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(The following article was published April 30, 2016, by TelesurTV media. For more audio commentary, listen to the Alternative Visions radio show, of April 29, listen below this blog entry)

This past week the U.S. government announced the country’s economy rose in the January-March 2016 at a mere 0.5 percent annual growth rate. Since the U.S., unlike other countries, estimates its GDP based on annual rates, that means for the first quarter 2016 the U.S. economy grew by barely 0.1 percent over the previous quarter in late 2015.
Growth this slow indicates the US economy may have “slipped into ‘stall speed’, that is, growth so weak that the economy loses enough momentum and slides into recession”, according to economists at JPMorgan Chase.

Has the U.S. economy therefore come to a halt the past three months? If so, what are the consequences for a global economy already progressively slowing? What will an apparently stagnating US economy mean for Japan, already experiencing its fifth recession since 2008? For Europe, stuck in a long term chronic stagnation? And for emerging market economies, struggling with collapsing commodity prices and currencies, rising unemployment, and long term capital flight trends? Once heralded as the only bright spot in the global economy, the US economy now appears to have joined the slowing global trend.

Some Interesting Trends

Last quarter’s 0.5 percent U.S. GDP may indicate the nation’s economy is even weaker than it appears. The economy of the United States’ recent 0.5 percent growth rate is the latest in a steady declining U.S. GDP growth trend over the past year. In the previous fourth quarter 2015, the US economy grew 1.4 percent, which was down from the preceding quarter’s growth of 2 percent and before that 3.9 percent. So the U.S. economy appears to be slowing rapidly over the past year.

Over an even longer period of more than eight years, since the previous peak growth in late 2007, the U.S. economy has grown by a cumulative total of only 10.1 percent. That’s a paltry annual growth of only 1.2 percent a year on average for the past 8+ years.

But even those figures are overestimated. In 2013, the U.S. redefined the way it estimated GDP, adding categories like R&D expenses and other intangibles that artificially boosted U.S. GDP estimates simply by redefining it. That “economic growth by redefinition” raised GDP by around 0.3 percent annually, and in dollar terms by roughly US$500 billion annually. So the real U.S. GDP may be actually growing by less than 1 percent on average per year since 2007; and during the most recent quarter, January-March 2016, the economy may not have grown at all, but may have stagnated, collapse, and come to a halt.

Behind the Wizard’s Curtain

The media and press like to define recessions as two consecutive quarters of negative GDP growth. Actually, U.S. economists tasked with declaring when a recession has begun or has ended don’t rely totally on GDP estimates, which are notoriously inaccurate and have become increasingly so, given U.S. and other governments’ penchant for changing how they define GDP.

Redefining GDP to boost the appearance of growth is not just a problem in the US in recent years. For example, there are few independent research sources that think China is growing at its officially announced 6.8 percent GDP rate. To note but a couple, both Capital Economics and Lombard Street research estimate that China’s GDP is growing at only around 4-4.5 percent based on close examination of other indicators like electricity usage, power generation, local transport volumes, and so forth. In recent years India officially nearly doubled its GDP overnight by redefining it. So did Nigeria. India bank researchers, whom this writer has talked to, say they have a rule of thumb: take the official government GDP rate and half it and that’s probably close to India’s actual GDP. In Europe, a number of economies, including Britain, which have been desperate to raise their GDP in recent years, now include drug smuggling and prostitution services in their estimates of GDP. How they come up with such estimates and the pricing of such services is, of course, interesting.

Not satisfied with the media-press definition of a recession as two consecutive quarters of negative GDP, US economists at the National Bureau of Economic Research, who are tasked with declaring the beginning and end of a recession, look at various economic indicators — like industrial production, retail sales, exports-import trends, and other sources. A recession may occur in just one quarter; or may require more than two.

Looking at these other indicators for this past January-March 2016 period, the US economy appears even more likely headed for a recession and sooner rather than later.

US industrial production (manufacturing, mining and utilities) declined at an annual rate of -2.2 percent this past quarter, after having declined -3.3 percent the preceding quarter. Industrial production has fallen six of the last seven months. US industrial capacity is now at its lowest point since 2010.

