Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
Could these people possibly get any more stupid? Just when I think they have flown off the top of the stupid chart, they set yet a new standard.
IMF Approves $36 Billion Funding for Greece
By ASSOCIATED PRESS | March 15, 2012 |
(ATHENS, Greece ) — The International Monetary Fund on Thursday approved euro28 billion ($36.56 billion) in funding for crisis-hit Greece over the next four years, while Standard and Poor’s said that the country’s new bonds were still vulnerable to a default.
Greece will receive a total euro172.7 billion in rescue loans from its eurozone partners and the IMF to keep it afloat in the next few years, as dizzily high borrowing rates have blocked its ability to raise money on the international bond markets.
Greece’s problems began when it surrendered its Monetary Sovereignty. Having made itself monetarily non-sovereign, it needs not only to balance its budget, but it needs a positive cash flow (all monetarily non-sovereign governments do). But it has no way to achieve that positive cash flow.
So what is the EU/IMF solution? Lend Greece more money, to put it even deeper into debt, then demand Greece wreck its economy further with higher taxes and lower spending, i.e. austerity.
IMF spokesman Gerry Rice said “continued reform efforts to improve competitiveness and restore economic growth will be key to overcoming the crisis.”
Oh really? And how will Greece accomplish that, while paying off higher and higher debt?
Without the bailout, Greece would have been forced into a messy default of a euro14.5 billion bond repayment due on March. 20, a move that could have sent shockwaves throughout the global financial system and further destabilized the group of 17 countries that use the euro as their currency.
Translation: We screwed Greece, because we don’t want “messy” or “shockwaves” or heavens-to-Betsy, to destabilize that shining symbol of currency stabilization, the euro.
The new bailout cash was approved after Greece secured a massive debt-reduction deal with banks and other private bond holders, swapping old government bonds for new ones that have better repayment terms.
Translation: We screwed the private sector, too.
The ratings agency Standard and Poor’s assigned a CCC score — or still vulnerable to default — and said Greece’s sovereign rating would remain in selective default until the exchange was completed next month.
Translation: Forget “selective default.” Greece is dead. If we had a ZZZ rating, we’d use it for Greece.
The country has survived since May 2010 on a first rescue loan package worth a total euro110 billion ($143.63 billion). In return for both bailouts, Athens has imposed harsh cost-cutting measures, slashing pensions and salaries while repeatedly increasing taxes.
Translation: See, here’s how economics works. You increase taxes to gut the economy. Simultaneously, you cut pensions and salaries, to impoverish the people. And you slash government spending to finish the job. Then stand back and insist Greece grow its economy while paying off its debts. It should be a good plan. After all, we got the idea from the American Tea/Republican party.
Also Thursday, Finance Minister Evangelos Venizelos said he would ensure the terms of the bailout deals would be met if he is part of the next government. Venizelos is the only contender for the leadership of the majority socialist PASOK party in a vote this Sunday.
Once he takes over the party helm, he will resign as minister to focus on the election campaign. “It is hypocritical to say that you can sign commitments and then say you are not bound by them. That’s an insult to our intelligence,” Venizelos said.
That’s the insult to intelligence? How about the plan to drain blood from the patient, to cure anemia?
Meanwhile, a European Union inspector has reported rare progress in Greece’s effort to reform its large civil service — one of the key austerity measures and a condition of receiving the bailout. Horst Reichenbach, heading an EU task force sent to Greece to assist painful structural reforms, said there had been a “number of very positive developments” including an improvement in clearing tax arrears.
Translation: We’re firing lots of people and collecting more taxes from the few who still have jobs. What could possibly go wrong with that?
I award 6 dunce caps (out of a maximum of 5 — that’s how incredibly stupid this is), to the EU, the IMF, and the Greek leaders who would do this to their own people.
People of Greece: My heart truly goes out to you. You are doomed. Now if only, we here in America, can prevent our leaders from doing the same things to us. They already have begun.
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. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports