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My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. http://sharonfirebrace.files.wordpress.com/2014/02/18-2-14-john-passant-aust-national-university-g20-meeting-age-of-enttilement-engineers-attack-of-austerity-hardship-on-civilians.mp3 (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. http://sharonfirebrace.com/2014/02/11/john-passant-aust-national-university-canberra-2/ (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. http://sharonfirebrace.files.wordpress.com/2014/02/4-2-14-john-passant-aust-national-university-canberra-end-of-the-age-of-entitlement-for-the-needy-but-pandering-to-the-lusts-of-the-greedy.mp3 (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole
(0)

Sick kids and paying upfront

(0)

Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. http://sharonfirebrace.com/2013/12/03/john-passant-australian-national-university-8/ (0)

I am not surprised
I think we are being unfair to this Abbott ‘no surprises’ Government. I am not surprised. (0)

Send Barnaby to Indonesia
It is a pity that Barnaby Joyce, a man of tact, diplomacy, nuance and subtlety, isn’t going to Indonesia to fix things up. I know I am disappointed that Barnaby is missing out on this great opportunity, and I am sure the Indonesians feel the same way. [Sarcasm alert.] (0)

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Cliffhanger for US economy

Alex Callinicos writes on Obama’s latest crisis in Socialist Worker UK

Will the US economy fall over the “fiscal cliff”? As Socialist Worker goes to press, this question remains unanswered.

Whatever happens, the crisis represents the paralysis of the political process in America. This paralysis is all the more remarkable given that both Barack Obama and his Republican opponents in Congress are fully signed up to neoliberalism.

Our story starts in July 2011, when the Republicans, swept to victory in Congress by the Tea Party movement, refused to raise the limit on federal government debt.

Many of the more extreme Republicans are so convinced that big government is the enemy that they wanted to force the US to default on its debt.

This was idiotic in so many different ways. For one thing, as ex-central bank chief Alan Greenspan pointed out, “the United States can pay any debt it has because we can always print money to do that.” The dollar is the world’s main reserve currency, and as long as foreigners are willing to accept it, the US can cover its debts.

Nor is the US debt unsustainable. The Marxist economist John Weeks has calculated that “when we take out what the federal government owes itself [about 40 percent of the total], the US public debt is a smaller proportion of GDP than the same debt measure for any other major developed country. Indeed, it is so low that it is no problem.”

What is true is that the budget deficit—the difference between what the US government spends and what it receives in tax revenue—has risen in the last few years.

This is mainly because the great recession of 2008-9 and the sluggish “recovery” that followed have meant that tax payments have fallen at the same time as even a welfare state as mean as the US has had to spend more to support the large numbers of unemployed.

This spending is a good thing—if the US government hadn’t borrowed and spent more, the slump would have been much worse and the recovery even feebler.

Super-rich

In Europe as well as the US the super-rich and their media and political hangers on have done very well in the neoliberal era. This coalition has defined the deficit as the big problem that is holding the economy back.

Obama agrees with the Republicans about this. So he ended the debt crisis in July 2011 by agreeing on a set of tax increases and cuts in spending that were set to come into effect automatically on 1 January. The only way to stop this was for Congress to come up with a programme of measures to cut the deficit.

These automatic increases and cuts are the fiscal cliff. If implemented, they will take about £370 billion out of the economy, about 2 percent of national income. Although they would actually come into effect gradually, they would probably push the US back into recession.

As a way out, Obama is insisting on a largely symbolic tax increase on those earning £155,000 a year. But in exchange he is willing to agree to cuts in the most important federal welfare programmes. These include Social Security (pensions), Medicare (health insurance for the elderly) and Medicaid (healthcare for the poor).

This kind of package probably corresponds to what the core of US big business would like to see. It means a further reduction in, but not the abolition of the US welfare state. Working people and the poor will thus continue to pay for the crisis.

But a large number of Republican Congressmen and women are opposed to any tax increases at all. Just before Christmas they humiliated the Republican speaker of the house, John Boehner, by failing to support his own proposed compromise. This makes it harder to achieve a deal.

When Congress initially rejected the 2008 bank bailout the financial markets went wild. Commentators predict that the same will happen now and this will force Obama and the Republicans to compromise.

Reality will no doubt impose itself on the warring politicians somehow. But what’s for sure is that working class Americans aren’t represented at the bargaining table.

Comments (see the link under the heading) close after 7 days.

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Comments

Comment from billie
Time January 1, 2013 at 9:39 am

Clearly the rest of the world economies need to put the US economy on emergency by-pass and write commodity contracts for oil in Euros, Reminbi, Sterling or what ever.

Doesn’t Congress realise that the US economy is propped up by the Chinese purchase of US bonds.

Congress grandstanding makes great political theatre but it does nothing to calm the economy and instill confidence in Americas future

Comment from Mary
Time January 1, 2013 at 11:39 am

Working class Americans ha ve never been representatives in the US. Unions have been weak and lack political influence as the rich have inherited the master servant relationship with their workers. There is still slave labour and casual workers are exploited by rich employers. In that respect nothing much has changed in 50 years for the lower class in the US. The press is run by the rich -Murdoch etc and only promote the status quo of the master race in the US -Republicans! Obama may have won but he still has not got the power. I have visited the US and the differnce is stark. Many envy our system even tho it has a few
problem at least things do get done for the benefit of all. Abbott would not follow the same path I am afraid.

Comment from Charles Jannuzi
Time January 1, 2013 at 2:33 pm

Right, as if the post-Clinton expansion of the national security state had nothing to do with the mismatch between government revenues and expenditures. The most striking thing about Obomber is he has expanded it over what the Bushwa had.

Obomber has no agreement with the Repugs. His agreement is with his CIA (who basically sponsored his move into public life and politics) colleagues: the federal government and its national security empire can not rely on a Wall Street capital gains bubble to get the revenues.

Obomber is not a liberal out to try and cut national security a bit to try and expand social spending a bit. He is no Mondale.

He is the CIA’s main man. A sort of Putin for the US in crisis.

Comment from Charles Jannuzi
Time January 1, 2013 at 2:38 pm

It also has to be pointed out that Obomber and Co. propose getting the needed revenues by going after US money parked overseas by the rich and corporations (Apple alone is sitting on well over 100 billion in untaxed — and largely unproductively invested — revenues). Some estimates say that there is over 30 trillion in such money overseas now.

This was the only major point of contention in the 2012 election–Obomber proposed cutting US domestic corporate rates to 27% while going very vigorously after offshore money for taxes. If not paid, the US government claims the extra-territorial right of confiscation of up to 50% of such money (a very high tax rate indeed).

Mutt Bombney, on the other hand, wanted to go for a cut to 24% in the corporate tax rate while dropping claims of extra-territorial taxation of all those offshore dollars. So you could see his faction were hoping that they could get capital gains bubbles going again.

Obomber doesn’t think this is a sound strategy, and his CIA agrees with him.

Comment from Ross
Time January 2, 2013 at 11:45 am

Max Keiser reckons that this will be the year that hyper-inflation happens.They now have endless creation of money both in Europe and the USA which Wall St and the banksters have used to steal real assets.

Prof William K Black said that 90% of the Fannie and Freddie loans were fraudulant.Then we have the LIBOR scandal and still no one is charged.

Comment from Lorikeet
Time January 2, 2013 at 3:45 pm

I would personally like to beat Obama about the ears with a “Fiscal Cliff”.

Comment from Ran
Time January 3, 2013 at 3:23 pm

Liked your post. From one fiscal cliff to the next – we are ‘qualitatively screwed’. http://bit.ly/UljqdN

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