●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.
Henry Blodget (born 1966) is an American former equity research analyst, currently banned from the securities industry for lying in his stock analyses, who was senior Internet analyst for CIBC Oppenheimer during the dot-com bubble and the head of the global Internet research team at Merrill Lynch. Blodget is now the editor and CEO of The Business Insider, a business news and analysis site, and a host of Yahoo Daily Ticker, a finance show on Yahoo.
Here is what honest Henry and his honest pals, say about the economy:
CEOs Launch Campaign To Get Congress To Finally Fix The Deficit
By Henry Blodget | Daily Ticker
One of the biggest challenges for the U.S. going forward is the country’s massive debt and deficit problem.
Right away you know you are about to read bullsh*t, since as you will see, the so-called “problem” never is identified. It only is criticized for being “massive,” as in: The U.S., being a “massive” nation, has created a “massive” amount of dollars. And this is a “massive” problem.
The U.S. government is currently spending about $1 trillion more every year that it takes in, and we’ve now piled up $16 trillion of debt. So far, this debt burden has been sustainable, but only because interest rates are at generational lows. If and when our creditors wake up and start demanding higher rates of interest, our ballooning debt-service costs will quickly swamp everything else in the budget.
Henry made a “massive” amount of money by lying, and he just can’t get out of the habit. The “debt burden” is sustainable because it isn’t a burden. Federal debt simply is the total of deposits in T-security accounts at the Federal Reserve Bank. I never have heard of a bank complaining that its deposits weren’t sustainable. In fact, though banks no longer give away toasters for deposits, they still solicit for deposits.
Blodget is waiting for poor, sleepy China et al to “wake up” to the notion that interest rates are low, something he suggests is a secret from the Chinese, though obvious to every other human on this planet. And when China et al “wake up,” Henry expects them to demand higher rates, or else . . . or else, what?
Will they stop buying T-securities? No, but if they did, who cares? China’s dollars go into China’s T-security account at the FRB, and there they reside, until the T-securities mature, at which time, China takes their dollars back. Never does the U.S. Treasury receive or even need those dollars.
A mere glance at the federal budget reveals to any reasonable human being that we can’t go on like this.
A “mere glance,” and a crook, might say that, but an honest, informed analysis says the opposite. There is zero possibility the FRB will be unable to pay China et al back, or create sufficient dollars to pay interest. No taxes needed.
And yet, so far, our elected leaders have refused to do anything about it. Instead, our elected leaders have formed themselves into two ideologically-driven camps that, like groups of children, refuse to compromise. The Republicans want to fix the debt by cutting spending. The Democrats want to fix the debt by raising taxes, especially on rich people.
Well, yes, if you’re going to reduce the deficit, you have to cut spending and/or increase taxes. Duh. And, by the way Henry, either approach would bring on a recession.
And Henry, it’s not “especially” on rich people, it’s only on rich people. That’s the real problem, isn’t it?
And, for some reason, our leaders seem to think it is okay to simply hunker down and stick fast. Never mind that, with every day that goes by, our debt burden grows larger.
And never mind that a growing federal “debt” is required for a growing GDP. Henry, don’t you remember that GDP = Federal Spending + Non-federal Spending – Net Imports? Sure you do, but you don’t want to admit it.
The consensus of non-partisan economists (and reasonable people everywhere) is that the only way to solve our debt and deficit problem is to do it in a balanced way: To trim spending AND increase revenue.
Currently, government spending is running at about 24% of GDP, and tax revenues are only coming in at about 17% of GDP. The only way to reasonably expect those lines to cross is to reduce spending and increase revenue, perhaps converging at about 20% of GDP. And if we don’t agree on this soon and make the tough decisions necessary to gradually get there, our situation will only get worse.
Yes, to trim spending and increase taxes, aka “austerity” is a great solution – if you consider prosperity to be a problem and poverty to be a solution. And where did you get that phony 20% figure? You have no idea. It just popped into your head like your fake research numbers.
The good news is, reasonable people everywhere will now have the help of some of the country’s business leaders, who have formed a campaign to pressure Congress into coming up with a long-term deficit reduction plan.
According to the Wall Street Journal, about 80 CEOs have joined this group, which is dedicated to ending the deficit dysfunction in Washington. Politically, the CEOs hail from both sides of the aisle, but they’re united in this common purpose.
“There is no possible way; you can do the arithmetic a million different ways” to avoid raising taxes, said Mark Bertolini, CEO of Aetna. “You can’t tax your way to fix this problem, and you can’t cut entitlements enough to fix this problem.”
Translation: “About 80 rich people want to reduce federal spending (the vast majority of which benefits the poor and middle classes) and to broaden the tax base (to tax more poor and middle class people).” What a surprise that you and those 80 rich people would want to increase the income gap.
Jeffrey Immelt of General Electric (GE), J.P. Morgan’s (JPM) James Dimon and Honeywell’s (HON) CEO Dave Cote support this call for a balanced approached the deficit.
And these three gentlemen are widely revered for their humble, aesthetic lives and their concern for the welfare of the 99%. And, what is that “balanced approach” BS? Why not call it a “balanced budget“?
Oh, yeah. Economists now have come to realize that a balanced budget causes recessions, so the new euphemism is “balanced approach,” whatever that means.
But big oil executives, who fear higher taxes on their record profits, have not fallen into line on this push. For the sake of the country, let’s hope that support for this purpose only grows.
Perhaps we can spare big oil by cutting Social Security, Medicare, food stamps and federal workers’ pay.
You know you’re on the wrong side of the argument if ever you find yourself agreeing with honest Henry Blodget and his 80 honest CEOs.
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