this post was submitted on 28 Oct 2024
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Image is from this SCMP article.
Much of the analysis below is sourced from Michael Roberts' great website.
Japan's ruling parliamentary coalition, consisting of the LDP (purple) and it's junior coalition partner Komeito (in light pink) have lost their ruling majority. They have ruled post-war Japan for almost its entire history. The LDP is currently led by Shigeru Ishiba after Kishida stood down due to a corruption scandal, and ties to the Unification Church.
While geopolitical factors (over the cold war between the US and China, etc) may have played a role, by far the biggest reason for this result in the poor economic conditions over the past few years. Inflation has risen and real wages have fallen, with little relief for the working class via things like tax reductions. While inequality in Japan is not as extreme as in America, it is still profound, with the top 10% possessing 60% of the wealth, while the bottom 50% possess just 5%.
Shinzo Abe previously tried to boost economic performance through monetary easing and fiscal deficits, while Kishida ran on a "new capitalism" which rejected Abe's neoliberalism and promised to reduce inequality. Nothing substantial has resulted from all this, however, other than increasing corporate wealth. Innovation continues to fall, and domestic profitability is low, resulting in decreasing investment at home by Japanese corporations. Labour productivity growth has only slightly picked up since the mid-2000s and is falling again. The rate of profit has fallen by half since the 1960s, and Japan has been in a manufacturing recession - or very close to it - since late 2022. In essence: there is no choice but between stagnation or decline.
Please check out the HexAtlas!
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The RSS feed is here.
Last week's thread is here.
Israel-Palestine Conflict
Sources on the fighting in Palestine against Israel. In general, CW for footage of battles, explosions, dead people, and so on:
UNRWA reports on Israel's destruction and siege of Gaza and the West Bank.
English-language Palestinian Marxist-Leninist twitter account. Alt here.
English-language twitter account that collates news.
Arab-language twitter account with videos and images of fighting.
English-language (with some Arab retweets) Twitter account based in Lebanon. - Telegram is @IbnRiad.
English-language Palestinian Twitter account which reports on news from the Resistance Axis. - Telegram is @EyesOnSouth.
English-language Twitter account in the same group as the previous two. - Telegram here.
English-language PalestineResist telegram channel.
More telegram channels here for those interested.
Russia-Ukraine Conflict
Examples of Ukrainian Nazis and fascists
Examples of racism/euro-centrism during the Russia-Ukraine conflict
Sources:
Defense Politics Asia's youtube channel and their map. Their youtube channel has substantially diminished in quality but the map is still useful.
Moon of Alabama, which tends to have interesting analysis. Avoid the comment section.
Understanding War and the Saker: reactionary sources that have occasional insights on the war.
Alexander Mercouris, who does daily videos on the conflict. While he is a reactionary and surrounds himself with likeminded people, his daily update videos are relatively brainworm-free and good if you don't want to follow Russian telegram channels to get news. He also co-hosts The Duran, which is more explicitly conservative, racist, sexist, transphobic, anti-communist, etc when guests are invited on, but is just about tolerable when it's just the two of them if you want a little more analysis.
Simplicius, who publishes on Substack. Like others, his political analysis should be soundly ignored, but his knowledge of weaponry and military strategy is generally quite good.
On the ground: Patrick Lancaster, an independent and very good journalist reporting in the warzone on the separatists' side.
Unedited videos of Russian/Ukrainian press conferences and speeches.
Pro-Russian Telegram Channels:
Again, CW for anti-LGBT and racist, sexist, etc speech, as well as combat footage.
https://t.me/aleksandr_skif ~ DPR's former Defense Minister and Colonel in the DPR's forces. Russian language.
https://t.me/Slavyangrad ~ A few different pro-Russian people gather frequent content for this channel (~100 posts per day), some socialist, but all socially reactionary. If you can only tolerate using one Russian telegram channel, I would recommend this one.
https://t.me/s/levigodman ~ Does daily update posts.
https://t.me/patricklancasternewstoday ~ Patrick Lancaster's telegram channel.
https://t.me/gonzowarr ~ A big Russian commentator.
