Mitchell’s laws:
●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.
●Cutting the deficit is the government’s method for taking dollars from the middle class and giving them to the rich.
●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.
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Double trouble: House GOP eyes default, shutdown
By Jim Vandehel, Mike Allen and Jake Sherman | 1/13/13House Republicans are seriously entertaining dramatic steps, including default or shutting down the government, to force President Barack Obama to finally cut spending by the end of March.
Translation: “Cut spending” is shorthand for cut spending on Social Security, Medicare, Medicaid and other programs that help the middle- and lower-income classes. The military is one of those “other” programs as it directly employs thousands of lower paid people, and indirectly employs the thousands of workers in the industries that support the military.
Spending cuts (aka austerity) are the proven method by which the government takes money from you and widens the income gap between the rich 1% and the rest.
The idea of allowing the country to default by refusing to increase the debt limit is getting more widespread and serious traction among House Republicans than people realize, though GOP leaders think shutting down the government is the much more likely outcome of the spending fights this winter.
Translation: “If we don’t get our way, we Republicans plan to shut down the government, because that really would screw you of the lower 99%. The only question is when we’ll do it – for the debt limit fight or the spending fight.”
“I think it is possible that we would shut down the government to make sure President Obama understands that we’re serious,” House Republican Conference Chairwoman Cathy McMorris Rodgers of Washington state told us.
Translation: “Attention, middle and lower classes: We’re going to cut your noses to spite your faces. And you’re so stupid, you’ll agree with it.
House Speaker John Boehner “may need a shutdown just to get it out of their system,” said a top GOP leadership adviser. “We might need to do that for member-management purposes — so they have an endgame and can show their constituents they’re fighting.”
Translation: “We’re going to punish the poor to show the rich we’re worth the campaign money they give us. We don’t bite the hand that feeds us.”
The country would eventually default if House Republicans refuse to raise the debt limit. Obama assumes Republicans would never be so foolish as to put the economy at risk to win a spending fight. Conservatives say he’s definitely wrong on that score. They say he’s the foolish and reckless one for piling up $6 trillion in debt on his watch.
Translation: Federal deficits are the government’s method for adding dollars to the economy, which is the way the economy grows. With our large net imports taking billions out of our economy, no federal deficit = recession. Guaranteed.
Economic disaster is good for the 1%. It widens the income gap by impoverishing the 99%.
“No one wants to default, but we are not going to continue to give the president a limitless credit card.”
Translation: “We’ll keep telling the same ‘credit card’ lie, as long as you keep falling for it. You haven’t yet figured out that the federal government never can run short of money. Until you get it, we’ll just keep beating you, your wife and your worthless children down.”
The conventional wisdom is that Obama and Congress will ultimately work out a grand spending compromise that raises the debt limit, keeps funding the government and changes the $1.2 trillion in automatic “sequestration” spending cuts set to kick in on March 1.
Two top GOP officials told us Republicans are not willing to compromise on the $1.2 trillion in cuts. Right now, half the cuts target defense, half other programs. The White House not only wants to use the sequestration debate to resolve all of the spending fights — it wants to replace some cuts with tax increases.
Translation: The Republicans want to keep their promise to the 1% (to widen the gap) by shutting down the government. The Democrats want to keep their promise to the 1% (also to widen the gap) by increasing taxes on the middle and lower classes. Obama already has done his part by increasing FICA.
GOP officials said 90 percent of their members are prepared to allow the cuts to take effect, rather than compromise, based on their preliminary head counts. This seems like the most likely outcome right now.
Translation: “To hell with America. We made promises to the rich, in exchange for campaign contributions, and we intend to keep those promises. We’re honorable people. Anyway, what are you poor people going to do about it, huh?”
Boehner’s own staff has warned conservative lawmakers that deficits will soar, as interest rates rise, the markets will tumble and the economy will face catastrophe if they truly follow through on default.
Translation: “Ah, who cares. The people are sheep. They’ll do anything and believe anything we tell them. A little poverty will teach them a lesson (so long as I’m O.K.)”
Look for (Republican) members to push for an idea, crafted by Sen. Pat Toomey (R-Pa.), to cushion the effect of default by passing legislation beforehand that prioritizes the order that government bills will be paid in the event the debt limit is not increased.
Translation: “Trust us Republicans to come up with an idea that is against the law. The Impoundment Control Act of 1974 forbids the President from not spending (“impoundment”)what the Congress has authorized, without approval of both houses of Congress.
“We plan to blame the Democrats for not spending what we have authorized, because we want to decrease spending. Think about it and tell me if you understand what I just said.”
Chris Chocola, president of the conservative Club for Growth: “What’s more irresponsible: continuing on this path to fiscal ruin, or changing the path?” he said. “There is a high level of frustration, and a willingness to do something dramatic. They think this is the only way to get Obama’s attention.”
Translation: “It goes like this. Sure, we know the federal government is different from you and me. It even is different from state and local governments. How? It alone never can run short of money, so there never can be ‘fiscal ruin.” But “fiscal ruin” is just our phony argument to brainwash you, the public, and so far, you have proven ignorant enough to buy it.
