–Times are bad, so let’s toss out the aliens. Protectionism always has worked for us in the past.

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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Here are a few excerpts from an article that is sure to precede months of controversy.

Washington Post
Young illegal immigrants’ amnesty could tighten competition for jobs, college
By Pamela Constable, Published: June 15

President Obama has just opened a floodgate of opportunity for young illegal immigrants in the United States, but could it squeeze the aspirations of legal Americans in the process?

A “floodgate” of opportunity? You mean like millions of aliens will be flooding into the United States? Let’s get real:

1. The population of the United States is about 315 million.

2. According to the article, “An estimated 1.4 million children and young adults live in the United States illegally.” So we will be giving temporary, legal status to what amounts to four tenths of 1% of our population. Some “flood.”

3. The “young illegal immigrants” already live here. They won’t be “flooding” anything. All this will do is allow them to do legally, what they have been doing illegally.

Across the nation Friday, immigrant advocates and Hispanic youth groups hailed Obama’s decision to offer legal status to some undocumented immigrants under 30 as a watershed in U.S. immigration history and a long-sought victory for ambitious youths denied a chance to realize the American dream.

“I thank God for this day. It has changed my whole life,” Jorge Acuna, 19, a college student in Silver Spring who came to the United States with his family as a child. . . Now, under the amnesty, he will be able to pursue his degree in engineering.

Will the U.S. benefit or suffer from young Mr. Acuna’s degree in engineering?

But opponents of illegal immigration warned that the policy could create significant new competition for jobs and university slots at a time of nationwide recession and numerous states’ efforts to curb public spending.

“I see a tidal wave coming,” said Brad Botwin, president of Help Save Maryland, a group that opposes legalization for undocumented immigrants. “Half of our college graduates today can’t find jobs, and the unemployment rate for high-school-aged Americans is extremely high. This is unfair to U.S. citizens and legal immigrants who are out there struggling to get ahead.”

From a “flood,” we now have moved to a “tidal wave.” What next, a tsunami? He says, “Half of our college graduates today can’t find jobs.” Really? I’d love to see the statistics on that one. And why can’t people find jobs? Because that four tenths of one precent is taking all of them? Gimme a break.

This is typical of the xenophobic, protectionist, scare tactics we always see during difficult times. Yes, the economy is recovering too slowly, and yes, unemployment is too high, but is that really because of undocumented aliens?

Every time this nation suffers, the panic mongers turn us into fortress America. During the Great Depression, we tried to “keep jobs from going overseas,” by increasing import duties. You know how well that worked.

Under the new policy, as many as 1.4 million undocumented immigrants under age 30 will be able to apply for the amnesty, allowing them to work and attend college legally. To be eligible, they must have been in the United States for five years, have no criminal record, and attend high school or college or be a military veteran.

The panic mongers would like to toss out young people who attend high school or college or served our nation in the armed forces, and who have no criminal record. Are these the people who are a danger to America?

The policy does not provide permanent legal residency, but it protects those who qualify from being deported and gives them a chance to renew their new status every two years. It also does not grant any public benefits, such as Medicare and Medicaid. Federal law already grants all undocumented immigrants the right to a public-school education and emergency hospital care.

Why no Medicare or Medicaid? There are two other choices: Sick children could go to those expensive hospital emergency rooms. Alternatively, we could let those children get sick and die. As an American, I opt for giving them Medicare or Medicaid. The federal government could pay, and there need be no additional taxes. So, why not?

“Texas and California will definitely benefit from this,” said Marielena Hincapie, executive director of the National Immigration Law Center in Los Angeles, adding that the two states have large populations of Hispanic immigrants who will now be able to open businesses, hire people and earn more.

You won’t hear that from any of the panic mongers. All they will tell you is negative myths about lost jobs.

California, Texas and eight other states have laws giving in-state tuition benefits to illegal immigrants. Maryland passed such a law, but it has been stalled by legal challenges. The new federal policy does not address this issue, however. At the other end of the spectrum, Arizona and Alabama have passed tough laws barring illegal immigrants from a range of activities and allowed police to check their legal status.

Which states are acting more like real Americans — California, Texas and the eight other states, or Arizona and Alabama, which seem to have forgotten what it means to be American?

The new federal policy is a strange compromise between compassionate, logical Americans vs the panic mongers. The whole process of becoming a citizen is so crazy, it needs to be fixed. Why does it take 5-10 years? What’s the problem? Do we really have too many consumers in America? Do we really have too many people being educated, too many people starting small businesses, too many people hiring other people, too many people who are not criminals?

