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.
Yesterday’s post contained excerpts from an interview with Christine Lagarde, the managing director of the International Monetary Fund. The post contained many of her comments, but one was so amazing, I repeat it here, to make sure you didn’t miss it:
“When the world around the IMF goes downhill, we
thrive. We become extremely active because we
lend money, we earn interest and charges and all
the rest of it, and the institution does well.
When the world goes well and we’ve had years of
growth, as was the case back in 2006 and 2007,
the IMF doesn’t do so well both financially,
In short, the IMF relies on its clients doing poorly. Now, at last, you can see the motivation for the IMF’s truly terrible advice — the push for austerity and the lending to nations that should not borrow. The IMF is a clone of the crooked U.S. banks that gave all those “liars loans,” which caused the great recession.
The above quote should hang on the wall of every politician in the world, as a reminder of what the “cut-government,-raise-taxes” crowd will do to ruin economies, and why they do it.
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