In 2008 the economic crisis erupted in the United
States, following the collapse of major financial institutions, crisis
immediately reflected on Europe and the rest of the world.
Governments were forced to pick up the tab for bankers,
giving them money, but the real solution chosen to remedy the crisis was the
adoption of austerity measures that hit, not the bankers or the banks, but the
rest of the population by reducing public spending on vital sectors like
health, education and public employment. In other words, they took the money
for the payment of the services of the population to give the money to the
bankers and banks.
Why austerity in public spending and not austerity in banks?
That's the key question; however, has no clear
response from politicians.
Banks did not practice healthy financial policies and
therefore went to bankruptcy.
The 2008 financial crisis revealed a fact already well
known: the public finance deficit of nations.
And, despite the deficit, governments were left with
no choice but to give money to failing banks to prevent the collapse of
economies, because some institutions had a major role in the overall financial
structure of countries.
Instead than focus on how the financial institutions
are managed, the attention of institutions like the International Monetary Fund
and the European Central Bank, politicians and media shifted to the deficit of
public finances, giving rise to programs cut in public spending that have
diminished services and caused unemployment to millions of people.
The public finance deficit has basically an origin:
the growth of the population, that every day has more material needs. This
forces the state to meet those needs.
In the Western, welfare policy inspired in the
Keynesian idea was primarily aimed at ensuring citizens social security:
pension rights, unemployment insurance, the right to health and education, and
ran from the end of World War II until the 80 when the English Prime minister,
Margaret Thatcher, adopted the neoliberal model promoted by the Chicago School,
seeking, inter alia, the elimination of the deficit of public finances. The
model was also adopted by President Ronald Regan of the United States, the
International Monetary Fund, the World Bank and governments in Latin America in
the 80s and 90s of the twentieth century. But it is necessary to underline that
none of the goals of neoliberalism including reducing or eliminating the
deficit of public finances was achieved in those years. On the contrary, the
deficit in England and the United States during the President Ronald Regan period
increased exponentially. The same neoliberal scheme of the 80s and 90s is now
imposed on Europe, especially to the southern countries of the continent,
Greece, Portugal, Spain and Italy by the International Monetary Fund and the
European Central Bank, led by Germany and France.
In the essays I've gathered in this paper, it is
demonstrated why austerity is not the appropriate way to achieve the welfare of
people. On the contrary, the way is the
expansion of money to meet the needs of the growing population without causing
inflation.
Monetary expansion must be related to the growth of
the population and its needs and cannot be considered as the main cause of
inflation. The main cause of inflation is human selfishness that has no limits
to the accumulation of wealth and the trend to the robbery.
The following are links to the essays:
Giving financial assistance direct to the consumers
How to recover an economy after a financial disaster
Was the 2008 recession provoked with a deliberate
objective?
Banks in bankruptcy but rich bankers, Theory of the
coercive deficit
The mortgages are not the main cause of the financial
fallout
Effects of the economic crisis on the world stability
What true wealth is? The monetary illusion
Abstract ideas, economic reality and philosophy of
science
Money is only metal and paper without intrinsic value,
philosophy of money
Economic crisis 2011: the solution is to realize that
the economy operates in a new scale and not reducing the public spending
Fiscal deficit and size of the economy
Financial crisis: the solution is to issue more money
and not reducing the public spending
Bank of England recognizes that to issue more money is
the solution
Austerity generates unemployment, poverty and
political instability
There are not true reasons for the financial crisis in
Europe
How rationalist ideas based in the mathematical logic affect
the life of millions of people, the European crisis
Why is it necessary to build a new balanced economic
model without ideological prejudices?
Is there a limit to the amount of money that an
economy can to issue? A reflection on the U.S. fiscal cliff
The lack of money should not be the cause of the
poverty of nations
The austerity policy is not necessary, a thesis
different from traditional concepts of monetary policy
The backing of money
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