July 19, 2011

Freakshow: Deficits, Taxes, Austerity

Filed under: Neo-feudalism, Reformism Can't Work — Tags: , — Russ @ 1:28 am


I haven’t been closely following the latest magic show in Washington. I’m aware of the same old maelstrom of lies, fake struggle, phony digressions, dire predictions. The truths are clear: The deficit and the debt are not real issues. No one within the system who claims to care about them actually cares about them, and there’s no reality-based reason anyone should care about them. There’s no difference between Democrats and Republicans on this, although each pretends there is. Of course, if Obama wanted the political/media discussion to be about job creation and not about deficits, that’s what the discussion would be. But just as much as the Reps, he’s focused only on austerity for the people. This is a kleptocratic imperative.
Meanwhile we have digressive, misdirectional nonsense like debates over the legality and/or constitutionality of the debt ceiling, philosophical hand-wringing over the very concept, speculation over how Obama can/ought to do end runs around the law and constitution (thus the liberals get a whack at aggrandizing the imperial presidency). All this is absurd since this government recognizes no “law” in the first place. If it wants to borrow, it’ll borrow. If it wants to print, it’ll print. It’ll deal with this law the same way it deals with every other law, acknowledging its authority or flouting it (brazenly or clandestinely) based purely on what brings the outcome most congenial to kleptocracy.
(Of course the US government is hardly unique in this. It’s cute the way European governments, none of whom, including the Germans and French, adhered to the debt-to-GDP requirements of the Eurozone, are pretending to agonize over this latest example of US banana republicanism. I think there’s plenty of bananas to go around.)
The point of the foregoing was to describe how this is a completely phony debate. As always, the government will do exactly what it wants to do, regardless of the law.
What about the alleged substance of the issue – are deficits and debts really a problem? MMT says no. In an economy this depressed, government can and should run deficits as long as the spending is on constructive things. The current political reality is a funhouse mirror image of this. Everyone in Washington, all elites, agree that the government can and should borrow and spend infinitely on corporate welfare. (And this is without reference to the economy’s operation relative to capacity. No political/media elite thinks corporate welfare should be cut even if the dreaded inflation monster did show itself.) Somehow, deficits are only an issue, and the fear of inflation is only an issue, where it comes to public interest spending. This really means that it’s not deficits or inflation which is the real issue, but the public interest itself. Today’s elites are dedicated to destroying government as something which benefits the people in any way, while maintaining it (in an extremely big, aggressive form) as the machine of corporate tyranny and looting.
This leads us to taxation. Like austerians elsewhere, Obama keeps intoning that we must have “shared sacrifice”, which is of course code for 100% sacrifice for the non-rich, 0% for the rich. What would happen if he were forced to listen to actual citizens demanding to know, “You can actually stand there and claim we haven’t sacrificed enough already? Do you have even the slightest shred of decency or shame?” But he clearly has neither. Part of this demanded sacrifice is raising taxes on the non-rich, even as government abdicates all responsibilities to us, once and for all. On the contrary, we’re to be taxed to fund bureaucratic and police assaults on us, and to facilitate the “privatization”, that is robbery, of our public property.
It’s clear that whether or not taxation on the non-rich ever had any legitimacy in the past, it no longer does. Philosophically, we do not have a legitimate government. This is a kleptocracy which recognizes only the rich and big corporations as citizens, as persons at all. It does nothing other than for their benefit. From the point of view of the actual citizens, people who actually do work, this government is nothing but a parasite and a predator. It will never inaugurate a new public interest program, but only continue to destroy the ones which still exist. To the extent any still exist, this is only out of inertia and political duress.
(As for entitlements, these aren’t legitimately part of any discussion involving deficits and debt, because we the people already paid for them with dedicated taxes. We must refuse to allow that they’re touchable even in principle. We must reject immediately anyone who participated in embezzling those funds for other spending (or who supported such embezzlers) and who now wants to turn around and claim those programs are debt-drivers that need to be cut.)
As a practical matter, people who are struggling, people who face even more severe economic tyranny further down the road, and especially people who are fighting to relocalize their economies and rebuild their communities, need every cent we can get, and we can use that cent far more effectively if we do it directly by ourselves than if it’s “trickled back down” to us by alleged good government, and if we do it now rather than at some indeterminate time in the future. For both of these reasons any taxation upon us robs us of precious resources we can’t afford to lose.
And then there’s the fact that the money taken from us isn’t merely handed over to the corporations and the rich to be thrown down a rathole never to be seen again. That would be bad enough. But much of it is then used by these predators as a weapon against us. This is war, and ammunition stolen from us and handed over to the enemy will then be used to shoot at us. That’s the effect of the government policy of redistributing wealth upward. That’s the effect of all taxation. To the extent that taxation touches the non-rich at all, it is regressive by definition. Viciously so.
That’s why it’s stupid to still argue about “making the tax code more progressive”. One, kleptocracy would never do that. Two, even if this system ever did make the income tax, and even payroll taxes, nominally more progressive, that would make no difference. The rich would continue to evade these taxes, and anything taken from them in taxes would be handed right back to them anyway, since the government’s policy is to benefit them in any way it can. (“Trickle down” really would work for the rich.)
So we’ve disposed of taxation as such, and of the progressive-vs.-regressive misdirection ploy. We’re left with a clear, stark position:
No Taxes on the Non-Rich.
We must furiously resist any tax increases upon us (any hike in existing taxes, any new taxes like a VAT), and fight to have existing taxes removed. Every cent we redeem for our own use in this way is a pure gain. Under this system we’ll never do any better with the diminishing money we have.
(Previous posts on my No Taxes position include No Taxes on the Non-Rich and End All Taxation.)
There’s no point fearing that without taxation the criminals will have a pretext to gut Social Security and Medicare. They already want to do that and will do so whenever it’s politically possible. The presence or absence of any given level of tax revenue won’t change that. No, here we must make another stark demand:
Total Austerity for the Criminals, Not One Cent More From the People.
Including the rock that SS and Medicare are untouchable. Absolutely no cuts to them. (On the contrary, we should be demanding Medicare expansion, Medicare For All, single payer. We should always take the offensive.) They’re perfectly solvent. They’re not part of the deficit. We the people already paid for them. To even suggest compromising them is to advocate robbery plain and simple.
So there’s the clear, simple position: No taxes, no cuts in anything but corporate welfare.


