Mitchell’s laws: The more budgets are cut and taxes increased, the weaker an economy becomes. Until the 99% understand the need for deficits, the 1% will rule. 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 myth: We really don’t need government workers. They are lazy bureaucrats, who do nothing but shuffle paper.
This myth, often repeated in various forms, by those who know nothing of federal services, together with the John Boehner boldfaced lie that the federal government is “broke,” has led to:
Washington Post
More federal pay freeze plans pushed in House
By Eric YoderFederal pay rates would be frozen for the third straight year in 2013 under several plans that advanced in the House on Wednesday.
A spending bill covering general government matters for the upcoming fiscal year approved by a House Appropriations subcommittee contains no additional money to pay for a raise, effectively rejecting President Obama’s request for a 0.5 percent increase in January.
That spending bill, which also provides operating funds for financial regulatory agencies and central management agencies, typically is the vehicle for setting the annual federal pay raise, when one is provided.
Translation: Who needs financial regulatory agencies? They didn’t have enough trained personnel to regulate the big, dishonest banks, which led to the Great Recession, so maybe by not giving raises, we’ll attract more and better people who’ll do a better job. Right?
Also on Wednesday, the House started voting on a spending bill for the Department of Homeland Security that provides no funds for a raise there.
Translation: Who needs homeland security? We haven’t had many terrorist acts in America. So obviously these people are unnecessary. Right?
And then there’s this:
Weather Service says furloughs possible for up to 5,000 to close budget gap
By Lisa Rein and Jason SamenowThe National Weather Service notified lawmakers on Thursday that it plans to furlough up to 5,000 employees for a total of 13 days between July and September if Congress and the agency cannot find $36 million to cover its budget deficit.
Weather Service officials acknowledged in their memo to legislators, as well as the union, that requiring employees to take unpaid leave would seriously disrupt critical weather operations at the peak of hurricane season.
Translation: Who needs weather prediction? Hurricanes and tornadoes aren’t all that serious. Right?
And then there’s this:
House backs federal job cuts, extended pay freeze
(A) budget resolution proposed by Rep. Paul Ryan (R-Wis.) calls for continuing the freeze on federal salary rates through 2015, cutting federal employment by 10 percent by hiring only one replacement for every three employees who leave, and requiring employees to pay as much into the retirement fund as the government pays. That provision would require an increase on the employee side of as much as 6 percent of salary.
Translation: Who needs federal employees? They aren’t very helpful, are they?
Bottom line: There are a thousand stories like this, and they all are based on two facts:
1. The federal government falsely claims the federal deficit is too high, when in reality, it is too low.
2. This false claim allows the 1%, as represented by the federal government, to stick it to the 99%, as represented by federal employees, thus increasing unemployment and the gap between rich and poor.
And the American public, which is punished when federal services aren’t provided (especially the 99%), falls for this garbage.
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 
Rodger, don’t worry about that silly Weather Service; the folks on the coasts and those of us here in midwest tornado territory can just keep an eye on the sky. It worked for the pioneers didn’t it?
This is not exactly OT for this thread, but you might be interested in having a look at this new report about Ecuador. They are doing better than many coming out of the recession because they are actually STIMULATING their economy rather than imposing austerity. Imagine that! Here is an interview with the co-author of the report: http://tinyurl.com/75a8rqr also here is the link to the actual report: http://www.cepr.net/documents/publications/ecuador-2012-05.pdf
They are not using Monetary Sovreignty or MMT explicitly of course, and in fact they can’t technically because they use the US$ as their currency and thus are not monetarily sovreign! But they had saved oil export revenues and when the bad times hit, they stimulated their economy with the savings. Ecuador President Rafael Correa is a very smart man and actually cares about his country and its people, too, unlike others I could name but won’t. Ecuador has been mentioned as a place that might try out MMT or MS but for now Correa says they will remain on the $. Maybe you and/or the MMTers could put on a conference there like the one they did in Italy.
Best,
Tim
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As I read the news, I keep thinking that Congress and the President have to be puppets for another power. With rare exception, they all seem to be at or above average intelligence. They should be able to understand what is going on and how their actions will make things worse. But it seems that their intelligence is bent toward “acting” instead of fixing.
All these budget cuts at the federal level and their effect on the rest of the economy seem like a deliberate plan to destroy our nation, impoverish our people, and eventually oppress and enslave us like large corporations and wealthy people have done to countless 3rd world countries.
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Yep. That sounds about right.
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Rodger: This is a bit off subject but this is the kind of response I always receive when trying to school one of those blissfully ignorant among the ignorant masses on monetary sovereignty. Here goes:
2 hours ago (12:54 AM)
One-You claim that we would be as able to pay our bills with 0 dollars in taxes as we would be with 100 trillion.
You cant pay anything with 0 dollars. Ask the unemployed-they can tell you.
Secondly-you consider the super rich to be job creators. They arent. Consumer demand is what creates jobs. And in order to boost consumer demand you need consumers with money-not rich people with more money.
Third-I have no interest in reading through your past comments. Frankly-you just arent all that special.
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bambi,
1. The person thinks federal financing is the same as personal financing. Common belief. Doesn’t realize the government creates dollars.
2. I agree. We need consumers with money, not rich people with more money.
3. The person not only is ignorant of economics, but wishes to remain ignorant. Somewhere they heard “ignorance is bliss,” so they wish to remain blissful.
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Hi Rodger-Thanks for your reply. Of course I agree with you about what you and what she said regarding point two. I paraphrased a statement of yours from 2009 in which you said” Even now, with so many unemployed, the poor remain slow to understand that their jobs depend on the financial health of the rich, the spending they do and the businesses they own.” I simply wished to say more money in rich folks [the “job creators”] pockets (by not repealing bush tax cuts) means more money in the economy. I guess that was construed as me believing the rich are job creators. In actuality the statement I made was said in jest and the two words were written as “job creators” (in parentheses). My seemingly futile attempts at sarcasm often go astray it seems.
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Roger writes, “The person thinks federal financing is the same as personal financing. Common belief. Doesn’t realize the government creates dollars.”
Yes, it’s as simple as 1+1=2, yet it is beyond the average person’s grasp. Once you sucker the masses into believing that federal financing is the same as personal financing, you can sucker the masses into anything. To use an analogy, once you convince your slaves that they are safer in their dungeon that they would be outside, you can abuse your slaves all you like. The more you exploit them, the more you weaken them. The weaker they are, the more they fear liberty. The more they cling to the lies you tell them.
I suspect the reason why the masses are so gullible is that the average person copes with reality by thinking in fairy tales. For example, if I fantasize that federal financing is the same as personal financing, then I can fantasize that politicians are telling the truth when they say, “We must shrink the deficit!” If I fantasize that Iran wants to nuke the planet, then I can fantasize that America stands for truth and goodness.
Thus, the average person defends his fantasies with acerbic nastiness, and even violence if necessary. He is willfully, defiantly stupid. This is human nature for most people in the bell curve.
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