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  • Jul, 2012


    The American Disease Spreads

    Cough. Cough. Cough. It’s that time of the year — the office becomes a petri dish and, please, would you just stay home. But, it’s not that pesky disease that passes that should be of concern. Rather, what hurts more is something more permanent–The American Disease.

    I wrote about this back in April for the Sydney Morning Herald:

    But the American disease spreads its hurt into every pore of society. Here is how I define it: an ideology based on a phantom idea called the “free market”, whose purity and virtue can only be realised by tearing down any regulation deemed “anti-business”, cutting every tax ever conceived and shovelling most of the wealth created in society into the hands of a few.

    The American disease has been wildly successful. It has killed the middle class, diverting 30 years of wealth growth from the people who created the value into the hands of the few. More people live in poverty in the US – 46 million – than at any time in the half-century the US government has measured that figure.

    What reminded me of this disease is the continuing obsession with a phantom threat: budget deficits. For some reason, the Labor government has decided that it has to worry about government deficits–which are puny, in relative terms, to the economy. But, this idiotic obsession with deficits has been sweeping the globe, and powered most strongly from the United States, where politicians of both political parties–including the president–are trapped in the foolish debate.

    The reminder of the rhetoric here came from, not surprisingly, the Financial Review, last week, which started a hand-wringing warning (behind the newspaper’s paywall) from the International Monetary Fund with:

    The US faces a decade of fiscal discipline to get its “heavy and growing debt” under control, International Monetary Fund chief Christine Lagarde warns.

    And only at the end are we reminded:

    US revenues are lower than in most rich countries and could be raised by introducing a value-added tax, increasing personal income tax rates for high earners, eliminating loopholes and reforming corporate tax.

    Well, duh. There is not debt or deficit crisis. None. The problem is not balancing the books. It’s getting the priorities right. So, if the priority is to let the rich continue to rob the country, well, then, you might have to look for more revenues. And if you want to let the drug companies and insurance companies rob people, as opposed to having a real national health care system, then, since health care costs are the major cost factor (15 percent of US gross domestic product) driving the US federal budget, of course, you’re going to have less money.

    But, it still is not a crisis.

    Which brings us back to Oz. It is obvious to anyone who does basic math that as long as robber barons like Gina, Clive and the rest of the gang are unwilling to pay a fair share of the mountain of cash they keep stashing away, the government’s cash position will be just a bit less.

    But, no one should be fooled. Believing there is a deficit crisis is just nonsense. It’s part of the American disease that needs to be rooted out and killed.