The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.
In the event you think the Republicans finally have awakened to shed the nutball Tea party, read excerpts from an article in the Washington Post.
Boehner demands ‘trillions’ in spending cuts in exchange for lifting debt ceiling
By Paul Kane and Lori Montgomery, Monday, May 9, 2011
NEW YORK — House Speaker John A. Boehner (R-Ohio) is demanding that the White House agree to at least $2 trillion in spending cuts in exchange for lifting the limit on federal borrowing to finance the government’s massive deficits.
And if the White House does not agree to the suicidal spending cuts, what then, Rep. Boehner? Destroy America?
In a Monday evening address to the Economic Club of New York, Boehner will say that in the ongoing negotiations over the federal debt limit, he is demanding that President Obama and Senate Democrats agree to spending cuts greater than the value of the planned increase in federal borrowing. Even under the House Republicans’ budget-slashing proposal, the Treasury would need to borrow an additional $2 trillion to make it into 2013 without defaulting on its loans.
Before a meeting at the White House, House Speaker John Boehner and Republicans spoke about the upcoming budget negotiations.
“The cuts should be greater than the accompanying increase in debt authority the president is given. We should be talking about cuts of trillions, not just billions. They should be actual cuts and program reforms, not broad deficit or debt targets that punt the tough questions to the future,” Boehner says in his prepared remarks, which were distributed before his speech.
“Cuts of trillions”? I assume Rep. Boehner is aware that such cuts would throw us into a depression, which means he is more interested in a Tea/Republican victory next year, than the welfare of the American people.
These cuts would come from discretionary spending programs — those that are financed anew each year in the federal budget process — as well as from mandatory spending programs such as Medicare and Medicaid and other items such as agriculture subsidies. Boehner was vague on the time frame for the spending cuts, meaning that they could be phased in over many years.
Translation: Remember, these are the same politicians who cry crocodile tears, while lying that our children and grandchildren would pay the federal debt, but are ready to punish our children and grandchildren to lower Medicare, Medicaid and Social Security benefits. Talk about hypocrisy! Boehner relies on Americans being so selfish, so uncaring, we will agree to reduced Medicare and Medicaid for future generations, so long as current recipients are not touched. Lord save us if that is what we have become.
After a week of mixed signals about how hard GOP leaders will push for the controversial Medicare-overhaul proposal, Boehner is standing behind the partial privatization of the popular health-care plan for the elderly. However, in recent days, many GOP aides and several Republican leaders signaled that the proposal is not likely to be a focus of the ongoing budget negotiations led by Vice President Biden and a bipartisan group of six congressional leaders, because President Obama’s staunch opposition makes the plan virtually dead on arrival.
Thank goodness for that!
In short, the Tea (formerly Republican) Party, rather than developing a plan to help America (for instance, by increasing federal deficit spending on health care and Social Security, and/or by cutting taxes), has decided to pursue the extremist, Tea Party, wealthy-first agenda, come what may. In short, it’s “To hell with the poor and middle class; to hell with Medicare, Medicaid and Social Security recipients; to hell with the future of America. All we care about is protecting the our rich contributors and the next election.
I find traitors to this nation disgusting.
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetarily Sovereign, and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.
Remember that the next time you’re tempted to ask a dopey teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it screwed up the economy.”
8 thoughts on “–Latest idiot proposal by the Tea (formerly Republican) Party”
Going to be interesting what the Street thinks of this. Democratic fundraising just got boost. and GOP fundraising just took a big hit. If the GOP persists in this, the market is setting up for a nice short.
This is nothing new. This nation has always been a den of thieves.
Genocide against the Indigenous People of North America and stealing their lands, 200 years free labor from slavery followed by another 100 years of exploitive Jim Crow laws, most recently, the asset stripping of the American middle class.
All so the fabulously wealthy and powerful can become more fabulously wealthy and powerful. But hey, nothing like a little financial planning to ensure that in the future the income steam continues to the top.
But are the Democrats and especially the President not equally to fault. TARP was initiated under Bush, but Obama continued protecting the money class.
I can understand stabilizing the system. At some point, the banks should have been broken up: the stockholders wiped out and the bondholders getting a haircut or debt for equity cram down. This would have cleared the system of bad debt and allowed the creation for a new credit cycle. Sadly, BO is not FDR.
I think this would have destroyed wealth but not money, therefore not unhealthy for the economy.
What is your position of what the other idiots (Democrats) are doing to harm this economy? It is a given that the Tea Party is just simply crazy, and this is not a comparative exercise.
The Tea/Republicans are not crazy. Some subscribe to:
1. the false belief that fed debt is like personal debt, and must be “paid back” with tax hikes, while others subscribe to
2. the traitorous belief that the way to win the next election is to sink this country and claim the Democrats did it.
