It is impossible not to have some sympathy with the tea party/ rural republicans stance in the USA on the debt crisis. On other issues they are downright insane. But this one not so much. For basically they’re asked to sign a blank cheque in perpetuity.
The question is what are they seeing that’s missing is the general analysis. I think what they are seeing is the results of underemployment on a local rural area. Where the only people with any certainty are those on a Government pay cheque, be this a Dole or pay cheque. And this with small farmers and the local business people being squeezed out of existence by economic circumstances designed towards the ever bigger and ever more efficient. All while being fleeced by a taxation system in its workings designed to operate against itself and requiring an entire industry to keep the plates spinning. When what should be in place for anyone with less than ten employees should nowadays be input-able in some basic IT programme and the bill spat out on the other side. Of course, the unhappy question here is if there was less taxation on those local areas would the cash be used to create new businesses. It sure as hell didn’t here in Ireland, we had the wealthy investing in any part of the world the could find a risky home. But even outside Ireland the general evidence here is No. So basically this is insolvable using the levers of to-days economy.
In the Anglophone economies there are similarities. These similarities are at such a basic level that most don’t even know they exist or see them as being almost part of the woodwork.
That there was a profound fixation on communism over the last 80 years of the 20th Century meant that 17 century systems that needed reform were artificially retained for years after their use-by date. Why these reforms were not enacted in the 19th is directly down to the great empty space that was the middle of the USA taking the pressure. Then these areas together with Oz, NZ, Canada and parts of Africa went through two thousand years of economic development in the space of 50 years. From the Trapper of fur to the high finance of building the Panama Canal.
But they were intent on replicating the Home economy IN EVERY ASPECT.
On the European continent the Napoleonic Wars brought forward the nascent middle classes and the subsequent wars moved that class further to the fore. Culminating after WW2. But here we’ve a tiny bit of hilarity. The western Allied Powers in their governance of Germany and their chauvinistic fixation with the destruction of Krupp and IG Farben ending up recreating the economy of New England with its focus on the local coupled with international trade. Culminating to-day with a Germany where unemployment is mostly non-existent. And largely so for 50 years.
It is at this point where things get a bit confused.
That the systems of finance replicated across the anglophone world is easily proved as most Finance Houses have a genesis in the City of London, that of Bristol or Liverpool. While the Medical Community and the Legal Community have direct active links to this day. Education is so closely tied that they might be said seamless. And while Religion has certain differences, they are not so different in a game changing way as to fall outside.
Is it any wonder then that given the system and resulting problems that all would conform and would fall less like Dominoes but in a form of sympathy.
So then what the heck is the problem.
Well I see it as one where the cash, – where called cash- does not hang about in the Local System long enough to do much if any good. Where if one takes a small economic unit like a farm, forgetting about any subsidy, and simply looking at the lines that the cash takes. The trades in other words. We will find that the lines are very short indeed before the cash enters the Banking systems and is then sucked out of the community. Such that in the US it is not just out of the community but out of the State entirely. So when a tractor bought by the farmer with borrowed money imported in at high cost with the cheap local cash ferried to head office. The active cash sticking to the Local economy is less that 10% of the price. Anyhow, the question is how much is held by the local area. Think of it as Seed Money in the very real meaning of the word. But seed money in the form of a local development bank where a percentage of that money paid in taxation remains within and administered by an unpaid rotating board made up of all the community.
Can this be converted to the big town or City. Well yes, I believe it can. And further I see no reason, why those unemployed areas cannot put in say 5% of their unemployment cheque to such a system. The local people know who will repay far better than those outside. And I see little reason in providing a system of Aid in perpetuity while making certain that every penny of that aid is removed instantly. This is valid for Africa also, where billions have sent only to rebound as if there was a yo-yo string attached.
Why on earth am I looking at the issues in the USA for heaven’s sake, have we not enough economic issues on the island of Ireland that I’ve to go looking for them outside. The reason is simple, it’s far easier to see from further away. And this gets to the title of the post.
The Gordian Knot cannot be undone until Alexander hits it with his sword, job done. Well that’s what most people get for that story. But that wasn’t the original point of the knot at all. It became the entire point. Much like the civil services of the anglophone countries. Much like the finance systems. And much like the professions. They’ve become the reason for the States very existence. Or the Knot, when the point is to release the Ox-cart. Put simply, the Ox-cart is the reason not the Knot.
These last few days here in Ireland we received a report of the budgetary intentions of the Government. They want to remove 2.5billion from the welfare and rise tax by 1.5billion. This seems reasonable on the face of it (isn’t even measured in a sneeze to what is going on the USA). That is until you count in that there are 450,000 people unemployed within a 4.5million population. Where like in the UK and USA and unlike most of Europe, the welfare payment pitched at a level designed for deterrence. And realizing that there are NO jobs. For even though we are running a very positive balance of trade. Any spare Moneys sucked into covering gambling debts made by privately owned banks.
All the while, where a country GP is getting €500,000($712,000). Not the plastic surgeon, yes I do mean the local lad you go to for antibiotics. And the civil service has an understanding with the Government that their pay cannot be in any way reduced, but are getting an average of TWICE what the same levels are getting in Germany.
To sum up, it’s the local economy stupid. It always has been. And it always will be.