Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
Thank you Russia for helping to save our economy.
The super committee “failed,” meaning it did not succeed in cutting $1.2 trillion from our money supply, thereby causing the worst recession, possibly depression, ever. So with that so-called “failure,” we now can breathe a temporary sigh of relief.
Yes, the economy won’t improve much, it probably will decline for lack of money, but at least it may not immediately crash and burn as the result of a super committee deficit-cutting “success.”
Super Committee Failure Complicates 2012 Election
Beginning in 2013, the federal government faces two oncoming trains. When the supercommittee was unable to find agreement by Wednesday, it triggered spending cuts of $1.2 trillion starting in January 2013 and extending over 10 years. Half of the cuts would come from defense spending, the other from education, agriculture and environmental programs, and, to a lesser extent, Medicare.
At the same time, tax cuts adopted during the presidency of George W. Bush will expire at the end of 2012, meaning an increase for every taxpayer.
Defense Secretary Leon Panetta has said the cuts would “tear a seam in the nation’s defense.”
So unless Congress does something positive (try to visualize that), defense, education, agriculture, environment and Medicare will take a hit. And there will be a tax increase. Understand that in debt-hawk terms, all of the above money cuts somehow, by some unknown magic, will reduce unemployment and improve the economy!
Anyway, Congress cares only for votes, not programs. And where are the votes? Medicare has votes, but Congress will be sneaky. It won’t cut benefits. It will delay benefits.
Taxes have votes, so Congress will raise taxes some, but not as much as a complete reversal of the Bush tax cuts – so the 99% will be assuaged. Voters will be told that only a partial reversal of Bush tax cuts actually is sort of, kind of, like a tax cut, and based on history, the voters will buy into it. (Hey, voters already think cutting the money supply will help the economy recover, so why not?)
As for education, agriculture and the environment, who cares? Certainly not Congress. How many votes do these programs have? A few teachers? A few tree huggers? A couple of parents who actually understand the adverse, economic effects of deficit reduction? Unimportant.
And then we come to defense:
Medvedev: Russia may target US missile shield
By Vladimir Isachenkov MOSCOW (AP), 11/24/11 — Russia’s president threatened on Wednesday to deploy missiles to target the U.S. missile shield in Europe if Washington fails to assuage Moscow’s concerns about its plans, a harsh warning that reflected deep cracks in U.S.-Russian ties despite President Barack Obama’s efforts to “reset” relations with the Kremlin.
So thank you, Russia. Our war-hawks will out-posture our debt-hawks, and demand that “something be done,” because the Russians are coming, the Russians are coming. (Remember, it was Russia’s Sputnik that sent us to the moon, and having beat Russia there, we never did much of significance, again.)
We seem to need Russia to force Congress to spend the money that stimulates our economy. (It is NASA’s most fervent hope that Russia will send someone to Mars. That would revive federal spending on space and the many related sciences.)
Now, Russia’s latest threat virtually assures no cuts in defense spending, and maybe even some growth, which would help grow our moribund economy, although employment-crushing cuts in other programs, along with tax increases, may well overshadow any increases in defense spending.
By the way, before readers tell me how awful defense spending is, let me assure you, I hate war as much as you do. I also hate poverty, unemployment, homelessness, sickness and illiteracy, recessions and depressions, all of which will result from the federal deficit reduction insanity being proposed by the Tea-whipped.
So again, thank you, Russia. Keep up your threats and we yet may recover from this recession.
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