“Our real goal is to keep collecting campaign money from the rich, who want to push you and your family down as far as possible. We don’t care what disasters befall you – in fact we welcome those disasters — so long as our own jobs are safe.”
By now the stock market should have gone into free fall. But sane people have trouble believing politicians claiming to be patriots, and elected to help the economy, intentionally would cause a depression.
We disagree. We now regard Michele Bachmann, Donald Trump, Wayne LaPierre, Herman Cain and Rush Limbaugh as among the less crazed Republican “patriots,” (who, by the way, plan to destroy America.) There actually are Republicans far more damaging.
And, you believe what they tell you.
Back in Chicago, we call you “chump.”
Rodger Malcolm Mitchell
Monetary Sovereignty
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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
#MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
Oh please, the Republicans have no interest in cutting spending any more than the Democrats. All talks of spending cuts are for show only and are always to projected increases in future spending. Instead of increasing spending by 12 Trillion in the next 10 years Republicans recommend an increase of 10 Trillion and call it a 2 Trillion cut. That’s like me saying I’m going to lose 10 lbs and the way I’m going to do it is gain 200 lbs first then drop 10.
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I pray you are right, but I doubt it. The Republicans (and to a much lesser extent, the Democrats), have been paid by the upper 1% to widen the gap between rich and poor (and middle).
The best, easiest way to widen the gap is by cutting federal spending, the vast majority of which benefits the 99%.
Look at the euro nations. There, austerity has devastated the 99%, while doing nothing to hurt the 1%. Austerity widens the gap, and it is the gap that concerns the rich.
Remember: Without the gap, there would be no rich.
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From: Jake Horowitz (jhorowitz@policymic.com), 15-Jan-2013
Austerity is working.
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Good news: Conservatives reluctant to take flu shot:
There’s hope for America.
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Natural selection hard at work.
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1.) Max Pruger says Republicans have no interest in cutting spending.
Republicans want to cut spending on social programs that benefit the 99%.
Meanwhile they want to increase spending on wars and weapons, on bailouts of Wall Street and big banks, on subsidies to oil companies, etc.
2.) Rodger says, “We now regard Michele Bachmann, Donald Trump, Wayne LaPierre, Herman Cain and Rush Limbaugh as among the less crazed Republican “patriots,” (who, by the way, plan to destroy America.) There actually are Republicans far more damaging.”
Yes, ten years ago, people like Rush Limbaugh seemed radically right wing. Today they are to the Left of Republicans and Democrats alike. Richard Nixon would be extremely Leftist by comparison. Meanwhile Obama is considerably farther toward the right-wing than even W. Bush.
Thus, we now have a choice between (a) extreme right-wing Republicans, and (b) slightly less extreme right-wing Republicans (i.e. Democrats).
3.) The Politico blog is notoriously right-wing. Its two clowns write that, “The country would eventually default if House Republicans refuse to raise the debt limit.”
Nonsense.
Regardless of Congressional antics, the Fed and the Treasury will never default on T-securities, since the Fed and the Treasury both create money on keyboards. Average people don’t know this, but brokers and investors do. Hence, debt ceiling antics affect the real economy, but not the financial economy. Average people in the real economy fear that the government might actually “shut down”—that is, close all its military bases and federal prisons, end all Social Security benefits, lay off all federal employees, and so on.
It’s garbage, but the public eats the garbage, since the public thinks that fiat money is something physical and limited – even though the public lives in a nearly cashless society. Less than 3% of the total U.S. money supply consists of coins and notes. (Same with England and Japan.) We live with checks, debit cards, credit cards, and direct deposit for everything from food stamps to payroll to Social Security benefits. And yet the public still insists that money is physical.
Meanwhile the Treasury supports the debt ceiling charade, since Treasury bureaucrats work for the 1%, just like politicians do. The Treasury continues to create money on its keyboard as always, but calls this routine practice, “extraordinary measures.” In this way the Treasury supports austerity.
4.) If you ask the average person about government spending, he will go in circles.
QUESTION: Where does the government get its money?
AVERAGE PERSON: The government borrows its money from the Fed.
QUESTION: Where does the Fed get its money?
AVERAGE PERSON: The Fed borrows it from China.
QUESTION: Where does China get its money?
AVERAGE PERSON: From the sale of goods to the USA.
QUESTION: Where do U.S. consumers get money to buy those goods?
AVERAGE PERSON: From banks, and from the government, which borrow their money from China, which gets its money from consumers, who get their money from banks and the government, who get their money from China.
Round and round, going nowhere. And yet the public insists that fiat money is physical and limited, and “comes from some definite source.”
What is that source? The public accepts any idea so long as it is not the truth that banks and the government create money on keyboards.
For the public, reality is absurd, and absurdity is reality. “Common sense” says that black is white, squares are round, and 1+1=3. And so the masses remain enslaved.
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….
