The Roots and Remedies of The Financial Crisis

Leo Panitch: It's time to make banking a public utility

WASHINGTON - October 10 - In his discussion with Senior Editor Paul Jay, Leo Panitch summarizes the context and history leading to the current financial crisis. Historically, the crisis has its roots in the 1960s during the US war in Viet Nam and a domestic period of social upheaval. Responding from pressure to fund the Viet Nam war and also to fund a domestic 'War on Poverty', the US government drastically reduced its public expenditure and left the provision of public housing to the private domain. Panitch argues the current US debt 'isn't poor people's fault' but is a 'product of not being willing to have public expenditure'.

Panitch suggests two necessary changes for the US government during this economic transition. First, it must put in place a more equitable redistributive taxation system. Second, it needs a reallocation of state expenditure.

The reallocation of state expenditure may be compromised by the potential future need for increased American military expenditure. For example, Panitch states that the realization of 'threats' from Pakistan, Russia and Iran could result in the continued need for military spending.

The current economic crisis requires a historical understanding. As Panitch states, 'a capitalist system will self-create contradictions'.

Watch the full story on The Real News Network: The Roots and Remedies of The Financial Crisis

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