Economic austerity causes civil disorder. Reduced money growth cannot increase economic growth. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
I have faith. I have faith that one day Monetary Sovereignty will be recognized as the factual description of our economy by the old-line economists, by the college professors and their students, by the media, the politicians and ultimately by the public.
I may be naive, but I believe the truth will out. But I also believe, that when the world comes to its senses, those same old-line economists, college professors and students, media, politicians and members of the public, will deny believing the debt-hawk, Tea Party, bleed-the-patient nonsense that passes for economics, today. They will tell those of us, who do understand fact-based economics, that they really knew it all the time.
So here and now, I am beginning a list titled, W.A.S.T.E.D. (Wrong Again. Still Talking Economic Drivel) memorializing the utter garbage these people spout to the detriment of the United States. The list will be long, and I’ll keep adding to it as the weeks go by. Presumably it could contain the vast majority of the people in the world. So I’ll try to limit it to opinion leaders.
Down the road, watching these people squirm and attempt denials, might provide what President Obama calls “a teachable moment.” And being on this list will help these people establish their legacy for all time.
W.A.S.T.E.D Wrong Again. Still Talking Economic Drivel
8/6/11: Standard & Poors: “ . . . further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed . . . “
8/10/11: President Barack Obama: “The fact is, we didn’t need a rating agency to tell us that we need a balanced, long-term approach to deficit reduction.”
8/10/11: Harold Meyerson, Washington Post: “The payroll tax can’t be suspended indefinitely without compromising Social Security, which it funds.”
8/10/11: Dennis Byrne, Chicago Tribune: “Whoever is to blame for this financial debauch, which started with Ronald Reagan, the first of a line of presidents who borrowed our way to prosperity, the recent political and market convulsions should convince even the most flagrant borrower that we’re reached the end of the line.”
8/10/11: Eric Zorn, Chicago Tribune: “His (Sen. Coburn’s) biggest bite is a $2.64 trillion reductin in Medicare and Medicaid spending over 10 years. . . I am persuaded that we need to trim the growth in these programs and other entitlements . . .”
8/10/11: Rep. Jeb Hensarling (Texas): “Times are tough, and American families have had to make many sacrifices over the last few years. While they didn’t cause this debt crisis, they’ve learned how to make do by tightening their belts and living within their means. It’s time Washington did the same.”
8/10/11: Rep. Dave Camp (Michigan): “If we are successful in curbing the overspending in Washington that has sparked fear in the financial markets and created uncertainty on Main Street, we will start to see the job creation we desperately need.”
8/10/11: Sen Jon Kyl (Arizona): “Chronic joblessness, out-of-control deficits and debt, and an unprecedented credit downgrade represent an historic challenge but also an historic opportunity for lawmakers in Washington to show they can work together on a plan that puts America back on the path to prosperity.”
8/10/11 Rep. Robert Dold (Illinois) ” . . . our current fiscal situation is unsustainable . . . I am dedicated to putting our country on a fiscally sustainable path so that we can pay down our debt, grow our economy, and create jobs here at home.”
8/10/11: Maya MacGuineas, Committee For A Responsible Federal Budget: “Policymakers need to . . . enact more aggressive deficit reduction that results in stabilizing the debt. Failure to do so will result in higher borrowing costs, less budget flexibility, lower longer-term economic growth, and ultimately a fiscal crisis.”
8/10/11: Niall Ferguson, Newsweek (July 4&8/11 issue): “It’s not defense spending that’s bankrupting America; its the spiraling cost of entitlements as the baby boomers retire.”
8/10/11: President Bill Clinton, Newsweek (June 8/11 issue): I’d be happy to go back to the tax rates people at my income level paid when I was president in order to pay for the tax incentives to put more people to work.”
8/10/2011: Sen Rand Paul (Kentucky): “Democrats have to admit that entitlements and welfare need to be reformed. Social spending needs to go down . . .”
8/11/11: John Micklethwait, Editor, The Economist: “As flawed a messenger as S&P is, its message should still be heeded. . . it concluded that America’s debt was rising unsustainably as a share of GDP, in contrast to other AAA-rated countries such as Britain and Germany that have put in place plans to stabilise that ratio. . . . the debt deal in Congress just before the downgrade was plainly inadequate. It focuses its cuts on discretionary spending, which future legislatures can too easily override. More durable deficit reduction means reforming both the tax system and entitlements such as pensions and health care for the elderly. And there is no guarantee that Congress will allow the deal’s spending cuts to occur.”
