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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 ultimately 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.
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The right-wing, Washington Times ran the following article. Here are some excerpts. Think about what this article is trying to sell you.
Washington Times
Poverty level under Obama breaks 50-year record
By Dave BoyerFifty years after President Johnson started a $20 trillion taxpayer-funded war on poverty, the overall percentage of impoverished people in the U.S. has declined only slightly and the poor have lost ground under President Obama.
Although the president often rails against income inequality in America, his policies have had little impact overall on poverty. A record 47 million Americans receive food stamps, about 13 million more than when he took office.
So obviously, those food stamps don’t do any good. Right? And it’s all Obama’s fault. Right again?
Read on.
About 50 million Americans live below the poverty line, which the federal government defined in 2012 as an annual income of $23,492 for a family of four.
President Obama’s anti-poverty efforts “are basically to give more people more free stuff,” said Robert Rector, a specialist on welfare and poverty at the conservative Heritage Foundation.
Giving poor people “free stuff” doesn’t help them. Right?
(Oh, by the way, the Heritage Foundation is funded by the extreme right-wing rich, whose cure for poverty seems to depend on lower taxes for the wealthy and less regulation of wealthy corporations.)
Mr. Rector said the war on poverty has been a failure when measured by the overall amount of money spent and poverty rates that haven’t changed significantly since Johnson gave his speech.
“We’ve spent $20.7 trillion on means-tested aid since that time, and the poverty rate is pretty much exactly where it was in the mid-1960s,” he said.
O.K., we get it. Spending $20.7 was a waste of money. It hasn’t helped at all because the same number of people are in poverty. So we ought to stop giving poor people “free stuff.” Right?
Then there’s this from the Census Bureau:
How the Census Bureau Measures Poverty
The Census Bureau uses a set of money income thresholds that vary by family size and composition to determine who is in poverty.
The official poverty thresholds do not vary geographically, but they are updated for inflation using Consumer Price Index (CPI-U).
So the same income — $23,492 for a family of four — defines poverty in Manhattan and poverty in Mississippi? Interesting to learn that it costs no more to live in America’s most expensive locations than in America’s least expensive locations.
But it gets even more interesting:
The official poverty definition uses money income before taxes and does not include capital gains or noncash benefits (such as public housing, Medicaid, and food stamps).
Get it? The spending to which the Heritage Foundation’s mouthpiece says does nothing to help the poor, is not even included in the definition of poverty.
Who is poorer? The family with an income of $23,492 that also receives free food stamps, free Medicaid and free housing, or the same family that does not receive this “free stuff”?
Clearly, the “free stuff” to which the Heritage Foundation objects is a huge benefit to the needy people receiving it.
That “free stuff” may prevent starvation, homelessness, sickness and death. But the Heritage Foundation seems not to care about the poor. These mean-spirited guys send out liars like Rector to tell America food stamps don’t work; free housing doesn’t work; Medicaid doesn’t work — and while we’re at it, let’s cut unemployment compensation, Social Security, Medicare and every other aid to the poor and middle classes, while “broadening the tax base.”
The cruelty of the wealthy liars is beyond comprehension. While the rich lounge on yachts, millions of people suffer on scaps, but even that suffering isn’t sufficient. The rich want to take away the scraps.
They paint the poor as lazy freeloaders, who would rather do nothing than work for a living. It’s a cruel lie, but the cold-hearted among us eagerly buy into that lie.
If a nation is measured by its treatment of its less fortunate, then America is diminishing. The fault lies not only with the rich, but even more so with the fools who believe their lies.
And the irony: Those federal benefits don’t cost anyone anything. In our Monetarily Sovereign nation, taxpayers don’t pay for federal spending.
In short, those who object to the “free stuff” that keeps people alive, don’t even pay for the “free stuff.”
How stupid is that?
Rodger Malcolm Mitchell
Monetary Sovereignty
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Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
9. Federal ownership of all banks (Click here)
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10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt
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:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports
THE RECESSION CLOCK
As the federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise.
#MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
Regarding “free stuff,” here is an iron rule of any society: the richer you are, or the higher on the social ladder you are, the more you receive “free stuff” in various forms. And yet, the more you tend to claim to be a “maker” and a “self-made man.” You order your slaves to build you a monument. Afterward you say, “I built this.”
Meanwhile the poorer you are, the less you receive “free stuff” in its various forms. And yet, the pampered rich call you a “taker.” You do all the work. You keep everything moving. You are invaluable to society. You are the source of everything in civilization. And yet you are a “taker.”
Which is more indispensable? If all rich people were to disappear, then others would take their place. But if all the not-rich were to disappear, then civilization as we know it would end. And yet, average people are called “takers.”
It’s like the relationship between plants and animals. Plants were here first, and they created oxygen. Later came animals. Plants changed so that they used animals to carry seeds and pollen. If all animals were to disappear, then plants would find other ways to reproduce. But if all plants were to disappear, then all the animals would die from lack of oxygen. Thus, we need plants far more than they need us. And yet, like poor people, we consider plants to be “inferior life forms.”
Everything in human society is upside-down and back-asswards. The takers (rich people) are called makers, and the real makers (average people) are called takers.
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—Off topic – off topic –
THE BIG LIE, YESTERDAY AND TODAY
Rodger mentions the Heritage Foundation in his post above.
Speaking of right-wing propaganda mills, I just read a paper from the Cato Institute in Washington DC (funded by the Koch brothers). Written in 1983, I thought it was an interesting example of how the rich and their toadies adjust the Big Lie to fit changing social conditions.
First, a background comment…
The Big Lie was part of the Clinton administration’s push for a balanced budget at the behest of Treasury Secretaries Lawrence “Sleepy” Summers and Robert “Deregulator” Rubin.
Then came W. Bush, who toned down the Big Lie in order to focus on his “war on terror.” This angered his Treasury Secretary Paul Henry O’Neill, who opposed Bush’s tax cuts, and who endlessly nagged about the supposed need for austerity (deficit reduction). O’Neill commissioned reports which claimed that Social Security, for example, would collapse without massive austerity (spending cuts and tax increases).
Eventually Bush grew weary of this nonsense, and fired O’Neill after 23 months as Treasury Secretary. Later, O’Neill helped author Ron Suskind write a polemic (“The Price of Loyalty”) in which O’Neill claimed that Dick Cheney told him, “Reagan proved that deficits don’t matter.”
After Bush fired O’Neill, he looked for a Treasury Secretary who would give him limitless money to fight endless wars. A month before the US invaded Iraq, Bush appointed John William Snow, an executive from the railroad industry. Mr. Snow kept quiet and “signed the checks,” so to speak, until he was forced to resign in 2006 because of a personal income tax scandal.
I have reason to suspect that Snow was pushed out by his replacement, Henry Paulson, who took office and greatly expanded the frauds behind the housing bubble as W. Bush continued to focus on his “war on terror.” Later, when the bubble popped, Paulson held a gun to America’s head and threatened to pull the trigger (i.e. destroy the US economy and banking system) if the US Congress did not pay him a ransom of trillions in Wall Street bailouts.
By January 2009, Bush was gone, and Obama was in. Paulson appointed his crime partner (Timothy Geithner) as his successor, and the Big Lie was back with a vengeance. By June 2010, austerity mania began to sweep the world, and the Big Lie saturated the entire Internet.
MY POINT is that the Cato paper was written long before all this, back in 1983. Thus, its Big Lie was a bit different from today’s, although the goal was the same: namely to widen the gap between the rich and the rest. (This goal never changes.)
Yesterday, today, and tomorrow, the dream of Wall Street is to privatize Social Security, so that billions of FICA tax dollars are no longer destroyed, but instead go into the pockets of Wall Street swindlers. The FICA tax must remain, so that donations to Wall Street are mandatory. (That’s the beauty of privatization: the government enforces collection, and Wall Street thieves pocket the loot. The more this is the case, the more right-wingers call government “efficient” – i.e. efficient at widening the gap between the rich and the rest.)
