–The rise and fall of America. The cost of ignorance and austerity.

Every day you hear and read the false belief that the federal deficit and debt are “unsustainable” and should be reduced. You hear and read the false belief that federal deficit spending causes inflation.

What you don’t hear is the terrible cost of reducing the deficit and debt. Here are just three examples of how each day, America is diminished — how each day we lose a bit of our greatness.

New York Times
Student Loan Interest Rates Loom as Political Battle
By Tamar Lewin

President Obama begins an all-out push on Friday to get Congress to extend the low interest rate on federal student loans, White House officials said, an effort that is likely to become a heated battle along party lines. If Congress fails to act, the interest rate on the loans, which are taken out by nearly eight million students each year, will double on July 1, to 6.8 percent.

The Congressional Budget Office has estimated that a one-year freeze on the interest rate for subsidized Stafford loans would cost $6 billion.

What does it cost America if just one brilliant child is financially unable to attend college? No one knows, of course. But imagine if a hundred thousand of our best and our brightest are forced into menial jobs, especially in this increasingly high-tech world where brains win against brawn. As our factory workers are replaced by machines, and our machines are replaced by artificial intelligence, where will our former greatness be a decade from now?

What will we lose? A physicist who would have led us to the stars? An artist? A great political leader? A great legal mind who will improve our Supreme Court? Will we lose the next Jonas Salk, who saved millions of children from a crippling death?

The answer is “yes,” we will lose those people and thousands of others like them, who might have built America.

Chicago Tribune
Lawmakers skeptical of Quinn Medicaid cuts, $1 tax on cigarette packs
By Ray Long, Monique Garcia and Alissa Groeninger, Chicago Tribune reporters, April 20, 2012

SPRINGFIELD— — Gov. Pat Quinn challenged lawmakers Thursday to approve a $1-a-pack increase in the cigarette tax and accept major cuts in the state’s health care program for the poor, but many Democrats and Republicans view the plan as more a work in progress than a final deal.

Among Quinn’s suggested cuts are eliminating a discount prescription program for seniors and people with disabilities as well as removing thousands of patients from Medicaid by scaling back who is eligible. The governor also called for getting rid of dental and chiropractic care for adults and limiting what the state would cover for people with HIV and cancer.

Los Angeles Times
Survey shows holes in health insurance coverage
April 19, 2012|By Noam N. Levey

WASHINGTON — With the future of the healthcare law emerging as a major campaign issue this fall, a new survey has found that more than a quarter of adults ages 19 to 64 in the United States lacked health insurance for at least some time in 2011.

And the vast majority of those people – nearly 70 percent – had been without coverage for more than a year, according to the study by the nonprofit Commonwealth Fund, a leading authority on health policy.

Here is a nation that claims greatness, but because of a false idea, will refuse to aid the poor and the sick. The federal government, being Monetarily Sovereign, can and should provide Medicare to every man, woman and child in America. Yet, in health care, our “great” nation lags most other civilized nations in the world.

NASA budget might have less space for JPL’s planetary science
President Obama’s $17.7-billion budget request for NASA for the 2013 fiscal year includes a $300-million cut to planetary science, the very work JPL specializes in. It’s a dark development in an otherwise heady time.
March 31, 2012|By Scott Gold, Los Angeles Times

At the Jet Propulsion Laboratory, tucked into the hills above Los Angeles, these are heady days: The robot dubbed Curiosity is hurtling toward Mars and is expected to put scientists on their strongest footing yet to determine whether the Red Planet is or ever has been hospitable to life. More than 1,000 of JPL’s scientists, engineers and technicians — a full fifth of the lab’s workforce — have put in time on the mission.

Kepler has discovered more than 2,300 planetary “candidates,” said William Borucki, Kepler’s principal investigator at NASA’s Ames Research Center in Northern California. Scientists believe the telescope could also produce an explosion in the understanding of stars. “We need a longer mission to do the job,” Borucki said.