Business investment is another trouble spot. Investment in business structures fell by -10.7 percent and investment in new equipment by -8.6 percent, the latter the biggest drop since the 2007-09 recession. Business inventories rose barely, by the smallest amount in two years, continuing a slowing trend of the past nine months.

And what about consumption, which constitutes about two thirds of the total US economy? US consumer spending has been growing at an average monthly rate of only 0.1 percent. Retail sales, the largest element of consumer spending, has fallen every month on average during the quarter. After having sustained retail sales in previous years, auto sales, a large component of retail sales, declined for the second consecutive quarter during the January-March period. The outlook for U.S. consumer spending recovery is also not too bright. A recent Gallup poll reported that 60 percent of those interviewed indicated the U.S. economy was “getting worse.” Reflecting the poor demand for consumer goods, U.S. consumer prices now hover on the brink of deflation, falling at an average monthly rate of -0.1 percent for the quarter.

Exports are declining, residential housing construction recently plummeted. In other words, not many of the economic indicators that comprise GDP show a promising picture. GDP should probably be even lower than the recently reported 0.5 percent annual and 0.1 percent quarter to quarter growth rates. The U.S. economy has obviously “stalled.” But it’s not the first time. In fact, it’s the fifth time it has since the official end of the last recession in June 2009.

What’s a Relapse?

The performance of the US economy this past January-March, a trend that appears is continuing into April, represents what this writer has called an ‘economic relapse’. A relapse is a collapse of economic growth for a single quarter, to near zero or even negative growth.
The U.S. economy has experienced now five such single quarter relapses since the 2007-09 recession was officially declared over. The economy collapsed to 0.1 percent in early 2011, to 0.2 percent in late 2012, declined again by -2.2 percent in 2014 and collapsed to 0.2 percent in 2015.

Relapses are the consequence of “epic” recessions such as occurred in 2007-09, which are typically characterized by short, shallow recoveries that slip repeatedly into periodic bouts of renewed stagnation. They are the result of near total reliance on central bank monetary policies that are designed to boost stock, bond and other financial markets — and thus the incomes of rich investors — but which fail to generate a sustained real economic recovery. Fiscal policies designed to stimulate consumption and good paying jobs are rejected. That almost perfectly describes U.S. economic policy the past eight years.

Politicians Wearing Rose-Colored Glasses

Despite the facts, U.S. government politicians and Federal Reserve bank officials continue to run around declaring that the U.S. economy is performing well. They like to cite the 200,000 jobs allegedly created in recent months. But a closer examination shows the jobs being created are part time, temp, contract, low paid, no benefit service jobs. Jobs that generate no overall wage increase for the economy and no real income gains for working people.

Young workers 30 years old or less are especially hard hit by this “‘well performing US economy.” A recent study by the Center for American Progress, for example, showed that 30 year old workers earn today the same pay, adjusted for inflation, that 30 year olds earned back in 1984.
Despite all that, President Obama continues to tour the country complaining that he doesn’t get enough credit for bringing the US back from the worst recession since the 1930s depression. He should tell that to the millions of millennial young workers, with low paid crappy service jobs, with no medical insurance, having to live at home with relatives because they can’t afford to rent an apartment, loaded with debt and with no prospects for meaningful change on the horizon. No wonder they’re rallying around Bernie Sanders, who continues to capture 85 percent of their votes in the presidential primaries. Obama (and Hillary) will have a hard time convincing them “all is well” — and an even harder time getting them to vote Democrat in the coming election in November.

Jack Rasmus is author of the recent, 2016 book “Systemic Fragility in the Global Economy,” by Clarity Press, soon translated into a Chinese edition, and the forthcoming June 2016 book, “Looting Greece: The Emerging New

For my analysis (and confirmed prediction) that the US economy would collapse to virtual zero growth this past quarter, listen to my April 29 Alternative Visions radio show, at:

http://prn.fm/category/archives/alternative-visions/

or at:

http://www.alternativevisions.podbean.com

SHOW ANNOUNCEMENT:

