Debating the stimulus and the rights of the needy

It is also a matter of whether or not the people will stand up for justice.

An Australian response

Taking the scenario of unemployment rising by an additional 300,000 by mid-2010, it is worth asking: how can such structural impositions on the Federal budget be sustained without tax reform?

Again: Tanner’s “2 per cent cap” on additional expenditure - taken as a ceiling of $20 billion - is probably insufficient if taken in addition to the cost of welfare reform. And given the long-term benefits of investment in education and infrastructure, there are solid arguments in favour of greater expenditure here and now.

While Labor might hold off on increasing taxes now - to maximise the stimulus - in the long run the Government must act. Tax reform is necessary to sustain the Australian welfare state and to provide critical services and infrastructure, which are key to our economic and human needs.

A global effort - a flawed system

In both the short term and long term - global co-operation is required to breathe new life into consumer demand, global liquidity and investor confidence.

Standards need be set to ensure that events such as the US “sub-prime” disaster are not repeated. Prudential regulation and a substantial role for credit unions and public banking can assist here.

And globally - widespread nationalisation must provide public benefit in proportion to the public cost of “bailout” commitments. A democratic and mixed banking sector should emerge as one positive and lasting legacy.

Finally, the stimulus effort must be co-ordinated as well as global. This must include investment for the future - in the kind of social programs and infrastructure which will provide the foundation for future growth. With future growth, debt incurred from such interventions can be serviced sustainably.

Recovery, though, could be a long and painful process - perhaps lasting years. Such is the scale of the catastrophe, and of the necessary process of adjustment: there is no easy way out.

Capitalism remains a flawed system: a system characterised by exploitation, cyclical crises of over-accumulation and waste; crises of over-production, and concentration of economic power in the hands of a few.

“Free trade” is extolled as a virtue: and yet workers are denied what are among the most basic rights of all: to withdraw their own labour. It is a system where human - and environmental - need is consistently given a “back seat” in favour of accumulation as a “principle in itself”.

And yet these flaws need be considered alongside the right for ordinary people to invest the proceeds of their labours as they will and the innovations which spring from competition.