https://t.me/rybar ~ One of, if not the, biggest Russian telegram channels focussing on the war out there. Actually quite balanced, maybe even pessimistic about Russia. Produces interesting and useful maps.
https://t.me/epoddubny ~ Russian language.
https://t.me/boris_rozhin ~ Russian language.
https://t.me/mod_russia_en ~ Russian Ministry of Defense. Does daily, if rather bland updates on the number of Ukrainians killed, etc. The figures appear to be approximately accurate; if you want, reduce all numbers by 25% as a 'propaganda tax', if you don't believe them. Does not cover everything, for obvious reasons, and virtually never details Russian losses.
https://t.me/UkraineHumanRightsAbuses ~ Pro-Russian, documents abuses that Ukraine commits.
Pro-Ukraine Telegram Channels:
Almost every Western media outlet.
https://discord.gg/projectowl ~ Pro-Ukrainian OSINT Discord.
https://t.me/ice_inii ~ Alleged Ukrainian account with a rather cynical take on the entire thing.
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The US government takes dollars from US taxpayers and points to the military budget as part of the reason why.
If this is a "fundamental misunderstanding of what the US military's purpose" is, what is?
Sorry, this is just flat out wrong. Michael Hudson’s Super Imperialism had thoroughly dissected how the US can uniquely fund hundreds of military bases around the world simply through recycling the excess dollars spent overseas back into US treasuries.
Governments with monetary sovereignty aren’t funded by taxes. If you’re US citizen who earns dollars, then those dollars are simply “tax credits”. All of the dollars in your bank account belongs to the US Federal Government, who reserves the right to take away your money (usually through tax hikes) because you never owned them in the first place!
When you pay your taxes, they don’t go into funding government programs. Your money gets destroyed in the Treasury.
Instead, you use the extra “tax credits” (money not being taxed yet) to obtain real goods and services that you can use, consume and enjoy. The government controls how much treats you can get simply by adjusting how much “tax credits” you can have. When the government raises taxes, you get less “tax credits” to buy stuff to consume. Similarly, when the government reduces deficit spending, there are less “tax credits” being circulated in the economy, and so you (and everyone) get less “tax credits” to buy stuff.
The Republicans are king at deficit spending - but the money goes to the military industrial complex instead of public infrastructures that benefit the working people. Biden’s interest rate hike over the past two years also paid out interests mostly to rich people, while poor working class people are being squeezed harder than ever. This is the power of the State - they can do whatever they see fit with the currency simply by spending where it matters (to them).
The same goes for billionaires. None of Elon Musk’s money belongs to him. They all belong to the US Federal Government, who reserves the right to confiscate every single dollar that Elon Musk “owns” if it ever wishes to do so. The government does not need a single dollar from Elon Musk to fund its spending, it can print the dollar any time it wants! The government can tax billionaires because they simply want to, not because they need the billionaires’ money. This is the power of the State.
From the perspective of the government, money and taxation are simply tools to shape the socioeconomic activities. If some segment of the society has accumulated too much wealth, then taxation can be used to decrease inequality. If the government wants to punish bad behavior (smoking, public hazard etc.), then taxes are incurred on such products to discourage consumption.
Remember, money is debt, and debt is just promise. Money has no inherent value (Michael Hudson would literally call you a fascist if you believe in such nonsense lol - a few years back during an online discussion, he suddenly lost it when a random person in the audience asked this innocuous question and got called a fascist by Hudson lol) - it is simply debt/promise from the government (hence “government debt”).
Once you have made this fundamental shift in understanding how money (debt) works, you will understand how powerful the State truly is over Private Capital. And once you have realized how the dollar is a global reserve currency that is not tied to anything (i.e. fiat instead of gold standard during the British Empire), then you will understand how much power the US State has over the rest of the world.
There is no actual destruction of money being done this way, unless the relevant units are too damaged. The taxed money is either put into the treasury or it is returned into circulation through a budget.
On that note, it doesn't matter where money came from with regards to a budget, so when people say that some part of a budget if funded by some specific money (in the short term, at least), they are being silly.