Dr. Jack Rasmus dissects the latest report on US economic growth for first quarter 2016, showing a mere 0.5% annual GDP growth rate. The collapse confirms his prediction of early January 2016, and confirms the US economy remains on a ‘stop-go’ trajectory, having again slipped into a ‘stall speed’ that raises risks of US sliding into recession. Rasmus explains the longer term trends behind the 0.5%, and why the US 0.5% annual growth rate, when compared to the previous quarter, is an even lower 0.1% GDP or less. Averaging over 8+ years, the US economy has grown only 10.1%, or barely 1%, or even less per year after adjustments. Jack explains how the US and other countries have been redefining GDP to help the appearance of growth—including China, India and Europe as well as US. The more fundamental trends behind 1st quarter US GDP are then reviewed–including business investment, industrial production, exports, consumption, and prices, all of which suggest the US economy nearing the brink of another recession. Why the US economy keeps ‘relapsing’ periodically since 2009 is discussed, as well as the likely impact of the 1st quarter US slowdown on other global economies and markets. (For more information, listeners should read Jack’s recent Telesur media article on US GDP posted on the PRN network website—‘Is the US Economy Heading for Recession?’)

(This article was published by the author in Telesur Media English Edition, April 17, 2016)

Last August 2015, after eight months of intense negotiations with Europe’s Troika financial institutions—the IMF, European Central Bank, and European Commission—the Greek Government capitulated to the Troika’s demands imposing more austerity on Greece and its people in exchange for another $98 billion in additional loans.

The $98 billion did not represent economic assistance to Greece, to stimulate its economy, but was earmarked almost exclusively to pay back interest to the Troika, Europe banks, and Europe investors for prior loans made to Greece in 2012, 2010, and before. But while the Greek people would see little real benefit, they would have to pay the price. In exchange for the $98 billion in new credit, the August 2015 debt restructuring deal required Greece to even further cut pensions, axe more government jobs and cut wages, raise taxes, accelerate the sales of public works (ports, airports, utilities, etc.) to private investors, and to in effect turn over Greek banks to the Troika and its northern Europe banker and investor friends.

To ensure Greece would not renege on the August 2015 deal, it would now also have to submit to vetoes by Troika representatives sent to Greece to oversee virtually all policy decisions made by Greece’s democratically elected Parliament or local governments. The Troika last year thus tightened its grip on Greece both politically and economically to ensure it would receive debt payments from Greece no matter how harsh the austerity terms.

The Greek government may have thought it had a debt deal, albeit a dirty one, last August 2015; but recent developments are now beginning to reveal it was only temporary. Worse is yet to come. The Troika grip on Greece is about to tighten still further, as revelations in recent weeks show Troika plans to renege on last year’s terms and demand even more draconian austerity measures. Leading the Troika attack on Greece once again is the International Monetary Fund, the IMF, one of the Troika’s three institutional partners.

IMF Secret Plans to Impose Further Austerity on Greece

This past April 2, 2016, Wikileaks released transcripts of a secret teleconference among IMF officials that occurred on March 19. In it, leading IMF directors expressed concern that discussions between Greece and the IMF’s Troika partner, the European Commission, on terms of implementing last August’s deal were going too slowly. The Eurozone and Greek economies have been deteriorating since last August. Still more austerity would thus be needed, according to the discussions among the IMF participants in the teleconference. And to get Greece to agree, perhaps a new ‘crisis event’ would have to be provoked.

The original August 2015 deal called for Greece to introduce austerity measures that would result in a 3.5% annual GDP budget surplus obtained from spending cuts, tax hikes, and public works’ sales needed to make the debt repayments to the Troika. But the IMF’s latest forecast for 2016 is that Greece in 2016 would have a -1.5% GDP budget deficit, not a 3.5% budget surplus. And 2015, for which numbers are not yet available, was probably even worse. Getting from -1.5% or worse to 3.5% was thus virtually impossible, according to the IMF discussants on March 19, and therefore additional austerity measures were necessary.

According to the IMF, the additional austerity would have to occur in the form of ‘broadening the tax base’—a phrase typically associated with making households with lower incomes pay more taxes instead of just raising tax rates on the top income households. The IMF thus rejected taxing the rich further, and instead taxing middle and working classes more. In addition, still more pension cuts would also prove necessary, as well as other measures.

