AUSTERITY :   THE GERMAN MIRACLE WORKER …. A TENTATIVE SOLUTION FOR RESSURECTING GREECE’ ECONOMY.

…by Dr. Anthony Horvath

THE FALLACY OF THESE AUSTERITY MEASURES.

This is just another opinion of the author of a new controversial economic phylosopy, CAPITAL-less-ISM. soon to be published. http://www.capital-less-ism.com/ In this dynamic model, the economy is viewed as a gigantic circulating financial information (capital) system much the same way as the blood is circulating in the human body. As the blood circulation, SUFFICIENT CAPITAL CIRCULATION MUST sustain production/consumption in the economy. AUSTERITY MEASURES represent an internal bleeding weakening the economy by a never ending capital hemorragy ot of the country. The ensuing capital anemia is the lack of sufficient amount of capital which must circulate freely as the blood in the body. consequently lack of capital will DEPRIVE enterprises, institutions and people causing unemployment and a downspiralling decrese in consumption, suffocating the entire economy, causing economic death of Geece.

AUSTERITY IS THE SOLUTION FOR THE BANKS BUT IT IS A BURDER TO SOCIETY

By definition austerity measures proposed by various governments as a solution for the crisis are counterproductive. They emphasize cutting down on government or personnel spending, which produces direct income losses on the income-spending chain, thus causing more job losses, and a downspiral of the socio-economy of the country.

Austerity is only partially effective while it cuts unnecessary spending (e.g., war costs) or unnecessary investment or gluts or capital flights. Any cuts in domestic spending affects domestic capital supply and circulation, thus jobs and further productivity. Then it reaches a multi-level critical point.

-1- critical level #1: when the decreased INCOME REACHES THE SPENDING LEVEL of the individual, thus no more saving is possible for rainy days

-2- critical level #2: USE UP SAVINGS, when the income level decreases below the spending necessity, thus he is required to dip into his savings

-3- critical level #3: GOING INTO DEBT, the income decreases below the spending level of the individual, thus it requires borrowing

-4- critical level #4: POVERTY LINE, when the income decrease reaches to the point where spending for necessities is impossible because of a lack of credit, producing social instability

Conclusion: austerity measures should apply for capital flight and gluts. Instead, we should focus on job and enterprise creation programs.

DO YOU WANT REAL SOLUTIONS???

LET’S START WITH

IN OUR NEXT ARTICLE OF THESE SERIES WE WILL ELABORATE ON SPECIFIC POINTS FOR GREECE