Eric V. Encina

U. S. President Obama is presenting all the positive sides of the "stimulus package" and pushing its ratification in the halls of Congress. Likewise, the Philippine President Marcapagal is carrying out a comparable program to uplift his own country's ailing economy, create jobs and save the financial system from total collapse. However, the problem with the stimulus packages created by these two leaders is that the money to be used to jumpstart business activities, obviously, provides a "band-aid remedy" coming from borrowings and taxes, which will create the same results of crisis in the long run except that it will be even bigger and more catastrophic. Therefore, the best kind of repair for the economic downturn is the creation of debt free money by governments' financial arms.

In short, why not provide the stimulus packages directly to the people who create the wealth through labor rather than to the bankers and other financial managers, who do practically nothing other than receive bonuses and other sorts of compensation benefits in the millions of dollars? Besides, it was the bankers and other speculators who created many of the problems in the first place. So, who is to say that they won't do so again?

Acute money crisis and stimulus packages:

Indeed all over the world, government leaders are undertaking activities to limit large scale fiscal ruin during which they are unveiling similar stimulus packages to shore up their ailing economies from recession and depression. Concurrently, endless debates and arguments are going on concerning whether or not to push through the measures other than tax cuts, direct subsidies to the poor, bail-out for banks and other key financial institutions, etc.

Yet, who will benefit from these plans? Surely, it is not the workers whose livelihoods, food supply, healthcare and homes are at risk to disappear.

Many so-called experts in economics, who often are only good in predictions while doing nothing to ease the burdens to the poor, are perfectly contented to predict a crisis, such as the one that is happening right now in relation to unemployment and the downtrend in the economic activity. They rarely, if ever, offer advise about any feasible resolutions to the predicaments faced by the masses.

And even in the issue of job losses, the Philippine governmental leaders, for example, have financed the debt and consistently taken the side of the big corporations rather than the marginalized sectors of society. In other words, the action needed now is to have the money in the hands of the public to really foment growth and provide for sustainable living.

Therefore, the Philippine government must revamp its business model away from being oriented towards imports (which further drain finances out of the country), based on foreign investments and involved with a debt-logged monetary system. As such, the best alternative is debt free money creation that will prioritize domestic needs while doing so for people's interest and development over the banking institutions and multinational corporations that are guaranteed to siphon money into the hands of the ultra-wealthy.

Moreover, the Philippine Government's 2009 P1.415 Trillion Budget with P700.6 Billion interest payments, wrecked by budget and trade deficits will not be enough to see such a plan take place. This is because the budget is coming from private, foreign, international loans at high interest from the forcible taxes with which citizens are ultimately burdened.

At the same time, the 2010 Philippine Presidential Candidates are likely going to repeat the history of debt and poverty in the Philippines. These candidates have their billions of pesos and have money campaign machinations to fool the Filipinos.

The problem is that they are all the same sorts of plans under debt finance and taxes for the benefit of the transnational banking, agricultural and industrial consortiums rather than their meeting the desperate needs of the common Filipinos. This is nearly always the pattern in the state of economic and financial disasters in the sense that the downtrodden always get worse conditions while the upper most affluent group "make out like bandits" through commandeering the wealth and, in the end, control of resources on a worldwide scale.

HOW CAN WE SURVIVE?

What is the cardinal rule to survive? Pure survival, rather than focus on any other orientation, is said to be a basic instinct of man when hard times strike. On account, it brings out the worse or best in us.

As such, today's global recession to depression, now really deepening and going into overdrive, is compelling us to think of any ways and means to ride out the financial-economic tornado. Yet how can we do so when there are no opportunities available? How can we do so when everything is "business as usual?"

Moreover, it most surely is "business as usual" with the same out patterns present that got us all into this current dilemma in the first place. Meanwhile, the ripple effects of the crisis continue lamentably right around the world.

On account, personal efforts are not enough to handle the ongoing worsening conditions. Consequently, there must be government intervention to truly jump the economy forward, especially as the government exists for the people and not the other way around!

If this whole trouble is not a supernatural problem, but is only an artificial problem, then it can be solved in an outright fashion since it is manmade. Therefore, the successful remedy can be generated, too, which involves removal of debt, the creation of which led to the most turbulent years in the history of global financial markets in that debt generation has arguably been THE main foundation for the money flow in our current model.

Consequently, governments should be compelled to infuse funds in capital or aid programmes that create work and economic stimulus for their citizens rather then help the banking system carry on as usual. After all, who can borrow money from the bank if he has no means for capital growth as the foundation to pay it back with interest?

