet somehow, the GOP propaganda machine of FOX News, Morning Joe Scarborough, David “Meet the Biased Press” Gregory, and countless A.M. Radio blowhards have convinced a full third of the population that more tax cuts, less spending and further de-regulation will magically now spur growth? AGAIN!!!
Here’s the problem with that.
- Tax rates are already at a 40-year low and wages and growth has consistently stagnated or declined.
- One only has to look at any reliable news source(read: non-television) to see that the GOP plan is failing miserably in the UK and Europe, yet they want to implement the same policy here!
- 75 out of 100 of Mitt Romney’s advisors were advisors under George W. Bush and would undoubtedly push the exact same policies that they rammed through under Bush-the idiot who was conned by Dick Cheney, et al. into starting two decade-long wars, tax cuts for the wealthy, and proclaimed repeated that “deficits don’t matter-Ronald Reagan proved that”!
- We’ve de-regulated so much already that Wall Street Banksters are stealing, committing SEC Fraud, and lying to Congress with absolutely NO consequences for their crimes.
And Mitt Romney’s answer is to even further de-regulate? I might as well just send my pitiful paycheck directly to the 1%–because they’re going to steal everything the 99% owns anyway.
THE U.S. IS RUNNING OUT OF BULLETS
The Fed’s policy-setting committee meets next week amid reports that it may be close to taking fresh action to stimulate the flagging economy. But Ben Bernanke is simply out of ammunition. Interest rates have been at historic lows around the world, but anyone with half a grain of sense should be able to see that :
- Tax cuts have not spurred growth in 40 years, why would they spur growth now?
- With businesses worried about taking on new risk and households struggling to make ends meet, fresh data this week point to an ongoing economic slowdown in the U.S.
- Low interest rates have helped all they can. Business are not going to borrow any money unless there is enough demand to warrant expanding what they already have.
The danger for the United States is clear, but there’s also a clear lesson. Republicans have become the U.S. Equivalent of Angela Merkel and David Cameron, demanding and getting spending cuts at the worst possible time while ignoring the economic and social consequences.
Even if the U.S. economy (as well as President Obama’s reelection campaign) survives the global slowdown, we’re heading for a big dose of austerity economics next January — when drastic spending cuts are scheduled to kick in, as well as tax increases on the middle class. But the U.S. economy isn’t nearly healthy enough to bear this burden.
When the global credit markets collapsed in the fall of 2008, central banks around the world quickly exhausted the primary tool they’ve reliably used to fight financial fires for decades: slashing the interest rates on money lent directly to banks. Despite those efforts, the world economy slid into a nasty recession.
With the world now locked in what appears to be a protracted and synchronized slowdown, central banks around the world have been flooding the system with money to prod businesses and consumers to borrow and spend. But the global economy continues to lose momentum. The most pronounced slowdown is in Austerity-riddled Europe, where a Spain, Greece, Italy, France and even Germany are experiencing a deepening debt crisis is weighing on business and consumer confidence and hammering the banking system. England was just beginning to recover from the 2008 crisis when Conservative David Cameron came swooping in and implemented the same ill-advised Austerity policies. England’s economy has, predictably, gone downhill since. Whereas the U.S. has been able to eke- out a fragile 2% growth during the Obama Administration, England has now shrunk by 1% for two quarters in a row. This will undoubtedly have a Depression-esque characteristic soon if they continue down this foolhardy road.
Like their American counterparts, European central bankers are struggling to push money into the economy. But deep government spending cuts in Greece and Spain have left many households without a paycheck to spend. Spain’s latest unemployment rate is a terrifying 25% with 50% of those under the age of 25 unemployed.
In China, the last major economy showing decent growth, the Chinese Central Bank predicted this week that that the world’s second-biggest economy has yet to bottom out. Beijing is now moving to boost growth again. But those measures are expected to be too limited to help revive the rest of the global economy. England is actually shrinking under Austerity, and the U.S. is being held hostage by radical right-wing domestic terrorists in the House or Representatives.
If, by some chance, you are one of the few reading this, think long and hard about how the U.S. economy can buck the global trend that is happening in real-time over the rest of the world if we give in to Republican misinformation.
How you vote this November, whether for State, Congressional, or Presidential candidates will seal the fate of the U.S. to either follow in the footsteps of the riots and social discord in Europe, Britain and China or to give the U.S. a chance to reinvigorate its economy by the ONLY proven successful method in the past 50 years.
Neither party is perfect. Far from it. But one party wants to go back to the George W. Bush years despite the permanent damage that will be done to America’s middle-class and working poor. The other wants to move forward and utilize every tool our country has left to lead the country and the world in the direction of economic growth with proven economic practices.
I cannot place your vote for you, but if I could, I think you know which of the two choices above I would choose.