I'd also say that the points about money that individual people have being 'tax credit' are not informative.
However, yes, the obsession with calling money 'taxpayer money' is rather silly, and it should be recognised that money is something issued by a government in order to reliably distribute various goods/services in a society. A state could, indeed, decide to maintain its military in many different ways, including with no budget, depending on how it sets up its economy. (However, it should be noted that it does depend on how the economy is set up. Capitalist states generally need to pay wages/salaries to its military, as well as buy equipment and/or resources to make equipment with for the military, which necessitates usage of money, and simply issuing more money without an increase in productive capacity would mean a reduction in the ability of money to guarantee one goods and services.)
I do have to say that you did not make the relevant points clear for other people. It isn't going to be clear to people what sort of a shift in understanding you are talking about there in the end.
Where did this come from?
When government taxes, the liability of the central bank (L1, monetary base) falls and so too did its asset (A1, claims on non-federal sector) and so it is balanced out. There is no direct link between taxed money and budget spending (you don’t move money from one account to another like you’d do when you buy stuff).
The only reason why taxes were needed to “finance” government spending was that during the gold standard era, the currency was tied to gold (or another currency/commodity). This means that to attract and to promote the usage of the currency, the government promises the exchange of your currency to gold at a certain rate, and so it increases the confidence in the people who were skeptical about your currency.
The problem here is that the government now needs to maintain a gold reserve in order to defend that exchange rate - if it cannot fulfill this promise, then the government has to default (or the currency is depreciated i.e. exchange rate drops).
Let’s say the government has $10 billion worth of gold reserve. If you want to spend $1 billion extra to build a hospital, you have to print an $1 billion worth of currency into the circulation (to hire laborers, to buy raw materials, to buy equipments and import technology etc.) You now have $11 billion currency in the economy but only $10 billion worth of gold reserve.
Without increasing your gold reserve (dig, buy, steal), this means you either have to depreciate your currency, or you have to take that $1 billion excess money out of the circulation so you only have $10 billion total in the economy in order to fulfill the promise of defending a certain exchange rate. You now have to tax $1 billion from the citizens, not to finance building the hospital, but to take the money out of the circulation while you create an extra billion to pay the people and buy the stuff needed to build the hospital. The taxed money is deleted/destroyed once they go back into the Treasury. New money is created to pay the people building the hospital. There is no “transfer” of money from one account into another.
An alternative is through government bonds. Instead of taxation where money is deleted, the government promises to take your money to store them safely for a few years and pay you back with interests, and in return you are not allowed to use the money during those years. This is called the “government issuing bonds/debt” - it has the similar effect of taking $1 billion out of the circulation, except that the $1 billion is not destroyed, they are “kept” safely in the form of treasury securities (bonds) and returned to you in a few years’ time once matured.
Government debt here means the government promises to return your money with interest, it doesn’t mean you lend your money to the government to finance spending. The government doesn’t owe you shit, your money has always belonged to the government. Remember, money is just debt, and debt is just a promise.
As you can see, there is no fiscal or monetary operation that directly takes money from the “tax account” and puts it into the “spending account”. The connection was mostly due to the restrictions during the gold standard eras. But these days, most currencies are fiat and they are no longer constrained by the same limitations.
Finally, an explanation for what people mean when they say that 'money is destroyed' when it is taxed. However, all this means is just that money is taken out of circulation, which is much better explained in just those words - that less money stays in circulation.
There isn't a direct transference from accounts, but there is the fact that a government is forced to maintain a balance of its revenues (which include taxation) and budgets. That means that revenues (including taxation, which is a major part of every government's revenue) and budgets are not completely separate things that exist independently of each other.
In any case, it's rather silly to go for the sensationalist 'money is destroyed upon being taxed!' instead of going with the much more informative 'money is taken out of circulation'.
There is also the whole thing regarding the need for maintenance of balance between revenues and budgets, which is a basic macroeconomic fact.
The rest of what you say in the comment (apart from yet another insistence on money being destroyed) isn't controversial and is, in fact, covered/touched upon in my other posts in different wording.
