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The New Budget Demands Financialization and AntiCapitalism


Jack Abramoff lobbyist convicted. Illinois Governor Bovankovich under investigation ... The New Black Winter. Explosion of Arms Trade. 24. 25 ... – PowerPoint PPT presentation

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Title: The New Budget Demands Financialization and AntiCapitalism

The New Budget DemandsFinancialization and
  • 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

Purpose of this Handout
  • The primary purpose of the this handout is to set
    the theme
  • Show data to support the theme
  • Reflect on the future
  • The slides used in the presentation will use
    spreadsheets and graphs to more clearly
    represents the numbers

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
  • 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

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

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

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

US Budget Expenditure Trends
  • See spreadsheet India US Budget Expenditures

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

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

US Debt Picture
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

Percent US Debt Held by Other Countries
Percent US Debt Held by Other Countries
  • See India debt held by foreigners 1970 to 2007

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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The New GDP Challenge BRIC
The Budget Crimp in Economic Rationality
  • How Negative NPV becomes law
  • Lower the discount rate
  • Log rolling
  • Off budget financing

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

US Budget and Too Big to Fail History
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

Budgets, Financialization and Black Winter
Taking Away Black Winter
  • Reduce arms war
  • Industrial policy?
  • Energy
  • Clear water
  • education
  • Enforce moderate investment leveraging
  • Transparency with Risk levels

The New Black Winter
  • Explosion of Arms Trade

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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

Readings on Global Currency and Regulatory Changes
  • A 'Copper Standard' for the world's currency
    system? By Ambrose
    Evans-PritchardLast Updated 241PM BST 16 Apr
  • Chinas 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.
  • India US Budget history.pdf from 2009 Presidents
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