Total Economic Collapse is Imminent

Paul Craig Roberts has some impressive credentials: He was Assistant Secretary of the Treasury under President Ronald Reagan and an associate editor of the Wall Street Journal.

In this essay, he attributes the "fiscal cliff" to the offshoring of US middle class jobs and the financial burden of multiple unprofitable wars abroad. Because neither Republicans nor Democrats are prepared to address those factors, he warns, a grim scenario awaits: As the Federal Reserve prints ever more Dollars in an attempt to save banks that are "too big to fail", the foreign exchange value of the Dollar will drop, leading to a dumping of Dollars and Dollar-denominated financial instruments and, eventually, to hyperinflation.

And with a cruel twist of the dagger, he suggests that nobody in the international community will be especially sorry when the American Empire collapses. :o

A few excerpts:

Washington's response to the fiscal cliff is austerity: spending cuts and tax increases. The Republicans say they will vote for the Democrat's tax increases if the Democrats vote for the Republican's assault on the social safety net. What bipartisan compromise means is a double-barreled dose of austerity.

Paul Craig Roberts

Ever since John Maynard Keynes, economists have understood that tax increases and spending cuts suppress, not stimulate, economic activity. This is especially the case in an economy such as the American one, which is driven by consumer spending. When spending declines, so does the economy. When the economy declines, the budget deficit rises.

Paul Craig Roberts

The Federal Reserve's policy is focused on saving the banks, not on saving the economy.

Paul Craig Roberts

The real crisis facing the US is the impending collapse of the US dollar's foreign exchange value. The US dollar's value in relation to silver and gold has already collapsed. In the past ten years, gold's price in US dollars has increased from $250 per ounce to $1,750 per ounce, an increase of $1,500. Silver's price has risen from $4 per ounce to $34 per ounce. These price rises are not due to a sudden scarcity of gold and silver, but to a flight from the dollar into the two forms of historical money that cannot be created with the printing press.

Paul Craig Roberts

The Republicans are determined to continue the gratuitous wars and to make the 99 percent pay for the neoconservatives Wars of Hegemony while protecting the 1 percent from tax increases.

The Democrats are little different.

Paul Craig Roberts

America is going to crash big time.

And the rest of the world will be thankful. America along with Israel is the world's most hated country. Don't expect any foreign bailouts of the failed superpower.

Paul Craig Roberts

Wait, I don't get it. He states tax increases are bad, yet then advocates tax increases later in his article.

Wait, I don't get it. He states tax increases are bad, yet then advocates tax increases later in his article.

SpartanMSU

I didn't read it that way.

He just advocates a tax policy that rewards corporations that focus on employing domestic workers.

[QUOTE="SpartanMSU"]

Wait, I don't get it. He states tax increases are bad, yet then advocates tax increases later in his article.

Stesilaus

I didn't read it that way.

He just advocates a tax policy that rewards corporations that focus on employing domestic workers.

He implied that tax increases on "the 1 %" would be beneficial, yet earlier claims that tax increases and spending cuts are detrimental.

He implied that tax increases on "the 1 %" would be beneficial, yet earlier claims that tax increases and spending cuts are detrimental.

SpartanMSU

Perhaps he feels that increases on only the ultra wealthy are necessary. The bulk of his comments suggest that the economy needs people who have money to spend to keep itself going, and that's certainly not the first time I've heard that argument. The ultra wealthy may spend more than the average person, but it's almost a guarantee that if that same money was in the hands of people with less income, more of it would be pumped back into the economy. Too much wealth ends up sitting in offshore bank accounts, not really doing anything.

So in that sense, raising taxes on the majority will indeed be a problem, as will service cuts, since both will result in less disposable income and thus less spending. I'm not really convinced that increasing taxes on the ultra wealthy would present the same problem. Many of them already claim that a tax increase would have no effect whatsoever on their spending habits.

[QUOTE="Stesilaus"]

[QUOTE="SpartanMSU"]

Wait, I don't get it. He states tax increases are bad, yet then advocates tax increases later in his article.

SpartanMSU

I didn't read it that way.

He just advocates a tax policy that rewards corporations that focus on employing domestic workers.

He implied that tax increases on "the 1 %" would be beneficial, yet earlier claims that tax increases and spending cuts are detrimental.

The US, like any other nation in history, will fall. The question is when, how, and why? We do seem ripe for a big collapse right now, due to many factors coming into play at once. Good analysis overall.

[QUOTE="Stesilaus"]

[QUOTE="SpartanMSU"]

Wait, I don't get it. He states tax increases are bad, yet then advocates tax increases later in his article.

SpartanMSU

I didn't read it that way.

He just advocates a tax policy that rewards corporations that focus on employing domestic workers.

He implied that tax increases on "the 1 %" would be beneficial, yet earlier claims that tax increases and spending cuts are detrimental.

