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The New Budget Demands Financialization and Anti-Capitalism

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The New Budget Demands Financialization and Anti-Capitalism

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    1. 1 The New Budget Demands Financialization and Anti-Capitalism Professor Sacco, George Mason, and H.A. Sauer, Former Deputy Director for the Budget Committee, U.S. House of Representatives Research Assistants Sunitha Thummala Liang Li April 22nd 2009

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    3. 3 New Budget Challenges for the Republic, Representative Governments in the US Traditional budget concerns War Role of the banks Budgeting for electoral districts and special interest Infrastructure Add The Entitlements for elderly and safety net Social security, 1935 and Medical, 1965 For example, Earned Income Tax Credit Add International Financialization (1990s) and Terrorism, 9/11/09 Add Government as insurance agent for failure

    4. 4 1974 Budget and Impoundment Control Act Remains the key guide for Congressional budgeting The Act strengthened the congressional role over the President in the making the budget The instrument created to coordinate the budget was the concurrent budget resolution, a form of congressional decision that can, but not necessarily, bind congressional action Reconciliation results in one budget package that often ignores the concurrent resolution

    5. 5 Budget Outlays and Reciepts The next three slides show trends A general picture of budget outlays A more detailed view of budget outlays Sources of Revenue

    6. 6 India overview US Budget vs. GDP See spreadsheet India overview US Budget vs GDP Most file names have India as the first term to identify it with the 4/22/09 presentation

    7. 7 US Budget Expenditure Trends See spreadsheet India US Budget Expenditures

    8. 8 India Sources of Revenue See India Sources of Revenue spreadsheet Most file names have India as the first term to identify it with the 4/22/09 presentation

    9. 9 Budget Financialization Financialization means seeking profit by leveraging for future monetary outcomes rather than future production Global Financialization is greater the nation state’s budget Financial intermediaries are political more powerful and regulations

    10. 10 US Debt Picture

    11. 11 International Theories and Budgeting Demands Neo-liberalism Free trade, international cooperation (WTO), less militarism, protection of private property and limited government spending; the economic piece gets larger for a better global life Realism Coercive power to raise money, military spending, international mistrust and coalitions based on electoral favors; zero sum Marxism Implosion of capitalism as profit margins are reduced below zero; the Republic attempts to save industry with bailout after bailout Anti-globalization global attacks on capitalism, huge debts to build electoral coalitions and address environmental and poverty demands

    12. 12 Percent US Debt Held by Other Countries

    13. 13 Percent US Debt Held by Other Countries Spreadsheet See India debt held by foreigners 1970 to 2007

    14. 14 Financing US Debt and Deficits Foreign ownership of US debt Taxes Surplus in Social Security goes to Treasury to pay government non SS bills Surplus in Medicare goes to Treasury to pay government non Medicare bills Raising retirement age Larger Medicare co-pays

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    16. 16 The New GDP Challenge – BRIC

    17. 17 The Budget Crimp in Economic Rationality How Negative NPV becomes law Lower the discount rate Log rolling Off budget financing

    18. 18 US Budget Process and Rules: formal and pay-go Formal rules restrict how much can be spent for discretionary and the size of the deficit as set by the Budget Committees Pay go (pay as you go) says that any times revenues are decreased expenditures must decrease by an equal amount Practice of waiving formal rules and pay go

    19. 19 US Budget and Too Big to Fail History

    20. 20 Budgets, Fraud and Corruption Jack Abramoff lobbyist convicted Illinois Governor Bovankovich under investigation San Diego city, US, took money from employee pension and lost in the market and covered it up

    21. 21 Budgets, Financialization and Black Winter;

    22. 22 Taking Away Black Winter Reduce arms war Industrial policy? Energy Clear water education Enforce moderate investment leveraging Transparency with Risk levels

    23. 23 The New Black Winter Explosion of Arms Trade

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    25. 25 Replacing the 1974 Budget and Impoundment Act Budgets sensitive to debt ceilings Reduce arms war Regular Fed and SEC presentations to Congress Coordination among GAO, CBO, OMB and OECD District and special interest spending is published

    26. 26 Readings on Global Currency and Regulatory Changes A 'Copper Standard' for the world's currency system? Telegraph.com.uk; By Ambrose Evans-Pritchard Last Updated: 2:41PM BST 16 Apr 2009 China’s Dollar Trap, Paul Krugman. NYT. 4/2/09 In Europe, Obama Faces Calls for Rules on Finances. NYT. 4/2/09 Pentagon preps for economic warfare. Politico. 4/9/09 India US Budget history.pdf from 2009 Presidents Budget

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