The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. Cutting the federal deficit is the most ignorant and damaging step the federal government could take. It ranks ahead of the Hawley-Smoot Tariff.
As a readers of this blog you probably have learned about Monetary Sovereignty. You know that the federal government has the unlimited ability to create dollars, limited only by inflation. You also know that neither taxes nor taxpayers nor borrowing pay for federal spending. In fact if taxes and borrowing were eliminated, this would not reduce by even one dollar, the federal government’s ability to spend. So long as inflation can be controlled, federal spending is stimulative to the economy. This all is absolute fact, not opinion or hypothesis.
On point, here is an article by Lori Montgomery and Shailagh Murray, Washington Post Staff Writers, Wednesday, February 9, 2011. I’ll quote from it, then translate.
Republican leaders unveiled a list of proposed cuts in government spending Wednesday that would strike hardest at priorities of the Obama administration, such as high-speed rail, scientific innovation and a wide array of clean energy programs.
Translation: Despite the fact that these initiatives would take not one dime from you taxpayers’ pockets, we have decided your children and grandchildren do not need high-speed rail, scientific innovation and clean energy.
“Never before has Congress undertaken a task of this magnitude,” House Appropriations Committee Chairman Harold Rogers (R-Ky.) told Republican lawmakers at a caucus meeting Wednesday morning. “You will be voting on the largest set of spending cuts in the history of our nation.”
Translation: Although federal spending is proven stimulative, we in Congress wish to starve the economy of money, so we have decided to do so, big time.
House conservatives were unappeased, however, and vowed to offer a plan to cut spending by at least $10 billion when the measure come before the full House for consideration next week. It was not clear whether the conservative Republican Study Committee would propose a lists of cuts to specific programs, as the Appropriations Committee has done, or whether it would simply instruct the White House to cut spending across the board, allowing it to avoid the sometimes painful specifics.
Translation: We heroically will pander to the far right by starving the economy of money, but we don’t want to take the blame for the horrendous results. So we will force the White House to do it. Then we can point fingers. Clever, huh?
House GOP leaders endorsed the Appropriations cuts but were vague about the details. House Speaker John A. Boehner (R-Ohio) said the package of reductions would fulfill “our pledge to the American people that we will cut spending. All of this will help create an environment where we’ll have more jobs in America.”
Translation: See, it’s this way: Removing money from the economy somehow encourages businesses to hire more. We’re not sure how that works, but so long as no one is asking, we’re not telling.
House Majority Leader Eric Cantor (R-Va.) told reporters Wednesday morning that excessive federal funding has “been a big inhibitor to investment and job growth.”
Translation: Like Boehner and the Tea Party said, adding money to the economy inhibits investment and taking money from the economy is stimulative. We know that doesn’t make sense, but is that important?
The list of cuts . . . (would include) Obama’s high-speed rail initiative and the AmeriCorps volunteer program, one of President Clinton’s signature creations.
Translation: Our kids don’t need high-speed rail. Walking is healthful. And sure, AmeriCorps members address critical needs in communities all across America, for instance: *Tutor and mentor disadvantaged youth, *Fight illiteracy, *Improve health services, *Build affordable housing, *Teach computer skills, *Clean parks and streams, *Manage or operate after-school programs, *Help communities respond to disasters, *Build organizational capacity
But the Tea Party tells me none of those things are important, and who am I to argue about details? I just say what they tell me.
The list takes direct aim at Obama’s innovation agenda, slashing the budget of the Office of Science by 20 percent. Elite science labs in Tennessee, California and Illinois are bracing for furloughs and possibly layoffs.
Other Republican targets include arts and cultural funding through the Corp. for Public Broadcasting, the Smithsonian Institution, the National Archives and Records Administration, the National Endowment for the Arts and the National Endowment for the Humanities. All of the entities are routinely included on GOP lists; federal subsidies for the CPB would be effectively eliminated under the House proposal, fulfilling a long-standing conservative pledge to cut federal ties with NPR and public television.
Funds for minority business development, family planning and conservation programs would also be axed. Despite the persistently high unemployment rate, job training funds would be reduced by $2 billion. Community health centers, which serve a large number of low-income uninsured people, would lose $1 billion in funding. And more than $200 million would be trimmed from maternal and child health grants, which provide funding for immunizations as well as assistance for blind and disabled children.
Translation: Oh, quit your whining. Just a bunch of bleeding heart stuff. Name one thing on the list that benefits our children, our grandchildren or America. Who cares about them, anyway. The important thing is to:
a. Beat Obama. b. Pander to the Tea Party. c. Remain ignorant about economics. So please, don’t bother us with facts. We have our priorities.
I hope this translation clarifies things.
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth.