Mitchell’s laws: To survive, a monetarily non-sovereign government must have a positive balance of payments. 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.
In the post titled: “Might Irene have a positive effect,” I wondered whether this disaster would bring Congress and the President to their senses, and begin a move away from the ridiculous, “small-government,” Tea/Republican, economic hypotheses.
Washington Post: FEMA, to pay for Irene damage, delays funds for rebuilding in tornado-ravaged areas: By Ed O’Keefe, Published: August 28
The Federal Emergency Management Agency is temporarily suspending some payments to rebuild roads, schools and other structures destroyed during spring tornadoes in Joplin, Mo., and Southern states and other recent natural disasters to pay for damage caused by Hurricane Irene.
Has our Monetarily Sovereign government – a government with the unlimited ability to pay any bills at any time – somehow run short of money? No. A Monetarily Sovereign government cannot run short of money.
But Congress, caring little for the human suffering in Joplin and the Southern states, prefers to cut off the funding these people so desperately need, rather than increase the federal deficit. Why? No reason. None at all.
Imagine a drowning person begging for a life line, and the Tea/Republicans refusing: “No, although I have an unlimited number of life lines, it is against my principles (and the 2012 election) to assist you unless I unnecessarily can steal a life line from some other drowning person.
With initial damage assessments from the storm potentially in the tens of billions of dollars, the Obama administration will need to request supplemental funding from Congress, possibly provoking another fight over federal spending as a new congressional “supercommittee” prepares to identify trillions of dollars in government spending cuts.
You remember the “supercommitte,” don’t you? That’s the group assigned to the task of applying leeches to cure the nation’s anemia. They will be judged on the amount of blood they can drain from this dying patient.
FEMA said Sunday it will still pay people eligible for individual storm assistance and some states recouping emergency response costs from previous disasters, but it will restrict payments for older, longer-term public rebuilding and mitigation projects to ensure the solvency of the federal disaster relief fund.
The decision affects projects tied to spring tornadoes and other disasters dating back several years and “prioritizes the immediate, urgent needs of survivors and states when preparing for or responding to a disaster,” said FEMA spokeswoman Rachel Racusen.
If you owned a home in Joplin, now destroyed, I’m sure you won’t mind if the government takes care of the East coast, first. After all, they have priority, and the government is “broke.” How do I know? John Boehner said so.
Federal officials Sunday would not estimate how much Irene’s damage could cost, but New Jersey Gov. Chris Christie (R), speaking Sunday on NBC’s “Meet the Press,” said damage estimates “are going to be in the billions of dollars . . . if not the tens of billions of dollars.”
Christie and other governors credited Obama for quickly issuing emergency declarations for their states in advance of the storm to provide money for their response efforts and to allow FEMA officials to assist state and local leaders in initial damage assessments.
Say, what? Republican Governor Christie is glad to receive federal money?????
But the moves will further sap the federal disaster fund, which over the weekend had about $900 million, according to FEMA, less than the $1 billion officials prefer to keep on hand.
On Saturday, House Appropriations Committee Chairman Harold Rogers (R-Ky.) called on the Senate to quickly pass the House GOP’s version of the annual Homeland Security spending measure, which includes $1 billion in additional money for the disaster fund this year and $2.65 billion for fiscal 2012.
Problem solved: The damage from Irene will be “in the billions of dollars . . . if not the tens of billions of dollars.” FEMA has $900 million and there is an additional $1 billion in the Homeland Security spending measure. Anyone see a problem, here?
The Obama administration “has let the fund reach critically low levels, putting continued recovery at risk, without a plan for the future or a clear method for dealing with new disasters,” Rogers said.
Let’s see now, the Republican House Appropriations Committee Chairman, perhaps the ultimate “cut-spending” guy is angry at Obama, for paying funds out of the disaster fund, when he should have (pick one):
1. Not paid for disaster relief and let the people suffer, or
2. Asked the Tea/Republicans for more money.
Despite potential funding shortfalls, Obama said Sunday that the federal government would continue providing full assistance to affected states and cities.
“As I’ve told governors and mayors across the affected areas, if they need something, I want to know about it,” he said.
Huh?? Mr. President, didn’t I just read, at the beginning of this article, that FEMA will suspend “some payments to rebuild roads, schools and other structures destroyed during spring tornadoes in Joplin, Mo., and Southern states . . .” Did you forget so soon?
Ah, don’t you just love the political double talk when the reality of human need meets the obstinance of wrongheaded theory? America, wake up. These fools are stealing your lives and the lives of your children. The Tea/Republican’s “cut-deficit” effort is mean, misguided and harmful, and you are paying for their ignorance.
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