Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

At the end of this post, I pose a question to the President of the United States and for Congress:

Obama urges supercommittee leaders to reach deal; warns against undoing consequences of failing to reach accord

Andrew Harrer/BLOOMBERG , By Rosalind S. Helderman, Published: November 11

President Obama called the Democratic and Republican chairmen of Congress’s special deficit reduction supercommittee Friday and urged them to reach a deal, as the panel’s deadline for agreeing on a strategy to slash the nation’s debt rapidly approaches.

The congressional supercommittee has less than two weeks left to agree on a plan to reduce the federal deficit and avoid harsh, across-the-board spending cuts to every government agency.
According to that agreement, if the committee of six senators and six representatives deadlocks, budgets will be cut automatically by $1.2 trillion over the next decade.

Half of those cuts would come from the Pentagon, a prospect daunting enough that leading lawmakers have suggested the cuts should be repealed. But the so-called sequester could not be undone without a sign-off from Obama, and he made clear Friday that he would not agree.

“The sequester was agreed to by both parties to ensure there was a meaningful enforcement mechanism to force a result from the Committee,” the White House said in a statement. “Congress must not shirk its responsibilities. The American people deserve to have their leaders come together and make the tough choices necessary to live within our means, just as American families do every day in these tough economic times.

Translation of Mr. Obama’s comment: “Your income is down, and you must cut back on your spending. So I, your leader, will cut back on government payments to you. See? We’re in this together.”

It is frightening indeed, that the President of the United States of America does not understand the difference between the U.S government (Monetarily Sovereign) and American families (monetarily non-sovereign).

While the President wants to cut federal deficit spending, here is a snapshot of the past decade:

Mr. President, ladies and gentlemen of Congress: does this really look like an economy that needs cuts in federal deficit spending? Will reduced federal spending help increase health insurance coverage, reduce home vacancies, reduce unemployment, support national defense and reduce mortgage delinquencies? Really?

I award 3 dunce caps to the President for wanting to raise taxes while cutting Social Security and Medicare.

I award just two dunce caps to Congress for wanting to cut spending, but at least having the sense not to increase taxes.

(This brings my dunce cap deficit to 1075. Taking my lead from President Obama, I plan “to make the tough choices necessary to live within my means”, and cut back on my dunce cap spending “just as American families do every day in these tough economic times.”)

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