Immigration advocates as well as critics said the new policy is far from an adequate substitute for an overhaul of the entire federal immigration system. “Due to congressional inaction, we have seen a lot of laws passed at the state level that in many cases only add chaos,” said Clarissa Martinez, an official of the National Council of La Raza in Washington. “Where the administration is justified and able, they should intervene, as they have done in this case. But it only intensifies the need for Congress to act.”

Congress will do the right thing, when every possible wrong thing has been tried and failed. There is no reason why becoming a citizen should take longer than a year. Someone applies, his/her background is checked, and if he’s O.K., he gets his papers. That’s all it should be. America is a long, long way from having too many people.

The most significant and contentious aspect of the new policy is that it automatically grants hundreds of thousands of people in their teens and 20s — most of them from Mexico and Central America — the right to work in the United States. Many may have already been working, but as undocumented laborers they often had to accept low wages and poor conditions.

So those people won’t be taking someone’s job; they merely will receive better pay and working conditions. And this is a bad thing??

When times are difficult, the protectionists always come crawling out of the woodwork, looking to scare you with scapegoats. In 1930’s Germany, it was the Jews, who were taking over the world. After WWII, it was the Japanese, who were producing low, cost stuff, and using their profits to buy Hawaii. More recently yet, it has been the Chinese, who are “stealing our jobs.” (Never mind that their low cost goods help prevent inflation, here.)

Today, the panic-mongers tell us to fear the undocumented Mexican immigrants. (Strangely, no concern is expressed about undocumented Canadian, British, French, or Australian immigrants. It’s the Mexican border states that are all atwitter.)

The bottom line: Rather than stealing jobs, the undocumented aliens are consumers, who through their consuming, create jobs. When they go to college, the increase in America’s brain power helps this nation grow and compete.

Bottom line: Do we really want evict all those young people, who have lived here five years, never have committed a crime and either are going to school or serving in our military? They’re here, so what do we want to do about them?

Young people, whether their skin is black, tan, yellow or white, are America’s future. We need more, not fewer, young people, to give us the energy and drive that has made America great. We should not allow the panic mongers to make xenophobes of us all.

It’s cruel and it’s bad economics.

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

–Or, we could have moved inland, to higher ground . . .

This lovely structure is what can happen when man decides to fight nature.

New York Times

Vast Defenses Now Shielding New Orleans
By John Schwartz
Published: June 14, 2012

NEW ORLEANS — Finally, there is a wall around this city.

Nearly seven years after flood waters from Hurricane Katrina gushed over New Orleans, $14.5 billion worth of civil works designed to block such surges is now in place — a 133-mile chain of levees, flood walls, gates and pumps too vast to take in at once, except perhaps from space.

Two “lift gates,” 50 feet across, can be lowered to block the waters of Lake Pontchartrain. A navigation gate 95 feet wide, whose curved sides weigh 220 tons apiece, can be swung gently but mightily into place.

Yet all that seems puny in comparison to the two-mile “Great Wall” that can seal off the channel from Lake Borgne to the east, or the billion-dollar west closure complex, which features the biggest pumping station on the planet.

Whatever storms might approach New Orleans this year or in the future, they will encounter a vastly upgraded ring of protection. The question is whether it will be enough.

Or, we could have moved inland to higher ground.

(It is) a vast civil works project that gives every appearance of strength and permanence. “This is the best system the greater New Orleans area has ever had,” said Col. Edward R. Fleming, the commander of the New Orleans district of the corps.

Marc Walraven, a district head in the Dutch ministry of transport, public works and water management, recently toured the defenses. While 100 percent safety is impossible, he said, and challenges in operations and maintenance can be expected, “the constructions that have been built are in my opinion adequate to defend New Orleans.”

Or, we could have moved inland to higher ground.

Tim Doody, the president of the levee board that oversees Orleans and St. Bernard Parishes, disagrees. While the construction appears to be strong, he said, the level of protection authorized by Congress for the corps to build is “woefully inadequate.”

The new system was designed and constructed to provide what is informally known as 100-year protection, which means it was built to prevent the kind of flooding that has a 1 percent chance of occurring in any given year.

But New Orleans has seen storms far more damaging than the 100-year standard. Katrina is generally considered to have been a 400-year storm, and rising seas and more numerous hurricanes predicted in many climate-change models suggest harsher conditions to come.

“It’s what the country will pay for; it’s what FEMA insures for,” Mr. Doody said. “But our thought and belief is that we all need to be behind protection that’s greater than that.”

Or, we could have moved inland, to higher ground . . .

While a major storm could lead to street flooding — something New Orleans, much of which is below sea level, sees even with heavy rainfall — the kind of catastrophic, explosive wall of water resulting from the failure of sections of flood wall and the dissolution of poorly-built levees that devastated so much of the city after Katrina should not occur again, (corps officials) say.

Overall construction started in 2006, and while some work is still going on, the projects are substantially complete and functional for this hurricane season.

Even many in the corps seem astonished by the speed of the work; projects of this magnitude would normally take decades to construct, said Kevin G. Wagner, a senior project manager with the agency. Looking out toward the billion-dollar pumping station and gates at the west closure complex, he said, “It’s truly amazing, starting in 2009, to be where we are today.”

Or, we could have moved inland, to higher ground . . .

Building greater than 100-year protection might not be simply a matter of building walls ever higher. It will also come from restoring the coastal environment that slows and buffers storms and their surge. It means restoring wetlands that have been rapidly disappearing, and perhaps creating barrier islands to act as speed bumps for storms.

When asked whether he thought the new hurricane structures would be effective, Jasen Seymour, a 19-year-old who was bowfishing with a friend near the 17th Street Canal, said “If the Army Corps of Engineers has anything to do with it, it’s not going to be strong.”

Still, some residents demonstrate their faith in the future simply by not leaving. Artie Folse, who rebuilt his home after Katrina and lives just a few blocks from the site of the breach of the 17th Street Canal that inundated his Lakeview neighborhood, said: “The fact of the matter is, I still live here. That pretty much says it all.”

Or, you could have moved inland, to higher ground . . .

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

#MONETARY SOVEREIGNTY

–Why not increase federal deficit spending? Here’s why.

Today, Americans are suffering from unemployment, which means Americans are suffering from lack of income — particularly the so-called “99%” who comprise the middle and lower income groups. And today, the political campaigns are in full swing, with politicians telling you what they think you want to hear.

And today, they will tell you what they plan to do about our economy, and particularly about the federal deficit. So today, might be a good time to remind you, once again, why the federal government doesn’t increase deficit spending.

After all, if the federal government would spend more on goods and services, while cutting taxes, this would create more jobs, reduce unemployment and put more dollars into the pockets of Americans. So, why not increase federal deficit spending?

As you know, the federal government (unlike state and local governments, businesses, the euro nations and us private people) is Monetarily Sovereign. It has the unlimited ability to create dollars.

If the government owed you a trillion dollars, it simply would instruct your bank to increase the number in your checking account by 1,000,000,000,000. Done! “Paying for” its debts is no problem for the federal government. It never can run short of dollars.

The federal government doesn’t even need taxes. If federal taxes were $0, the federal government still could create as many dollars as it wished, and still could pay you that trillion dollars. So, why not increase federal deficit spending?

According to Table S–6. Proposed Budget in Population- and Inflation-Adjusted Dollars (Government Printing Office), the total proposed 2012 budget is $3.7 trillion, of which $1.5 trillion is for Medicare, Medicaid and Social Security, which goes into the pockets of us Americans. That’s a good thing, right?

So why not increase deficit spending on things like Medicare, Medicaid and Social Security?

Another $884 billion goes for “Security,” much of which pays soldiers’ salaries and the domestic companies that make the guns, planes and ships for the military. We all hate war, but financially, paying soldiers as well as domestic companies that hire people, would seem to be a good thing for our economy. Right?

If the federal government can create all the dollars it wants, and most of those dollars go into the pockets of Americans, why not increase federal deficit spending?

Now, some people will tell you that although millions of Americans and American businesses are struggling financially, and although the federal government can create unlimited dollars, and although these dollars would go into the pockets of Americans, while supporting vital services like health care, education, infrastructure and defense, the deficit should be reduced.

Why? These people will tell you deficit spending causes inflation.

They will tell you that inflation is our biggest worry and we should remember the Weimar Republic and Zimbabwe hyperinflations. Never mind that the Weimar hyperinflation was caused by the onerous post-WWI conditions put on Germany by the Allies. And never mind that the Zimbabwe hyperinflation was caused by Robert Mugabe’s stealing of land from farmers and giving it to people who didn’t know how to farm.

And never mind that despite wars, recessions, depressions and federal deficit spending, we never have experienced hyperinflation. Those people fear a hypothetical, never-experienced problem more than the real problem of a recession from which we have not yet recovered.

So for those people, I again offer the following graph:

As you can see, there has been zero relationship between federal deficit spending and inflation. Zero.