The Philippine government is currently pledging P15 Billion or $300 Million in capital from taxpayers' money and/or from foreign borrowings for Philippine Deposit Insurance Corporation (PDIC) to fund the payout of deposits of the closed bankrupt legality group of rural banks presumably caused by the greed and corruption of those involved. Meanwhile, we see the same pattern of wrongful behaviors around the world!

In particular and concerning the Philippines:

IMF has the forecast that Philippines has $800 Million deficit in balance of payments in 2009.
IMF AND WB loans at interest are destroying my country's economy and the working class people who suffer increasing poverty under such an arrangement.

So what is next? Why do we need to pay interest further? How CAN we do it? The Filipinos have paid too much already. We have NO MORE to give! We cannot pay back whatever we do not have and it was an unjust transaction with which to begin such that no Filipino in his right mind would ratify it except for our wealthy elite, who took the loans for their own indirect benefits.

In the end, let's face a hard truth in this whole matter. It is this: What kind of values do we want to promote as a society? Can we not realize that it is not the banks that matter, but the people who make up the society? If this latter view is the case, then we need to change our financial models to support them rather than use them like chattel and slave for the gains of the global business and banking tycoons.

The alternative -- the one to which we are likely heading -- just might be that Filipinos wind up expecting to copy the poor in Haiti in order to get ourselves out of this mess. Are we expected to live under tarps after losing our homes? Are we expected to look for food by combing garbage dumps? Must we and our children eat mud cookies because we can no longer have jobs and cannot pay for imported food?

As Penny Hess stated in "America causing world food crisis and starvation" [1]:

"Forced deregulation of world agricultural markets. Historically countries around the world produced food for themselves and their governments kept restrictions on the price of food to prevent speculation and price gouging. Haiti, where the people are today forced to subsist on a steady diet of mud, is a perfect example. Twenty-five years ago Haitian farmers grew and exported their own rice.

"But in the late 1980s the U.S. backed IMF forced Haiti, as a condition for a desperately needed loan, to deregulate their markets and open them up to competition from the outside. The U.S. then dumped its government-subsidized rice onto Haiti (and many other countries around the world), selling the American rice cheaper than Haiti farmers could sell theirs for. The U.S. rice dumping brought to an abrupt halt Haiti's own self-sufficient agricultural infrastructure and forced millions of people into desperate poverty.

"U.S. Agribusiness. According to Gretchen Gordon in, 'The Food Crisis: Global Markets and Deregulation Strike Again,' three major corporations, Cargill, Archer Daniels Midland and Bunge, 'control the vast majority of global grain trading, while Monsanto controls more than one-fifth of the global market in seeds.'

"While billions of human beings are starving, Cargill's third quarter 2007 profits increased more than 86 percent and Monsanto's were up 45 percent. In fact they are using the current crisis to further impose their genetically modified seeds on the peoples of the world."

Meanwhile, high salaries and compensation packages -- rewards really for doing who knows what -- are still given to the bankers and business tycoons even in these hard times of global financial crisis and even while President Obama and the Australian prime Minister have called for an end to unrestrained selfishness on the part of these financial speculators. At the same time, it has been reported that, in Germany, bank managers receive annual Euros 500,000.00 or $645,000 as a rough average intake.

In a similar vein, Josef Ackermann, chief executive of Deuthsche Bank AG has the total gain, including assorted benefits and shares, of Euros 14 Million or $18.9 Million. And the list goes on... and on concerning irresponsible money managers who are making out royally due to the losses of many, many others.

As such, European bankers receive astronomical, US-style compensation, which is similar to the huge rewards obtained by other financial executives in India, China, Philippines, India, Russia, Mexico, Brazil and other countries. Likewise, some Russian financial executives and bankers are paid in the amount of $500,000 to $5 Million range, while top Italian and French executives make $2 Million to $3 Million annually.

Similarly, Indian salaries have risen to $300,000 to $3 Million level and Mexican financial executives are making nearly $1 Million. However, chief financial executives in Japan usually receive salaries merely in the $400,000 range. All the same, many ordinary citizens around the world wallow in dreadful poverty, hunger, homelessness and despair while these financial gangsters worldwide gain from their ongoing losses.

In the end, we need to reorganize the patterns of the global economy rather than continue to throw money at useless crooks and empty remedies that, doubtlessly, do not work because, if they did, we would be seeing improvements already rather than an ever deepening crisis. Therefore, we need to start pressuring our government representatives to make the necessary radical reforms. If we not change our monetary patterns soon, the most terrible outcomes imaginable are all but assured.

References:

[1] "America causing world food crisis and starvation" by Penny Hess is located at http://www.talkzimbabwe.com/news/130/ARTICLE/2208/2008-04-25.html.

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Eric V. Encina, Filipino Social Creditor/Monetary Reformer, can be contacted at ericencina@yahoo.com.