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.

President Obama’s “American Jobs Act.” What he said; what it means. He said:

It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for the long-term unemployed. It will provide a tax break for companies who hire new workers, and it will cut payroll taxes in half for every working American and every small business.

Pass this jobs bill, and starting tomorrow, small businesses will get a tax cut if they hire new workers or raise workers’ wages.

This is backwards. Companies don’t hire new workers and give raises to get tax cuts. They hire workers if business improves and they need workers. Another example of the government trying to run businesses rather than helping consumers consume, which would improve business naturally.

And in hiring new workers to get the tax cut, will companies fire old workers? This whole concept is foolish.

Pass this jobs bill, and all small business owners will also see their payroll taxes cut in half next year. If you have 50 employees making an average salary, that’s an $80,000 tax cut.

Excellent, though in typical Obama style, it is too little. There are at least ten reasons FICA should be eliminated — not cut, but eliminated.

And all businesses will be able to continue writing off the investments they make in 2012.

Good. Too little, too late – but good.

Everyone here knows that we have badly decaying roads and bridges all over this country. Our highways are clogged with traffic. Our skies are the most congested in the world. This is inexcusable. Building a world-class transportation system is part of what made us an economic superpower.


And there are schools throughout this country that desperately need renovating. How can we expect our kids to do their best in places that are literally falling apart? This is America. Every child deserves a great school – and we can give it to them, if we act now.

The American Jobs Act will repair and modernize at least 35,000 schools. It will put people to work right now fixing roofs and windows; installing science labs and high-speed internet in classrooms all across this country. It will rehabilitate homes and businesses in communities hit hardest by foreclosures.

Sounds great.

Pass this jobs bill, and companies will get extra tax credits if they hire America’s veterans.

More silly government meddling. So if companies hire veterans, will they also fire, or fail to hire, non-veterans?

Pass this jobs bill, and companies will get a $4,000 tax credit if they hire anyone who has spent more than six months looking for a job.

Even more silly government meddling. So companies get nothing for hiring someone who has been out of a job for “only” five months? How about: Fire an employee and hire another employee to get the $4,000? Truly foolish.

This jobs plan builds on a program in Georgia that several Republican leaders have highlighted, where people who collect unemployment insurance participate in temporary work as a way to build their skills while they look for a permanent job.

WPA can work. It pumps money into the economy, whether or not people actually “build their skills.”

The plan also extends unemployment insurance for another year. If the millions of unemployed Americans stopped getting this insurance, and stopped using that money for basic necessities, it would be a devastating blow to this economy.

Excellent. And no, it does not encourage sloth. That is a myth. What it does is add dollars to the economy, thus stimulating business, which then will hire more people.

Pass this jobs bill, and the typical working family will get a fifteen hundred dollar tax cut next year.

Sounds good, depending on what a “typical working family” means. It would be far better merely to give actual dollars to every man, woman and child in America, rather than helping only “working families.”

And to help responsible homeowners, we’re going to work with Federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4% — a step that can put more than $2,000 a year in a family’s pocket, and give a lift to an economy still burdened by the drop in housing prices.

The last time this was tried it was an abysmal failure, because the banks were given no incentive to do it. So people wasted years (literally), filling out endless forms, and waiting on endless phone lines, while the banks did nothing. It proved to be a serious negative for the economy.

Better include big incentives for the banks, or it will fail again.

A week from Monday, I’ll be releasing a more ambitious deficit plan – a plan that will not only cover the cost of this jobs bill, but stabilize our debt in the long run . . . it’s a balanced plan that would reduce the deficit by making additional spending cuts; by making modest adjustments to health care programs like Medicare and Medicaid; and by reforming our tax code in a way that asks the wealthiest Americans and biggest corporations to pay their fair share.

What’s more, the spending cuts wouldn’t happen so abruptly that they’d be a drag on our economy, or prevent us from helping small business and middle-class families get back on their feet right away.

Yikes!! Stupid beyond all comprehension. First he lists the money the government will pump into the economy, to revive business. As usual, the plan is too little, too late, but at least it’s a step in the right direction.

But then, he talks about pulling money out of the economy. Hmm, let’s see. If pumping money into the economy stimulates business, what will pulling money out of the economy do? Duh.

Finally, he acknowledges that spending cuts are “a drag on our economy,” so he delays them to some time in the future, when presumably a drag on the economy will be a good thing!? This part of the speech earns four dunce caps.

Millions of Americans rely on Medicare in their retirement. And millions more will do so in the future. They pay for this benefit during their working years. They earn it. But with an aging population and rising health care costs, we are spending too fast to sustain the program.

Nonsense. A Monetarily Sovereign nation can “sustain” any program. Have you heard of any federal checks bouncing. This “sustainability” lie is a relic of the gold standard days, which ended in 1971. Total crap. Where the hell are the honest economists who will reveal this lie for what it is? The fact that so few economists speak up demonstrates the bankruptcy and illegitimacy of mainstream economics.

Ask yourselves – where would we be right now if the people who sat here before us decided not to build our highways and our bridges; our dams and our airports? What would this country be like if we had chosen not to spend money on public high schools, or research universities, or community colleges? Millions of returning heroes, including my grandfather, had the opportunity to go to school because of the GI Bill. Where would we be if they hadn’t had that

How many jobs would it have cost us if past Congresses decided not to support the basic research that led to the Internet and the computer chip? What kind of country would this be if this Chamber had voted down Social Security or Medicare just because it violated some rigid idea about what government could or could not do? How many Americans would have suffered as a result?

Amen, brother. If the Tea/Republicans had existed 100 years ago, America would be a third-rate country, somewhere below Russia. No roads, no schools, no research, no medical care, no medicines, no consumer protections, no safe food – and no money.

Anyway, if what he proposes actually happens, it will help a bit. My fear is that it is just the first step in what will be another “Obama compromise” – give the other guy everything he demands and claim it was a compromise.

And the other guy – the Tea/Republicans – will complain it increases the deficit. Why will they complain? Because they know pumping money into the economy will improve America before the 2012 election, and improving America is the last thing these “patriots” want.

All in all, it was a pretty good speech by a politician who knows nothing of economics — better than I thought it might be. Though again, the proposals are way too little and far too late, we’ll see what actually gets passed.

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