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.

A persistent message on this blog is that calls for deficit reduction have nothing to do with fiscal prudence, but rather are attempts to increase the gap between the upper 1% and the middle to lower income classes.

Again and again, the media and the politicians tell you the government, like you, must “live within its means,” or “can’t afford” something, whether it be Social Security, Medicare, health insurance, housing and food for the poor, federal employment — the list goes on and on. What they’re really saying is the middle and lower classes either must do with less, or pay more.

Here’s but one of many examples:

Washington post

What the Republican payroll tax plan would mean for federal workers
Federal unions oppose House GOP payroll tax plan
By Ed O’Keefe

House Majority Leader Eric Cantor (R-Va.), left, and House Speaker John A. Boehner (R-Ohio) announced a plan to extend the payroll tax reduction. Talk about timing: Just as most federal employees were leaving the office Friday afternoon, House Republicans announced the details of a plan to extend the payroll tax reduction that would force feds to face another year of frozen pay and to increase contributions toward their retirements.

The broad package would extend the tax cut for another year. It also would extend unemployment insurance and reimbursements for doctors who see Medicare patients . . .
Under the plan, federal workers would face a one-year extension of the current two-year pay freeze, meaning no raise until January 2014 at the earliest, and a 1.5 percent increase in employee pension contributions that would be phased in over three years starting in 2013.

For those who retire in 2013 or later, the government would eliminate the Social Security supplement for workers who retire before 62, unless the employee is in a position with a mandatory retirement age (including law enforcement personnel, for example).

The bill also would create new retirement rules for federal workers hired beginning in January 2013 who have less than five years of previous government service. Those employees would be forced to pay 3.2 percent more of their salaries toward their retirement savings starting in 2013 (although they would not be subject to a further increase as higher contributions are phased in for everyone else). Their retirement benefits would be based on their highest five years of compensation, rather than the highest three, with the net effect that those employees would be paying more for less.

[…]Colleen M. Kelley, president of the National Treasury Employees Union, said it is “outrageous” that Republicans “would single out hard-working middle-class federal employees to bear such a disproportionate burden while continuing to oppose even the smallest sacrifice by the most affluent.”

And then there’s this article:

Christian Science Monitor

Republicans will tax anyone but the rich
By Robert Reich, Guest blogger / December 6, 2011

For years, Republicans have been telling us tax cuts pay for themselves by promoting growth. If they believe what they say, why should they worry about paying for a one-year extension of the payroll tax holiday?
Here are the details: The payroll tax will increase 2 percent starting January 1 – costing most working Americans about $1,000 next year – unless the employee part of the tax cut is extended for another year.

Democrats want to pay for this with a temporary – not permanent – surtax on any earnings over $1 million, according to their most recent proposal . . . . Republicans say no to the surtax. “The surtax is something that could very much hurt small businesses and job creation,” says John Kyl of Arizona, the Senate’s second-ranking Republican.
Not even a resolute, doctrinaire follower of GOP president Grover Norquist has any basis for preferring millionaires over the rest of us.. . . So Republican leaders are trying to get rank-and-file Republicans to go along with an extended payroll tax holiday . . . According to their latest proposal, they want to pay for it mainly by extending the pay freeze on federal workers for another four years — in effect, cutting federal employees’ pay even more deeply — and increasing Medicare premiums on wealthy beneficiaries over time.

For years, Republicans have been telling us tax cuts pay for themselves by promoting growth. So if they believe what they say, why should they worry about paying for a one-year extension of the payroll tax holiday? Surely it will pay for itself.

The upper 1% want to increase the gap because widening the distance between them and the 99%, enlarges their power. They can use this augmented power to solidify their control over an already bought-and-paid-for Congress. Absolute wealth is far less meaningful than comparative wealth, so keeping the 99% down is as important as lifting the 1% – at least to the 1%.

This has the support of a right-wing Supreme Court which, for instance, ruled recently that corporations have the same Constitutional rights as American citizens. (Remember, the largest corporations are groups run by tiny and wealthy cabals, whose personal interests may not reflect the interests of their shareholders or employees.)

In short, all the misleading talk about fiscal prudence, discipline and austerity, merely is a covert attempt to put a wise face on a worldwide effort to grow the gap and steal the freedoms of the middle- and lower-classes.

The payroll tax debate is a tiny piece of an ongoing war. You’ll see evidences again and again. The next time you read or hear any debate about national finances, ask yourself: “Is this liable to increase the gap, that is will it help the 1% more or damage the 1% less, than the 99%?”

Keep your eyes open and you’ll see most Congressional money decisions, whether regressive taxes like FICA or regressive tax cuts like capital gains, or efforts to eliminate the health insurance law, all manage to increase the gap. Remember, those Congressional and Presidential votes have been paid for by the 1%.

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. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
b>Gross Domestic Product = Federal Spending + Private Investment + Private Consumption + Net exports