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 = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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The problem with the euro nations is they are monetarily non-sovereign. They can run out of money. The same is true for the U.S. states. New Jersey, New York, all of you are in the same pickle. You’re not monetarily sovereign, so can be insolvent.
But you have one advantage over the euro states: You can get money from the federal government, which because it is Monetarily Sovereign, and has the unlimited ability to create dollars, never can run short of money.
Unfortunately, the debt hawks don’t understand that, so they want the government to reduce its deficit spending.
A reader named Tim, from Iowa, commented on my post about gambling, and observed that Iowa has placed casinos near its border with Illinois, to draw as much money from Illinois as possible. Soon, Illinois will place additional casinos near its border with Iowa, and the two will battle in a zero-sum game.
This reminded me that a monetarily non-sovereign government can survive long term only if it has money coming in from outside its borders. It cannot survive on taxes alone, because the first time it spends a dollar on imports it reduces the total dollars in its economy, which is a prescription for local recession.
At http://www.nemw.org/index.php/iowa you will see that in 2009, the federal government spent about $29 billion in Iowa and took out (in taxes) about $18 billion. So you folks came out about $11 billion ahead.
By contrast, New York received about $195 billion, but paid about $200 billion. So you folks were screwed out of $5 billion.
One state that took a real hosing was New Jersey. You paid the federal government $38 billion more than you received. That’s about $4 thousand dollars for every man, woman and child in your state — gone. And I’ll bet at least half of you think the federal deficit should be reduced!!
Connecticut only lost about $1 billion. But Delaware lost $7 billion; goodbye $7 thousand for each of you. A family of four lost $28 thousand, for no good reason. Maine made $8 billion, and Maryland profited by a nice $45 billion. But Minnesota lost $23 billion.
You can see a list of 18 northeast and midwest states at http://www.nemw.org/index.php/state-economic-profiles
The point is, of course, that all you folks who think the federal deficit is too high — do you enjoy seeing your state slowly go down the tubes?
Rodger Malcolm Mitchell
http://www.rodgermitchell.com
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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
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports
#MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
Based on the logic behind Monetary Sovereignty, all else being equal, shouldn’t we expect the states that see more money coming in than going out to be weathering the current recession the most successfully? Have you looked at that data?
Or is the problem that all else is not equal? i.e. there is more to the story
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Yes, there is a great deal to the story, and perhaps you can do the research.
We first would need to know the historical, per-capita, current account of each state. Then we would need a measure of “weathering the recession” — perhaps each states historical per-capita GDP ?? Or historical unemployment rate ?? Historical poverty rate ?? Bankruptcy rate ?? Homelessness ??
It would be worthwhile comparison, but too much work for me.
Rodger Malcolm Mitchell
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Rodger mentioned Iowa as one state with a large surplus of Fed spending vs. Fed taxes. We have not escaped recession, but we are doing much, much better than many other states. Including, I believe, New Jersey, which was mentioned as having the opposite situation. Of course, this is just anecdotal.
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Re casinos on the Iowa / Illinois border, I’ve got a better idea: brothels on the border. Iowa brothels would have windows facing Illinois, with scantily clad chicks behind the window to tempt Illinois men (and vice-versa). In fact this brings an entirely new meaning to the phrase “vice-versa”.
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HAHA Ralph, public brothels are about the only thing that has not been proposed to raise money. In many ways, I think they could be much less morally problematic than casinos, provided of course that the workers are willing and well-compensated. And we needn’t be sexist about it — sex workers of all possible genders could service customers of all possible orientations.
The facing-windows idea might need some work, though. The Mississippi River is pretty wide and the residents will need high-powered binoculars to see the goods on the other side clearly.
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Wait a minute,RMM.Yes the federal government took away almost $3 trillion(Est) from the states (taxpayers),but they redistributed $4 trillion (Est).
“Obama administration may start very soon to redistribute
$5 or $6 trillion this year (creating jobs and give housing a little grease,with Fl and Ca getting the most help).
Guess it took a little longer (read an election year) to realize “to solve the financial problem,we must first solve the housing crises which may help solve the jobs crises”
What really stinks is the method of collection for the redistribution “is the unfair Income Tax”,and , of course the stupidity of paying interest on our own money to the private financial institutions whom we have also allowed to “print” our currency.How else can you explain $235 trillion in derivatives(Published by OCC) ?
QUESTION:If a Moneytary Sovereignty allows Fractional Reserve Banking,doen’t it destroy itself simply because another entity could create more money than the MS ?
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SORRY TO TAKE UP SO MUCH SPACE, BUT THIS IS IMPORTANT.
CONGRADULATIONS !!
100% RIGHT!
Maybe , we should ask that you should be nominated for the Noble Prize for Economics.
Post Admits Austerity ‘Killing’ Greece
Wednesday, January 11, 2012 – by Staff Report
In Greece, fears that austerity is killing the economy … Deeply indebted and nearly bankrupt, this Mediterranean nation was forced to adopt tough austerity measures to slash its deficit and secure an international bailout. But as Greece’s economy slides into free fall, critics are scanning the devastated landscape here and asking a probing question: Does austerity really work? Unemployment has surged to 18.8 percent from 13.3 percent only a year ago. Overburdened public hospitals are facing acute shortages of everything from syringes to bandages because of budget cuts, with hiring freezes forcing the mothballing of operating rooms even as more unemployed are relying on the public health system. Rates of homelessness, suicide, crime and HIV cases from intravenous drug use are jumping. “Conditions have deteriorated so dramatically that doctors in this country now believe that the Greek crisis is no longer just a financial crisis but a humanitarian crisis,” said Dimitris Varnavas, the president of the Federation of Greek Hospital Doctors’ Unions. – Washington Post
Dominant Social Theme: Greece needs to “get its act together.” But will the pain be too much to bear?
Free-Market Analysis: The almost genocidal nature of modern “austerity” as interpreted by the current crop of European one-world technocrats has come in for some mild criticism in the pages of the Washington Post.
Surprise! It must be really bad in Greece for this august, mainstream mouthpiece to publish such an article. Look on it as a limited hangout of sorts. With the Greek economy continuing to collapse as suicides pile up, a responsible mainstream paper must provide some sort of realistic reporting. And so it does.
Of course, the underlying assumptions remain resolutely unexamined. This is a kind of power elite dominant social theme of sorts – that the “cure,” while necessary, is harsh. It is a pure Hegelian Dialectic when one considers this approach, as the argument is NOT framed by the question as to whether “austerity” is necessary at all.
In Singapore one can be flogged for certain offenses. Perhaps the Washington Post shall do an article wondering whether the number of lashes ought to be mitigated. That’s how this article appears to us. We would ask why someone needs the lash at all. The Washington Post worries only that the cure is a bit extreme. Here’s some more from the article:
Leaders aim to hammer out a plan to save the euro, while demonstrators take to the streets to show opposition to austerity measures in cash-strapped countries. Greece has been forced to cut spending and raise taxes in the middle of a severe downturn, slashing pensions as well as state salaries, jobs and services.
As public confidence has evaporated, consumer spending — the biggest driver of the economy — has plunged, generating cascading losses at private firms. The result is a dizzying economic plummet and social crisis that is bringing the cradle of Western civilization to its knees …
On Monday, German Chancellor Angela Merkel and French President Nicolas Sarkozy turned up the heat on Greece, suggesting that its bailout deal is in danger of unraveling if Athens does not press ahead quicker with pledged budget reforms and seal a deal with bondholders to voluntarily restructure its massive debt.
For some reason, the powers-that-be are determined to grind Greece into the ground. When they are done nothing will be left but a spot. This is the way of the IMF, of course, as amply documented by such by books as Confessions of an Economic Hit Man.
First, the World Bank lends to a country’s leaders – the more corrupt the better, which is why much of this takes place in the so-called developing world. Then the leaders abscond with the loot, leaving behind huge “public” debts.
Western banks, which have also lent to “build up the country’s infrastructure,” cry out that they have taken humanitarian risks and now will go bust if they are not paid back, jeopardizing the entire Western financial system. Sound familiar? The IMF is called in to make an emergency bailout.
The IMF is a stern taskmaster. It will demand that taxes go UP and that government spending go DOWN. Then it will demand that various government assets be sold off to raise funds. The assets, of course, are bought by select Western corporations at pennies on the dollar. People starve; the Anglosphere gains additional control.
