Tuesday, April 24, 2018

Joaquin Flores — ‘Oligarch’? Putin decrees a massive budget-doubling of socialized healthcare

Health care and infrastructure. 

How to pay for it? "We'll figure that out later."

So much for affordability versus the common good and general welfare.

Russia takes a cue from China?

Fort Russ
‘Oligarch’? Putin decrees a massive budget-doubling of socialized healthcare
Joaquin Flores


Konrad said...

“Fort Russ News” is out of Belgrade Serbia. The main source for the above item is Bloomberg, which cites no names, and nothing verifiable.

FROM BLOOMBERG: “How much of the latest spending increases would be offset by cuts in other spending and tax hikes isn’t yet clear, according to the people. The recent rise in oil prices could ease the financial pressure on the Kremlin, potentially pushing the budget into surplus this year.”


First of all, the Russian government creates infinite rubles out of thin air. Therefore if the Russian government wants to increase its spending on healthcare and infrastructure, then the Russian government has no need to “offset spending,” and no need to increase taxes.

Second, it is true that oil prices have been rising (from $44.33 per barrel on 21 June 2017 to $74.40 today) -- but this is irrelevant. Russia sells oil in exchange for foreign currency, which Russia uses to buy imports. If Russian government wants to increase domestic spending on healthcare and infrastructure, then this domestic spending would not be in foreign currency, but in domestic rubles, which the Russian government creates out of thin air. Bloomberg's talk of an oil-based "budget surplus" is meaningless.

It is typical of corporate media outlets to never specify whether they are talking about foreign or domestic currency. They intentionally do this in order to keep the masses confused and enslaved. Another trick is to call their bullshit propaganda a “study” or a “report.” Another trick is to cite unnamed “experts” and “people familiar with the plan,” as Bloomberg does.

Unfortunately RT repeats the same nonsense from the same Bloomberg post...

So does Pravda and many other blogs. All are questionable, since the original Bloomberg post is questionable.

Today RT added a new post in which Dmitry Peskov (Putin’s spokesperson and deputy head of Russian presidential administration) says that all these figures are erroneous, since the Kremlin has not yet decided on the Russian state budget.

Joaquin Flores of FRN adds: “How to finance such expenses, officials have not yet decided. Most likely there will be no sources of funds in the decrees, the official said. Where the money will come from, the new government will decide at that time.”

The rubles will come from thin air, like they always do. The Russian government can finance an infinite amount of domestic spending, limited only by the potential for inflation. This is basic MMT.

ORIGINAL BLOOMBERG POST: https://www.bloomberg.com/news/articles/2018-04-23/putin-said-to-back-162-billion-spending-spree-for-new-term

Tom Hickey said...

I don't know whether Putin understands MMT, but if he does, he is not talking about it. Like the Chinese, who do understand judging from their behavior, but they just do it and don't talk about it.

Konrad said...

TOM HICKEY WRITES: "They just do it and don't talk about it."


This describes one of the differences between the Western Empire on one side, and Russia / China on the other.

At the UN Security Council, for example, the certifiably insane Nikki Haley shrieks her endless threats, insults, and diatribes, while the Russian delegation quietly stares at her in pity.

Some people want Haley to run for US president. She would be a perfect fit. A total psychopath representing a psychopathic nation.

Noah Way said...

Why let the cat out of the bag? It gives Russia and China a huge step up over the US.

They are busy building vibrant societies while we are busy burning ours down so the already way-too-rich can get even fatter.

Konrad said...

@ Noah Wray: this is why I say that neoliberalism is a cancer. Neoliberalism allows the cancer cells (i.e. the rich oligarchs) to suck up all money and energy.

Because of the cancer, the USA is becoming like an orange that was left to dry in the desert sun. On the outside, the orange appears somewhat intact. On the inside, it is black, hollow, and burnt to a crisp. If you pick it up, it crumbles in your hands.

This is what will happen to the USA if we go to a full scale war with Russia and China, even if nukes are not used.

Kaivey said...

My feelings entirely. If Russia and China did as the West did there would be an uproar in our media, and the Western people would be very scared indeed. We would feel as if we are dealing with something incredibly evil.

