Call for pensioners to 'share the pain' of cuts

Pensioners should share the pain of austerity cuts and pay more tax to promote fairness between the generations in the housing market, a think-tank has warned.

The Fabian Society claims high levels of home ownership among older people threatens fairness, as the wages of middle-income workers stagnate and they cannot afford to buy a home.
It argues pensioners' taxes should increase, their benefits should be cut, and a tax on property wealth should be introduced.
The report follows previous warnings that the range of universal benefits for pensioners in Scotland such as free care and bus travel may lead to conflict between the generations.
It also comes weeks after Welfare Secretary Iain Duncan Smith failed to rule out future cuts to benefits such as Winter Fuel Allowance for well-off pensioners, while Business Secretary Vince Cable has also said it was "barmy" to continue paying benefits to wealthy pensioners.
Meanwhile, a report by the Joseph Rowntree Foundation said the council-tax freeze and universal free services have not helped poorer households and may have made the impact of austerity cuts worse.
It said the impact of cuts on the vulnerable was not being properly addressed by councils, while the Scottish Government was subsidising wealthier families.
According to the Fabian Society, more than three-quarters (76%) of pensioners now own homes, compared with just over half (58%) 20 years ago, while in the past decade there has been a "dramatic fall" in home ownership among under-45s.
In 1979, the year Margaret Thatcher came to power, middle-income working-age households enjoyed an income 93% above that of middle-income retired households. That figure is now 37%, the study showed.
The society said this had profound implications and there should be a presumption of equality as "old age is no longer a proxy for poverty". It says the key policy should be to raise £7.2 billion by hiking taxes on pensioners so the 27% they pay as a portion of their gross income would rise to 33%.
That would put their tax in line with that of working-age households with the same income.
It said the project should be long-term, to avoid a sharp drop in living standards, but said for now the Government should consider measures such as taxing private pension lump sums to help fund universal care services.
It said: "In public policy and deficit-reduction measures, ministers should adopt a presumption of equality across age groups.
"In financial terms alone, older people are no longer distinct and blanket policies favouring them should be reviewed."
But Age Scotland said the vast majority of pensioners north of the Border were not rich, with more than 100,000 living in poverty.
Spokesman Lindsay Scott said: "Pensioners have had to scrimp and save for their homes and basically what someone from the south-east of England is saying in this report is saying is 'flog them'.
"Treating pensioners as an amorphous group of relatively wealthy people who should make way for up-and-coming generations is a bit rich.
"Where are they going to go? Where are the small houses for them?"
The Fabian Society said specific universal benefits, such as the winter fuel allowance, which contributes 3% to middle-earning pensioners' incomes, could be
reassessed without threatening the wider principle of universalism.
The Government should also scrap its "triple lock", which keeps pensions rising in line with the highest measure of inflation, as when working-age incomes are falling it "creates intergenerational unfairness".
The age of 80 is an "appropriate starting point" for age-specific benefits if the policy is aimed at supporting those on low incomes or older people with high social or health needs, the think-tank said.
"The adverse impact of either approach on retired households in the middle could be justified by the need to 'share the pain'," the society said.
As well as cutting benefits or raising taxes, the society backed Labour calls for a tax on property wealth, saying it could be done through council tax reform.
Grant Costello, chairman of the Scottish Youth Parliament, said he remained supportive of universal benefits.
He added: "It is wrong to shift the burden on to one group, regardless of the generation. Elderly people are no more advantaged or disadvantaged a group than any other."

Double whammy of bad news wings its way to the Chancellor

Fears grow that ONS data will show Britain in the dreaded grip of a triple-dip recession 

George Osborne faces a potential double whammy of dire news this week that would further ratchet up the pressure on the Chancellor to change his economic course.

