Welcome to a new class of ‘Economists’ and Policy makers – THE AUSTERITARIANS

We have heard enough about libertarians, liberals, socialists, institutionalists and their views and policy prescriptions. They are just opinions because we don’t see them put to work anywhere in the society or economy, if we were to hear the Keynesians and the monetarists or believe them. 

I am sure the Austrian school of economists are not going to like this. But this emerging class of economists and technocrats that are heading the infamous ‘troika’ of IMF, ECB and the EU, also stand for debt reduction. The only difference is that while Austrians do not favor debt build-up, the ‘Austeritarians’ don’t mind a debt pile-up because they have a ready medicine. That sure-fire medicine is called austerity measures. 

This is the bitter medicine that the troika and its varied institutional incarnations prescribe, impose and administer whenever there is  an economic and financial crisis caused by excessive debt build-up. The more bitter the medicine, the more effective and imperative it is sold as.

This troika has already subjected the countries of Greece, Portugal and Ireland to the torture and misery of their austerity potion and cocktail.  Italy is next in the line of firing and is already on the verge of having this bitter pill of austerity measures forced down its throat.  

The Austeritarians are not called that for nothing. Their austerity prescription is very typically and uniquely unfair, unjust and biased.  This can be seen from the ingredient mix that this cocktail carries

Cuts on Greece:

•    Public sector wages to be cut by 20 per cent, and wages of state-owned enterprises to be cut by 30 per cent
•   30,000 civil servants to be put on partial pay — meaning 60 per cent of regular pay for one year
•  Monthly pensions above 1,000 euros to be cut by 20 per cent;
• Monthly pensions at the same level for existing retirees under 55 to be cut by 40 per cent
• Health spending to be cut by 310 million euros ($432.2 million Cdn) in 2011, a further 1.8 billion euros between 2012 and 2015
• Education spending to be trimmed through merging or closing of 1,976 schools
• Defense spending to be cut by 200 million euros in 2012, and 333 million every year from 2013 to 2015

Taxes

• The tax-free income threshold to be lowered from 12,000 to 5,000 euros
•  In an effort to raise money for the growing number of unemployed, the country is to introduce a "solidarity levy”" of between one and five per cent per household, which will be raised twice in 2012
• Taxes on gas, cigarettes and alcohol to increase by one third; luxury taxes to be levied on items like pools and yachts
• The rates for the value-added tax (VAT) — similar to Canada's HST — to increase

Government sell-offs

• Selling 10 per cent of Hellenic Telecom to Deutsche Telekom for 400 million euros
• Selling stakes in various banks, utilities, ports, airports and land holdings in 2011/2012
• Privatization of the state lottery, Athens and Hellenikon airports, four Airbus A340 aircraft and 2004 Olympic venues, hotels, beaches, marinas and casinos. Also the main gas distributor, petrol refiner, the main railway operator and the motorways.

Some of the bulleted points above in the cuts are highlighted in bold to emphasize what they really mean, a drastic reduction in the welfare of general community imposed by diktat. Hitting retirees below the belt by not only reducing their entitlements when they need it most, but also compromising on healthcare is also another ‘necessary evil’ of austerity induced ‘reforms’. Added to this injury is the insult of reduction in education spending and shuttering down of schools. Are any banking or financial institutions being told to shut down in Greece and Ireland?. Isn’t a ‘50% Hair-cut’ a big austerity attack on the banks and the ‘big bad bond market’?!!

All of this and more, just to release a measly tranche of 8 Billion EUR!!! Is any of this helping Greece? What a trite question to ask?! Have we not heard enough of the failures of these harsh measures. But that is not really the point.

1. Does austerity mean punishing the masses for the ills, evils and sins of the elite and the elected?
2. Does austerity mean a back-door repeal of not just welfare state but of the welfare and humanistic orientation of an economy and system under the guise of ‘fiscal restructuring’?
3. Does austerity mean forced privatization of even utilities and transfer of wealth to troika favored agents and institutions (If Deutsche Telekom is so near, can Deutsche Bank be very far!!!) under the pretext of smaller government?.

This is elitist fraud and tyranny of the masses hiding behind the veil of austerity and economic discipline.

This is worse than austerity, it is sheer brutality!! May we call the economic technocrati of EU the ‘BRUTALITARIANS’