●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.
●Everything in economics devolves to motive.
“I’ve been applying leeches to cure your anemia, but for some reason, the more blood I draw, the weaker you become.” Barack Obama, MD
In The United States of Europe: The when and the how. (Monday, Apr 30 2012), we said:
The long term survival of any monetarily non-sovereign government requires money coming in from outside its borders. Germany, for instance, survives by exporting goods and services (i.e. importing euros).
Of course, Germany has to get those euros from someplace, and unfortunately for their neighbors, that “someplace” is them. The flow of euros toward Germany sucks the life blood from France, Greece, Portugal, Spain and other nations having negative balances of payment.
Apparently, Germany is confident it will continue to bleed its neighbors, because:
Germany would take on no new debt, while a budget surplus of five billion euros (will) be secured in 2016.
Translation: In 2016, five billion net euros will be taken from Germany’s private sector, impoverishing the middle- and lower classes.
“With all modesty, this is a result of historic proportion,” Economics Minister Philipp Rösler told reporters in Berlin. “The lesson from the sovereign debt crisis is that solid finances are essential.”
Translation: “I’m brilliant, because I have figured out how to run a surplus in a monetarily non-sovereign nation: Tax the hell out of the little people. But when things turn sour, don’t blame me. I’ll do a ‘Sergeant Schultz’ and deny I had anything to do with it.”
Finance Minister Wolfgang Schäuble used the occasion to once again brush aside accusations from fellow eurozone countries Germany had been insisting on too much austerity in southern Europe. He argued the Germany example was proof there was no contradiction between budget consolidation and growth.
Translation: There is no contradiction if you use the other guy’s money.
The cabinet said the strong performance of the German economy and its labor market had helped to boost tax revenue and produce a solid fiscal basis for the country. But it added increased tax income had not been used to increase spending.
Translation: “The spending increase came from the money we took out of our neighbors’ treasuries. But don’t tell them that. They are too stupid to figure it out for themselves.”
Rösler’s crowing aside, the Germany is building on the flesh and blood of its neighbors and its citizens. In a brilliant campaign, reminiscent of the American .1% income group’s campaign to impoverish the U.S. middle- and lower classes, Germany has convinced the world its success is based on “budget consolidation” and “solid finances.”
A growing Gross Domestic Product requires a growing supply of money. In the case of Monetarily Sovereign nations, like the U.S., Canada, China, Australia et al, that money can be created ad hoc by their sovereign governments.
But for monetarily non-sovereign nations, which have no sovereign currency and so the total supply cannot be increased, each nation must try to steal euros from the others, in a nationalistic riot of mutual cannibalism.
When the other euro nations finally surrender to the eventuality that they either return to Monetary Sovereignty and re-adopt their own currency, or merge into a financial version of a United States of Europe, Germany will run out of blood donors.
At that point, German citizens will begin to suffer so much they will seek out a strong, ruthless leader, who will identify and persecute scapegoats, then renounce the euro, so as to finance a war.
During the chaos, the German uber-reich will feed off the dying German populace, as salaries are diverted to taxes and the focus turns to saving the government. Soon there will be but two classes: The very wealthy and the very poor. The gap will be complete.
By the way, eurozone, how’s that austerity thing working out for you?
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