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.
The following graph is no surprise:
When Gross Domestic Product heads down, we have a recession — but not always.
And when the National Activity Index heads down, we have a recession — but not always — except when it dips below -0.5%.
So how about combining the two indexes and see if we can get an “always” situation, that also may be appropriate to the current situation:
If we make the indicated combination, we find that after the graph line drops significantly below 0.0, we always seem to have a recession. Will this continue? Are we headed for a recession before there will be a recovery? I don’t know, but the data are interesting, and a bit ominous, in light of where we are now.
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