●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.
The UK wisely kept its own currency, the pound, rather than join the mutual suicide pact of the euro nations. So the UK remains Monetarily Sovereign. It never can run short of its sovereign currency, the pound. It never needs to borrow pounds or to ask anyone for pounds.
Unfortunately, UK politicians, like U.S. politicians, act as though their nation were monetary non-sovereign. They seek balanced budgets; they cut spending; they raise taxes — all harmful to their economies, and especially harmful to the middle- and lower-income groups.
Excerpts from Financial Times
Britain slides back towards recession
By Sarah O’Connor and Claire Jones
Britain’s economy shrank 0.3 per cent in the final quarter of last year, bringing it closer to a possible “triple-dip” recession and piling pressure on the coalition government.
Chancellor George Osborne, whose austerity programme has come under increasing criticism as the economy has faltered, said he would “confront” the UK’s problems and not “run away” in response to the data, which was worse than economists had predicted.
He said. “. . . we face problems at home because of the debts built up over many years and problems abroad with the eurozone, where we export most of our products, in recession.”
Er, ah, excuse me, Chancellor, but you “face problems” because of your austerity program. You are pulling money out of your citizens’ pockets and expecting this to grow the economy.
But don’t feel bad. Our politicians in the U.S., being on the dole from the 1%, are doing exactly the same thing.
Said Chris Williamson, an economist at Markit, a data company. “. . . the data pile ever more pressure on the chancellor to seek ways to revive the economy in the March Budget.”
If you’re waiting for Chancellor Osborne to revive the economy, I wish you a very long life. He is clueless about Monetary Sovereignty.
The opposition Labour party hit out at the government, holding it responsible for the poor economic figures. Ed Balls, shadow chancellor, said: “These deeply disappointing figures expose just how dangerously complacent the prime minister was when he said last autumn that the ‘good news will keep coming’.”
Mr Balls called for the government to abandon its plans for fiscal consolidation. “A plan B now should include a compulsory jobs guarantee for the long-term unemployed and a temporary VAT cut to boost family incomes and our struggling high streets,” the shadow chancellor said. “We should also bring forward infrastructure investment including building thousands of affordable homes and establish a British Investment Bank to boost lending to small businesses.”
Possibly helpful, sort of helpful and very helpful. The jobs guarantee possibly could help – or ever hurt — depending on the details. The temporary VAT cut will help, but why make it temporary? Make it permanent. And government spending on infrastructure definitely will help.
Like American politicians, UK politicians pretend their nation is not Monetarily Sovereign, so the middle- and lower-income classes must pay the price. Austerity always, always, always widens the gap between rich and poor, by crushing the poor.
That is the true purpose of austerity, as ordered up by the 1%.
My question is, if every time austerity happens, recession happens, how long will it take the voting public to realize that austerity causes recessions, which in turn, punishes the 99%, and that the politicians are paid by the upper 1% to widen the income gap?
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