the key to blocking austerity is to understand how it is rooted in privilege, and to articulate a future vision that can animate a movement to destroy privilege, resist the elite, and defeat disaster capitalism.

I like this. It's important to frame the debate in terms of revenues of capital vs. salary. The years of great economic growth, say 1950-1980, were characterised by a very different distribution of incomes, and the past thirty years have seen the capture of the economic system by capital, grabbing an ever increasing proportion of ever decreasing economic growth.

So that's one way of looking at the current crisis, an important one : capital is determined to maintain its share of income and wealth by putting the squeeze on the rest of us. Our great leaders toe the line because they don't question the curious doctrine that what is good for capital is good for everyone.

But the missing element in your analysis, Montereyan, is the limits to growth argument, the good old Malthusian, Club of Rome, ecologist explanation that we're going to run into a wall, or off a cliff.

Well, guess what, we have. We are now pedaling thin air like the coyote in the cartoon.

This does not invalidate your arguments -- it's not an "either/or" proposition. But it perhaps explains the sudden change of tune of the wise heads who govern us.

They have been accustomed to flattening out speed bumps in the growth curve, by deficit financing, and encouraged by low interest rates to believe that there is no need to pay back the deficits. This is perhaps the implicit contract between governments and capital : we keep inflation low, you lend us money cheaply.

The breakdown of this system comes when it becomes credible to question the sustainability of the model. It's convenient to blame speculators, but that's like blaming the flies who are attracted to a dung heap. The problem is that there is a genuine problem with the sustainability of borrowing to maintain government spending...

... because there is no convincing evidence that there will be sustained economic growth subsequently, to narrow the gap between revenue and spending.

And why is this?

Because we ran out of cheap energy. That was the principal driver of economic growth, and we are in an economic system that cannot be stable without growth. We are in overshoot, and we need to adjust to a lower level of energy inputs, which means less prosperity.

The question is, how we get there from here.

Austerity, as currently being implemented, will surely be harmful to the interests of capital, because severe recession is the result. It is surely in the best interests of owners of capital to share the effort now in order to limit the depth of the depression. The problem is, capital does not have a mind of its own. The market doesn't think. International regulation of capital will be too little, too late. National regulation will lead to protectionism which will probably make most things worse...

American exceptionalism : Apparently, the US can run deficits that are forbidden to other nations, who, as we see daily, are severely punished by the market. Geithner knows he has to continue to defend deficit spending. Does he know where that takes the US?

Just rambling. Carry on.

_{It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II}