So the US goes into Afghanistan to get Bin Laden and his team of bandits that live in the mountains. (Where Bin Laden had previously been paid by the CIA to develop his mercenary army and had made millions out of it). The Taliban offered to Bin Laden, but only if he was tried in an international court, but the US ignored this and went in and bombed the place to the ground anyway. What wild we say if China or Russia does this to a country?

The same goes for Iraq. Our was said that Saddam had WMD but after the US army in, and tortured thousands of people trying to find some WMD, Washington and the UK Parliament, said they had been given faulty intelligence. If this was Russia and China, who would believe that? And David Kelly, who was going to say that Iraq had no MMD, was found hung in the woods in an apparent suicide just before could say anything. The British and Americans have never been concerned, but imagine is something similar happened in Putin's Russia?

The US blanket bombed South East Asia with napalm and prosperous killings millions, destroying a continent, imagine if China or Russia has done that.

Yeah, the so called good guys had done this for a 'greater good'. It's a joke, you can't get more evil. How does the US get away with it? Propaganda which we are drilled with all our lives. And now I realise everything we were told after WW2 was a lie too. We were just as evil as the Germans.

Konrad said...

KAIVEY WRITES: “And now I realize everything we were told after WW2 was a lie too. We were just as evil as the Germans.”


Here is how 99.99% of people think…

THEM: In any war between equals, the victors always write the history books, and always portray themselves as saints, while they depict the vanquished as demons.

YOU: Always? There are no exceptions? Not ever?

THEM: Not ever. Not anywhere. There are no exceptions.

YOU: Okay, what about our nonstop vilification of National Socialist Germany?

THEM: That’s an exception.

The “holocaust” is a get-out-of-jail-free card not just for Jews, but for everyone. No matter how many millions of people the USA exterminates, we are STILL better than those ebil, ebil Nazis. No matter how depraved and impoverished Western society becomes, it is still better than ebil, ebil NS Germany.

The USA dropped more bomb tonnage in Vietnam than did all belligerents worldwide during all of WW II. And yet the USA is still better than them ebil Naht-sees.

Our hypocrisy is infinite.

For the UK and USA, the war with Japan ended in 1945, but the war with National Socialist Germany continues to this day.

Incidentally the U.S. did not invade Afghanistan to get Bin Laden, but to start up a vast opium production project. There are two places where opium poppies grow best. One is the erstwhile “Golden Triangle” region in Asia, which the USA operated during the War on Vietnam, and which local nations shut down after the war. The other place is the “Golden Crescent” which includes Afghanistan. The USA started opium / heroin production there in 2001. (Check out “Golden Crescent” on Wikipedia.)

In 1991, Afghanistan became the world's primary opium producer, surpassing Myanmar, formerly the world leader in opium production. The Taliban shut it down in Afghanistan, so the USA invaded in 2001 and started it up again.

As for Myanmar, it is constantly vilified by the USA fir shutting down its heroin production.

Kaivey said...

I agree with you, Konrad. When I first contributed to MNE'S I was accused by some of being a conspiracy theorist so I tend to be careful. I'm not a conspiracy theorist, I'm on the left and I'm not paranoid, but I have come to believe that the ruling elite are capable of anything.

Now this is weird, and I know what to mate of it, and I've never been able to find this clip again either. But I saw a speech of Hitler complaining of the barbarism of the UK and the US as they firebombed German cities. He said he had refused to retaliate until now and the German audience got up and applauded him. It was then they he started blitzing London.

I put out a documentary here once about how the allies firebombed the German cities and millions of people were burnt alive. Many run into the parks for safety but the allies in their fighter jets gunned them down, women and children too. Churchill deliberately chose working class areas because they were more closely populated and so it would kill more people.

The Russians lost 20 million people in WW2 and when they went into Germany the troops went on a rampage. The allies did the same coming in from the West. There was mass rape and murder.

The elite caused this war, and many made a lot of money out of it. This is why I think they are capable of anything. Churchill starved to death 3 million Indians during WW2 when he took away their good to give to his troops.

In the 'War Effort' many Britains worked for nothing on the armament factories, but the factory owners offered no discount on the weapons. Britain was broke after the war, but I wonder if the elite factory owners were.

mike norman said...

Putin believes that Russia needs to run budget surpluses so this will be neutral at best. The "spending" will certainly come with cuts in other areas (military--stupid, particularly now when the West is on a mission to destroy you) and sales taxes.

And as a further example of how dumb Putin is, he buys gold, which is a direct subsidy to his oligarch friends in the mining business, when that spending could already be used for the infrastructure and health care investments he proposes.

Konrad said...

KAIVEY WRITES: “I've never been able to find this clip again, but I saw a speech of Hitler complaining of the barbarism of the UK and the US as they firebombed German cities. He said he had refused to retaliate until now and the German audience got up and applauded him. It was then they he started blitzing London.”

As soon as Churchill became prime minister on 10 May 1940, he ordered British bombers to start attacking German targets in the hope that Germany would retaliate, so Churchill would have proof of “Hitler’s evil." British bombers kept coming for two months, but Hitler did not retaliate. Hitler wanted to avoid war with England at all costs, and he hoped that by not responding, he would show England that he was not their enemy. Indeed, Hitler had let the British expeditionary force leave in peace after they lost in Norway, and then leave France in peace after they lost in France. (Dunkirk was only one of five places where allied troops departed in peace.) Unfortunately Hitler underestimated Churchill’s psychosis.

Although Hitler had allowed the British troops to leave in peace, the British continued to bomb Germany, creating so much political pressure for Hitler than eventually he was forced to respond, starting with British airfields. The so-called “Battle of Britain” was on. (10 July 1940). By late August, British bombers were directly targeting German civilians. Berlin was bombed for seven nights in a row, after which Hitler gave a famous speech (4 Sep 1940) at the Berlin Sportpalast, a multi-purpose indoor arena (demolished in 1973). Hitler said if Britain insisted on bombing civilians, then Germany was forced to reply in kind.

Meanwhile by mid-October 1940, Stalin had massed his armies in the east, clearly planning to invade and conquer all of Europe, including Britain. By 31 Oct 1940, Hitler decided to break off the war with Britain so he could prepare for the coming invasion by the Red Army. Britain declared that it had “won” the “Battle of Britain.” By June 1941 Stalin was days away from ordering his Europe-wide offensive, but Hitler struck first (Operation Barbarossa, 22 June 1941), thereby saving Western Europe (including Britain) from Soviet domination.

Eventually Germany lost the war. Therefore Germany was “evil.” Churchill’s buddy Stalin also became “evil” as soon as the war ended. To this day the Western Empire claims that Hitler wanted to “conquer the world,” just like Hezbollah does, and Hamas, the US-backed “ISIS” and al Qaeda, Palestinians, Yemenis, Somalis, Venezuela’s government, North Korea, Russia, etc etc etc etc. They all want to “conquer the world.” :-)

Konrad said...

MIKE NORMAN Writes: “And as a further example of how dumb Putin is, he buys gold, which is a direct subsidy to his oligarch friends in the mining business, when that spending could already be used for the infrastructure and health care investments he proposes.”

This may not be as dumb as it seems. The US government has no need to buy or sell gold, since the U.S. government is monetarily sovereign, and the U.S. dollar is accepted worldwide. Same with British pounds, and with Australian and Canadian dollars.

The Russian government likewise is monetarily sovereign. However Russian rubles are not widely accepted outside Russian borders. Therefore Russia needs foreign currency with which to buy imports (unlike the UK or USA, which do not need foreign currency). Sometimes Russia must borrow foreign currency, depending on economic cycles, production cycles, and so on. Borrowing foreign currency includes the sale of Russian sovereign bonds.

Might not gold serve as Russian collateral for such loans, and for Russian securities? Just asking.

Tom Hickey said...

Russia and China are acquiring gold through their central banks for several reasons.

1. Part of de-dollarization. Save in gold rather than foreign currency.

2. Gives the appearance of a sound currency. Perception is reality.

3. When the central banks buys gold from domestic producers, as in Russia and China, the cb credits bank accounts with more of the domestic unit of account. This is stimulative fiscally. It's a quasi-fiscal operation by the cb, like paying interest on reserves.