Sunday, February 24, 2013

Tens of Thousands Protest in Spain (as Santa Clause dies)




On Saturday, tens of thousands marched in cities throughout Spain to protest deep bankster driven "austerity" measures taken by the government. The people are clearly fed up. The sad part of this is that most have no clue as to what are the proper measures that should be taken to reverse the deteriorating economic situation.

Reuters reports:
Gathering under the banner of the "Citizen Tide", students, doctors, unionists, young families and pensioners staged rowdy but non-violent demonstrations as a near five-year economic slump shows no sign of recovery and mass unemployment rises. 
"I'm here to add my voice. They're cutting where they shouldn't cut; health, education ... basic services. And the latest corruption scandal is just the tiniest tip of a very large iceberg," said Alberto, 51, an account administrator for a German multinational in Madrid[...]
The Alberto, quoted above, though an accountant, seems to have a problem understanding that the Spanish government has no money to provide health and education at previous spending levels. The country is reaching what Ludwig von Mises called the exhaustion of the reserve fund:
The interventionist in advocating additional public expenditure is not aware of the fact that the funds available are limited. He does not realize that increasing expenditure in one department enjoins restricting it in other departments. In his opinion there is plenty of money available. The income and wealth of the rich can be freely tapped. In recommending a greater allowance for the schools he simply stresses the point that it would be a good thing to spend more for education. He does not venture to prove that to raise the budgetary allowance for schools is more expedient than to raise that of another department, e.g., that of health. It never occurs to him that grave arguments could be advanced in favor of restricting public spending and lowering the burden of taxation. The champions of cuts in the budget are in his eyes merely the defenders of the manifestly unfair class interests of the rich.

With the present height of income and inheritance tax rates, this reserve fund out of which the interventionists seek to comer all public expenditure is rapidly shrinking. It has practically disappeared altogether in most European countries.[...]

From day to day it becomes more obvious that large-scale additions to the amount of public expenditure cannot be financed by "soaking the rich," but that the burden must be carried by the masses. The traditional tax policy of the age of interventionism, its glorified devices of progressive taxation and lavish spending have been carried to a point at which their absurdity can no longer be concealed. The notorious principle that, whereas private expenditures depend on the size of income available, public revenues must be regulated according to expenditures, refutes itself. Henceforth, governments will have to realize that one dollar cannot be spent twice, and that the various items of government expenditure are in conflict with one another. Every penny of additional government spending will have to be collected from precisely those people who hitherto have been intent upon shifting the main burden to other groups. Those anxious to get subsidies will themselves have to foot the bill. The deficits of publicly owned and operated enterprises will be charged to the bulk of the population.[...]

Every strike becomes, even in the short run and not only in the long run, a strike against the rest of the people.

An essential point in the social philosophy of interventionism is the existence of an inexhaustible fund which can be squeezed forever. The whole system of interventionism collapses when this fountain is drained off: The Santa Claus principle liquidates itself.
The only way Spain gets out of its deteriorating situation is by cutting the red tape that makes it difficult for businesses to operate, and to also cut taxes and government spending, so that the country moves away from its current bureaucratic mess and closer to a free market that can spur energy and creativity.

6 comments:

  1. It is sad!. They have the greatest living Austrian Economist, Huerta de Soto, there and do not follow him. He has told them many times what needs to be done and they just ignore him.

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  2. Whats amazing to me about the idea of "tax the rich to pay for everthing, they dont deserve all that money" is that you are essentially supporting a system in which "everything" is dependent on the rich having enough "undeserved" wealth to serve the tax scheme. If the rich are doing something wrong, wouldnt it make more sense to address those wrongs rather than using them to pay for everything? Why do so many who point to problems of income inequality, sometimes rightly often wrongly, want to reorganize society according to a scheme that depens on that very inequality?

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    1. Will, that is one of the most insightful comments I have ever read on here! Thanks.

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    2. Arthur Krolman, CFAFebruary 24, 2013 at 2:15 PM

      @Will. A brilliant logical insight. But a little too logical as far as the government propagandists are concerned, I'm afraid. They depend on the vilification of their "rich pig" victims to garner public approval and the cloak of justice as they go about their looting.

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  3. "They're cutting where they shouldn't cut"

    Translation: The government thugs I voted into power should give more of the stolen loot to me.

    Let's not sugarcoat it. The Santa Claus of children's tales is not a thief. Government is organized crime.

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  4. Thanks for the presentation that "The country is reaching what Ludwig von Mises called the exhaustion of the reserve fund". I do have to agree on that.

    What would be reequired for economic stabilization would be the elimination of whole swaths of government employees, especially in education, but Germany has an unbeatable lead in economic production, with low wage rates in place and emanufacturing technology in place that the rest of Europe does not have. No one, not even Germany is going to build a factor of any kind in any of the periphery nations.

    In The Economist Magazine Print Edition Long After The Party, How Italians are going to vote is not clear; but the vote will matter both to the future of their country and to the Euro, page 26, the chart of Eurozone Unit Labor Costs from 1999 through 2011, shows that Spain, followed by Italy and then France have labor costs in excess of 128, compared to Germany with 102.

    The introduction of the Euro did a number of things, it created the Euro, FXE, as a Commodity Currency, CCX, which drove up the price of Commodities, DBC, and created European Socialism, and the most extreme form of Socialism, that being Greek Socialism, and it created Export Germany, based upon what is fiat asset deflation in Germany, as is indicated by Germany’s low unit labor cost, by the failure of its housing prices to soar like in Spain and France, and by the depression of German Treasury Debt. There is no amount of restructuring or rebalancing that can be done in the periphery to stabilize the European Union. Like oil and water, the core, being Germany, and the periphery, being the PIIGS, cannot mix; one will rise to the top, and the other settle to the bottom.

    Not only will Germany be the epicenter and hub of economic activity in Euroland, it will also be the head of hegemonic military and spiritual attention as well.

    Johannes Stern of WSWS writes The return of German imperialism. Germany is making intensive preparations to wage new wars to secure resources. And Wolfgang Weber of WSWS reports German Government Decides On Long Term Military Deployment In Mali.

    Tyler Durden reports German lawyer to head Vatican Bank A German pope may be vacating the Vatican but a German lawyer is about to head its bank, an institution some say is as important if not more, and whose shady dealing some say may have been the reason for the pope premature departure. Per Reuters, “The Vatican appointed German lawyer Ernst von Freyberg to be the new president of its bank on Friday, filling a post left vacant since May when the previous head was ousted from the scandal-tainted institution.

    As it grows in prominence, Germany will transition from being a One Euro Government to being a One World Government as foretold in Daniel 7:7, the fourth beast, and in Daniel 7:23.

    New sovereignty, new sovereigns, and new sovereign wealth is coming from two agents of Destructionism, these being first, the unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, and second competitive currency devaluation.

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