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AMERICA'S LOOMING COLLAPSE FISCAL The new budgetary measures designed to rescue the US economy are serving the interests of Wall Street bankers to the detriment of working people, causing economic dislocation, unemployment and mass poverty. “We will rebuild, we will recover, and the United States of America will emerge stronger.” — US President Barack Obama, State of the Union Address, 24 February 2009 "Strong economic medicine" with a "human face" t first sight, the recent US budget proposal has all the appearances of an expansionary program, a demand-oriented "Second New Deal" geared towards creating employment, rebuilding shattered ocial programs and reviving the real economy. The realities are otherwise. Obama's promise is based on a mammoth austerity program. The entire fiscal structure is shattered, turned upside down. To reach these stated objectives, a significant hike in public spending on social programs (health, education, housing, social security) would be required as well as the implementation of a large-scale public investment program. Major shifts in the composition of public expenditure would also be needed, i.e., a move out of a war economy, requiring a movement out of military-related spending in favour of civilian programs. n actuality, what we are dealing with is the most drastic curtailment in public spending in American history, leading to social havoc and the potential impov- erishment of millions of people. The Obama promise largely serves the interests of Wall Street, the defence contractors and the oil conglomerates. In turn, the Bush-Obama “bank bail-outs" are leading America into a spiralling public debt crisis. The economic and social dislocations are potentially devastating. Obama's budget submitted to Congress on 26 February 2009 envisages outlays for the 2010 fiscal year (commencing | October 2009) of USS3.94 trillion, an increase of 32 per cent. Total government revenues for the 2010 fiscal year, according to preliminary estimates by the Bureau of the Budget [Office of Management and Budget], are in the order of $2.381 trillion. The predicted budget deficit (according to the President's speech) is in the order of $1.75 trillion, almost 12 per cent of US gross domestic product. by Prof. Michel Chossudoysky © 2 March 2009, Global Research Centre for Research on Globalization, Montreal, Canada From the web page: http://www.globalresearch.ca/ index.php?context=va&aid=12517 War and Wall Street This is a "war budget". The austerity measures hit all major federal spending programs with the exception of defence and the Middle East war, the Wall Street bank bail-out and interest payments on a staggering public debt. It diverts tax revenues into financing the war. It legitimises the fraudulent transfers of tax dollars to the financial elites under the "bank bail-outs”. The pattern of deficit spending is not expansionary. We are not dealing with a Keynesian-style deficit, which stimulates investment and consumer demand, leading to an expansion of production and employment. NEXUS ° II APRIL - MAY 2009 www.nexusmagazine.com