For control is what is sought. That’s the reason to grind people into the dust of mercantilist bankruptcy. The power elite that wants to run the world cares not at all for the welfare of the people whose country it is supposedly rescuing. And so it is with Greece.
As we have pointed out numerous times, the top men in Greece (and Ireland and Eastern Europe) were virtually bribed to bring their countries into the EU. This was done via a clever mechanism in which the Brussels bureaucrats determined the amount of funding that a given country needed to bring its economy in line with stronger economies such as Germany’s.
The money was duly calculated and handed over to the various national elites who then fulfilled their part of the bargain by ensuring this country and that country was indeed delivered into the clutches of the EU. This mechanism occurred with considerable alacrity in the 2000s, for it was increasingly evident that the world’s economy was collapsing and that there was a limited window available during which the lies would yet be tenable.
In any event, the money that went to these countries didn’t do what it was supposed to do. The economies were not stabilized. Public spending was not rationalized. Instead, absurd public works projects were embarked upon. And if they money was not wasted in this way – lining the pockets of certain local corporations and their owners – it was merely absconded with.
Today, the elites that pocketed these funds have apparently left power. They will not be prosecuted, for they held up their end of the bargain. They delivered their countries into the clutches of the EU. And now these countries are the EU’s – and the Eurocrats can do as they please. Which was the whole point.
Austerity is nothing but a ruse. The IMF’s oft-stated intention to turn a country into a going concern is certainly misleading. The Anglosphere power elite seeks pliable nationalities that it can utilize for purposes of building an international community. This is why it crushes countries over and over. Culture is its enemy. Especially a stubborn, age-old culture such as exists in Greece.
Of course, the outrageousness of what is going on in Greece (and in other EU countries to a greater or lesser extent) must occasion articles like this one in the Washington Post. Justifications must be trotted out. The destruction, we are to believe, is unintentional. The aims of the power elite are pure.
They are not, of course. And Greece would have done better to emulate Argentina and Iceland and refuse to play the game the way the IMF and the big banking institutions demanded. What the cowardly Greek elites have agreed to will blight several generations of Greek families in the name of this “false” austerity, which is merely the crushing of a culture. In the meantime, the false memes will continue to be generated by power-elite mouthpieces.
“Greece, proponents of austerity say, has no one to blame but itself,” the Washington Post informs us. “After a decade of excessive borrowing and spending, evidence emerged in late 2009 that Greek officials had lied about the extent of the country’s whopping deficit. That lighted the first sparks of the European debt crisis, touching off a firestorm of investor panic that spread across Europe and is jeopardizing the global economy.”
You see, they deserve their fate. Nobody knew what was occurring until 2009! It was a total surprise. (Never mind that this merciless system has been in place for at least 50 years, since the World Bank and IMF were set up, post-World War II.)
And just to make sure we understand that “merciless rigor” is truly justified, we read the following: “Slashing the deficit quickly is essential to ushering in a sustainable future … and the resulting social pain is necessary to impress on Greek politicians and society that such excesses should never happen again.”
As the economy further degrades in Greece and elsewhere, as the suicides rise and the cultural fabric itself is rent, we shall no doubt read more and more articles like this one. This is how the New World Order is to be built, on human suffering. The bodies and souls of the poor people trapped by this terrible paradigm are but rungs in a ladder that is ascending into the sky of a “brighter” tomorrow.
Conclusion: The storm troopers’ measured tread as they climb this ladder is the sound track of what the future holds if these lies are not debunked and the terrible EU experiment is not exposed and ultimately dismantled.
Quoted from http://www.thedailybell.com/3482/Post-Admits-Austerity-Killing-Greece
HOW LONG HAVE YOU BEEN “Sounding that Alarm”?
Perhaps,the REVERE AWARD as well for you !
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Thank you, just a lucky fool, for this piece. Unfortunately, the plan is the same for we working stiffs right here in the good old USA. It’s coming to a theater near you. Though you will never convince the majority of stupid a$%&d Americans it’s their future.
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Rodger,
I just sent this blog to “His Largeness” our esteemed Governor Mr. Chris “Fat Burger” Christie one of the largest proponents of cutting spending. Yes, unfortunately, I am a New Jersey resident. Maybe he’ll take some time away from the buffet at Golden Coral and educate himself. Though it is highly doubtful.
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