●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
Italian Prime Minister Mario Monti says more austerity will solve his nation’s recession. Italy’s doom is assured. With the euro nations as a model, American politicians vote for austerity.
Monti expects to see Italy recovery signs within months
(Reporting By Antonella Ciancio, Writing by Catherine Hornby; Editing by Rosalind Russell)
CERNOBBIO, Italy (Reuters) – Prime Minister Mario Monti said on Saturday he expected it would be only a few more months before signs of recovery start to emerge in the recession-hit Italian economy.
Italy has been in a recession since the middle of last year, weighed down by austerity measures passed by Monti’s government to cut the country’s massive debt, including tax hikes, spending cuts and a pension overhaul.
Unemployment has risen to its highest since monthly records began in 2004 and unions are locked in growing disputes with companies over plant closures and layoffs.
Monti defended the austerity measures, and said he believed his government would be remembered for having helped Italy pull itself out of a deep economic crisis without needing to resort to external aid.
Translation: “Austerity put us into this crisis, so more austerity will pull us out. I know it makes no sense, but isn’t that exactly what the Americans believe? If austerity is good for them, it’s good for us.”
“I hope that one day we can say that thanks to us Italy was not colonized by Europe and it maintained its own dignified sovereignty in an increasingly integrated Europe,” he said.
Translation: “We surrendered our Monetary Sovereignty, but by gosh, we have our ‘dignified’ sovereignty. Understand?”
This week the Treasury raised a record-breaking 18 billion euros through a retail bond sale, which Economy Minister Vittorio Grilli hailed as a sign of a turnaround in perceptions of the country’s debt.
Translation: “Being monetarily non-sovereign, we couldn’t service the debt we had, so we borrowed 18 billion more. Things are getting better.”
The European Commission has proposed making the ECB responsible for supervision as a step towards a banking union in which euro zone countries and any others that want to join would together resolve problem banks and protect savers’ deposits.
“This is another step to accelerate the end of the crisis and to strengthen European governance through a more efficient supervision of banking activities aimed at avoiding contagion risks,” Monti said.
Translation: “The problem is not that the euro nations surrendered our Monetary Sovereignty — the control over our money supply. The problem is not that the euro nations are deeply in debt, yet being monetarily non-sovereign, cannot create the money to pay our debt. The problem is not that our tax increases and spending decreases continue to suck money out of the private sector. No, the problem is that our banks need more supervision.”
There are two, and only two, solutions for the euro nations:
1. Re-adopt their sovereign currencies
2. The EU gives (not lends) each nation euros as needed
The EU struggles to patch a broken machine, rather than adopting a new one, while across the ocean, American politicians opt for Europe’s austerity “solution” Both sides wish to do more of what always has failed.
And the people don’t understand.
Rodger Malcolm Mitchell
Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%
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 Imports