  1. Another issue about austerity for the general populist during this time of debt is the repatriation of capital.

    With you’re skill in writing and knowledge of the system would make a good article.

    Comment by jwbeene — July 19, 2011 @ 9:02 am

    • There’s actually nothing inherently wrong with what you call the “repatriation of capital.” If a condition of avoiding the corporate income tax for repatriated capital is its investment in manufacturing and other infrastructure, the “waiver” in taxes would be money well spent.

      The problem is the purpose of repatriation is to bundle the money and send it back out to investors as dividends.

      Comment by Tao Jonesing — July 19, 2011 @ 9:50 am

      • Yes, whether or not something is inherently wrong doesn’t matter much if the only way it’ll ever exist in practice is in a criminal form.

        Comment by Russ — July 19, 2011 @ 10:23 am

      • The wrong with repatriation of capital, is why; my thought is from fear of what is going on elsewhere.

        Money is not the issue in creating private jobs. It does not happen without demand by consummers, which are becoming an every smaller class.

        Comment by jwbeene — July 19, 2011 @ 10:42 am

      • One thing we need to do is transcend the dichotomies producer-consumer and jobs-consumer. The only way out of the maze is for us all to become the producers of what we consume; to turn our consumption needs into our own jobs. We have to supply our own demand, and set our own price for it.

        Nothing in the system economy – none of its ideas, none of its practices – works. Only becoming our own economy shall avail us.

        Comment by Russ — July 19, 2011 @ 10:59 am

      • Russ we agree on much. But having been a small farmer in late 60s till 81 can tell you. You need cash to support the farm. I had almost everything in place before beginning…land, an experienced father in law who already had most of the equipment. Plus I had zero debt and stated at one of those times when people were selling cattle at well below cost. Yes you eat well and better quality of food.

        Comment by jwbeene — July 19, 2011 @ 11:29 am

      • I’m sorry to hear (infer) that you’re no longer a farmer (unless you chose to give it up because you no longer liked it; but it sounds like you gave it up on account of financial pressure). America will need tens of millions of new farmers and growers.

        But you’re right, it’s not likely to be doable under this economic system. It all boils down to the fundamental depravity of food commodification.

        Comment by Russ — July 19, 2011 @ 12:12 pm

  2. Good piece,but the immorality and wasteful expenditure of blood and treasure by the Police State on trumped up wars against unthreatening peoples(except in certain
    instances to its bandit junior partner, Israel,) should always be mentioned when Medicare and SS and the victims of outsourcing are forced to pay for them and now threatened with increasing penury to do so.

    Comment by Ken Hoop — July 19, 2011 @ 10:34 am

    • Yes, I usually give a list with some specific items – the Bailout, the wars, weapons spending, Big Ag subsidies, the police/prison state, the Drug War, and the rest of corporate welfare. This time I subsumed it all under corporate welfare.