The IMF secret teleconference further revealed that the IMF was increasingly concerned that the European Commission, in the midst of discussions with Greece on the details of the implementation of the August deal with Greece, might agree prematurely to grant some kind of ‘debt relief’ to Greece. The IMF was strongly opposed to ‘up front’ debt relief. All talk of debt relief should be postponed for at least another two years, according to the IMF’s secret discussions.

The private teleconference also revealed the IMF was growing increasingly concerned that Greece’s major debt payment to the Troika due this coming July 2016 might not be paid. The default on the payment would come within weeks of a possible United Kingdom exit (Brexit) from the European Union, scheduled for a vote in the UK on June 23, 2016. If the UK exited, and Greece could not pay, it might raise renewed interest—the IMF feared—in a Greek exit (Grexit) as well as a UK ‘Brexit’. The IMF’s March 19 teleconference therefore raised the idea that further austerity should be considered and proposed on Greece and quickly, before the June 23 UK ‘Brexit’ referendum in that country.

The IMF’s April 15, Press Conference

The ‘firestorm’ over the leak of the IMF’s plans for new and more austerity for Greece, prompted public responses by Greece, as well as a clarifying press conference by the IMF’s European directors on April 15, 2016.

Greece’s prime minister, Alexis Tsipras, publicly replied, noting Greece was already undertaking “an ambitious reform of income tax and a major overhaul of the Greek pension system”—the former providing a revenue of 1% of GDP and the pension reform and even greater 1.5% by 2018. With pensioners carrying the greatest burden of the austerity terms, why should the very rich be given relief with more taxation imposed on the middle and working classes by ‘broadening’ the tax base—i.e. making it less progressive, Tsipras inquired?

Wolfgang Schaueble, hard line German finance minister, who led the forces imposing even more austerity on Greece in August 2015, responded that debt relief was “not necessary” and ruled out any debt relief whatsoever for Greece, in 2018 or at any time. Schauble added that IMF refusal to participate in the August 2015 Greek debt deal unless the terms of the deal were changed to suit the IMF (which did not sign the deal as yet), would collapse the 2015 deal altogether.

In the IMF’s press briefing of April 15, 2016 Poul Thomsen, head of the IMF’s European department, responded that the IMF could not participate in the bailout without debt relief in some form, but left the door open as to what debt relief actually meant. Thomsen repeated his proposal to “broaden the tax base” and not raise taxes further on the rich.

Behind the apparent Schauble vs. IMF disagreement is the implication that ‘debt relief’ would require some kind of what is called ‘haircut’ and reduction in interest and/or principal for those investors holding bonds issued by the Troika on Greek debt. That’s what Schauble and European bankers don’t want. The IMF thus assured that debt relief did not require ‘haircuts’.

The Meaning of the IMF’s New Attack on Greece

What the new developments reveal is that fractures are emerging within the Troika and the Euro elites in general over the Greek debt deal of last August, as Europe’s economy continues to falter. New crises have emerged in Europe, including the cost of refugee settlement and the great economic uncertainty associated with the possible UK ‘Brexit’ this June. Europe’s central bank monetary policies are also clearly failing in the face of a steadily slowing global economy.

At the same time, the IMF itself is facing additional challenges supporting an even worse economic crisis in the Ukraine, which it has also committed to bail out but which is collapsing faster than predicted. Meanwhile, on the horizon are growing stresses in emerging market economies that have accumulated $50 trillion in additional debt since 2009, which threaten to lay claims on the IMF in the not too distant future. The IMF is no doubt looking over its shoulder at even greater potential challenges than Greece.

In short, the deteriorating conditions in the global economy are beginning to converge, and the Troika, Europe, IMF are all feeling the heat as the economic temperature rises. Another debt crisis in Greece is inevitable. But it may occur at a juncture at which it appears the least of the economic problems facing the global economy.

Jack Rasmus is author of the recent book, ‘Systemic Fragility in the Global Economy’, Clarity Press, January 2016, and the forthcoming, ‘Looting Greece: The Emerging New Financial Imperialism’, Clarity Press, June 2016. He blogs at jackrasmus.com.

