German austerity economics have swept over Europe reducing the Continent to a region of misery, growing unemployment, perpetual recession, in short to economic disaster which of course brings civil and social disaster in its wake.
A small but vivid example of how German austerity, aka Nonsense Economics works can be seen from what is going on in Greece. Not the general picture of a destitute bomb site, but just a single detail.
In September, we are told, 1 billion Euro was withdrawn from bank savings deposits in order to pay the exorbitant, extortionist taxes imposed by the troika government. This is supposed to help balance the budget. Ok. However, Greece, that is the Greek taxpayer has borrowed 50 billion to recapitalise the banks. Small detail that while the Greek taxpayer is putting up the capital, ownership of the banks remains with the private bankers.
Okay again. Only recapitalisation itself does not restore the banks to health. The banks need deposits to be able to lend to businesses and households in order to provide the necessary liquidity. The government, however, taxes to extortion because the troika believes, erroneously that this is the way to balance the budget.
Now the brunt of the exorbitant taxation is on property, that is houses, many of which are still struggling to pay off their mortgages. The exorbitant taxation, however, makes it impossible for a large number of households to meet their mortgage payments. Hence the bad debts figure for the banks grows and grows.
Deposits dwindle because there is no other way to pay taxes since all income had been slashed. So the banks are faced with growing bad debts on the one hand and dwindling deposits on the other owing to the taxation brilliance imposed. Hence banks remain dangerously insolvent teetering on the edge of collapse, and the Greek taxpayer over indebted and over taxed. So what to do?
Well of course we know what to do. The fuzzy headed pig farmer heading the Eurogroup at Germany’s behest has told us as much. Quite simple really. Since by a stroke of genius depositors have been upgraded to investors the solution is easy. The bank confiscates all deposits over 100,000 Euro (and of course this may well be less, say 50,000 or even less. Why not?)
So deposits will inevitably be shorn off. But then how are any of the taxes going to be paid? Simple, we confiscate all housing! And then? Well… we’ll sell off all Greek real estate to foreigners. Really? And why do you think foreigners will be so dumb as to buy a house that carries an enormous tax burden with it?
But not to worry. All is going well in the Eurozone. The austerity is working, we are turning the corner. Look! Ireland will be back in the markets by the end of the year…
Oh and the Euro elections will return a majority of extreme right wing anti Europeans. Interesting.