America’s Deceptive 2012 Fiscal Cliff By Michael Hudson

28 December 2012 — Michael Hudson

How today’s fiscal austerity is reminiscent of World War I’s economic misunderstandings

When World War I broke out in August 1914, economists on both sides forecast that hostilities could not last more than about six months. Wars had grown so expensive that governments quickly would run out of money. It seemed that if Germany could not defeat France by springtime, the Allied and Central Powers would run out of savings and reach what today is called a fiscal cliff and be forced to negotiate a peace agreement.

But the Great War dragged on for four destructive years. European governments did what the United States had done after the Civil War broke out in 1861 when the Treasury printed greenbacks. They paid for more fighting simply by printing their own money. Their economies did not buckle and there was no major inflation. That would happen only after the war ended, as a result of Germany trying to pay reparations in foreign currency. This is what caused its exchange rate to plunge, raising import prices and hence domestic prices. The culprit was not government spending on the war itself (much less on social programs).

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Marx, Keynes and China Today

10 Feb 2012 — Solidarity Economy

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Deng Xiaoping and John Maynard Keynes

Introduction

The international importance of China’s economy is twofold. The first is practical – the scale of China’s economic growth, its global impact, and the consequences for the improvement of the social conditions of China and the world’s population. The second is theoretical, including the potential international applicability of conclusions drawn from China’s economic policies.

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Let us speculate By William Bowles

28 October 2008

There’s an awful lot of speculation going on right now, from both the left and right about where the latest crisis of capital is headed, chief amongst them is the notion that this signals the end of the US Empire, that the so-called uni-polar world is over, that a new multi-polar world, headed by China, Russia, India and Brazil is emerging.

The theory is based upon the fact that the US is no longer the world’s numero uno economic power and it’s true that even an overwhelming military force is dependent on the economics that fuels it. But how true is this idea and even if it is true, over what timescale are we talking about here?

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