Wednesday, November 17, 2010

"Carbon Taxes are Just Another Way to Raise Revenue" - Greek Prime Minister

George Papandreou, Greek prime minister of a country that allowed its government to borrow so much money that it cannt repay it, has said that there may need to be new world-wide forms of taxation to help pay for the bail-outs that will be needed by the growing number of crashing economies.

His suggestions include “carbon dioxide taxes” which, he says, could provide “important revenues and resouces for funding such a [bail-out] mechanism".

Now, I’ve never actually heard a major politician (let alone a national leader) admit this before: what Mr Papandreou is saying is that carbon taxes would have not have the effect of reducing emissions - because if they did, they would be useless as an additional form of revenue. All the hokum that is talked about protecting the planet by taxing carbon use is just a front for the real purpose of such penalties on industry and consumers which is to raise more money for governments to spend (in this case, on trying to remedy their own political follies).

The only way for Australia to repay its huge and growing debt is more taxes. That is why the Labor Party and the Greens are so in favour of global warming. A carbon tax would raise huge amounts of revenue from the people to, so the politicians say, pay back the International banks.

What will really happen is that governments, including Australia's, will just spend this money and borrow more from the international banking cartel.

Australias situation is really crazy!

Let's put it in a situation closer to home. A two adult, two children family have an income of, say $700 per week. They can live reasonably comfortably on that income but, hey, they JUST have to have the biggest flat screen, the latest SS Commodore, 3 Playstations for the kids (dad included) and are paying a mortgage on a 5 bedroom, 3 bathroom McMansion. All this, plus food, rates, insurance, etc adds up to outgoings of $900 per week!

They are broke, big time broke, but they continue to borrow the $300 weekly shortfall on credit cards!

How long can this go on?

Soon the lending authority will foreclose on them. The house will go, as will everything else.

How does that relate to Australia? How can banks reposses a country?

Pretty easy actually. When the country can no longer repay the interest on the borrowings, let alone the principle a "bailout" is offered by the International Monetary Fund.  This bailout comes with some pretty stringent conditions. Stringent for ordinary Australian citizens in that we, the taxpayer, pick up the repayment by way of much higher taxation (carbon tax included) and, as happened in Greece, a large drop in wages and cuts in many social services including raising the retirement age to 70.

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