Alright, time for Master Alfred to explain a thing or two in simple terms to the undereducated lot of you. I am aware that you know barely anything of economic ‘science’, dear readers; and that you understand even less of the fiscal and monetary carnage that is presently being perpetrated upon Europe. And who can blame you? It is bloody well easier to follow the tactical motions of the 30 Year War than to grasp the insane manoeuvring of the brutes and yokels that pretend to be our present national and supra-national leadership.
However, Master Alfred – who is the author of such outstanding studies as ‘Taking a Crowbar to Keynes’ and ‘The Bonfires of Bretton Woods’ – understands a lot of economics, and with a shortcut or two and a grain of salt shaken over the witches’ brew, he can make it pretty easy for you all to understand.
Lesson 1 addresses some very simple questions: ‘Why does the Austerity Shock treatment as applied to the GIPSY Countries (1) over the last four years not work? Why does it have the exact reverse effect of that which Our Masters promised? Why does it cause unemployment and contraction of the economy, although we were assured it would bring us jobs and growth?’
Well, to answer that I must first confront you with a scandalous statement. Here goes: if you look at it closely, there is solid logic to the stark conservative policies known variously as Thatcherism, Reaganism, Chicago School, neo-con economics or old time liberalism. That logic runs as follows: We must chop back government spending, so that we may lower taxes, which will result in increased consumption by family households and greater investments by private business. This in turn fuels the economy and will therefore create jobs and generate growth.
Now, one may raise all sorts of objections against this tenet, but one thing must be admitted: if done correctly and consistently, such a line of action will have a benign effect on the state of a free market economy.
So why, may you ask, does the Thatcherism forced upon the Gipsy countries by Brussels and its Abominable Troika not work? Well, pretty simple, dear children: because Brussels’ neuro-con policies never get around to lowering taxes. On the contrary. The sums saved by the mammoth cuts in government spending in countries like Greece, Portugal and Spain do not end up in the pockets of private households and businesses, but are siphoned off only and exclusively to pay interest over past loans to mostly foreign lenders. As the government decreases its own investment in the national economy (thus causing business to fold and workers to be fired), the money it saves leaves the country, having no beneficial effect on local economic activity whatsoever. And since folding businesses and unemployed workers generate less revenue than before, the desperate government has no other choice than the RAISE taxes on an already poorer productive sector. This is what they all have done, by raising VAT drastically and by inventing all sorts of new dues and taxes and duties to be paid by consumers and producers.
A lethal, downward spiral is thus set in motion, to which there is no end in sight. See Greece, which is not getting out of the mire, but sinks ever deeper into the quicksand of Brussels’ policy.
For many decades now, conservatives the world over used to censure left-wing parties for their Tax-and-Spend proposals. But look at what our Neuro-Cons are doing now! It can only be qualified as Tax-and-Smother! It is truly the worst of both worlds, the toxic combination of the defects of both respectable philosophies: left wing taxation with right wing stinginess.
If anybody thinks a recipe like this will work, he must be a true ass, or a well-paid European Beurocrat with a hidden agenda, or both. And it is high time that this be recognized. Do not blame the Krauts, ye Spaniards! Do not blame the Pepper-bellies, ye Germans! Blame those who gave you the Divine Euro and are now blitzing your Freedoms and your Prosperity!
(1) I.e. Ireland and the lands around the Mediterranean. These are usually designated by the vicious term PIGS (an acronym for Portugal, Italy, Greece and Spain). I much prefer the term GIPSY, since that gives us a far more valid figure of speech: countries which often live hand-to-mouth, are not always on their best behaviour, but are much more maligned than they deserve out of hateful petty bourgeois prejudice.