I realize this is off target however would you consider providing some commentary on the following: ….we should all be realizing that the Fed has less control over the money supply than most of us have been led to believe. The money supply being endogenously controlled by the banking system means that the Fed can influence the cost of money, but cannot completely control the supply of money. The money supply is largely regulated by market conditions and the demand for loans. In other words, the money supply is almost entirely privatized in the USA. The Fed tries to influence the cost of this money by gauging economic conditions and forecasting policy changes to economic agents.
So, what happens to this system if the government self finances? Obviously, we’re entering a monumental paradigm shift. We’re transferring from a system where money is created endogenously by banks who compete to issue money, to a system where the government exogenously creates money. It’s almost impossible, difficult to say whether one system is more inflationary than the other. But what becomes clear in a system of government self financing is that the existence of private banking becomes increasingly less significant which would render the need for the central bank as increasingly less significant (since the central bank exists to support private banks and operates policy through the banking system).
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Private lending creates dollars. Government spending creates dollars.
Why would you prefer to increase government spending while decreasing private lending?
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The statement comes from a site called Pragmatic Capitalism and it’s pet theory Monetary Realism, which seems to challenge the ideas contained in MS and to some extent MMT; who they state fail to recognize that private banks create the majority of money and not the Treasury Dept. or the Fed. Since I tend to value your opinions more than most others I asked for your impressions.
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Chasfra writes, “A site called Pragmatic Capitalism and its pet theory Monetary Realism seems to challenge the ideas contained in MS and to some extent MMT; who they state fail to recognize that private banks create the majority of money and not the Treasury Dept. or the Fed.”
Yes, of course private banks create most of the money. Rodger has never said otherwise. And while there are many things about MMT that Rodger and I disagree with, the “Monetary Realism” people have never said anything that Rodger has not already said, many times.
Let’s examine this specific topic once again…
The US government creates its spending money on computer keyboards. Banks create loan money the same way. Bank loans are money, since loan money can be spent or deposited.
Now, consider that America’s overall GDP is about $15 trillion each year. The U.S. government expects to spend $3.8 trillion for FY 2013. Right away we see that U.S. government spending is only about 25.3% of GDP. This figure is not entirely accurate, since the government will tax $2.9 trillion out of the depressed economy, and destroy it, but the 25% figure suffices to show that three fourths of America’s GDP consists of bank loans, plus financial investments and shenanigans, consumer spending, and so on. Only a quarter of the money supply comes from government spending.
Currently the banks are not lending or investing, since banks can make more money by speculating, and through various forms of arbitrage. Moreover, if the banks lose on their bets, the Fed and / or the Treasury create more money on their keyboard, erasing the banks’ losses. So the banks have no reason to lend.
Since the banks are not lending, we have a depression. When we have a depression, only three things can save us…
1. The USA becomes a net exporter to the world. (This won’t happen.)
2. Banks dramatically increase their lending. (Again, won’t happen.)
3. The U.S. government dramatically increases its spending.
Rodger focuses on the third option, since it is the easiest to achieve, and the most viable. This focus may lead the casual observer to falsely think that Rodger says all our money comes from the government.
The 1% and their puppet politicians want decreased government spending, so that we all become poorer, and more dependent on the 1% and politicians.
And they have brainwashed 99.99% of the public into agreeing with them.
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Natural selection hard at work.
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chada,
I can’t imagine why he says Monetary Sovereignty “fails to recognize” a well-known fact.
In the above graph, the blue line is the total money in the economy; the red line is just the money created by the federal government. The difference is non-federal money.
There is a post on this difference at: “Is federal money better than other money?” The answer is: Yes. Much different. Federal money is better.
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Bank lending (unlike federal spending) eventually causes bubbles, which always burst when the debt load grows too high. This is called the business cycle.
When the bubbles burst, banks stop lending, thereby causing a recession or depression.
The depression continues until the government increases spending.
The government will only increase spending if the public wakes up from its trance (which is unlikely) or if we have another world war (which is much more likely).
The world war will kill millions.
After the war, allies will be enemies, and enemies will be allies.
Then the entire process will repeat.
There is no mystery to the process. It is sustained by every idiot who smugly denies the facts of Monetary Sovereignty.
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Do you believe that I am among a group that “smugly denies the facts of Monetary Sovereignty”. Do not make assumptions, sir. The reason I ask Rodger such questions is to receive an interpretation from one whose ideas I completely and utmostly respect and believe in. Every word you have written enlightens me no further than I have already been. In other words, you are preaching to the godamned choir.
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Chasfra, when I spoke of “every idiot who smugly denies the facts of Monetary Sovereignty,” I did not reference you. I was not even thinking about you. Yet you chose to imagine that you were being personally attacked, thereby revealing a persecution complex that is likely the flipside of arrogance. Moreover your caustic profanity suggests emotional problems. You asked a question based on erroneous assumptions, and I answered it while correcting your false assumptions.
Get over yourself. In your current state, you have nothing that (for me anyway) merits listening to.
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Mark, so you are a psychiatrist as well as an economist of distinction. I do not read this blog to be enlightened by you. I believe you should practice exactly what you preach.
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