Scientists are concerned about a significant “brain drain” at JPL in coming years if the La Cañada Flintridge lab’s planetary missions are curtailed, particularly among its sterling roster of Mars specialists.

We were proud, justifiably so, when we became the first, and still the only, nation to land men on the moon. We were people of courage then, with a leader of courage. Today, we have become a cowardly, cringing nation, afraid of everything — foreigners, the government, deficits, gays, people whose skin is a different color, the rich, the poor.

We allow ourselves to be led by those who call themselves religious patriots, but who neither are religious nor patriotic. So we elect those who have no greatness in them. We would rather do without than dare. Once we thought of ourselves as John Wayne, but we have become Barney Fife — a mean Barney Fife.

I saw the rise of America. I probably will not live to see the fall. But I feel for our grandchildren. They are the ones we punish, today.

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

8 thoughts on “–The rise and fall of America. The cost of ignorance and austerity.

  1. Hi Rodger-This is a bit off topic but could you possibly address this information I read over at HP today in one of your future blog pieces? “…since Social Security is forbidden by law from contributing to the deficit, it’s absurd to connect its financing to discussions of the Federal debt””.-Richard Escow(OurFuture.Org). Thanks and kind regards,Bambi.

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  2. One reason why a college education is increasingly necessary:

    Monetary Sovereignty

    The blue line is the ratio of manufacturing jobs to total non-farm jobs. The red line is the ratio of management, business and financial operations jobs to total non-farm jobs.

    Ongoing trend to fewer manufacturing; more management, business and financial operations.

    But in the U.S., a college education is increasingly expensive. Rather than lending money to college students, thereby causing them the go deeper and deeper into debt, the federal government should pay students a salary for going to college.

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    1. And you thus create incentives to stay in school too long instead of getting a job. That destroys real resources while increasing the money supply. Furthermore, it worsens our demographic problems (too few children, primarily due to delaying marriage). You want us to create more dollars while undermining our ability to produce the goods and services that give those dollars value.

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      1. Stay in school too long? You say that without having any idea what salary I’m suggesting. Doesn’t that make any difference?

        And where did “too few children” come from???

        And as always, lots of opinion, but no facts.

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  3. Roger, thought you might find this more than interesting/worthy of some discussion.

    http://www.shareable.net/blog/there-is-an-alternative-0

    …”That the invasion of market relations into every sphere of life has always been accompanied by violence. War, debt, and the market are inextricably linked. Even today, our money system is based mainly on the monetization of government war debts. If there is one persistent theme to this book, it is that our association of debt repayment with morality is false; that, indeed, the debt relations that hold today are rooted in a history of violence; that debt and money itself are social creations and not unalterable facts of nature; that our understanding of human nature is deeply colored by the market-based, debt-based world we live in. The world could be different. We are right to want it to be different.”

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  4. deficit spending without selling the debt can cause inflation. however, such would be difficult in the current environment with high unemployment and contracting bank credit. i think you’re largely right in a lot of areas, but i’m wondering if you’re using enough reasoning beyond observations. strict observation with macroeconomics is difficult since it is hard to control for the various factors. and for the guy who wants $1/pack tax on cigarettes, the government should be paying smokers because smokers save the government lots of money when they die before collecting years of social security and medicare.

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  5. the government should be paying smokers because smokers save the government a lot of money when they die before collecting social security and medicare.

    deficit spending without selling the debt can cause inflation. however, in our current environment of high unemployment, low economic growth, slowing monetary velocity, low land values, and most importantly, contracting bank credit, that would be difficult. when banks are fixing the balance sheets and lowering reserve ratios from bad credit default swaps, we’re not going to see inflation, only stagflation. stagflation is deflation in the domestic economy in the face of rising commodity prices demanded on world markets. stagflation can also exhibit in other ways, such as when the rich get richer and the poor get poorer due to crony capitalism.

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