I remember when I was a young girl, my mother would always balance the family chequebook at the end of every month. She would stress that this was the secret to good financial planning and would warn me, "It doesn't matter how much money you earn, you will never have enough money to do and buy all the things you want to - so watch what you spend."
Proper budgeting has always kept households solvent, and in most families this responsibility usually falls to the woman. If we find we have spent too much, the next month we cut back. We don't keep spending because we know if we do, we will end up losing our home, most of our personal belongings and a life we hold dear. Balancing expenditures against income means not having sleepless nights worrying about how we are going to survive. Having enough money means both security and freedom.
But now that the recession is biting hard, there are growing numbers of economists and political advisors who believe the only way to get out of this recession is to spend our way out of it. The number of boarded-up shops on the high street and half-finished building sites are just the beginning signs of the double dip recession and the new austerity we face. There is a growing chorus of naysayers who believe that austerity is not the solution, and if we spend more, our assets can be rescued and revitalised. They want us to believe that we can "spend our way out of this recession" and return quickly to the 'good times'. The economy just needs to be infused with cash in order to increase liquidity; then lending will start to flow again and the good times will return.
The mantra of the Cameron administration has, from the start,been that, "Reducing the deficit is a necessary precondition to growth". But is he right? In the UK, we have now had 18 months of essentially no growth and the latest forecast is for no growth this year. It is predicted that the UK won't get back to pre-recession levels until sometime in 2014. Already, this is this is the slowest recovery on record, including what happened after the Great Depression.
Years of economic greed, having more and wanting more, caused the subprime mortgage crisis and the European debt crisis. Perhaps we can learn from Iceland, a country that was bankrupt but has improved its economic status dramatically.
Iceland is now run predominately by women. Women know that the only way to run a fiscally responsible home is to balance incoming revenue with outgoing expenses. You don't need to be master of the universe or head of a country to figure out that a balanced chequebook, no matter how big it is, is, quite simply, the 'financially responsible' way forward. So, my advice to Prime Minister David Cameron: stay close to your female ally, German Chancellor Angela Merkel, stick with the austerity plan and no u-turns on what will be a painful but necessary process to a balanced budget.
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When financial institutions play by different rules to ensure profits for shareholders at the expense of middle class working taxpayers then it is not really austerity for all now, is it?
On the other hand the banks have a different approach , of not being fiscally responsible ,they get those who are, to carry the can for them, so lets not forget why we are, where we are.
When austerity puts people out of work and shrinks an economy its not rocket science that any debts you do have you have less money to reduce them with.
Then we have our advisors, one female for instance the head of the IMF, who pays no taxes on her salary while telling the Greeks they need to pay their taxes, yes good old female , good housekeeping.
So you either have not enough people paying in to cover debts or as a result of bank bail outs we are are spending too much. Wouldn't it make sense for those who caused the problem to repay the billions they extracted while creating the problem, lets make those responsible bankrupt not those who never borrowed a penny or did anything wreckless.
The current approach is to surreptitiously sell off the last few remaining assets, namely services, for which we pay through taxation.Although this will bring in some cash it reduces income even further, as the companies who "win" the contracts reduce wage levels, staffing levels and cut services in order to keep more of the cash. Much of the profit is not taxed, as these companies are expert at avoiding it. So, despite rhetoric on efficiency, we get even less income. All that is happening at the moment is a huge pile up of cash in the hands of a relatively small number, who won't invest it in useful ways, as they see no future in this. So we get deeper in debt with the added bonus of increased poverty and social unrest.
Current policies evidently won't work. We shall have to return to older ways of regulation of investment banking, taxing those who can pay, giving fiscal stimuli to SME's, supporting research and development and putting some money into projects for our future.
After all, we do live on a planet with finite resources and I, for one, do not wish to waste my one-and-only life converting those resources into largely pointless crap to enrich a very few.
I think segregating men and women into a "who is best" pot is wrong (sexist at worst). If you look at an individual female such as Merkel, then in this case, she may well be "better" than Cameron, but that won't always be the case when comparing a female to a male!
Take this statement "Women know that the only way to run a fiscally responsible home is to balance incoming revenue with outgoing expenses".... Clearly this is true of a proportion of women, but it is also true of probably an equal proportion of men.
Let's not generalise or pigeon hole here, shall we?
Money is certainly not wads of coloured paper, or plastic cards. And passing it hand to hand does not make more of it no matter how fast you do it.
So what is it?
I work, and get paid for my labour with colored bits of paper which are tokens of my muscle or brain output. I then take those tokens, and buy the results of someone else’s labour, whose work output I need: Food, fuel, medical care, whatever. Money becomes a token of energy output, it has no intrinsic value of its own; passing it around doesn’t create ‘wealth’ unless there is that constant input of effort no matter how big the amounts spent. Money has value only if it is supported by primary energy.
Our economic system really is that simple, and has worked that way through the entire history of civilization.
That’s why ‘printing money’ is effectively like trying to print energy. It doesn’t work
Our economy is driven by energy, not money; as energy declines our future is going to be very unpleasant when we find that out. http://www.yourmedievalfuture.com/