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.
This article ran on page 2 of the 3/20/12 Chicago Tribune’s Business Section. Is it good news or bad news?
Mortgage bailout at $25B in black
The U.S. Treasury Departmen said Monday that it made a $25 billion profit on sales of mortgage-backed securities acquired during the financial crisis, part of its ongoing efforts to wind down the taxpayer-financed bailout programs.
The sales were the latest indication the multiple programs the government and Federal Reserve initiated to bail out the financial sector may turn out to be less costly than originally feared.
The Treasury bought $225 billion of the securities in 2008 and 2009 in an effort to keep the mortgage market from freezing up as private investors fled. The $250 billion it reaped from the investment reflected both principal and interest.
So, in summary, what happened? First, the government pumped $225 billion into the economy, trying to prevent a worsening of the economy. After that stimulus, the government withdrew $250 billion from the economy.
So you tell me. Is this good news or bad news?
Side question: Was this really a “taxpayer-financed bailout program”?
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