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Posts Tagged ‘austerity’

Last Friday, Brazilian unions ratcheted up the pressure on president Michel Temer Last Friday, Brazilian unions ratcheted up the pressure on president Michel Temer with a nationwide general strike that closed schools, disrupted transport networks and led to clashes with public security in several cities. Thirty-five million Brazilians took part in the strike out of 208 million. Now if only we could get US citizens so united against the massive corruption of both major political parties and the corrupt US government.

Demonstrators in Rio de Janeiro and São Paulo blocked key roads with barricades of burning tires on. Riot police used teargas and percussion grenades to try to disperse the crowds and open the routes.

Brazilian media reported protests in 26 states and strikes by teachers, bus drivers, healthcare providers, oil industry workers and public servants.

As night fell on Friday, there were multiple clashes in central Rio between protesters, who set fire to a bus, and riot police, who fired dozens of rounds of tear gas.

The reason for the protests is simple. The corrupt Brazilian government wants to redistribute income from the 99 percent to the 1 percent by cutting pensions and new labor laws that weakened workers rights. This is called a policy of austerity, which is well known to be a failure at economic stimulus. Since austerity is a proven failure, there is no reason to attempt such a remedy of the economic downturn Brazil has fallen into.

According to the Guardian, “Many voters are furious that politicians are insisting on the need for cuts in benefits and public services even as evidence grows that they benefited personally from illegal kickbacks on overinflated contracts.”

Cutting pensions and benefits will only make the economic downturn worse, and this President Temer must know, otherwise he is ignorant, stupid or corrupt. Obviously, we’re looking at “corrupt.”

The Guardian went on, “Eight cabinet ministers have been implicated in the Lava Jato (Car Wash) investigation into corruption at the country’s two biggest companies, Petrobras and Odebrecht. Temer’s approval ratings have slipped into single digits, similar to the level of his predecessor, Rousseff, when she was impeached last year.”

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The polls closed in Greece on Sunday and Syriza has become the first anti-capitalist party in European history to win a national election. The party won 149 seats in the parliament, and will work with another smaller right-wing party to ensure a majority. Syriza is more anti-bailout than anti-capitalist.

Alexis Tsipras was sworn in at a ceremony this morning. The 40-year-old former Communist party youth activist, student leader and firebrand, becomes Greece’s youngest prime minister. He has also broken with tradition by not being sworn in by the head of Greece’s orthodox church, Archbishop Ieronymos. A self-described atheist, Tsipras, who also refused a religious marriage ceremony with his long-time partner, Betty, made a courtesy call to the cleric at 2.30 pm.

Syriza promises to wipe out the debt imposed by bankers and reverse cuts to social services that have resulted in misery. Now corrupt bankers will go on trial, we hope. Democracy will reign once again in Greece, austerity for the 99 percent is at an end, and let us hope that justice will be served and austerity for the corrupt 1 percent, and prison terms as well, will be meted out.

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The US Austerity Program: What’s it all about?

Creating greater unemployment via an austerity program usually means pushing wages down. Perhaps that’s what Obama, the Corporate Democrats and the entire Republican Party want. Push down wages and the difference between the old wages and the new go into the pockets of the rich via higher corporate profits, rising dividends and greater share prices.

The United States and United Kingdom experienced similar rates of economic growth prior to the U.K.’s passage of an austerity budget in mid-2010. This budget caused U.K. economic growth to stagnate, while the U.S. economy continued on its trajectory of solid-if-not-stellar growth. If U.S. policymakers fail to counteract contractionary elements of current law in 2013, the United States’ trajectory will come to more closely resemble that of the United Kingdom.

Adapted from “A tale of two economies,” an EPI Economic Snapshot published April 26, 2012

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Americans Feel US government Austerity

WASHINGTON (Reuters) – Americans are beginning to feel the pinch from Washington’s decision to embrace austerity measures aimed at bringing down the nation’s budget deficit.

Paychecks across the country have shrunk over the last week due to higher federal tax rates, and workers are already cutting back on spending, which will drag on the economy this year.

In Warren, Rhode Island, Ben DeCastro got his first paycheck on Friday in which taxes on his wages rose by 2 percentage points. That works out to about $30 a week.

“You sit back and do the calculation, and that’s $30 I’m not going to spend at a restaurant,” said DeCastro.