To listen to this Alternative Visions Radio show, host Dr. Jack Rasmus, interview of Pablo Vivanco, Director of Telesur Media TV, Quito, Ecuador, on eyewitness events in South America, go to:

http://prn.fm/category/archives/alternative-visions/

Or go to:

http://alternativevisions.podbean.com/

SHOW ANNOUNCEMENT:

Jack Rasmus welcomes Pablo Vivanco, political commentator in Quito, Ecuador to provide a latest update on the right wing economic and political forces in ascendance in South America, focusing on the latest developments in Argentina, Brazil and Venezuela. As the economic crisis deepens throughout the region due to forces beyond the control of progressive governments in the region—i.e. falling oil and commodity prices, collapsing currencies, capital flight, slowing global economy—right wing forces (with assistance of US government and elite) have launched in the past year an intense attack throughout South America to reverse the tide of progressive governments that came to power since 2000. Vivanco describes the strategies and tactics, economic and political, currently being employed by the nascent Right Wing Offensive, including efforts to depose recently duly elected governments in Venezuela and Brazil and the launching of intense austerity measures, shutting down of independent media, mass layoffs, while rewarding of global bankers and investors by the new right wing government of billionaire, Mauricio Macri, in Argentina. New popular movements of resistance are described by Vivanco, as are efforts of the new right wing forces and governments to stifle independent journalists and media outlets throughout the region.

Biography: Pablo Vivanco is currently Director of the English Division of Telesur Media in Latin America, a consortium of progressive Latin American countries. A former radio host of ‘Voces Latinas’, he is a long time activist in movements for progressive change in Latin America, living and working in Quito.

For timely reports in English on daily Latin American political events, go to: http://www.telesurtv.net/english/index.html

As U.S. presidential candidate Bernie Sanders has gained momentum in the presidential primaries, the attacks on his proposed economic programs have grown proportionally.

Leading the assault have been supporters of Hillary Clinton, especially Paul Krugman, and other “stars” of the economics profession like Christine Romer, Laura Tyson, Alan Kreuger, and Austan Goolsbe — all of whom have served in past Democratic administrations and are no doubt looking to return again in some capacity in another Clinton administration. Sometimes referred to as the “gang of four,” in recent weeks all have been aggressively attacking Sanders’ economic programs and reforms. However, the target of their attacks, which began in February and continue today, is Sanders’ proposals for financing a single-payer universal health care program by means of a financial transactions tax.

The irony of the Krugman/Gang of Four attack is that Sanders’ proposals represent what were once Democratic party positions and programs — positions that have been abandoned by the party and its mouthpiece economists since the 1980s as it morphed into a wing of the neoliberal agenda.

Sanders’ critics have been especially agitated that their own economic models are being used to show that Sanders’ proposals would greatly benefit the vast majority in the U.S. But debating Krugman and his neoliberal colleagues on the grounds of their faulty economic model — a model that failed miserably under Obama to produce a sustained, real economic recovery in the U.S. — is not necessary. Their model has been broken for some time. Some straightforward historical facts and recent comparative studies are all that’s need to show that a real financial transaction tax can generate more revenue than is needed to fund a single-payer type program. Here’s how.

A Real Financial Transaction Tax

Let’s take four major financial securities: stocks, bonds, derivatives, and foreign currency purchases (forex).

A European study a few years ago involving just 11 countries, whose collective economies are about two-thirds the size of the U.S. economy, concluded that a miniscule financial tax of 0.1 percent on stocks and bonds plus a virtually negligible 0.01 percent tax on derivatives results in an annual tax revenue of US$47 billion. In an equivalent size U.S economy that would be about US$70 billion in revenue a year.

Wealthy investors’ buying of stocks and bonds is essentially no different than average folks buying food, clothing or other real ‘goods and services’. Why shouldn’t investors pay a sales tax on financial securities purchases? In the U.S., average households pay a sales tax of 5 percent to 10 percent for retail purchases of goods and many services. So why shouldn’t wealthy investors pay a similar sales tax rate for their retail financial securities’ purchases?

