Mitchell’s laws: To survive, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Reduced money growth cannot increase economic growth. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

Might Irene have a positive effect?

My family has a slogan: “Good comes from bad.” It is related to the old saying, “It’s an ill wind that blows no good,”

The Irene hurricane and subsequent tropical storm may cause more damage than any natural disaster in recent memory, perhaps in American history. People will die. Homes will be lost. Families will be torn apart. Businesses will disappear. The cost in human suffering will be enormous.

So, “positive effect”? Really?

Yes, I can think of one, and if it happens, it may be a long lasting positive effect that even outweighs the horrors of Irene. Because Irene is damaging the east coast, where live and work America’s most influential people — i.e. the politicians and the bankers — President Obama and the Republicans may agree on one thing: Massive federal spending will be needed.

Yes, that President Obama. You know, the DINO (Democrat in name only). The one who talks like a liberal but walks like a conservative as he leads the United States of Bank. Even he will agree “this is no time for deficit cutting . We have to rebuild the East.”

Never mind that rebuilding the southern states after Katrina, never was important to the conservatives. Never mind that rebuilding the entire country has not been a top line on the conservative/Obama agendum, so long as the banks were protected and politicians retained their gold-plated medical care. If the influential people now suffer losses, swift action will be taken. And so perhaps, just perhaps, this east coast storm may foster the realization that deficit spending is necessary for economic growth.

Yes, the first steps will be to assure the soundness of the banks. And thereafter, money will be needed to rebuild the infrastructure upon which the banks stand and the bankers live. The entire financial community will need saving, and who better to save them than the federal government?

This means jobs and business, to supply the goods and services the influential people cannot live without. And that requires deficit spending. Lots of it.

And, despite the plaintive wails of the ultra-conservatives, whose mantra is “Weimar Republic, Zimbabwe, Weimar Republic, Zimbabwe . . . “ this deficit spending will not cause inflation, at least not an inflation the Fed cannot easily cure. So perhaps a lesson will be learned, and the nation can grow again. Perhaps, good can come from bad.

We shall see.

Rodger Malcolm Mitchell

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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings