Economic downturns cause global wars

Economic downturns cause global wars

So far, such half-hearted experiments not only have failed to work; they have left the societies that have tried them in a progressively worse position, farther behind the front-runners as time goes by. Argentina has lost ground to Chile; Russian development has fallen farther behind that of the Baltic states and Central Europe. Frequently, the crisis has weakened the power of the merchants, industrialists, financiers, and professionals who want to develop a liberal capitalist society integrated into the world. Crisis can also strengthen the hand of religious extremists, populist radicals, or authoritarian traditionalists who are determined to resist liberal capitalist society for a variety of reasons. Meanwhile, the companies and banks based in these societies are often less established and more vulnerable to the consequences of a financial crisis than more established firms in wealthier societies. As a result, developing countries and countries where capitalism has relatively recent and shallow roots tend to suffer greater economic and political damage when crisis strikes--as, inevitably, it does. And, consequently, financial crises often reinforce rather than challenge the global distribution of power and wealth. This may be happening yet again. None of which means that we can just sit back and enjoy the recession. History may suggest that financial crises actually help capitalist great powers maintain their leads--but it has other, less reassuring messages as well. If financial crises have been a normal part of life during the 300-year rise of the liberal capitalist system under the Anglophone powers, so has war. The wars of the League of Augsburg and the Spanish Succession; the Seven Years War; the American Revolution; the Napoleonic Wars; the two World Wars; the cold war: The list of wars is almost as long as the list of financial crises. Bad economic times can breed wars. Europe was a pretty peaceful place in 1928, but the Depression poisoned German public opinion and helped bring Adolf Hitler to power. If the current crisis turns into a depression, what rough beasts might start slouching toward Moscow, Karachi, Beijing, or New Delhi to be born? The United States may not, yet, decline, but, if we can't get the world economy back on track, we may still have to fight.

Spending Link

Rainy Day funds will be accessed when spending due to too many cuts - momentum

Gov. Rick Perry, sensing that lawmakers are racing to take money out of the state's rainy day fund to ease the impact of sweeping spending cuts, said Monday that they should use that money only as a last resort.? After a closed-door meeting with the House Republican Caucus, Perry said he does not think the time has come to tap the fund, where more than $9 billion is expected to accumulate by the end of the upcoming budget period in 2013. But in doing so, he seemed to soften on his earlier position that lawmakers should not use that money at all.? "I specifically asked them to look at all the different options before they would ever come to the point of saying, OK, that is an option," Perry said about the rainy day fund. "We're not there."? But House Appropriations Chairman Jim Pitts, R-Waxahachie, seemed to take exception to the idea that lawmakers haven't already made deep spending cuts, saying there are more than $30 billion in cuts in the proposed 2012-13 budget.? "It's frightening," Pitts said of the effect of those proposed cuts.? The state faces a two-pronged budget shortfall. It is about $4.3 billion short of the money needed to pay for the current two-year budget, which ends Aug. 31. The state is also about $23 billion short of the money needed to continue current services over the next two years.? Momentum has been growing to use the rainy day money to close the deficit in the current biennium, particularly after Comptroller Susan Combs, a Republican, said last week that there is not time for the state to cut its way out of that deficit.? Despite Perry's plea for a slowdown, Pitts said he plans to move ahead this week on legislation to use $4.3 billion from the rainy day fund for the current budget.? "The reality of it is … we don't have the money to pay our bills" without the rainy day fund, Pitts said.? Perry seemed to be more open to using the fund in conversations behind closed doors than he has been in his public comments. Pitts said Perry on Monday indicated a willingness to use some of the emergency reserve fund to close the hole in the current budget but was resistant to using any of it for 2012-13.? And Senate Finance Chairman Steve Ogden, R-Bryan , said Perry has said privately that he is open to accessing the rainy day fund once legislators have scrubbed all of the excess out of the budget.? At the start of the legislative session in January, Perry said lawmakers should keep their hands off the fund. But the first half of the session has been dominated by discussions of how deep spending cuts would affect the state. School districts are preparing to lay off thousands, state agencies are cutting their staffs and nursing homes are bracing for closure.

Texas insufficient budgets will pull from Rainy Day Fund

The Associated Press 11(The Associated Press Texas Senate OKs nearly $4B from Rainy Day Fund May 16, 2011)http://www.businessweek.com/ap/financialnews/D9N8N9TO0.htm

The Texas Senate has voted to spend nearly $4 billion from the state's Rainy Day Fund to cover gaps in the current state budget.? Spending money from the state's savings account has been one of the most controversial issues of the session. An earlier deal struck between lawmakers and Gov. Rick Perry would spend about $3.2 billion for the current budget.? The Senate moved to add the extra money late last week. The idea behind spending the extra $800 million is to free up that amount of money in the spending plan lawmakers are writing for the next two years.? Democrats tried Monday to get the Senate to spend an additional $3 billion, but those efforts were rejected by the Senate's Republican majority.? Spending money from the state's savings account has been one of the most controversial issues of the session. An earlier deal struck between lawmakers and Gov. Rick Perry would spend about $3.2 billion for the current budget.? The Senate moved to add the extra money late last week. The idea behind spending the extra $800 million is to free up that amount of money in the spending plan lawmakers are writing for the next two years.

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