●The more federal 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.
●The penalty for ignorance is slavery.
To make a plane stall and crash, you either increase its load (by pointing the nose up), or you decrease its power (by easing off the throttle). So, if you already are stalling, which is better: To increase the load or to decrease the power?
Dumb question, right? Either approach would send your plane into a death spiral.
That’s the debate Congress currently is having about our economy. Should they increase our tax load or decrease our federal spending power? Dumb debate, right? Either approach (aka “austerity”) will send us into an economic death spiral.
It widely is understood that increasing your taxes depresses the economy, by taking spending money out of your pocket. It also widely is understood that cuts in federal spending depress the economy, also by taking spending money out of your pocket.
So Congress, it its wisdom, is telling you that a some combination of tax increases and spending cuts magically will grow the economy. Huh?
Excuse me, Congress, but combining two wrongs does not make a right. It just makes a “worse.”
Consider FICA. The U. S. federal government, being Monetarily Sovereign, does not use FICA to pay for Social Security and Medicare. Even if FICA were $0, the government could fund Social Security and Medicare, forever. The U.S. simply never can run short of its own sovereign money.
All FICA does is take spending money from your pockets, thereby depressing the economy. FICA is the single, most economically harmful tax in American history, as it punishes the lower and middle classes. So predictably, Congress wishes to increase FICA and other tax collections as a “solution” to the recession.
And consider Social Security. It adds spending money to your pockets, thereby stimulating the economy. So predictably, Congress repeatedly cuts SS by increasing the qualifying age and by taxing benefits.
In short, to cure the recession, Congress wishes to implement a combination of the two acts that will worsen the recession – tax increases and spending cuts – and thereby send us into an economic death spiral.
Its what the super rich tell them to do. As Romney’s tax returns demonstrated, the super rich are hardly touched by tax increases. The man paid so little taxes, he had to phony up his returns to show increased tax payments. The life style of the super rich hardly is touched by recessions and depressions.
But the middle and lower classes suffer from tax increases and spending cuts and recessions. So tax increases and spending cuts help increase the gap between the super rich and the rest. And Congress, bought and paid for by the super rich, does exactly as asked: Increase that gap.
The super rich, using Congress as its stooges, has convinced the populace that the federal deficit is “unsustainable” and that the U.S. must “live within its means.” This is 100% nonsense — an absolute lie – for the U.S. can “sustain” any amount of deficit, and does not have a “means” to live within.
But ask your friends if the deficit should be reduced and they will say, “Yes,” because they have been brainwashed by the super rich into believing federal finances are like their own, kitchen table, personal finances.
You never want to be in a plane piloted by Congress or by your friends. If the plane ever gets into a stall, they either will increase the load or cut the power – or a combination of the two — sending you into a death spiral.
Which is where we are headed, now.
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