[QUOTE="SpartanMSU"]

[QUOTE="Stesilaus"]

I didn't read it that way.

He just advocates a tax policy that rewards corporations that focus on employing domestic workers.

harashawn

He implied that tax increases on "the 1 %" would be beneficial, yet earlier claims that tax increases and spending cuts are detrimental.

Tell that to professional athletes who make $10 million a year and then end up broke 3 years after they retire. I think they spend a lot, relatively.

[QUOTE="harashawn"][QUOTE="SpartanMSU"]

He implied that tax increases on "the 1 %" would be beneficial, yet earlier claims that tax increases and spending cuts are detrimental.

hartsickdiscipl

Tell that to professional athletes who make $10 million a year and then end up broke 3 years after they retire. I think they spend a lot, relatively.

The U.S is a consumer economy that runs on middle class and lower class spending. Without it, the economy collapses.imaps3fanboy

SPEND SPEND SPEND SPEND!!!!!

This spending culture needs to die. I hope an economic collaspe does come.

[QUOTE="hartsickdiscipl"]

[QUOTE="harashawn"] The more money you have, the more you save. People with less money tend to spend more, relatively. A slight increase in taxes for the higher income folks gives the government more money to spend. If taxes increased for everyone then everyone would spend less (Remember that 1% of my money is a lot more for me than 1% of Bill Gate's money is for him.)imaps3fanboy

Tell that to professional athletes who make $10 million a year and then end up broke 3 years after they retire. I think they spend a lot, relatively.

I agree with you there.

[QUOTE="SpartanMSU"]

[QUOTE="Stesilaus"]

I didn't read it that way.

He just advocates a tax policy that rewards corporations that focus on employing domestic workers.

harashawn

He implied that tax increases on "the 1 %" would be beneficial, yet earlier claims that tax increases and spending cuts are detrimental.

Keynesians advocate tax cuts and increases in spending during harsh economic times. He is contradicting himself. How can he not be?

[QUOTE="harashawn"][QUOTE="SpartanMSU"]

He implied that tax increases on "the 1 %" would be beneficial, yet earlier claims that tax increases and spending cuts are detrimental.

SpartanMSU

Keynesians advocate tax cuts and increases in spending during harsh economic times. He is contradicting himself. How can he not be?

[QUOTE="harashawn"][QUOTE="SpartanMSU"]

He implied that tax increases on "the 1 %" would be beneficial, yet earlier claims that tax increases and spending cuts are detrimental.

SpartanMSU

Keynesians advocate tax cuts and increases in spending during harsh economic times. He is contradicting himself. How can he not be?

[QUOTE="imaps3fanboy"]The U.S is a consumer economy that runs on middle class and lower class spending. Without it, the economy collapses.Jebus213

SPEND SPEND SPEND SPEND!!!!!

This spending culture needs to die. I hope an economic collaspe does come.

[QUOTE="imaps3fanboy"]The U.S is a consumer economy that runs on middle class and lower class spending. Without it, the economy collapses.Jebus213

SPEND SPEND SPEND SPEND!!!!!

This spending culture needs to die. I hope an economic collaspe does come.

[QUOTE="SpartanMSU"]

[QUOTE="harashawn"] The more money you have, the more you save. People with less money tend to spend more, relatively. A slight increase in taxes for the higher income folks gives the government more money to spend. If taxes increased for everyone then everyone would spend less (Remember that 1% of my money is a lot more for me than 1% of Bill Gate's money is for him.)imaps3fanboy

Keynesians advocate tax cuts and increases in spending during harsh economic times. He is contradicting himself. How can he not be?

Increasing taxes is an austerity measure, which was my point...

[QUOTE="SpartanMSU"]

[QUOTE="Stesilaus"]

I didn't read it that way.

He just advocates a tax policy that rewards corporations that focus on employing domestic workers.

imaps3fanboy

He implied that tax increases on "the 1 %" would be beneficial, yet earlier claims that tax increases and spending cuts are detrimental.

[QUOTE="imaps3fanboy"][QUOTE="SpartanMSU"]

Keynesians advocate tax cuts and increases in spending during harsh economic times. He is contradicting himself. How can he not be?

SpartanMSU

Increasing taxes is an austerity measure, which was my point...

[QUOTE="imaps3fanboy"][QUOTE="SpartanMSU"]

He implied that tax increases on "the 1 %" would be beneficial, yet earlier claims that tax increases and spending cuts are detrimental.

cslayer211

How the fvck can you think austerity measures don't work and then claim that we need to raise taxes. How are you guys this delusional? Can you really not see your own hypocracy?

How the fvck can you think austerity measures don't work and then claim that we need to raise taxes. How are you guys this delusional? Can you really not see your own hypocracy?

SpartanMSU

[QUOTE="SpartanMSU"]

How the fvck can you think austerity measures don't work and then claim that we need to raise taxes. How are you guys this delusional? Can you really not see your own hypocracy?

imaps3fanboy

Raising taxes is an austerity measure...holy fvck. Are you ok?