The Office for National Statistics will release its estimate of the GDP growth figures for the first quarter of last year, which could show that the UK has slipped into an unprecedented triple-dip recession. The ONS is also due to release the public borrowing figures for the final month of the 2012-13 financial year, with analysts warning of the possibility it could show the annual budget deficit is rising, rather than falling. City analysts expect the March public finances figures, released on Tuesday, to show government borrowing of around £15bn in the month.
This would leave the total deficit for 2012-13 (stripping out all the various distortions such as transfer of interest payments from the Bank of England) at £117bn, around £4bn lower than the £121bn borrowed in 2011-12.
But analysts also warned there is chance that tax revenues could be weaker than anticipated thanks to George Osborne's reduction in the top rate of income tax, which could push total borrowing for the year higher than last year. "It's possible that some people might have moved their income tax payments into the next tax year to take advantage of the 45p rate introduced in April," said Martin Beck of Capital Economics. "That could depress tax revenues".
This would be a political embarrassment for the Chancellor who has gone to extreme lengths to prevent the total deficit rising on last year, including slashing departmental spending in his March Budget and delaying subscription payments to international bodies the World Bank. Even more serious for the Chancellor would be a negative figure for GDP growth in the first quarter of this year, due on Thursday, which would confirm that the UK has entered its third recession since 2008. Although the consensus forecast is for a 0.1 per cent increase in GDP for the quarter, there is a good deal of variation between individual predictions. As a result, analysts say it is touch-and-go whether the economy managed to eke out any growth in the first three months. Although there have been signs the services sector, which accounts for three-quarters of the economy, did not contract between January and March, the general expectation is that construction and manufacturing sectors were a drag on growth. "There is major uncertainty over the likely outturn, given that it is unclear just how much economic activity was hit overall during the first-quarter by the cold weather that occurred in January, and then again in March" said Howard Archer of IHS Global Insight.
Last week the International Monetary Fund slashed its 2013 growth forecast for the UK to just 0.7 per cent and said the Chancellor should consider slowing the pace of spending cuts in order to support the recovery – something Mr Osborne has steadfastly resisted for the past three years.
Furthermore, on Friday Fitch became second ratings agency to remove Britain's top AAA rating, citing "a weaker economic and fiscal outlook". The ratings agency followed Moody's which made a similar cut to Britain's credit rating in February.

 

Paul B. Farrell: America needs a new war? For the economy to survive? Job market to revive? Capitalism thrive? Maybe. Here’s why:

By Paul B. Farrell, MarketWatch

America needs a new war? For the economy to survive? Job market to revive? Capitalism thrive? Maybe. Here’s why:

Forbes reported that GDP data “fell for the first time in three and a half years in the fourth quarter … declining by an annualized 0.1%” while “economists had expected GDP to increase 1%. A dramatic 15% drop in government spending dragged on economic activity. Defense outlays were cut the most, falling by 22.2%, the largest decrease in defense since the Vietnam War’s end in 1972.”

Wars stimulate the economy and we are a warrior nation: Didn’t WWII get us out of the Great Depression? And the Iraq/Afghan Wars, longest in history, sure stimulated the economy … the Pentagon war machine doubled from $260 billion in 2000 to roughly $550 billion last year … GDP increased 50% from $10 trillion to $15 trillion … and federal debt tripled to over $15 trillion from under $5 trillion back when our leaders believed “debt didn’t matter.”

But most of all, wars are great for capitalists: Forbes list of world billionaires skyrocketed from 322 in 2000 to 1,426 recently. Yes the adjusted household income of the rest of Americans flatlined the past generation.

But still, life’s great for capitalism and for 1,426 capitalists across America and worldwide, a tribute to the “disaster capitalism” doctrines of Nobel economist Milton Friedman and Ayn Rand’s free-market capitalism dogma.

American politicians conflicted, cut debt but not the war machine

However, with the Afghan and Iraq Wars winding down, capitalism needs an economic stimulus: a new war. It’s so American: Neocons believe a new war would boost GDP. They must be praying North Korea’s Lil’ Kim will do something impulsive. Give us an excuse.