He said he worries that people hit by higher taxes will spend less at the chain of furniture stores where he works as a marketing manager.

Politicians in Washington made much hubbub last week about a bipartisan deal to soften or postpone some $600 billion in scheduled tax hikes and government spending cuts. President Barack Obama said the deal would shield 98 percent of Americans from a middle-class tax hike.

Nevertheless, for most workers, rich and poor alike, taxes went up on December 31 as a temporary payroll tax cut expired. That cut – a 2 percentage point reduction in a levy that funds Social Security – was put in place two years ago to help the economy, which was still smarting from the 2007-09 recession.

About 160 million workers pay this tax, and the increase will cost the average worker about $700 a year, according to the Tax Policy Center, a Washington think tank.

“It stinks,” said Beverly Renfroe, an accountant for a realty firm in Jackson, Mississippi. “I definitely noticed a decrease.”

The pain will trickle through the economy over the next few weeks. Already, the new rate of 6.2 percent has trimmed paychecks for about half of the 200,000 employees whose paychecks are processed by Advantage Payroll Services, a payroll firm based in Auburn, Maine.

“HEADWIND TO GROWTH”

Economists estimate the payroll tax hike will reduce household incomes by a collective $125 billion this year. Some households could reduce contributions to retirement accounts or other savings, but most are also expected to cut back on spending.

That alone could reduce economic growth this year by about 0.6 percentage point, said Michael Feroli, an economist at JPMorgan in New York City.

“The headwind to growth should be noticeable,” he said.

Most mainstream economists say the government should still be trying to stimulate the economy by lowering taxes or raising spending to help bring down the 7.8 percent jobless rate.

Even Federal Reserve Chairman Ben Bernanke has said Congress could consider short-term stimulus measures if they can be coupled with a plan to tame the deficit over the long run.

But a consensus has emerged between Congress and the White House that the federal government should step up the pace at which it cuts the deficit, which ballooned during the recession.

That decision is having repercussions across the country.

In Bergenfield, New Jersey, Evelyn Weiss Francisco has put off plans to upgrade her cell phone and thinks she might go to fewer music concerts. A director at a public relations firm, she thinks the higher payroll taxes will cost her about $1,000 this year.

Some Americans will also pay higher income taxes this year. Congress and Obama let income tax rates rise for households making more than $450,000 a year, a partial repeal of tax cuts put in place under President George W. Bush. The wealthy will also pay a new tax to help fund a health insurance reform passed in 2010.

These will have a smaller impact on the wider economy because they affect fewer people. But taken together, this year’s tax hikes could subtract a full percentage point from growth, Feroli said.

Most economists see economic growth of roughly 2 percent this year, a lackluster pace held back by the government’s austerity measures that is likely to do little to reduce unemployment.

Failure to postpone government spending cuts due to begin around March would slow growth more, further frustrating the economic recovery.

http://news.yahoo.com/americans-feel-austeritys-bite-payroll-taxes-rise-141032370.html

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“Over the last three years, the long-term budget outlook (covering 75 years) if current law is followed has improved dramatically. In 2009, the Congressional Budget Office projected that debt held by the public would rise from around 60 percent of GDP to roughly 300 percent of GDP in 75 years. In contrast, in 2012 the CBO has projected that debt will consistently fall—and even be fully paid off by 2070.” Economic Policy Institute

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Are Republicans as stupid and anti-American as they seem to be? They claim we should cut back on government spending and for a while pointed to Europe and especially England as the way to go. They’re not doing that comparision thing much anymore because England and Europe are in recession because of goverment cuts. But the GOP still insist the best way that lead to growth is cutting social progams, and oh yes, giving more economically disastrous tax cuts to the rich.

That policy is a massive failure wherever it has been tried.

“ust as many had predicted, austerity during a declining economy doesn’t fix anything. It only makes the problem worse, by cutting off critical finances and services when they’re needed the most. It’s much cheaper for governments to borrow the money and keep money moving during soft economic periods like this.

Conservatives laughed off criticism of austerity, but it’s clear they were wrong.” Check out the rest of the story by clicking on the link below.

the-cost-of-austerity-just-look-at-the-uk-economy-its-a-mess–Truthout.org

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The Republican Party leadership and most of its hacks want the USA to follow Europe into recession by cutting back on government programs. The result of such policies in Europe have been a disaster for most Europeans.

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