Governments around the world are being stampeded by financial commentators and international organisations (IMF, OECD, G-20) to implement austerity programs to get their “deficits under control”. All sorts of horrendous predictions are being touted in the press daily by the deficit terrorists who focus their gaze on charts showing movements in financial ratios – such as the deficit to GDP and public debt to GDP ratios. They largely ignore history and when they do invoke it the introduce erroneous analyses which do not apply to the issue at hand. They erroneously conflate the Eurozone with sovereign monetary systems. And they never let up. But in all the talk of austerity the real dimensions of the problem get lost. That is what today’s blog is about – getting our focus down to the fact that thousands of children will die as a result of these unnecessary austerity programs which are just designed to satisfy the ideological hangups of the (mostly) high income and wealthy elites in our societies.

It is interesting how the big neo-liberal economic organisations like the IMF and the OECD are trying to re-assert their intellectual authority on the policy debate again after being unable to provide any meaningful insights into the cause of the global crisis or its immediate remedies. They were relatively quiet in the early days of the crisis and the IMF even issued an apology, albeit a conditional one. It is clear that the policies the OECD and the IMF have promoted over the last decades have not helped those in poorer nations solve poverty and have also maintained persistently high levels of labour underutilisation across most advanced economies. It is also clear that the economic policies these agencies have been promoting for years were instrumental in creating the conditions that ultimately led to the collapse in 2007. Now they are emerging, unashamed, and touting even more destructive policy frameworks.

When I saw the headline on this article – Time to plan for post-Keynesian era – in the Financial Times yesterday (June 7, 2010) I wondered which Keynesian era we were talking about. It was written by Jeffrey Sachs who is well-known for his anti-stimulus viewpoints. The upshot of his argument, however, is that he recommends deficit reduction strategies because the bond markets will get upset otherwise. At the same time he advocates medium-term investments in green technology and education which I support but which will not be consistent with deficit reductions.

I wrote the following for the local Fairfax press and it covers my reaction to today’s NSW state budget. I had 500 words and so the arguments are not well developed. It will be largely of local interest and I am posting it here for the records.

Today I am writing about child cruelty. We would all react to child cruelty in the same way – it is repugnant and undermines the chances of the child maturing into a fully functional adult replete with capacities that promote self esteem and allow meaningful and enduring relationships. So what would we think of child cruelty when a high level government agency is engaged in it? What would we think of a government that was poisoning the minds of the young? Many Americans write to me accusing me of being a communist sympathiser and claiming that freedom was subjugated under those regimes via brutal indoctrination mechanisms embedded in their societal infrastructure. Maybe it was. But the Americans don’t actually have to look very far nor resort to history to find regimes that use indoctrination to oppress their citizens’ free spirits, including the intellectual development of their children. On Thursday, June 3, the Director of the US Congressional Budget Office wrote his Letter to a Seventh Grader. It contains pure indoctrination designed to develop fears about budget deficits at an early age.