We’re going to cut expenditures so that we can use more of our tax revenues to repay debts, that were based on projections of future growth we are not, and probably cannot sustainably, achieve? We need to do this because we cannot possibly repay our massive debts because they are equal to the total output of our society for about a year?
If we don’t repay the interest and this year’s maturing debt, we won’t be able to borrow more to repay next year’s maturing debt? The only way out is if, by some miracle, we manage to produce and consume more with a less healthy, worse educated, less transported and less informed populace? And even that assumes we can actually grow without causing a global environmental crisis – which would only be possible if we were to invest heavily in retooling our industry and energy infrastructure for a low or zero carbon future?
So, tell me how this works again?
We borrowed so much to buy the house we’re living in that we can’t afford to pay the mortgage without canceling our health insurance? On top of that, the roof is leaking and we’re burning the doors to stay warm. If we all pull together and work really hard for the next month, we will be able to make next month’s payment. Is that it?
“No! No!”, you say?
“It’s really not that bad because you own the mortgage on your neighbour’s home, and so long as everyone just keeps paying their mortgages, it’ll all work out in the end.”
“You should even consider printing some money and giving to the banks, so you can borrow some more to buy a car. That will stimulate the economy!”
Now wait a minute! Tell me how this is going to work, again!?
… It doesn’t look like this is going to work out at all, if we keep doing what we’re doing now. Everyone has borrowed more than they can repay. The growth that would theoretically make repayment possible is either unachievable or unsustainable or, most likely, both. Forget what the money was spent on, it’s gone now and whether we gave it to bankers, spent it on war or funneled it into the pockets of those who already had too much is irrelevant – this is everyone’s problem now.
Carrying on down the path we’re on now will simply lead to the disorderly and bloody breakdown of the current system, causing misery and chaos to most of us. Most likely the expenditures will get cut further and further, resulting in social unrest and without engendering further economic growth. The debts will eventually be defaulted on or inflated away. In the meantime environmental degradation will accelerate, and the necessary investments for a clean energy future will not be made. Is this where anyone wants to go?
So if that won’t work, what will?
Just two moves? Really?
The first, stunningly simple, change is to confine the expenditure of income tax to social infrastructure. The only things income tax revenues can be spent on are: shelter, sustenance, education, healthcare, transport, information and legal services. No debt repayments, no incentives, no foreign aid, no military spending – those all have to be paid for out of sales and corporate taxes. And no borrowing to pay for social costs, you have to raise enough income taxes to pay for all the social costs.
Step two: add a carbon or environmental tax to everything that degrades the environment sufficient to mitigate the environmental damage that thing causes. Not a penny more, not a penny less. Spend that money on mitigating the environment.
Not hard, not difficult. All within the existing capabilities of government accounting, taxation systems and market economics.
There’s more, but that will do for just now. Digest those two simple steps, think about how those two changes would impact your life, your society and the world we live in.
Then, when you’re ready for more, go to www.standardsoflife.com.