Eric V. Encina

U. S. President Obama is presenting all the positive sides of the ‘stimulus package’ and, likewise, the Philippine President Marcapagal is doing the same to uplift his 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 stimulate the economy. 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 stimulus package 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 the ailing economies from recession and depression. Concurrently, endless debates and arguments are going on 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?

Most so-called experts in economics (who are only good in predictions while doing nothing to ease the burdens to the poor) are only content to predict a crisis, such as the one that is happening right now, in employment (as thousands have been already laid off and job losses in the Philippines in the last six months time) food crisis, oil and the downtrend in the economic activity.

And even in the issue of job losses, the Philippine governmental leaders 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 stimulate growth and provide for sustainable living.

Therefore, the Philippine government must revamp its economic model away from being export oriented, 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.

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 interest from the forcible taxes.

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 machines to fool the Filipinos. The problem is that they are all the same under debt finance and taxes for the interest of the multinational corporations rather than the needs of the common Filipinos. This is nearly always the pattern in the frequent 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."

What is the cardinal rule to survive?

Survival is said to be a basic instinct of man when hard times strike. On account, it brings out the worse or best in us. Today’s global recession to depression, now really deepening and going into overdrive, is compelling us to think ways and means to ride out the financial-economic tornado. The ripple effects of the crisis continues lamentably right around the world. Yet personal efforts, ways and mean are not enough as there must be government intervention to 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, which led to the most turbulent years in the history of global financial markets in that debt creation is the main foundation for the money flow.

Consequently, governments should be compelled to infuse funds in capital or aid programmes that create jobs and economic stimulus for the workers rather then help the banking system carry on as usual. After all, who can borrow money from the bank if he has no means, like a company that he runs or employment, 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 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 what we do not have and it was an unjust transaction with which to begin and no Filipino in his right mind would ratify it except for our wealthy elite, who took the loans with which to begin for their own 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 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 look for food by combing garbage dumps? Must we 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":

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-subsidiz ed 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 benefits of the bankers continue even in 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 bankers and other 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 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 losses.

In the end, we need to reorganize the patterns of the global economy rather than continue to throw money at useless remedies that, doubtlessly, do not work because, if they did, we would be seeing improvements already rather than an ever worsening 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.

Eric V. Encina
Filipino Monetary Reformer
[email protected] com
11 Feb. 2009