Monday, 29 September 2014

The politics of public debt - Wolfgang Streek

Just came across this paper by Wolfgang Streek, The Politics of Public Debt, finishing in a palpable sense of rage directed at the Fed:

Does this sound outlandish? Consider the current state of the distributional game in the United States, a country that, unlike Ukraine or China, is still considered a democracy by many. According to Emmanuel Saez, in 2010, the Year Two after the crisis, at a time of high unemployment and record public debt, 93% of all income gains in the US, i.e., almost the entire amount by which the national income increased , went to the top one per cent of the income distribution. What is more, the top 0.01%, about 15,000 households, received more than  a third, 37%, of those income gains (Saez, 2012).31  There is no reason not to call this an asset stripping operation of epic dimensions perpetrated by a tiny minority benefitting, among other things, from the deepest tax cuts in history. Why should the new oligarchs be interested in their countries’ future productive capacities and present democratic stability if, apparently, they can be rich without it, processing back and forth the synthetic money produced for them at no cost by a central bank for which the sky is the limit, at each stage diverting from it hefty fees and unprecedented salaries, bonuses and profits as long as it is forthcoming –  and then leave their country to its remaining devices and withdraw to some privately owned island?

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