[QUOTE="imaps3fanboy"][QUOTE="SpartanMSU"]

How the fvck can you think austerity measures don't work and then claim that we need to raise taxes. How are you guys this delusional? Can you really not see your own hypocracy?

SpartanMSU

Raising taxes is an austerity measure...holy fvck. Are you ok?

[QUOTE="imaps3fanboy"][QUOTE="SpartanMSU"]

How the fvck can you think austerity measures don't work and then claim that we need to raise taxes. How are you guys this delusional? Can you really not see your own hypocracy?

SpartanMSU

Raising taxes is an austerity measure...holy fvck. Are you ok?

Christ, imaps, it's obviously an austerity measure - and 'artificial' is a meaningless term here. You should acknowledge this and then explain how it is a more preferable alternative to:

1. Keeping long-term structural deficits, or
2. Enacting other austerity measures which are worse

[QUOTE="SpartanMSU"]

[QUOTE="harashawn"] The more money you have, the more you save. People with less money tend to spend more, relatively. A slight increase in taxes for the higher income folks gives the government more money to spend. If taxes increased for everyone then everyone would spend less (Remember that 1% of my money is a lot more for me than 1% of Bill Gate's money is for him.)imaps3fanboy

Keynesians advocate tax cuts and increases in spending during harsh economic times. He is contradicting himself. How can he not be?

[QUOTE="imaps3fanboy"][QUOTE="SpartanMSU"]

Keynesians advocate tax cuts and increases in spending during harsh economic times. He is contradicting himself. How can he not be?

nunovlopes

Hopefully the wars were to secretly control the world's oil.Diablo-B

, he attributes the "fiscal cliff" to the offshoring of US middle class jobs and the financial burden of multiple unprofitable wars abroad. Because neither Republicans nor Democrats are prepared to address those factors, he warns, a grim scenario awaits: As the Federal Reserve prints ever more Dollars in an attempt to save banks that are "too big to fail", the foreign exchange value of the Dollar will drop, leading to a dumping of Dollars and Dollar-denominated financial instruments and, eventually, to hyperinflation.

And with a cruel twist of the dagger, he suggests that nobody in the international community will be especially sorry when the American Empire collapses. :o

A few excerpts:

[QUOTE="Paul Craig Roberts"]

[QUOTE="Paul Craig Roberts"]

The Republicans are determined to continue the gratuitous wars and to make the 99 percent pay for the neoconservatives Wars of Hegemony while protecting the 1 percent from tax increases.

The Democrats are little different.

Stesilaus

America is going to crash big time.

And the rest of the world will be thankful. America along with Israel is the world's most hated country. Don't expect any foreign bailouts of the failed superpower.

Paul Craig Roberts

20% of the national budget is defense.imaps3fanboy

Yeah I think we can cut the defense budget...

I don't see what's wrong with rasing taxes on the top bracket back to before the bush tax cuts (that were supposed to be temporary to begin with). Then again I get that if you have wealth you want to keep it. I think it comes down to if you care if the country is successful or just in it for your own personal gain. If a balanced proposal of cuts and revenue would get established to get us into surpluses, I don't see why people would complain. After all is said and done and the defict is back to manageable levels what's to say that taxes won't get cut again?

[QUOTE="imaps3fanboy"][QUOTE="cslayer211"] Blame it on the idiots in the government who spend our money away. Passing the blame onto people making $250,000+ is funny.cslayer211

The top 400 earners in the economy have more than the bottom 150 million. You don't think raising the taxes on these sorts of people won't help to lessen the financial crisis? I agree we do need to cut spending, but I think most of this should come in defense spending. In terms of healthcare, we need a single payer system. IIRC we also dole out less welfare money than every other country in the industrialized nation, so that isn't really a problem. Social Security is fine for now. Around 10% of the budget goes to simply paying off interest on our debt, thanks to presidents like reagan and bush who cut the top tax rates which lost us trillions in revenue.

[QUOTE="cslayer211"][QUOTE="imaps3fanboy"] 20% of the national budget is defense. Should we cut that? (assuming you're a republican) and don't even bring up SS. It was running a surplus for quite a long time. Passing the blame? I'm simply in favor of raising the marginal tax rates by a few percent. imaps3fanboy

The top 400 earners in the economy have more than the bottom 150 million. You don't think raising the taxes on these sorts of people won't help to lessen the financial crisis? I agree we do need to cut spending, but I think most of this should come in defense spending. In terms of healthcare, we need a single payer system. IIRC we also dole out less welfare money than every other country in the industrialized nation, so that isn't really a problem. Social Security is fine for now. Around 10% of the budget goes to simply paying off interest on our debt, thanks to presidents like reagan and bush who cut the top tax rates which lost us trillions in revenue.