Deficits, Debts and Propaganda

June 30, 2010 by Walter Schneider.

Three new categories have been added to this blog:

deficit: ….1 a (1) : deficiency in amount or quality <a deficit in rainfall> (2) : a lack or impairment in a functional capacity <cognitive deficits> <a hearing deficit> b : disadvantage <scored two runs to overcome a 2–1 deficit>
2 a : an excess of expenditure over revenue b : a loss in business operations

debt: ….1 : sin, trespass
2 : something owed : obligation <unable to pay off his debts>
3 : a state of owing <deeply in debt>
4 : the common-law action for the recovery of money held to be due

propaganda: ….1 capitalized : a congregation of the Roman curia having jurisdiction over missionary territories and related institutions
2 : the spreading of ideas, information, or rumor for the purpose of helping or injuring an institution, a cause, or a person
3 : ideas, facts, or allegations spread deliberately to further one’s cause or to damage an opposing cause; also : a public action having such an effect

(The preceding definitions are quoted from Merriam Webster ONLINE.)

Over the years I made a good number of comments on this blog but I never once wrote anything about the term deficit.  A search for “debt” produced just two entries, one on the surprising tendency of  large number of instances of expensive “absolutely essential” new stadiums to turn into “old stadiums” that need to be disposed off and even demolished after relatively short intervals of service.  The other comment that had mentioned “debt” pertained to the Dec. 2009 Copenhagen Climate Summit, in which developing nations clamored that the developed nations had to atone for their climate debts through transfer of wealth from the latter to the former; as Carl Marx and his followers put it, “From those who have to those in need.”

Having followed the progress of the Toronto G-20 Summit, it became obvious that apparently nothing was said (at least not publically) by any of the G-20 leaders debating the health crisis of the world’s economy about the major cause of the financial crisis, namely the massive and escalating debt-financing that most of the world’s nations have become accustomed and addicted to.  The domestic and international mainstream media failed to pay any attention to that or, if otherwise, remained silent.

The riotous orgy of vandalism that we all saw much of and read much about had the (perhaps) desired effect.  Whether the effect was intentional or not, it diverted attention from what mattered, the absence of any discussion on what must be done to effectively cure the critically-sick world economy.

Things still did not quite crystallize in my mind in relation to that, but then something jogged me.  That was the recurring and all-pervasive assertion in the media that Stephen Harper hosted the Toronto G-20 Summit! That assertion, at least for me, is the key to understanding what is going on.

Was Stephen Harper not just the master of ceremonies, wasn’t it Canada (more correctly, its taxpayers) that was the host?  Wasn’t it Stephen Harper who was the organizer responsible for the fiasco that causes the Canadian taxpayers to shell out more than a billion dollars for the security measures that failed to prevent the calamitous consequences of the conjunction of rioters and plate glass windows in Canada’s largest metropolis?

A fraction of the cost of the inadequate security measures would have been more than sufficient to house the G-20 leaders and their media retinue in luxurious comfort in the far less expensive and far more effective security of one of many of Canada’s more appropriate and smaller localities.  Not only would it have required only a tiny fraction of the cost of the security fiasco in Toronto, but the facilities that would have been constructed in a much smaller location could have excluded some of the kitschy frills that were used to spice the mix, such as the construction of the fake lake.

Moreover, the facilities in a more suitable location could have been a permanent asset that could have been used time and again for any number of G-20 Summits slated to be held in Canada.

Rather than focusing on the failure of the Toronto G-20 Summit and the true cause of the economic crisis, the riots served as well as any well-planned propaganda action would.  The media gorged on the riots and largely ignored the failure of the Summit. The real problems with the economy remain largely unnoticed.  No plan at all to address them emerged.

How could that happen?  It was clear in my mind that the focus on “deficits” misses the point, that excessive debt-financing is the more important and primary issue that must be addressed, but why was and is that being overlooked? The assertions that Harper was the host of the Summit clinched it for me.  Propaganda is the unnoticed but essential component in the mix that caused the obvious lack of attention.

It has been quite a few years since I last tried determine the extent of Canada’s government debt.  The federal deficit was then at about $600 billion, but the total debt (by all three levels of government) was about $3.5 trillion dollars. It would surprise me if that debt load had decreased to less than $3 trillion dollars by now.  It would not surprise me if the figure would be the same or even a bit higher than $3.5 trillion.  After all, the demand on the Canada Pension plan, for example, has increased substantially from the time a few years ago.

The media’s take on all of that is that Canada needs to be commended for having a deficit of only $59 billion.  That is like ignoring the elephant in the china store.

Things are no better in the U.S.  A few years ago, the total U.S. national debt, including inter-state transfer payments, had reached $46 trillion.  Correct me if I am wrong, but I recall that just in his first few months in office Barack Obama added about $11 trillion to that pile of debt.  So what is the use of drawing attention to the fact that the U.S. annual federal deficit now regularly exceeds $1 trillion and to suggest that it would be a good idea to cut that in half by about three years from now?  That doesn’t even feed more than just a few peanuts to the much bigger elephant that is being ignored.

However, that is an example of what effective propaganda can achieve.  It diverts attention from important, vital and essential issues.

My wife relishes an anecdote that shows how even very young children know how to apply propaganda tactics.  More than 30 years ago she babysat a little girl who had committed a fairly serious transgression over which the girl’s father was trying to take her to task.  The girl’s reaction was to divert her father’s attention by pointing at the kitchen window and to exclaim, “Daddy! Daddy, look at the bird!”

Our “leaders” and their media retinue who glorify our leaders’ soft, weak and considerably meaningless promises do something similar by saying, “Oh, look at the deficit!”

A budget is a plan for how much we will pay on our financial obligations.  The objective of a budget is that the amount of money paid out over the budget period will be equal to what was budgeted for.  If we fail to budget properly, or if we pay little attention to what the budget requires, we will have a deficit or a surplus at the end of the budget period.  However, all that means is that we either planned correctly and paid according to plan, or, if there is a deficit at the end of the budget period, that we did not live up to what we promised to ourselves and to others about our financial performance.  If money is left over at the end of the budget period, we either paid little attention to what the budget required, or we did a lousy job of budgeting. In any case, it says nothing about whether our debtors will be forced to call in their loans and foreclose on us.

It remains to be seen whether the next G-20 Summit in November will produce something more concrete than non-binding promises to cut deficits.  No-one should get their hopes up that it will, but a few things are certain.  The media will glory in a propagandist orgy and assure everyone that the outcome will be good.  The taxpayers, as always, will foot the bill for the November Summit and its consequences, while we all accelerate our slide down to Hell in a hand-basket.

–Walter Schneider

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