Yet Washington politicians are conflicted. Some want to shrink government, cut debt and are cheering the “dramatic 15% drop in government spending.” On the other hand, the “largest decrease in defense since the Vietnam War’s end in 1972” is unnerving neocons, warhawks and politicians heavily dependent on defense contractors, lobbyists and voters at military bases in their districts.

So what’s next? If American capitalism needs a new war to survive … if we’re slowing down the Afghan and Iraq war theaters … if North Korea’s just saber-rattling … if China has too much to lose … if new wars are fought by drones from video screens in one of the Pentagon’s 70 drone bases … but if all the military-industrial complex capitalists who get rich off wars are still itching to attack … then who will trigger a new war for America’s “disaster capitalists?”

10 unpredictable flash points where new global wars can ignite

Although black swans are by definition unpredictable, there are 11 hot-spot pressure points already ramping up global tension and conflicts. And suddenly, the pressure can easily spark over the line, hit a flash point, and be ignited by any one of multiple unpredictable events that suddenly explode, and spread like a virus to all 10.

Then capitalist warhawks can take advantage of it, as they did by linking 9/11 with launching the Iraq War. So yes, in Worldwatch Institute’s report we see at least 11 challenging black swan hot spots that could surprise and ignite new wars:

Here’s Worldwatch’s blunt challenge: “Planet’s Tug-of-War Between Carrying Capacity and Rising Demand: Can We Keep This Up?” No: The planet’s “shrinking resources” cannot satisfy the exploding population’s “growing demand for food and energy.”

Why? It’s “impossible, we can’t keep this up.” Robert Engelman warns: “Rising trends will not last forever. They can’t.” The world will collapse under epidemics, famines, warfare.

When? A decade ago the Bush Pentagon predicted that “by 2020 there is little doubt something drastic is happening,” they told Fortune. “As the planet’s carrying capacity shrinks, an ancient pattern of desperate, all-out wars over food, water, and energy supplies would emerge … warfare is defining human life.” 2020 is dead ahead.

The coming capitalist wars reminds me of fighting depicted in the brutal “Hunger Games” movie. A perfect metaphor. With over one billion of seven billion people in the world living on two dollars a day … with accelerating food and commodity prices pushing more humans and emerging nations over the edge … with rising real food shortages, real hunger, real malnutrition, real starvation, real poverty … with the living standards of developed nations demanding an ever-increasing share of ever-scarcer resources … we see Worldwatch’s 11 vital signs as hot spots and black swans that can easily ignite rebellions, revolutions and full-scale wars in the near future:

1. Population explosion — planet can’t feed 3 billion more people

Back during the Great Depression the world had 3 billion people. Twelve years ago it had doubled to 6 billion. Now it’s 7 billion, with the United Nations predicting 10 billion by 2050. Worldwatch says “although fertility rates are falling worldwide, many countries with high birth rates will have to accommodate a rapidly expanding labor force in the next few decades. In Uganda, where women give birth to six children on average, this means needing to generate more than 1.5 million new jobs by the late 2030s.”

2. Factory farming — chemicals, water shortage, health risks, diseases

Big Agriculture “has contributed to a tripling in global meat production over the last four decades.” Texas cattlemen may be getting richer but this is “associated with heavy use of chemical inputs, the spread of disease, antibiotic overuse and resistance, massive water consumption, and declines in human health.”

3. Food production — skyrocketing demand, speculative pricing

Last year’s data tells us “grain production is recovering from a slump.” However, a longer-term recovery “is being seriously hindered by climatic changes and by rising demand for ethanol fuel, producing ripple effects throughout the economy through increased grain prices.”

4. Rain forest, timber lands — lost to urbanization and agriculture

As the demand for food and the price of agricultural lands continues rising, the world’s forests continue to disappear, wiping out species and habitats, displacing native cultures, disrupting climate patterns and contaminating the environment. For example, a few years ago Bloomberg Markets specifically exposed Cargill and Alcoa for “destruction of the world’s largest rain forest … robbing the earth of its best shield against global warming.”

