Some simple questions

June 11, 2009 at 2:00 am Leave a comment

The United States has spent US $11.6 trillion (and counting) on bailouts and stimulus packages. Click here to see how the US Government has used taxpayer dollars. The Australian Government has coughed up AU $42 billion so far – to get people spending on retail goods, to fund infrastructure spending and building works at schools. Mind you, it seems that a whole lot of dead people benefited from the $900 handout too (around 16,000 individuals) along with people with an overseas residential address in countries like the UK, US, France, Germany and Brazil. Talk about a waste of taxpayer’s hard-earned dollars.

Meanwhile, GM and Chrysler bite the dust, filing for Chapter 11 bankruptcy and leading to unemployment for tens of thousands.  In the United States, 14.5 million people are looking for work; in Australia, the jobless rate is around 5.7% and predicted to rise to 8.5% over the next 12 months as Australia starts to feel the ferocious bite of the GFC (although we had a positive growth quarter in March).  State governments are running out of money – just look at California, a US state that is taking a real beating. Tax refunds, welfare cheques and student loans were suspended from February 1, 2009 as the State had no cash. At least 43 US States are struggling with budget shortfalls. And in Australia, we’ve just heard the news that our universal free health care system may no longer be free within five years, leaving sick people to be – well, sick – if they can’t cough up the money to pay for health care.

When you read about the likes of AIG having the hubris to pay senior employees millions of dollars in bonuses after receiving US$165 million in federal aid, you have to start asking some very simple questions. Not pointy-headed economic questions, just simple ones like:

  • how are governments going to provide for the unemployed? help them to survive and not be stripped of dignity? how will the homeless be given shelter and fed?
  • what happens when State governments run out of money, to the extent that the elderly and sick are not cared for?
  • how do we regulate the economy and get governments to step in and address market failure? (basically a return to Keynesian economics)
  • should we be reversing the privatization of infrastructure and banks? The three hallmarks of privatization are divestiture, deregulation and outsourcing and look at where this has got us – concentration of wealth; the stripping of public resources; social objectives subordinate to the profit motive; private companies making a profit and serving the needs of those who can or are willing to pay the most, whilst the needs of the majority are not forefront – this is undemocratic. And the thing I really fear is the privatization of water – there would be no guarantee that water could be delivered safely to the public at an affordable price. And if you can’t pay for water, you will be denied a basic human right.
  • what are governments going to tell the elderly and the sick or youth who will be expecting jobs? – oops, sorry, we spent all your taxpayer dollars and can’t help you.
  • how do we rebuild a sense of community and neighbourliness in our society? if we can’t look to government to support us now in this financial mess or in the future because we’ll be saddled with government debt – how do we help ourselves and others?
  • how are we going to avoid or cope with civil unrest? The GFC is causing hardship; there is anger against Wall Street; millions are losing jobs; more people are homeless; we are wary about being burdened with government obligations that may take generations to repay.

And it’s pretty clear that governments are bracing themselves for civil unrest. Let’s look at some examples:

  • the CIA has added the economy to its daily security briefing for the White House – looking at the GFC and its cascading effects on the stability of countries throughout the world;
  • in the UK, MI5 has plans to cope with civil disorder and the army is on standby. The DCDC (Development, Concepts & Doctrine Centre, UK Ministry of Defense) warned in 2007 in their strategic trends report (p81) that: “the middle classes could become a revolutionary class….The growing gap between themselves and a small number of highly visible super-rich individuals might fuel disillusion with meritocracy, while the growing urban under-classes are likely to pose an increasing threat to social order and stability, as the burden of acquired debt and the failure of pension provision begins to bite”.
  • and I’ve told you before about H.R. 645, which established FEMA camp facilities on military installations in the United States – these centres would be used to provide temporary housing, medical and humanitarian assistance in the event of a national emergency eg civil unrest
  • I’ve also told you before about a US Army think tank report – Known Unknowns: Unconventional “Strategic Shocks” in Defense Strategy Development – and on p32 of this report it says: “Widespread civil violence inside the United States would force the defense establishment to reorient priorities….to defend basic domestic order and human security. Deliberate employment of weapons of mass destruction or other catastrophic capabilities, unforeseen economic collapse, loss of functioning political and legal order, purposeful domestic resistance or insurgency, pervasive public health emergencies and catastrophic natural and human disasters are all paths to disruptive domestic shock”.

So if we put all of this together, what do we have?

  • when we all realise that the bailouts and stimulus packages have failed to correct rampant capitalism and we are all laden with increasing taxes to prop up ailing governments – we will wake up and say we’ve had enough;
  • when people can’t afford to pay for health care; when the elderly do not get pension support; when an urban underclass is saddled with debt – there will be civil unrest;
  • when the future is one of food scarcity and water wars – there will be civil unrest;
  • and when that time comes, the military is ready and able to step in and take control.

Entry filed under: Economics, Future predictions, Useful resources. Tags: , , , .

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