They are destroyed when taxed. They are taken out of the circulation when used to purchase debts. Very important difference here. Not understanding this key difference is why so many leftists continue to regurgitate neoclassical myths. Remember, money is just debt.
Show me a source for the claim that notes and coins get destroyed or clarify what you mean by money getting destroyed and how that is different from it being taken out of circulation.
Unless I missed how governments routinely waste energy and resources on burning non-damaged bank notes just to make almost exact same things at the same time instead of just re-using them, it doesn't seem like any actual destruction is happening, and all that does is how much money remains in circulation.
Also, money is obviously not literally just debt. It is very liquid capital that serves as an exchange equivalent for goods and services. Also, I'd like to ask, in what sense is counterfeit money - which is still money - 'just debt'?
At the very least, you are being extremely uninformative, and you seem to be either unwilling or unable to elaborate on your claims.
Physical notes and coins comprise only a very small percentage (<10%) of total dollar in circulation. Most people pay taxes through their bank accounts (or having their wages withheld for tax purpose).
It all happens in the banking system - it’s like an Excel spreadsheet: when you pay taxes, your bank simply subtract the number on your bank account and the add the number on the Treasury account by changing the numbers, which are then deleted on the Treasury side to balance out the sheet (to account for the taxation). They are just numbers - that are deleted (disappeared) once you have paid your taxes.
It has nothing to do with needing to tax billionaires to fund spending. The government simply delete the tax money on the “spreadsheet” once it has been paid.
Read David Graeber’s Debt: the First 5000 Years. It will change your perspective completely on this subject.
And?
Firstly, you are now just trying to arbitrarily claim that physical money somehow doesn't count.
Secondly, 10% is not a 'very small percentage'. Thirdly, I can just as well point to the fact that the physical Russian ruble sums up to more than 20% of cashless ruble in M0. Now what?
Meaning that, at best, there is no distinction between saying 'money is destroyed' and 'money is taken out of circulation', contrary to your claim that that is not the case.
So far, you have not explained how the analogy of 'money is destroyed' (which is false in the usual literal sense, obviously) is more informative than saying 'money is taken out of circulation'.
If you are going to ignore the basics of macroeconomics and claim that governments can just pick whatever budgets they want at any point, especially under capitalism where said capitalists can just hike up the prices or otherwise realise their stranglehold on a given economy, then I'd like to ask why, you think, a government that maintains a capitalist economy can't just say 'no' to inflation? And what do you think would happen in a planned economy if the government were to just issue more money for salaries/wages without raising prices?
So, it's not destroyed, then. It is just removed from circulation.
I have several thousands of pages of very dense material to read as it is (including on finance specifically). I will not have much time for that one for at least a couple of years, and I don't see how that book would change my perspective, considering that 'money is just debt' is literally at best an extreme oversimplification and is overwhelmingly likely not something that the Graeber thought himself in a literal sense.
Also, I am going to note that you were either unwilling or unable to elaborate on what sort of debt counterfeit money is. Also, I am going to note that you have been either unwilling or unable to actually explain how money is 'destroyed' upon being taxed, and not simply removed from circulation.
I maintain that the claim that money is destroyed is silly , and less informative than just saying that money is taken out of circulation.
how
Double entry book keeping that sums to zero. You can find a better description, but it's something like this:
Government spends first, telling treasury to increase numbers in appropriate accounts. The treasury "withdraws" money from the Fed, which is also the state, creating a deposit from the left pocket to the right, and from the right pocked to the left. When taxes are payed, the treasury can "return" the money, wiping the spending from circulation. If the Fed sells debt, it can only be payed with money on the same currency that was already spent into existence. Loaning also creates money in the form of extra debt, but that debt can only be payed if it is spent into existence.
That means that the money is not destroyed. Equating destruction of money with taking money from circulation and putting it into what is effectively a government's savings is incredibly silly and non-informative.
The only savings are the paper, if it's physical money. The consolidated government reduces and increases the total value of reserves when needed either way.
Notably, physical money is still in use.
