Now, Bush and Gingrich are attacking state governments and the programs that they provide to citizens. They focus on unfunded pension liabilities that ballooned during the recession we're told is over. They fail to note the cause of those problems: the fact that pension funds relied on the Wall Street casino and fell victim to the vicissitudes of Goldman Sachs, etc., and the failure of Congress and the last two chief executives to regulate risky behavior.
The Neo Malthusian Catastrophe
Economist Thomas Malthus argued that there would be, "forced return to subsistence-level conditions once population growth had outpaced agricultural production." The new Neo Malhusians argue that we must return to inferior economic conditions, absent the right to organize and bargain for wages and without the promise of Social Security, because expenditures have outpaced the ability to produce offsetting revenue.
Bush and Gingrich fail to ask the questions of real importance. Why has the economy faltered so badly? The answers wouldn't please them or their patrons.
To begin with, there has been no regulation of risk filled financial schemes, from subprime derivatives to credit default swaps, since the big banks and Well Street were set free in the late 1990's.
We're fighting two very expensive and unnecessary wars.
Bailouts!
Then we have the money addiction of the top 1% of the population, which took 65% of the net new income in the United States from 2002 through 2007.
What are they Afraid of?
There is an island of fiscal stability among the states, North Dakota. The traditionally conservative state also has a state bank, the Bank of North Dakota (BND). State funds go into the bank, BND creates credit, and funds are available for the public benefit. Here is the BND statement of purpose for lending.
Lending Services: On behalf of the State of North Dakota, the Bank administers several lending programs that promote agriculture, commerce and industry. Financing economic development is the thrust of Bank of North Dakota's efforts. The Bank is specifically authorized to assist numerous other financial institutions in providing financing to stimulate economic development in the state.
Ellen Brown has been advocating state banks for the past two years. She points out that, ."With over $17 billion available to deposit in its own bank, California could create $170 billion or more in credit -- enough not only to meet its budget shortfall but to fund many other much-needed projects; and rather than feeding an ungrateful Wall Street, the bank's profits would return to the state and its people." Ellen Brown, July 22, 2009
Legislation was introduced in Washington that would create a state bank of Washington. This has attracted attention since it would be only the second state bank if the legislation passes.
"Rep. Bob Hasegawa, D-Seattle, the House bill's sponsor, said the proposal was modeled after a similar institution in North Dakota and based on the idea that the state's money should not be at the disposal of Bank of America, where Washington has its accounts.
"Why don't we create our own institution, keep that money in our state and we make money off our money that we can then reinvest back into our community?" asked Hasegawa.' The News Tribune, January 26
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