5. Meat products — huge gas emissions impacting climate and ozone

Worldwatch reports that “livestock are responsible for 40% of the world’s methane emissions and 65% of nitrous oxide emissions,” emitting toxic “greenhouse gases 25 to 100 times more potent than carbon dioxide.”

6. Organic foods — unintended consequences and high costs

Organic foods bought at stores like Whole Foods Markets make you feel spiritual. But Worldwatch warns that the organic movement is now being challenged by “rising farmland prices, inconsistencies in organic standards and higher prices of organic foods.” Moreover, organic farming is actually impeding “a broad global shift to sustainable agriculture.”

7. Starvation and obesity — both rise to global health pandemic

Imagine, “statistics from 177 countries show that 38% of adults — those 15 years or older — are now overweight, with trends on the rise across different regions of the world and different income levels.” Yes, both hunger and obesity accelerating, threatening billions.

8. Oil and alternative energy — increasing demand vs. finite supply

Global oil consumption reached a new high of 87.4 million barrels per day in 2010. Oil remains the largest commercial source of energy.” Meanwhile “global production of biofuels reached an all-time high of 105 billion liters in 2010, up 17% from 2009, mostly as a result of high oil prices, global economic rebound and new biofuel-related laws and mandates.”

9. Natural gas — fracking and shale gas damage to the environment

Fossil-fuel demand is being “driven by surging natural-gas consumption in Asia and the United States.” As a result natural-gas consumption increased 7.4% in 2009-2010 hitting a record 113 trillion cubic feet. The dark side: New technologies and sources such as fracking and shale gas are now environmental threats along with spill risks to aquifers and from deep-water explorations.

10. Nuclear power — meltdowns, terrorists and spent-fuel storage

Yes, the “generation of nuclear power fell in 2011” due to the “increasing costs of production, a slowed demand for electricity, and fresh memories of disaster in Japan,” plus Chernobyl, Three Mile Island, and the increasing risks of storing spent fuel.

Check out the Worldwatch site. Get their newsletters, get into action. And read the “Hunger Games” trilogy, a powerful metaphor for the world’s real “Hunger Games,” a global war for survival being fought every day, driven by an ever-increasing population with a seemingly insatiable “demand for food and energy” on a planet with “shrinking resources.”

Until we wake up to the coming wars, we’re just happy capitalists trapped in the mind-set of Robert Mankoff’s brilliant New Yorker cartoon: “While the end-of-the-world scenario will be rife with unimaginable horrors,” says the head of a too-greedy-to-fail bank, “we believe that the pre-end period will be filled with unprecedented opportunities for profit.” Go capitalism!

Paul B. Farrell is a MarketWatch columnist based in San Luis Obispo, Calif. Follow him on Twitter @MKTWFarrell.

World Bank President: Climate Change Is Urgent 'Today' Problem

Watch World Bank President on Urgency of Climate Change Issues on PBS. See more from PBS NewsHour.

"If we have any hope of keeping climate change below two degrees celsius, the peak year of carbon emission has to be 2016," said Jim Yong Kim, president of the World Bank. "So the challenge is right in front of us."
Thursday on the NewsHour, Kim speaks with Jeffrey Brown about a new initiative to address extreme poverty around the world. In an extended conversation, Kim also addressed the urgency of climate change and how World Bank is working to combat its effects. He says they must increase financial resources for sustainable energy, use innovative agriculture and partner with major cities to reduce their carbon footprint.
But getting different international powers to agree on things like the price of carbon has been one of the challenges in the effort to curb climate change. Kim said once that is decided, the market forces will kick in and regulate emission.
Kim stressed the importance of investing in sustainable energy, especially for developing countries in Africa where access to power and electricity is not a guarantee. The World Bank president also proposes reclaiming degraded land and growing foods that consume more carbon as innovative ways of reducing carbon emissions.
Kim cites the efforts of New York City as an example of a successful urban clean-up. New York is on track to have reduced its carbon footprint by 30 percent by 2017, reaching their target goal ahead of their 2030 deadline.
"Climate change is not an issue for our grandchildren. It's an issue today," said Kim.