With privatization, the Wall Street fraudsters could collect billions in revenue, and then engineer regular “crashes” that will let them stash all their stolen FICA loot in offshore accounts. That’s what happened to millions of workers’ IRA accounts after the crash of 2008. Their accumulated wealth simply “vanished.” (Behold the “free market” in action.)
Let me repeat this. The goal is not to eliminate Social Security, but to privatize it. The Big Lie validates austerity cuts. It is the cuts that eventually lead to privatization, as the masses become so miserable that they cry out for relief at any cost. Tortured to the point of begging for death, they scream for privatization, whereupon the rich (out of the kindness of their hearts) give the peasants what they beg for.
Put another way, if politicians simply eliminated Social Security, then they would face a political backlash. Furthermore, privatization would widen the wealth gap more than would elimination. Wall Street thieves could steal billions with impunity. Average Americans would have no way to get their money back, or identify the thieves. (“It wasn’t our fault that all your benefits vanished. It happened because of the free market.”)
Today, American workers no longer trust Wall Street, and no longer have any money to put into 401Ks or IRAs. However, workers must still pay the FICA tax. Hence, the Big Lie has been adjusted to say that Social Security is “unsustainable,” and can only be saved by continual cutting, until privatization becomes inevitable.
Back in the 1980s, the Big Lie was somewhat different. Since company pensions were tied to Wall Street, companies would be on the hook if the markets crashed. Therefore companies wanted workers to take their own private chances with Wall Street. Companies told American workers that their retirement benefits would quadruple if they no longer contributed to defined-benefit pensions, and instead donated their retirement savings to volatile Wall Street, via IRAs and 401Ks.
The Cato paper (link at bottom) says that this same lie about expanded benefits should be used to make workers submit to the privatization of Social Security. The paper says that professors, politicians, and media pundits must not say that Social Security should be “privatized,” but that retirement benefits should be “expanded” (via privatization). This was back in 1983.
This shows that, in one sense, the Big Lie never changes. The lie is based on greed and fear, both of which are always found together in the human mind. Where there is greed, there is fear, and vice-versa. The Big Lie changes according to which of the evil twins is prominent. Today the Big Lie emphasizes the fear side (“Social Security is unsustainable”), whereas in past years the Big Lie emphasized the greed side (“By sending your FICA taxes to Wall Street, you can retire wealthy”). Regardless of which side is prominent, the Big Lie always widens the gap between the rich and the rest. That is its sole function.
When one of the evil twins is prominent, the other lurks in the shadow. For example, today the fear twin is prominent (“The US government is broke!”), while the greed twin is in the shadow (“Blacks and poor people are useless takers that should be denied all social programs”).
In some cases, both twins are equally prominent: greed and fear alike. For instance, the lie about “generational war” lie (a.k.a. the “war on youth”) claims that senior citizens are stealing all the Social Security (fear side), and that young people should take revenge by letting Social Security be cut and privatized (the greed side). That way, young people will get more tomorrow by getting less tomorrow. (Huh?)
In reality there is infinite money for all, and taxes do not pay for federal social programs. The US government is not “in debt,” and Social Security is not “unsustainable.” But what is reality compared to the power of greed and fear?
The “war on youth” lie has been around for a long time (even the 1983 Cato paper suggests using it), but it became especially popular when austerity mania took off in mid-2010. Today, most champions of the Big Lie also spout the “war on youth” lie. (“Your wicked grandma is stealing from you! Stop her! Privatize social security NOW!”) People like Peter Peterson spend millions of dollars programming college students via essay contests, social affairs, and curricular materials with the idea that they are being robbed by their parents and grandparents. For the benefit of young people, SS benefits must be cut. (After which parents and grandparents will be forced to rely on their children, thereby causing added stress and expenses for young people.)
The Big Lie also accelerates “financialization” — i.e. the ever-widening gulf between the financial economy and the real economy. Although the two economies are separate, the financial economy is a deadly parasite on the real economy. “Financialization” causes big companies to act like hedge funds, devoting all their money to stock buybacks, and to gambling in the “markets.” Such companies no longer conduct R&D, lend to small businesses, physically expand, or otherwise create jobs in the real economy. They are only interested in paper profits. This “financialization” catastrophe would be greatly expanded by the privatization of Social Security, since billions of extra gambling dollars would be sent to Wall Street.