In short, some are ignorant and some are traitors.
Rodger Malcolm Mitchell
I note he’s from Ohio. Google tells me that Ohio recieves a large amount of agricultural subsidy. If he’s fair dinkum I imagine he’s up for scrapping these subsidies wholesale…. 😉
Somehow I don’t see that happening. Similar to what’s happening here in Australia, we’re about to have the annual federal budget announced tonight, and there’s been much talk about cuts needing to be made, and other austerity measures to bring us back into surplus by 2013, but somehow I don’t see some of the big middle class subsides like negative gearing on investment property (the ability to claim losses against your personal income) or the Baby Bonus (a $3000 cash handout to anybody who has a baby irrespective of income), being touched. Instead all the talk has been about cracking down on welfare cheats, and slashing science research funding.
As long as the U.S federal government continues to borrow money from the Federal Reserve for all it’s needs there will be taxation to offset the fact that the US is NOT “monetarily sovereign,” and it does not print money. It borrows all money not collected in taxes from “the Fed.” If and only if the Federal Reserve is dissolved will the United States become sovereign and begin to print/circulate its own currency.
In 1971, at the moment the Treasury went off the gold standard, it had been a subject of its lord and master, the Federal Reserve, since 1913, or 58 years.
Here is how the federal government borrows for instance, from China:
1. First, China must deposit dollars (not yuan) into its checking account at the Federal Reserve Bank.
2. Then, to “lend” to us, China asks the U.S. federal government to debit its checking account and to credit China’s T-security account, also at the Federal Reserve Bank. (A T-security account is similar to a savings account.)
3. Then, to “pay off” the loan, China’s T-security account is debited and China’s checking account is credited– all at the Federal Reserve bank.
And that’s it. Federal “borrowing,” which is much different from personal borrowing, consists of nothing more than debiting and crediting accounts at the Federal Reserve bank. There never is a time when federal debt is a burden to the federal government. It can debit and credit accounts at the Federal Reserve Bank, forever, and it can do so without inflation.
And of course, the federal government does not need to issue T-securities (i.e. “borrow”) at all. It can spend without limit, and issue no T-securities, merely by changing the law that requires T-securities to equal deficits.
Rodger Malcolm Mitchell
The Federal Reserve is PRIVATE bank owned by member banks, the twelve Federal Reserve banks around the country and all member banks that are part of the FDIC system. Virtually all management is done in secret by the board, and while the head of the bank is “appointed” by the president and rubber-stamped by the Senate, this process was known from the inception to be a fraud for public perception, to infer that the bank is owned by the federal government and the people. In fact, a member of the Senate and any other representative of the people is expressly prohibited from access to management decisions, and is prohibited from internal information, as if this information enjoys a “top secret” equivalent status. No member of the Senate, for example, or other public employee, is allowed to sit on the board of a Federal Reserve bank.
Ownership and management of the Federal Reserve system has been closely held by the Bank of England of the Corporate City of London and those associate with this small group. The Bank of England was founded by the Rothschild Dynasty, and even the most powerful of banking families in the United States have been merely associates of the same London-based group. For example, upon his death it was discovered that J.P. Morgan held only 19% of shares in Morgan Bank, the balance owned by European banks or families such as the Schiffs, who at that time lived on both sides of the Pond.
The recent wave of shrinking bank ownership and consolidation of smaller banks into larger banks, or the outright closer of hundreds of banks, has concentrated the ownership of the Federal Reserve system into fewer hands.
If this private ownership were not true, the “interest on the deficit” would not be a line item in the federal budget every year. The fact that the United States does pay interest to this private corporation is most recently dropped from discussions about the budget, largely since 2008, and is something that is rarely mentioned in any discussions of “the Debt Crisis.” It is practically taboo in mainstream media. This is because that line item would raise questions in the “public mind” as to who profits from this interest.
The way in which transactions are made to and from the banks is the same as most large corporations use with their suppliers. That is no surprise. The fact remains that the Fed issues the bonds, T-notes, and credits because it holds the accounts of many governments and private “lenders” while remaining independent. On a small scale it would be like a CPA or tax attorney having “power of attorney” over a client’s money.
Because the Fed benefits from every dollar “overspent” or issued in excess of revenue in the government’s accounts, including interest that the federal government owes to individual or “China” purchasers of Treasury Notes, it is ultimately the Fed who encourages deficit spending. The Fed also profits from management fees charged to the Treasury of the United States.
All of this information is freely available for those who seek it.
There you have it, folks. A classic conspiracy theory. The Rothchilds own the U.S. Federal Reserve and receive the interest paid on T-securities, and Congress does not determine the federal spending that results in T-bills.
Who’d a thunk it?