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Europe’s ‘New Austerity’ – The Cheesecake Diet

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Austerity has failed. You won’t see that in any of the headlines from the media propaganda machine, and for a very good reason: our intellectually bankrupt governments have no “Plan B”.

The evidence of the colossal failure of Friedman Austerity is both abundant and unequivocal. Greece was an insolvent economy in steady decline when its own “austerity” was commenced. After two years of austerity it was totally bankrupt, and the economy had been so completely destroyed that even after defaulting on 75% of its debt further default already seems inevitable. Austerity transformed an economic decline into one of the most rapid economic collapses in modern history.

Then there is the UK. It began its austerity campaign shortly after Greece, but its own economic collapse is proceeding on schedule. Its monthly budget deficits continue to widen, with the UK government recently reporting its largest one-month deficit ever for the month of February. Given that the entire raison d’etre of austerity is to shrink deficits, that statistic alone is proof of the complete and utter failure of UK austerity.

However, as an added “bonus” the UK’s people also get to watch their economy being destroyed through this economic masochism. Today the UK government announced the collapse in UK retail sales. Sales plummeted 2.3% in April from March. But keep in mind that number excludes inflation. Factor in double-digit inflation (thanks to “competitive devaluation” and endless “QE”), and the actual rate-of-collapse approaches 40% when expressed as an annualized number.

What was the explanation given by the mainstream media for this austerity-induced collapse in the UK retail sector? It rained in April. Yes, that must have been it. UK residents were unprepared for April showers. Perhaps they all lost their ‘brollys’?

Meanwhile, the newest member of Europe’s Austerity Club, Spain, has already announced that it will miss its 2012 deficit target, and that it will exceed its 2013 target by at least double. More austerity. More total failure.

It should be noted that I predicted from Day 1 that all of this austerity would be a total failure, one of the easiest “predictions” in history, since there were two reasons why there was a 0% probability of success. First of all these economies are already insolvent past the point of no return.

Secondly, the primary structural economic problem faced by these Deadbeat Debtors was not excessive spending but rather insufficient revenues – nothing less than a “revenue crisis”. This was recently explained and demonstrated in a three-part series, where I showed the total collapse of U.S. tax revenues (in real dollars). Meanwhile, government spending in the U.S. has actually been declining (not increasing) for the past quarter century (also in real dollars).

The collapse of Greece’s economy, the imminent collapse of the UK economy, and the obvious failure of Spanish austerity prove that I was right. If a doctor prescribes a diet for an obese person, at worst the doctor would do no harm. The obese person might not be able to lose weight, but a diet certainly wouldn’t worsen his health. Conversely, if a doctor prescribes a diet for someone already suffering from severe anemia it would cause their health to immediately worsen and might even kill them (if they were already frail).

The economic parallel is no different. If these governments had been over-spending (i.e. there was “fat” to be trimmed) then at worst austerity would have done no harm. But because all of the “fat” had already been trimmed (long ago), austerity immediately “cut to the bone”. You can’t solve a revenue crisis by cutting spending.

Now the governments of Europe have all implicitly admitted this, but naturally they won’t say so publicly – since to do so would make it obvious that these spineless “leaders” now have no plan at all. And so get ready for Europe’s “Cheesecake Diet”.

Europe must balance growth with austerity,” proclaimed the mainstream media propaganda machine, in headlines across North America, Europe, and around the world. In other words these shameless practitioners in double-talk are telling us that Europe is going to “balance” cutting spending with more spending. Officially all of the Deadbeat Debtors are still on their austerity “diet”, but now they have all collectively agreed to look the other way whenever one of these dieters decides to raid the refrigerator for a piece of cheesecake.

In the case of the UK, this involves no change in direction at all – since the UK has been on a Cheesecake Diet all along. While ordinary people in the UK have been punished with month after month of sadistic, suicidal austerity; the Bank of England has been showering its bankers with new money, courtesy of more UK “QE”.

Presumably where this new Cheesecake Diet might differ from the UK’s old Cheesecake Diet is that now some of the new spending might actually find its way into the hands of ordinary people. Then again, perhaps all this “balancing growth with austerity” rhetoric really means is that now all of Europe’s governments will start showering their bankers with more money – while continuing to stomp on ordinary people with Milton Friedman’s Boot?

The true verdict will come when we see the details of these new “growth” policies we’re told are on the way for Europe. If what we see is just more of the UK’s Cheesecake Austerity – showering bankers with money while starving everyone else – then this dooms the governments of Europe to the same fate as Greece: economies destroyed right down to their foundations.

On the other hand, if this “new balance” simply involves injecting stimulus into the broader economy then Europe will be precisely back where it started after the dust settled from the Crash of ’08. It’s nations will have gigantic, structural deficits; and absolutely no mathematical possibility of ever balancing their budgets.

The difference, of course, is that these Deadbeat Debtors have now piled on three more years of gigantic deficits since they first announced their plans to begin “austerity”. As we see with the latest statistics, the crippling size of the interest payments to the Bond Parasites has now made economic growth impossible for Europe.

Either way, the final verdict is clear: the governments of Europe now have no plan at all when it comes to ever restructuring their economies even to the point of solvency, let alone anything remotely resembling prosperity. They are doing nothing but economically treading water until inevitable debt-default takes place.

The question them immediately becomes: if default is inevitable, then why not do it now instead of later? Any/every financial counselor will tell their client that once bankruptcy has become inevitable, the smart thing to do is file immediately – in order to minimize one’s financial destruction.

Though national economies are much larger, the principle of arithmetic is identical. Indeed, we have seen what happens when one of these Deadbeat Debtors delays bankruptcy as long as possible: Greece. By declaring its bankruptcy later rather than sooner its economy is now in total ruin, and even after a 75% default on its national debt, more bond-burning is on the way. Even the creditors don’t benefit from delaying the inevitable.

However this has never been about economics and has always been about slavery. The Bond Parasites – known to each other as “The Pilgrims” – have never cared about the exact size of the debts under which these nations are buried. All that they care about is that these nations remain “mortgaged” beyond their ability to pay.

By having their nations over-leveraged with debt, the politicians become nothing but their banker’s servants. And what do the bankers want their servants to do? Just continue to squeeze the Little People. It’s all in black-and-white in The Bankers Manifesto of 1892”:

When through the process of the law, the common people have lost their homes, they will be more tractable and easily governed through the influence of the strong arm of government applied to a central power of imperial wealth under the control of the leading financiers. People without homes will not quarrel with their leaders. [emphasis mine]

Let’s put aside the fact that this premise is fundamentally flawed. People who have lost their homes (and are presumably near/at the point of starvation) will “quarrel with their leaders”. It is obviously the thinking of the bankers that serfs are easier to control (enslave) than citizens, and so their strategy all along has been to impoverish all the populations of Western nations to the greatest degree possible – simply to maximize their own political power/influence.

We see the real reason why the governments of Europe continue along their inevitable path to economic suicide. Europe’s new Cheesecake Diet isn’t a plan to avoid that fate. It’s a plan to ensure it.

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Jeff Nielson
...
written by Jeff Nielson, May 23, 2012
Jeff: very strong post on the hidden elite agenda that began to insidiously affect the West when the Jekyl Island cabal, for all intents and purposes, took over control of the US economy, and incrementally thereafter, the effective control of the world's greatest military machine. Although you offer no solutions, it is obviously to me that, no matter whether default, devaluation, or hyperinflation, the end game is for oppressive totalitarian control, and global genocide. Coming sooner rather than later, I fear.


Thanks for the comment Apberusdisvet!

But I will quibble with one remark within where you say "you offer no solutions". Some of the solutions can be found within articles I've linked to, and I didn't have the space here to get into that aspect of things. Here's a quick summary:

1) IMMEDIATE default on most of these $trillions in (fraudulent) Western bond debt. That will make our economies solvent again.
2) IMMEDIATE implementation of a flat wealth tax. That will provide our economies with both a fair and reliable tax base - to ensure they remain solvent.
3) IMMEDIATE implementation of a four-day work week. That will eliminate structural unemployment, and create millions of new taxpayers (who are no longer collecting benefits). That should allow our governments to run SURPLUSES.
4) IMMEDIATE enforcement of all the "anti-combines" legislation which already exists across the West, in order to smash all of the oligopolies and monopolies into little pieces. This will reduce corruption to the point where we would return to some form of quasi-democracy - instead of our current (Fascist) kleptocracies.
apberusdisvet
...
written by apberusdisvet, May 23, 2012
Jeff: very strong post on the hidden elite agenda that began to insidiously affect the West when the Jekyl Island cabal, for all intents and purposes, took over control of the US economy, and incrementally thereafter, the effective control of the world's greatest military machine. Although you offer no solutions, it is obviously to me that, no matter whether default, devaluation, or hyperinflation, the end game is for oppressive totalitarian control, and global genocide. Coming sooner rather than later, I fear.

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