A 10 percent “sales tax” on stock and bond buying and a 1 percent tax on derivatives amounts to a 100x larger tax revenue take than estimated by the European study. The US$70 billion estimated based on the European study’s 0.1 percent stock-bond tax and 0.01 percent derivatives tax yields US$7 trillion in tax revenue with a 10 percent and 1 percent tax on stocks and bonds and derivatives.

Too high, Krugman and the Gang of Four would no doubt argue. Wealthy stock and bond buyers should not have to pay that much. It would stifle raising capital for companies. Okay. So let’s lower it to half, to 5 percent tax on stocks and bonds and 0.5 percent on derivatives. That reduces the US$7 trillion tax revenue to a still huge US$3.5 trillion annually.

Still too high? Okay, half it again, to a 2.5 percent tax on stocks and bonds and a 0.25 percent on derivative trades. That certainly won’t discourage stock and bond trading by the rich (not that that is an all bad idea either). The 2.5 percent and 1 percent tax still produces US$1.75 trillion a year in revenue.

But what about an additional financial tax on currency trading, like China is about to propose? Currency, or forex, trades amount to an astounding US$400 billion each day! Not all that is U.S. currency trading, of course. However, the U.S. dollar is involved in 87 percent of the trading. A 1 percent tax on U.S. currency trades conservatively yields approximately US$3 billion a day. Assuming a conservative 220 trading days in a year, US$3 billion a day produces US$660 billion in financial tax revenue from U.S. currency financial transactions in a year.

US$1.75 trillion in revenue from stock, bonds, and derivatives trades, plus another US$660 billion in forex trade tax revenue, amounts to US$2.41 trillion in total revenue raised from a financial transaction tax of 2.5 percent on stocks and bonds, 0.25 percent on derivatives, and 1 percent on U.S. dollar to currency conversions.

So how much will that US$2.41 trillion a year cover is needed to fund a single payer-Medicare for All program in the US?

Paying for Single Payer Health Care

Nearly every advanced economy in the world provides a version of single payer health care to its citizens—except the U.S. On the other hand, no country spends as much on health care as the US. The UK spends 9 percent of GDP, Japan about 10 percent, France and Germany 11 percent, for example. The U.S., in contrast, pays 17 percent plus of its GDP on health care. Given that the most recent US GDP is about US$18 trillion a year, 17 percent of US$18 trillion equals just over US$3 trillion a year.

If the U.S. spent, like other advanced economies with single payer, about 10 percent of its GDP a year on health care, it would cost US$1.8 trillion instead of US$3 trillion a year. The U.S. would save US$1.2 trillion.

Where does that current US$1.2 trillion go? Not for health services for its citizens. It goes to health insurance companies and other “middlemen,” who don’t deliver one iota of health care services. They are the “paper pushers” who skim off US$1.2 trillion a year in profits that average returns of 20 percent a year and more. They are economic parasites, or what economists refer to as “rentier capitalists” who don’t produce anything but suck profits and wages from those who do actually produce something. They then used the US$1.2 trillion a year to buy up each other, expand globally, and deliver record dividend and stock buybacks for their shareholders.

In other words, a true financial transactions tax, that is still quite reasonable at tax rates of 0.25 percent to 2.5 percent, can pay for all of a single-payer health care program in the U.S. and still have hundreds of billions left over — US$641 billion to be exact (US$2.41 minus US$1.8 trillion).

That US$641 billion residual could then be used to better fund current Medicare programs. It could eliminate the current 20 percent charge for Medicare Part B physicians services and provide totally free Part D prescription drugs for everyone over 65 years. The savings for seniors over 65 years from this, and the tens of thousands of dollars saved every year by working families who now have to pay that amount for private company health insurance, would now be freed up with a single payer system, to be spent on other real goods and services.

A financial transaction tax and single payer program would consequently have the added positive effect of creating the greatest boost in real wages and household income, and therefore consumption, in US economic history. More consumer demand would mean more real investment.

Yes, there would be less spending by the wealth speculating in stocks, bonds, derivatives, forex and other financial securities. But so what? If rich and wealthy investors don’t like that, well then let them eat cake — or some other four letter word.

Jack Rasmus is author of the just published book, “Systemic Fragility in the Global Economy,” by Clarity Press, 2016. He blogs at jackrasmus.com.