Getting back to the Cato paper (link at bottom), it is quite candid. Titled, “Achieving a Leninist Strategy,” it alludes to the Bolshevik leader’s supposed ideas about dividing and weakening his political opponents.
In addition to its recommendations noted above (e.g. do not say that SS is being privatized, but instead say that retirement benefits are being expanded), the paper says that coalitions must be formed of agents that will benefit from privatization (e.g. bankers, financiers, insurance companies, and so on). Meanwhile politicians must load SS with so many restrictive laws and regulations that privatization seems more attractive to the masses.
And of course the public must be told that without privatization, SS is doomed. The Cato paper says this lie is especially effective on younger people, since they fear that their FICA taxes are wasted, and that there will be no SS money left for them when they retire. This is where the Cato paper hints at using the “war on youth” lie.
Finally, the paper admits that, “Social Security can only be reformed (i.e. privatized) by treating the issue as a political problem.” That is to say, Social Security is so popular that the Big Lie alone cannot destroy it. Media pundits alone will not cause the peasants to vote against their own interests. Fabricated charts and graphs alone will not incite mass suicide. Instead, the masses must be politically manipulated by inflaming their greed, fear, resentment, selfishness, and base emotions.
Note, incidentally, that word “reform.” The Cato paper uses it seven times. It’s the favorite word of all toadies for the rich. All social programs and “entitlements” must be “reformed. Any laws that protect workers must be “reformed.” Anything that helps the middle and lower classes must be “reformed.” Anything that narrows the gap between the rich and the rest must be “reformed.”
(Imagine a gang of heavily armed robbers bursting into a bank and screaming: “Everybody on the floor! This is a reform!” Or a mugger pointing a gun at you and saying, “I’m not robbing you. I am structurally adjusting you. I am making you more efficient and sustainable. This is a shared sacrifice.”)
To repeat: the goal is to privatize Social Security, so that billions of FICA tax dollars go to Wall Street. (The Supreme Court would rule this to be “constitutional,” just as it ruled mandatory Obama-care to be “constitutional.”) Continual cuts widen the wealth gap, while also being steps toward enforced privatization. When Social Security benefits become so low that senior citizens are literally dying in the streets, the masses will be ready for the next stage in enslavement. Pundits, professors, and politicians will claim that privatization will not only bring relief; it will make retirees quite well-off. And the masses will cheer. But with privatization, they will be worse off than ever.
Perhaps you think the public will not allow this; that the masses will rise up and say “No!” Well, I’m sorry, but the masses were helpless to stop the loss of their pensions. And the privatization of Social Security is even more inevitable. Reason: almost everyone believes the Big Lie.
For example, liberals and “progressives” agree that the federal deficit must be reduced, and that the national debt” is a “crisis.” They just claim that the “crisis” is caused by tax cuts and military spending, not by social programs. Hence, they say that the way to ease austerity is to INCREASE austerity via higher taxes and lower military spending. Once again, the wealth gap widens.
Other liberals and “progressives” use projections from the Congressional Budget Office that Social Security can stay solvent through 2038. They reject the facts of Monetary Sovereignty, and they trust the corrupt CBO, which can arbitrarily announce at any time, “We made a mistake. SS will become insolvent in three months.” (Oops.)
REMEMBER: if a person believes the Big Lie, then he automatically works to widen the wealth gap, and to privatize Social Security. No matter whether he is a “liberal” or “conservative,” and no matter how well intentioned he may be, he serves the rich at the expense of the rest. It is unavoidable.
Anyway the Cato paper is here (.pdf)…
Click to access cj3n2-11.pdf
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— Off topic —
[1] New York real estate developer Seymour Durst has invented a wondrous device that will let you look into any person’s soul and instantly determine whether he is “good” or “bad.”
The amazing device, called the “national debt clock,” says that each U.S. taxpayer now owes $150,000 on the “national debt.”
