There is more than the fiscal cliff to meet the naked eye.<\/p>\n
Wise people–Borosage, Krugman, Stiglitz–,some of them economists, see neither the fiscal deficit nor the US debt as the key problems, but the lack of growth.\u00a0 They point to Clinton years and how through growth the Debt\/GDP ratio went from a half to a third.\u00a0 Important, but then there is a fourth consideration: some Americans are suffering out there.\u00a0 “16 percent” comes up very often, of people and families below the poverty line, not knowing for sure where the food comes from the next day, not having medical insurance–.\u00a0 Macro-economics is blind to human basic needs, yet there may even be solutions hidden in them.<\/p>\n
But after the Clinton years came somebody else; increasing expenditure with enormously costly wars making conflicts even worse, and in addition lowering the revenue by reducing taxes on the super-rich.\u00a0 That a fiscal deficit would rearits ugly head, fed by such policies year after year, was a foretold conclusion.\u00a0 Democracy protects the president with a golden parachute, similar to that enjoyed by the CEO of a bankrupt company.\u00a0 But rightly so: he was elected, even re-elected.\u00a0 US voters, you asked for it; you got it.<\/p>\n
Overdue, but the Congressional votes came: a compromise on ten fiscal cliff factors.\u00a0 The market reacted “positively” if that is the right word when the finance economy makes a Dow Jones Industrial-DJI leap upwards while the real economy is stagnant–increasing the gap that feeds future crashes.<\/p>\n
It was a lazy compromise, meaning by that little new beyond juggling of the old factors.\u00a0 Major problems like Medicare payments– the US health services, at 17 percent of the GDP, produce less health than the typical EU at 8 percent of GDP–and unemployment insurance were postponed, not solved.\u00a0 Like, indeed, the debt ceiling.\u00a0 The New Congress inherits ever more intractable and pressing problems.\u00a0 One reason is obvious: the fiscal cliff discourse is much too narrow.<\/p>\n
Hence, let us bring in the suffering of the people, the missing growth and the debt burden, expanding the discourse for new visions.<\/p>\n
There is no Tennessee Valley Authority, TVA, anywhere<\/i>; only the old stuff, nothing inspiring pointing in new directions.\u00a0 How about a Municipal Uplift Authority, MUA, as a major federal program<\/i>; beyond TVA, less concentrated geographically, more inspiring and dynamizing! Hovering over the US municipal map, identifying the municipalities with the highest levels of misery–people below the poverty line, with hunger threatening and no health coverage–is easy.\u00a0 Lift them up!<\/p>\n
Cutting some expenditure and increasing taxes on the rich is indispensable, but limited and limiting.\u00a0 A huge imaginative program for the 16 percent to lift themselves up by their own bootstraps, with credits for small companies-cooperatives designed to produce food and water, clothing and housing, health and education, all at affordable prices might do miracles.\u00a0 Carefully monitored MUA should be self-sustaining, and after the credits have been paid generate US domestic demand for considerably economic growth.\u00a0 16 percent is a major proportion.\u00a0 An approach more realistic to get the economic wheels turning than hoping to become the major world hydro-carbon exporter by 2030–by then hydro-carbons may be phased out.\u00a0 Better turn inward, facing the fact: the US and Western world trade dominance is gone.\u00a0 Outcompeted.<\/p>\n
But there are also other approaches and they in no way exclude each other, nor do they exclude the fiscal cliff avoidance compromise.<\/p>\n
The US debt is increasing.\u00a0 The world is flushing with US$s.\u00a0 States and corporations buy US bonds at low interest–parking $s for some limited time to avoid the costs of buying other currencies–trusting to be serviced by freshly printed $s.\u00a0 But that cannot last forever, given the many schemes for regional and world currencies based on a mix, not on any single currency. Some parking lots will smolder under the cars: a heavy price for saving on exchange commissions.<\/p>\n
With a (flexible) US debt ceilings of $16.3 trillion the major creditor, China, has problems.\u00a0 Could the two agree on something in return for some debt forgiveness?\u00a0 Like the reduction of a major US federal expenditure, the $1 trillion military spending?\u00a0 A creditor is entitled to look at the debtor’s budgets to identity cuts; the debtor is entitled to say “that one has to do with you (and Russia)”, and the creditor to reply, “if so, let us talk; our economy is still smaller than yours, to match you militarily is more of a burden on us; how about bilateral-balanced-controlled disarmament, and we could throw some debt relief into the bargain?”\u00a0 China might demand no encircling of China militarily, nor any Trans-Pacific Partnership, TPP, bloc excluding China economically.\u00a0 Who will benefit? Obviously both; relieved of military waste, of a sizable tip of the debt iceberg, cooperating rather than competing in the global arena.<\/p>\n
We sense three possible losers: EU, Russia and Japan-Australia, hoping to be favored by one or the other.\u00a0 But USA-China together matter more; they might even engage in imaginative joint projects for poverty alleviation elsewhere.\u00a0 Lift up the bottom, create customers.<\/p>\n
The two policies, lifting up municipalities and tying debt relief to disarmament, are both rational.\u00a0 But in the way of rationality stands the arithmetic of Congressional voting, so well adjusted to the arithmetic of the deficit reduction as a hand to a glove; even if the hand becomes paralyzed. They fit too well, blocking for other views.<\/p>\n
Some other input is needed if the legislative power has no other game to offer.\u00a0 The onus is on the executive power.\u00a0 Could there be a latent FDR-Franklin Delano Roosevelt carrying TVA size policies, hiding in Obama’s second incantation?\u00a0 If not, poor USA; four more years of the same, downhill.<\/p>\n
In the swamp of problems there are bubbles waiting to burst: finance vs real economy, printed money vs real value, debt service vs people service. With sounds of a sucking quagmire a little further on.<\/p>\n
___________________________<\/p>\n
Johan Galtung, a professor of peace studies, dr hc mult, is rector of the TRANSCEND Peace University-TPU<\/a>. He is author of over 150 books on peace and related issues, including \u2018<\/i>50 Years-100 Peace and Conflict Perspectives,\u2019 published by the TRANSCEND University Press-TUP<\/a>.<\/i><\/p>\n Editorials and articles originated on TMS may be freely reprinted, disseminated, translated and used as background material, provided an acknowledgment and link to the source, TRANSCEND Media Service-TMS, is included. Thank you.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" There is more than the fiscal cliff to meet the naked eye\u2026 Let us bring in the suffering of the people, the missing growth and the debt burden, expanding the discourse for new visions\u2026 A huge imaginative program for the 16 percent to lift themselves up by their own bootstraps, with credits for small companies-cooperatives designed to produce food and water, clothing and housing, health and education, all at affordable prices might do miracles.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[31,65,55,146,206],"tags":[],"class_list":["post-24472","post","type-post","status-publish","format-standard","hentry","category-editorial","category-anglo-america","category-capitalism","category-economics","category-coops-cooperation-sharing"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/24472","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=24472"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/24472\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=24472"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=24472"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=24472"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}