The International Monetary System & The Future Of Money

Recommend skipping the first 10 minutes if you are not into Islam or religion in general. This man is entertaining and enlightening. We have to discard the money system that is enslaving the world.

Italian Political Trouble Just Became EU Economic Trouble

Source: Chris Street, Testosterone Pit.com

The Italians are electing their 63rd government in the last 68 years. This annual anarchy was only interrupted once since World War II, when Silvio Berlusconi from 2001-2006 became only Italian Prime Minister to ever finish a full five-year term. In 2011, Mr. Berlusconi was forced to step down after this picture of his infamous Bunga Bunga alleged bondage and sex partiesheated up tabloids around the world.
In most years, Europeans chuckle about this type of instability: “it’s an Italian thing”. But by controlling 16% of the European Union’s GDP, political trouble just became European economic trouble as Italy’s debt was downgraded to BBB+ and a growing Italian bank run seems to have begun. The realization that Italy is even too big for Germany to bail out seems to have sparked yesterday’s 5% crash in German stocks and is again heating up the European financial crisis.
Italy is a businessman’s nightmare and a tourist's dream. No matter how politically corrupt the economic environment, beautiful Italian girls will be decorating the outdoor “Café Society”, while wearing the latest designer fashion. The central government in Rome tries to balance the general needs of the country and the interests of local powers, which range from local, regional and national political leaders to labor unions, the Catholic Church and the various criminal organizations that operate in the country.
Approximately 45 million Italians may physically show up at 61,225 polling booths across Italy to select 630 members of the lower house Chamber of Deputies and 315 members of the upper house Senate for the national parliament by selecting from lists headed by 32 candidates for prime minister. Another 8 provincial presidents and 426 mayors will also be elected. The 2.6 million registered Italians living abroad can vote for an additional 12 members of the lower house and 6 members of the Senate.
Financially, the fertile and industrialized north is one of Europe’s richest regions and the arid south is one of the continents poorer regions. The prosperous north practices sophisticated tax evasion and the south benefits from state subsidies and organized crime. But by embracing the German dominated euro currency in 1999, Italy enjoyed a decade of economic stability through a 300% increase in borrowing.
Those days of wine and roses ended abruptly in 2011 as the European debt crisis hammered Portugal, Italy, Greece, and Spain, now known as the PIGS of Southern Europe. This week the country’s top business federation, Confindustria, said the economy is caught in a “vicious circle” where 29% of companies cannot meet “operational expenses”, frightened banks refuse to lend more money, 1,000 businesses a day to go bankrupt and the banks are rapidly going bankrupt.
Big industrialists, such as Fulvio Conti, head of the energy group Enel, said firms are dying from lack of liquidity and called on the Bank of Italy to take bold action to be the lender-of-last-resort to head off a disaster. But a leading cause of companies lacking liquidity is often the Italian government that is $59 billion in arrears in paying its vendors.
The Italians, like the other 25 members of the euro currency always assumed that if they ever suffered a financial crisis they could rely on the Germans to bail them out. Since 2009, the Germans controlled European Central Bank (ECB) was instrumental in restructuring debt for the little economies of Ireland, Portugal and Greece. Last September the ECB calmed financial markets by announcing a new government bond purchase plan which brought down the cost of selling bonds for Italy and Spain. But last month Germany shocked financial markets when they refused to bail-out tiny Cyprus and forced the government to expropriate a percentage of all their larger bank deposits.
The credit rating agencies and Italian bank depositors now know that there is no way Germany would or even could bail-out the 7th largest economy in the world. During January and February, Italian bank deposits shrank by 2% each month. But with Cyprus and the debt downgrade, many Italians are withdrawing large amounts of cash in a “flight to safety” to neighboring Swiss banks. With German investor beginning to panic over Italy’s problems, the “vicious circle” in Europe just got allot wider.

Max Keiser - Why You Should Own Gold Even After April (2013) Massive Price Fall

http://shar.es/JKcpC