Therefore, any deadbeat who fails to pay his $150,000 is a “taker,” and is “bad.”
http://www.usdebtclock.org/index.html
[2] British finance minister George Osborne says that even though austerity has cut the UK government deficit by a third, much more austerity is needed. Osborne has set out plans to keep increasing austerity until at least 2018. He says that only with ever-increasing austerity can the UK government “live within its means.”
He says Britons must face up to “hard truths” about the need to submit to more cuts in order to achieve a “stable economy.” He says that despite four years of ever-increasing austerity, the government is still borrowing too much and spending too much on interest on the “national debt.”
“We’re borrowing around £100 billion a year — and paying half that money a year in interest just to service our debts. We’ve got to make more cuts.”
TRANSLATION: investors are still putting £100 billion a year into their Bank of England savings accounts, and the government is still creating £50 billion a year (out of thin air) to pay the interest. Investors then deposit that interest into those same savings accounts (i.e. they use the interest to buy more “gilts” or T-securities). This is all quite trivial, and none of it has any effect on the economy. However it sounds ominous, so we’ll use it as an excuse to impose more and more austerity on the lower classes, and thereby widen the wealth gap. And yes, a 50% return on UK Treasury bonds is a comically absurd lie, but it too sounds ominous, so we’ll keep repeating it.
http://www.telegraph.co.uk/news/politics/georgeosborne/10552454/George-Osborne-to-cut-taxes-by-extending-austerity-and-creating-smaller-state.html
Osborne has already decreed that another £25 billion will be cut from social programs, including £12 billion from “welfare” (the British equivalent to Social Security).
However the cuts will not go into effect until immediately after the general election of 7 May 2015, when Britons vote for their MPs. (By delaying the cuts, the conservatives will maintain their majority in parliament.)
Osborn says the welfare system (social security) must become “permanently smaller.” He says that 2014 is the “year of hard truths,” and that only through more austerity can average Britons have better job prospects.
http://www.telegraph.co.uk/telegraphtv/10553112/Chancellor-George-Osborne-2014-a-year-of-hard-truths.html
If there ever comes a time in the distant future when mankind recovers from austerity mania, then historians will not call Osborne what he actually was: an evil, lying p.o.s. thief.
No, historians will say that Osborne meant well, but was simply “mistaken.”
In so doing, they will cause the austerity nightmare to begin all over again.
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“…austerity nightmare to begin all over again.
I think evolution is on our side in the long run. I don’t think austerity will go on and on or begin all over again. There are limits, even to stupidity. The ultimate stupidity (fear and selfishness) will kill us all when people lose their cool and go insane. Postal killing sprees, crime through the roof, international tension and war breaking out all over the place, you name it. But before all that happens, I feel automation and many other scientific discoveries will step in and convince policy makers to accept modern monetary mechanics as the only way out. Why? Because mmm provides the affordability to which we can all connect to future scientific development which will make our lives easier and safer and quickly up the living standards of undeveloped nations.
Failing to realize a system of total affordability is playing with atomic fire.
This will become increasingly obvious as conditions worsen. But also increasingly obvious will be the “awareness” of science’s potential, and the “awareness” of the utter disparity between traditional economic scarcity/failure vs. the brilliance of scientific achievement and the potential for abundant care available to all.
The point will come when people will say, “Wait a minute. How can economics be any kind of science and make zero progress?” The demand from people everywhere will be for their respective governments to get with it and to cut the puppet strings of the invisible power structure or be deposed. That’s when mmm will become a viable, practical solution to the world’s otherwise no-way-out debacle and impending oblivion.
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Economics can’t make progress until it attaches itself to a system of affordability.. then economics will automatically attach to the coat tails of industry and soar along. As hi-tech progresses so too will economics…(techonomics?)
But for now these two are separated by phony scarcity and all survival bunk that goes with it. This “Mal” thusian inspired, obsolete model we now call reality is only separating and grinding everything to a halt.
Once economics is taken out of the hands of politicians and placed in the hands of engineering we will be on our way to a far brighter future.
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