8/11/11: House Minority Leader, Nancy Pelosi: (The three lawmakers she chose for the bipartisan super committee will) “focus on economic growth & job creation–which reduces deficit.”
8/12/11: Charles Krauthammer: ” . . . without this long ugly process, the debt issue wouldn’t even be on the table. We’d still be whistling our way to Greece. Instead, a nation staring at insolvency is finally stirring itself to action, and not without spirited opposition.”
8/12/11: Michael Gerson: “A country that increases taxes on current workers and encumbers children with debt to maintain unreformed health entitlements is looking backward. ”
8/12/11: Australian economist John Quiggin: “My analysis is quite simple and follows the apocryphal statement attributed to Willie Sutton. The wealth that has accrued to those in the top 1 per cent of the US income distribution is so massive that any serious policy program must begin by clawing it back. If their 25 per cent, or the great bulk of it, is off-limits, then it’s impossible to see any good resolution of the current US crisis.”
8/12/11:Jeffrey Miron:Director of undergraduate studies and a professor of economics at Harvard University: “Policymakers should stop worrying about job growth. Instead, they should focus on eliminating economic policies that impede economic efficiency -— runaway entitlements . . .”
8/12/11: Ira Stoll, editor and founder of FutureOfCapitalism.com.: Congress should stop extending unemployment benefits, and better yet, restructure the unemployment insurance program or block-grant it to the states to allow them to experiment with ways of doing so. The idea is to change the program so it creates an incentive for recipients to get a job, rather than an incentive for them to remain unemployed.”
8/12/11: Sen Ron Paul (Texas),”The country’s bankrupt and nobody wanted to admit it. And when you’re bankrupt, you can’t keep spending.”
8/12/11: Rep Michele Bachmann (Minnesota): “We just heard from Standard & Poor’s, when they dropped our credit rating. What they said is, we don’t have an ability to repay our debt.”
8/12/11: John Mauldin: “What did we learn that we did not already know? The US is headed for a financial crisis if they do not get the deficit under control? This is news? . . . The economy is getting weaker. What can we do? The short answer is, sadly, not much.”
8/14/11: John Kass, Columnist, Chicago Tribune: “It (the Tea Party) changed the debate in Washington by focusing the nation on the debt and on the deficit and profligate spending. If I were speaking gravitas, I’d say that such out-of-control spending dangerously increases the size of government at the expense of individual liberty. But we don’t speak gravitas in Chicago.”
8/15/11: Alan Simpson, former U.S. Senator: “(The debt-ceiling deal) doesn’t get into Medicare, which is on automatic pilot, which is just gonna eat through the whole budget. It doesn’t get into Social Security solvency.”
8/15/11: Treasury Secretary Paul H. O’Neill: ” . . . the tax system . . . should be about raising the revenue we need to pay for the agreed shared needs of U.S. society . . .”
8/15/11: Robert J. Samuelson:”Decide to balance the budget over a decade. ‘Deficit reduction’ isn’t good enough. The case for balance (albeit at “full employment”) is simple: discipline. If people want public services, they should be willing to pay for them. . . Cut Social Security, Medicare and other retiree programs.”
8/15/11: Sen Mark Kirk (Illinois): “Because the federal government currently borrows 40 cents of every dollar it spends, credit rating agencies and leading economists recommended cuts of no less than $4 trillion from future spending and borrowing.”
8/15/11: Sen Dick Durbin (Illinois): “This agreement will begin the process of reducing our deficits and ensuring our long term recovery.”
8/17/11: Rep. Jim McGovern (D-Mass.), believes (a war tax) should be on the agenda of the debt-reduction supercommittee. “These wars ought to be paid for and not put on a credit card so that our kids will have to pay for this in the future,” McGovern said in a recent telephone interview. It’s morally wrong for members [of Congress] to call for support of our soldiers and then not ask the rest of us to pay for it . . . or have it left to the poor and middle-income and seniors to bear the sacrifice along with our soldiers and their families. That’s wrong.”
8/17/11: Gov. Rick Perry, (Texas): “We’re dismayed at the injustice that nearly half of all Americans don’t even pay any income tax.”
8/17/11: Roya Wolverson, Time: “At the end of the day, it’s the foreign holders of U.S. debt (China, Japan, etc) we’d want to target to inflate away U.S. debt. But even that could have repercussions, since we might still need foreign creditors to fund our future deficits. And those deficits would be even more troublesome if higher inflation stuck around.”
Welcome to membership in W.A.S.T.E.D. Your undeniable legacy is secure.
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings