November 18, 2010

Krugman: Austerity-Lite

Filed under: Disaster Capitalism, Reformism Can't Work — Tags: , — Russ @ 5:29 am


I don’t intend to start in again on the pernicious Paul Krugman, and I’m not going to write another long post on the likes of him.
I just wanted to point out another example of the standard Krugman ploy, this time in his post, Why I’m Soft on Sales Taxes.
Consider (as Krugman invites us to) a country like Sweden or Denmark which started out with a more socialistic mindset, always maintained a strong safety net, and always had consumption taxes as a major part of the revenue mix.
There’s obviously no comparison between that and imposing a massive, alien sales tax on a country where the safety net is being shredded, and where the mentality is a Hobbesian shooting gallery. Under those circumstances such a tax would be viciously regressive. Yet Krugman is now taking the lead in calling for such taxes.
This is the same scam Thugman pulled when he was astroturfing for the health racket bailout, another reactionary austerity measure, when he claimed that the “exchanges” had something in common with the systems of Switzerland and the Netherlands.
But again, this is a vicious lie. Such comparisons aren’t even on the same planet, let alone in the ballpark. But here’s Krugman trotting out the same lie, this time as part of the austerity-lite initiative exemplified by his own death panel proposal and the Rivlin/Domenici counterproposal to Obama’s Star Chamber plan. The goal here is to get reactionary “austerity” enacted by making it look reasonable by comparison to the Obama commission.
Thugman actually has the nerve to tell what he has to know is a criminal lie:

All of which says that if I can trade a somewhat regressive VAT for guarantees of decent retirement and universal health care, I’ll take it.

He knows damn well this is not the intent of any VAT proposal from the elites, and will not be its effect. He knows damn well any such revenue will go right down the rathole. He’s a despicable, criminal liar.
We need to be clear, that by now ALL taxes on the non-rich are purely predatory. Every cent of taxation on the non-rich is simply stolen from us and redistributed upward to the banksters and corporations. We need to become neo-Norquists, presenting a united front intoning an absolute NO to all tax increases for the non-rich.
This obviously includes all new regressive taxes and all regressive increases. We have to oppose these Krugman taxes.
Once and for all the people need to eradicate two equally pernicious ideas: We have one mob who wants to destroy all non-violent aspects of government in order to liberate the corporations. We have another, even more stupid, who thinks increasing the size and power of a corporatist government will somehow do anything other than further empower the corporations and further impoverish the people.
We need to reject both sides of this evil coin. We need to recognize the corporate tyranny and the government tyranny as the same tyranny. The corporations are completely dependent upon the government’s violence, overt as well as implicit, and they own the government.
So one part of the strategy has to be to starve government toward the goal of starving the corporations. This means, among other things, forcing it to continue borrowing instead of taxing. This will accelerate the government’s financial collapse, and that in turn will deal a mortal blow to the corporate parasite.
So read our lips. No Taxes for the Non-Rich. 


  1. Thank you for this piece. Krugman has exercise his duplicity from day one. You’ve assessed the underlying contradictions in most of his output. The destructiveness of the corporate/government collusion has become unbearable.

    Comment by Joyce — November 18, 2010 @ 7:10 pm

    • The basic contradictions were that:

      1. He started out as an arch-neoliberal predator in the 90s.

      2. Then, for partisan reasons, had to backpedal under Bush and contradict much of his prior ideology.

      3. He did such a good job of that that he became a “progressive” hero even though given his record there was no basis for considering him anything more than a Democratic partisan.

      4. Now under Obama he’s been trying to revert to his true corporatism without forfeiting his progressive cred. So he has to move slowly on austerity (and go silent on the war), but move he does, as we’re seeing these days.

      Comment by Russ — November 19, 2010 @ 12:47 am

  2. The government can’t be destroyed by borrowing. Borrowing is only an excuse to force austerity on the people. Then deficit hysteria persuades them it’s for their own good. I agree that borrowing is better than taxing, but not when public debt is used as a cudgel against the workers and elderly.

    Given the two-headed nature of the problem, it seems to me the government’s financial collapse can best be precipitated by withdrawing, as far as possible, from formal commerce and employment. Not only does this deprive the government of taxes but it deprives the corporations of revenue and willing slaves. Win-win.

    Comment by reslez — November 20, 2010 @ 2:51 pm

    • Yes, I agree deficits are used as that weapon. But at least it’s not a direct assault.

      There’s no good options right now in dealing with this monster.

      But I agree completely, withdrawal, detachment from as many entanglements as possible, is the best strategy, and the only possible one anyway. They’re driving us there anyway. It’s up to us whether we go there as helpless serfs or as assertive relocalizers.

      Comment by Russ — November 20, 2010 @ 3:19 pm

  3. The current National Debt is the end result of the elected officials underfunding the appropriations they passed under the current income tax regime by reducing tax rates and increasing tax payments. What justice is there in grossly reducing the income tax rates before the national debt created under this regime is paid-off. The following is a consumption tax model (with YouTube Link), which if is applied to all domestic spending, including imported goods and services should help improve of trade gap, improve our savings rate and be non-regressive:

    The Savings on Saving (SOS) System “the saver-friendly system”

    Social Security and Medicare taxes are deducted from employee’s earned income and matched by the employers, for a combined total is 15.30%.

    The Savings on Saving System “SOS” consists of a 15% consumption credit added to all payroll disbursements, and a 15% federal consumption tax. Individuals would get to keep the 15% credit on amounts not spent, as a reward for saving or investing. It further enhances any income tax benefits for participating in existing or new plans and universally applies to all saving.

    Over 150 countries have consumption taxes that encourage savings rather than spending, by taxing consumption. Saving by low and moderate earners is as or more important in achieving our national goals, as saving by the wealthy.

    All other things being equal, the SOS System will discourage consumption, encourage savings, raise the U.S. savings rate, very likely reduce the U.S. Trade Deficit, and collect approximately $57.8 billion of unreported employment taxes as a consumption tax.

    Video is at:

    Comment by Hugh J. Campbell, Jr. CPA — November 20, 2010 @ 8:44 pm

  4. […] So I'm certainly not calling for this particular government to tax more. On the contrary I say we must reject and resist all new or extended taxes on the non-rich.   In this discussion I only want to establish the principle that, as a matter of reformist […]

    Pingback by Guns, Butter, and Bonuses (MMT, Money, and Deficits) Part 2 « Volatility — November 23, 2010 @ 4:20 am

  5. […] simply be handed over to the banksters and to the likes of Chertoff-connected scanner contractors. Anyone who advocates a VAT or anything like it is simply advocating corporate robbery.   And I do say that we must draw a line against any further cuts to any public interest spending. […]

    Pingback by Let’s Take Back Our Money « Volatility — February 9, 2011 @ 5:48 am

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