This content was originally published by teleSUR at the following address:
http://www.telesurtv.net/english/opinion/Neoliberal-Economists-Against-Bernie-Sanders-and-Common-Sense-20160331-0026.html”. If you intend to use it, please cite the source and provide a link to the original article. http://www.teleSURtv.net/english

To listen to why Mainstream economists allied with the Democratic Party are attacking Bernie Sanders’ economic program–and Jack Rasmus’s defense and explanation how a financial transactions tax would more than pay for single payer-universal health care (Medicare for All)–listen to the March 25 Alternative Visions radio show. Go to:

http://prn.fm/category/archives/alternative-visions/

or go to:

http://alternativevisions.podbean.com/

SHOW ANNOUNCEMENT:

(Note: first half hour reviews the global economy. second half hour of show describes how a financial transactions tax pays for single payer with billions left over to expand social security Medicare)

Dr. Jack Rasmus explains how his version of a Financial Transaction Tax on stocks, bonds, derivatives, and currencies could raise far more than sufficient revenues to pay for a single payer-national health care program and still leave hundreds of billions to expand social security Medicare and other programs. In the second half of the show, Rasmus shows how a single payer system would save $1.2 trillion a year out of the current health care cost of $3 trillion today. Based on a tax study done in Europe in 2013, Rasmus shows a US financial tax of 5% on stocks & bond trades, a 1% tax on derivatives sold in the US, and 1% on non-government US currency sales raises $3.89 trillion a year, or about twice the revenues needed for a comparative single payer system. Rasmus then reviews and debunks the debates by neoliberal economists like Paul Krugman, and Clinton’s ‘gang of four’ economists, who have been attacking Sanders’ proposals for a financial tax and single payer health care. In the first half of the show, reviewing recent events in the global economy Rasmus addresses the fallout from the European Central Bank’s recent decision to expand its quantitative easing and negative interest rate programs and why they will fail; the growing default risk in the US energy junk bond markets; the preliminary agreements by Russia, Saudi Arabia and others to freeze oil prices; China’s continuing desperate moves to deal with the massive bad corporate debt problem; French retreats on introducing labor market reforms in response to mass demonstrations: the doubling in average prescription drug prices in the US: and why millennials (age 25-34) in the US now earn take home pay today in 2016 less than they did in 1984.

To listen to my March 11, 2016 Alternative Visions radio show on this topic, go to:

http://prn.fm/category/archives/alternative-visions/

or to:

http://www.alternativevisions.podbean.com

SHOW ANNOUNCEMENT:

Last month the Bank of Japan (BoJ) expanded its QE program and negative interest rates (NIRP) in a desperate attempt to reboost its stock market and Yen exchange rate. This past week the European Central Bank (ECB)went a step further, as both the ECB and BoJ continue to engage in ‘dueling QEs’ that are intensifying global currency wars and slowing global trade. ECB chairman, Mario Draghi, lowered the Eurozone’s negative rate on government bonds another notch, now to -0.4%. Reportedly half of all government bonds in Europe now trade at negative rates. In addition, the ECB raised its monthly buying amount from $66 billion to $88 billion, and now will buy corporate bonds as well. The move subsidizes Euro corporations, lowering their costs of borrowing and insurance (CDS) on bonds, a move to offload the $1.5 trillion in corporate non-performing loans in Europe. Jack Rasmus explains why this won’t have any effect on the Eurozone real economy but will temporary boost stocks and currency. Jack also reviews why global oil prices have risen recently to $40 a barrel, Japan’s official return to recession after doctoring GDP numbers last 3Q2015, China’s latest ‘mini-stimulus’, the US deepening control of Ukraine’s economy, and the significance of the ‘Socialist’ government in France new attack on eliminating the 35 hr. workweek, where 90% of all jobs created in 2015 were part time and temp, and the mass protests now emerging there. Jack concludes with brief introduction to his forthcoming May 2016 book, ‘Looting Greece: The Emergence of a New Imperialism’, and his next book out October 2016 entitled, ‘Central Bankers on the Ropes’, both from Clarity Press. (see his blog, jackrasmus.com and Clarity Press for more information).

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