Financial pundits use the word "austerity" as if it were a happy word – a word describing the positive and inspired state of former financial hard cases finally living up to their obligations – the repentant wrong-doers agree to live a diminished future to make up for a spendthrift past. The rich are only seeking justice, after all. Debts must be paid.
In the eyes of tosoc.org, this view has a nauseating resemblance to the happy workers pictured in communist art from around the mid-twentieth century. Nauseating because the communist vision was impossible and it is sickening to be reminded of the very many who struggled, suffered, and died under the lash of the imaginary communist future.
Today, in the justice system of the rich, the greatest crime is being unable to pay one's debts. Deadbeats are scorned, and the rich essentially complain that "Austerity is too good for them!" when they grudgingly agree to new debt deals.
The trouble with the justice of the rich is that the rest of us will be paying off debt forever. The capitalist system today is arranged so that becoming debt-free is an impossible dream on the wide social level. A few manage to do it (or are allowed to do it) to provide hope for the rest. A few become chronic deadbeats (or are made into deadbeats) to encourage the others. Most of us trudge our treadmills every day, stretched between heaven and hell, freedom and slavery, lashed by economic insecurity and hoping for the impossible.
Tosoc has mentioned before that capitalism has become more like a lottery. The propaganda is extravagant, most of the money is taken by those who own and run the lottery, the winners are very few, and the vast majority of participants are losers.
Greece is now in the unenviable position of being the world-wide example of losers -- the loser nation. They were lured into the Union with promises of European unity, equality, opportunity, and rising wealth. The problem was that they could not keep up with the Germans, and attempting to do so on a national level caused them to borrow too much. The Germans obliged, and now the Germans want to be paid back. So much for unity, equality, opportunity, and prosperity.
Therein lies the trap into which the rich winners lure the poor losers. Sales and marketing create unrealistic expectations, and loose lending standards allow the losers to borrow too much. The rich professionals also use the divide-and-conquer technique, taking advantage of their access to individuals. If they can convince enough individual amateurs to make mistakes, then they can loot the entire society.
One sad part is that the losers get to think of themselves as winners for a while, feeling middle class and believing that things are improving, but the good times do not last for very long. The losers have been sold the financial rope with which to hang themselves, and they obliging loop it around their own necks. A sucker is born every minute, as they say.
Now the Greeks see the results of the trap. They get the poverty ("austerity") and the Germans get the wealth.
Another sad part of this is that many Greeks are probably very careful with their money and objected to the borrowing by their government. To no avail. Now they are suffering, too, even though they are innocent even in capitalist terms. (This is just one example how the justice of the rich breaks down.)
A similar process is happening in the United States, though we are in the position of the one who just jumped off the tall building. Like the old joke, when asked how things are going, we can honestly reply that things are going OK so far. Greece has already hit the sidewalk. If we will just look ahead, we will see the sidewalk coming.
The problem is that we are still in trouble because we are still borrowing. Some of us have voluntarily cleaned up our personal balance sheets (that is, paid off our debts), imposing austerity on ourselves to get it done. Unfortunately that will not do us much good. Our thriftiness is offset by government borrowing. Even if we have paid off our personal debt, the government is still raising our collective debt. We are all in debt trouble together. Share and share alike. (Except, of course, for the rich, who can run away and protect their wealth.)
A large percentage of US government income is based on taxes on jobs. (Just for illustration, let us say 80%.) If you have a job, then dividing the debt per job makes your part of the national debt about $84,800 and is going up each year by over $5,000. In only a few years, the debt per job will be over $100,000 per job.
Depending on interest rates, we are paying about $2000 per job a year in taxes to pay just for the federal debt and the payment per job is going up each year by almost $100. Of course, interest rates are very low right now. This is part of the trap we are in. The total debt is less important than the interest rates because the payments rise with the interest rates.
If interest rates are 1% now and rise to 6%, then the payment per job each year will be roughly six times the current amount, or about $12,000, and will be going up by about $600 each year. Attempting to raise taxes and cut government spending enough to pay such a burden (which is the austerity solution) would cause an enormous recession if not a depression. This is exactly what happened to Greece and is on the way for the US.
No matter how thrifty you are, no matter how well you hew to the economic ethics recommended by the rich, then unless you are already rich, your economic destruction lies in the collective economic decisions of the rich, the US government, and your fellow citizens.
Another way we are in trouble is that collectively we are taking on new debt in order to make payments on old debt. For example, on a personal level, you know that is happening when you have to borrow on one credit card in order to make a payment on another credit card. This signals that the end of your prosperity is near.
On a national level, this is harder to detect, but roughly speaking, it is when the collective debt is growing at a faster rate than the collective income (that is, taxes). That is what we are doing, and that is why the current administration is so desperate to raise taxes and tax rates. They have already borrowed and spent the money, and now they have to raise the collective income to pay for it. First they put us in an untenable position, then they require us to sacrifice in order to fix things. These days, that is considered leadership.
The situation is even worse in Greece, where on top of a depression-level economy and more poverty, the Greeks are called irresponsible deadbeats, even those who individually worked hard, did not go into debt, and tried to save money.
At tosoc.org we are not pleased with the rigged debt game of the one-percenters, and we are not impressed with either their standards of "justice" or their "poverty is too good for them" attitude toward the Greeks and the rest of us. We believe that justice as practiced by human beings is generally as harsh and unfair as those who demand it, and we also believe that what goes around generally comes around. Those who demand justice should be careful because they themselves will be judged.
Tosoc believes in mercy instead of justice. We do not judge the Greeks. We sympathize with them because we bought into the propaganda just like they did. We borrowed money on visions of wealth just like they did, and we know how easy it is to fall into that trap. The rich are always busy smoothing and beautifying the wide and pleasant road to hell.
If nothing else, the Great Recession should have taught us that many of us will fall into debt traps if they are set for us. That is what the housing crisis was all about. Many of the rich will explain this away, saying that we are all adults here, after all. Poor decision-makers get what they deserve. It's a "dog eat dog" world, after all.
That sounds fair, but it is not. In reality, there is no contest. The giant dogs eat the little dogs.
Instead, tosoc says that amateurs should not be forced to compete against professionals. Tosoc says that the mistakes of the few should not be allowed to become general economic meltdowns that keep almost everyone poor. Tosoc says that the poor should not be looted through government debt to support the debt traps set up by the rich. We do not glory in a "dog eats dog" world. We would rather see a "dog helps dog" world.
We say all this in part to reinforce the idea that the common currency is the means by which the rich take advantage of the rest of us. The debt traps for the Greeks were set up in euros and our debt traps are set up in dollars. We amateurs are forced to compete against the professionals, and the currency is their playing field.
Multiple exclusive currencies would make it much more difficult for the professionals to set their traps for us and multiply the mistakes of the few into mass profits looted from the many. Our turf would be different from their turf, and we would not be forced to compete directly against them. Also, the divide-and-conquer technique could not be applied because our markets would meet their debt threats collectively from the start, before any economic disasters could unfold.
With multiple exclusive currencies we can defeat the economic tricks and traps that keep most of us poor. After all, if economic security is good for the rich then it must be good for the poor. We should start widening economic prosperity rather than narrowing it. "We all got it coming, kid." can be taken to mean deserving of mercy and prosperity.