      Comment by Russ — July 19, 2011 @ 11:00 am

  3. I’m not in the habit of recommending something on NPR, but today there’s an interview with Edgar Cahn, pioneer of time banking.

    Here’s the blurb:

    “TimeBanks Founder Edgar Cahn will be on NPR’s “Tell Me More” TODAY, July 19th, at 2:30 pm EST.

    He will be discussing the way timebanking can fit into today’s tough economy.

    Please tune in! Find the continuous stream at npr.org or listen to your local npr station.”

    I don’t know how NPR works, if that’ll be on at the same time on every station. But it ought to be worth listening to. (I’ve just been reading his book No More Throw-Away People, on co-production, a transitional concept I’ll soon be writing more about. It has a lot to do with what I just wrote in the above comment about breaking down the wall between producer and consumer.)

    Comment by Russ — July 19, 2011 @ 11:00 am

  4. The mayors of our Twin Cities (Minneapolis and St. Paul) were on public radio this morning, talking about such important things as what kind of taxes on the public would work best to keep the Vikings in the state (they are threatening to move because they want a new stadium). No mention of time-baking, alternative currencies, or anything new or innovative at all. Just tweaks to the current system: making the cities more “business friendly,” was a main theme.

    Comment by Publius — July 19, 2011 @ 11:32 am

    • Same old swine.

      Comment by Russ — July 19, 2011 @ 12:11 pm

  5. Have you seen Oklahoma Senator Tom Coburn’s plan?

    Comment by Edwardo — July 19, 2011 @ 6:50 pm

  6. Sorry, my last post was a tad short on information. This should help. http://coburn.senate.gov/public/index.cfm/pressreleases?ContentRecord_id=1d817708-76ed-4b2b-9cc2-076415409d44

    Comment by Edwardo — July 19, 2011 @ 6:53 pm

    • Hi Edwardo,

      Coburn’s plan is just more of the same – deficit terrorism. Lies.

      Maybe in theory he’s willing to cut some corporate welfare (knowing that will never actually be done). But the whole thing is still framed in terms of a deficit and debt crisis for the government, neither of which actually exist.

      Comment by Russ — July 20, 2011 @ 3:14 am

  7. I wonder whether there has ever been a “legitimate government.” The older I get, the more I embrace my inner anarchist.

    And I used to be a pure rationalist who believed in the fundamental decency of the American state.

    Comment by Tao Jonesing — July 20, 2011 @ 12:04 am

    • I had some qualms about that line myself, but I chose to go ahead and use it, as a term of expression. There’s different degrees of illegitimacy, and there’s a significant difference between kleptocracy and “normal” authoritarianism and corruption. But you’re right, the language makes it difficult for an anarchist to say what he really means.

      I’ve noticed a change in the things you say. Yesterday at Naked Capitalism you agreed with me that there’s no such thing as good elites, but I thought I remembered how you used to say you still hoped for meaningful reform of the representative system. I’m glad to hear you’re embracing your inner anarchist. I think this inner anarchist in all (well, most) of us is simply our inner wish for freedom and autonomy amid community, a healthy mix of the two.

      Comment by Russ — July 20, 2011 @ 3:10 am

  8. […] From here. The left blog Volatility is absolutely excellent, if heterodox in its outlook. It is extremely well written. Here is a recent post on the fake deficit crisis. I don’t agree with his no taxes idea, but it’s definitely very radical. He makes a lot of excellent points. The problem is that it plays into an anti-government directive that is then used by the elites to attack the notion that the state should do anything at all for the common good or especially for the non-rich. It’s also clear that there is little difference between Republicans and Democrats on these issues. They both work for the rich and attack the non-rich. […]

    Pingback by Volatility, “Freakshow: Deficits, Taxes, Austerity” | Robert Lindsay — July 22, 2011 @ 2:59 pm

  9. […] school in the first place. Here again we see what I’ve written about many times before, how the taxes of the 99 are merely extortions by the 1.   I’m not saying I’ve changed my mind and become a believer in the fast crash […]

    Pingback by Redolent of Olduvai « Volatility — November 3, 2011 @ 8:18 am

  10. […] home school in the first place. Here again we see what I’ve written about many times before, how the taxes on the 99 are merely extortions by the 1.   I’m not saying I’ve changed my mind and become a believer in the fast crash scenario. I […]

    Pingback by Olduvai One Year Later « Volatility — November 4, 2012 @ 7:03 am

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