I maintain that the 'money is destroyed' analogy is silly and uninformative. It is much better to just say specifically what you mean - that money is taken out of circulation.
spreadsheet magic lol. simply adding or subtracting the numbers like you’d do in Excel.
Ok people pay taxes, the money goes to the government, it gets allocated and used elsewhere. then you're saying they just fudge the numbers at the treasury to make taxes be cancelled out? To have this manipulation, the people doing the manipulation must be cognizant of this process, but acknowledged processes are not how capitalism works, so what is the magic trick here? How does this money destruction take place and what is the rationale that the treasury uses for it?
https://www.law.georgetown.edu/environmental-law-review/blog/federal-taxes-do-not-finance-spending-and-cost-benefit-analysis-must-change/
It doesn't answer the question, just reiterates what is said. Saying taxation destroys the currency is good and all but it's fundamentally untrue, because taxes do go somewhere in the end. They get allocated, reallocated, and spent elsewhere. They do not cease to exist. I am open to being proven wrong.
They don't. You can't tag a particular dollar and follow it as it leaves a taxpayer's account, goes into a government account, gets allocated to a particular item of the budget, and then gets spent out again into the economy. When a dollar is taxed, it basically goes into a furnace and disappears. Separately, dollars are conjured out of thin air and sent into the economy by the government.
The amount of dollars thrown in the furnace in a given day are tallied, sure. But that doesn't determine the amount of dollars the government can create, it only informs it. The government can create as many dollars as it likes at will.
You actually can. However, that's actually not relevant, as you seem to misunderstand what the other person is saying.
Also, if you were correct, it wouldn't be possible to say that money is destroyed in the first place, making What_Religion_R_They correct.
It doesn't. It gets reallocated. The fact that we supposedly can't trace it (marking physical currency and following electronic transactions is a thing) doesn't change that fact. The supply of money in the circulation+savings+treasury does not magically decrease.
Read the explanation I wrote here
So that's a long post before I read it, can you confirm that you've read my much smaller little bit of text?
I'm not saying that taxes "pay" for the military ("oh no my numbers don't add up on both sides of the balance sheet!!")
But the US government taxes money from people, destroys it and points to the military budget as part of the reason.
I don’t understand the argument, where did the US government say they can’t spend on public infrastructure because money has gone into military?
Literally all the time?
The liberal hand wringers say the military budget needs to be cut to fund public goods and services, and the deficit hawks say public services and government must be cut down to the bare essentials (military and courts)
Sure, but taxes are just to prove creditworthiness for bond sales. Governments are not funded by taxes. The US military's primary purposes are to generate capital for the shareholders of defense contractors and be a big enough stick to threaten allies that don't use dollars to buy Treasury bonds. All the other stuff, wars included, is secondary.
All great in theory until another war occurs where their interests are greatly at stake, and they cannot achieve strategic victory. Until the myth of dominance fades and the world goes wild, defying the US in every corner of Africa, South America, Europe and Asia. Until the entire thing implodes or is defeated in the field to the point it must concede major losses
Agreed, but losing Iraq and Afghanistan and Vietnam and Korea hasn't seemed to dent the United States ability to force its allies to keep buying Treasuries. It'll implode eventually, empires always do, but it's more resilient than I'd like.
Even the loses can be fucking intimidating, especially when there's a U.S. military base around every corner (and "guest" troops in "your" military base when there isn't one that technically belongs to the empire).
It's like when you take some ex-employer to court, and have a rock-solid case about retaliation or illegal discrimination or whatever, but the legal proceedings take many years, all you get is some lousy back-wages and a notice posted on the corporation's break room for a while, and you just want the whole thing to be fucking over now that you've had to move on and deal with yet another fucking boss for a good portion of your life on top of the legal battle. It has a pretty devastating effect on you even if you technically "win". Whether it's capitalists or their empire you are fighting, there's a lot of machinery towering over you.
I agree generally but the country controlling the global reserve currency doesn't need to care about convincing future creditors.
Threatening allies and maintaining the international economic system is still important and something the US military is doing increasingly poorly with.