So if the federal government is capable of unlimited deficit spending, and if deficit spending helps cure unemployment and puts dollars into American pockets, and does not cause inflation, why do we not increase federal deficit spending?

The answer: Ignorance and intent.

Some of our leaders — politicians, economists and the media — are ignorant of the facts. And some of our leaders, knowing the federal spending which reduces unemployment and puts dollars in the pockets of the 99%, also reduces the income gap. They don’t want that. They are the servants of the 1%, bought and paid for.

The next time you read about or hear someone saying the federal deficit is too high, “unsustainable” or should be reduced, know this: That person either is ignorant of the facts or intentionally wants to increase the gap between rich and non-rich. There are no other alternatives.

Now, the challenge is to find a politician who will tell the truth about the economy. Good luck with that.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

#MONETARY SOVEREIGNTY

–Baucus, Obama and Rivlin, oh my! Austerity is on the loose. Guard your wallet.

The euro nations, being monetarily non-sovereign, are unable to create their own currency, the euro. So to pay their bills, they are forced to limit their spending to what they can tax and borrow. Economists have given this problem the benign name, “austerity,” and it has led to the economic disasters of Greece, Italy, Ireland, France, Spain and Portugal, with others soon to follow.

Austerity (deficit reduction) always means the slow death of an economy, and it particularly impacts the lower income groups. The wealthy never feel austerity. They still ride their yachts and limousines, and eat at the best restaurants. In fact, austerity increases the income gap between the upper 1% and the other 99%.

By contrast, the U.S. is Monetarily Sovereign, so can create its sovereign currency the dollar — in unlimited amounts. Its spending is not limited to taxes and borrowing, both of which could be eliminated with no effect on the federal government’s ability to pay its bills.

Unfortunately, the Max Baucuses of the world, care nothing about the euro experience (as well as a similar experience which caused the Great Depression.) They treat the U.S. as though it were a euro nation — monetarily non-sovereign — so with deficit reduction, the result will be the euro result. Economic devastation for America.

New York Times
June 11, 2012, 12:44 PM
Baucus Says Tax Overhaul That Raises Revenues Is Moving Forward
By Jonathan Weisman

Senator Max Baucus of Montana, the chairman of the Senate Finance Committee, said on Monday that an overhaul of the tax code was moving forward, but that any plan must raise more revenue, help reduce the deficit and address the nation’s growing disparity between rich and poor.

Translation: Actually, I don’t give a damn about the poor, but I use that “disparity” phrase to fool them into thinking its necessary to raise their taxes and cut their social benefits.

“Everyone needs to contribute,” Mr. Baucus said during a speech at the Bipartisan Policy Center, a centrist research organization in Washington.

Translation: Never mind that the lower 99% will contribute comparatively more, because they have less to spare.

Mr. Baucus said he had been moving forward on a tax code overhaul that would be a pivotal part of any long-term deficit reduction deal. Mr. Baucus participated on Wednesday in a secret dinner on the end-of-year “fiscal cliff” that included Democratic Senate leaders like Charles E. Schumer of New York and Richard J. Durbin of Illinois.

Translation: The “fiscal cliff” is a series of tax hikes and spending cuts (aka “austerity) set begin on Jan. 1. Economists know this could cause the U.S. economy fall back into another recession. Therefore, to prevent the fiscal cliff, I am proposing a series of tax hikes and spending cuts. I know this makes no sense, but the unwashed masses won’t understand that.

That plan is likely to stay under wraps until after the November election, unless broad support for it coalesces earlier. Mr. Baucus does not want partisan lines drawn around the plan during the campaign season.

Translation: In the unlikely event the public catches on to the idiocy of my plan, I don’t want Republicans to get kicked out of office. So we’ll spring it on the people after elections.

In January, the Bush-era cuts to income, capital gains and dividends tax rates are set to expire, and the first wave of automatic defense cuts are scheduled to go into force. A new article in The New Yorker asserts that President Obama, regardless of the election results, is willing to allow all the tax cuts to expire on Jan. 1 if Republicans refuse to compromise on his demands to allow tax cuts for the rich to lapse.

Translation: The President is willing to let the entire country go down the tubes. (“I’m going to hold my breath until I get my way.”)

Mr. Baucus said deficit reduction and tax reform could not be separated. “We simply don’t raise enough revenue.” Since the 1986 tax code overhaul, the American economy has grown by 88 percent, he said, “but the rising tide has not lifted all boats.”

Translation: Sure, cutting taxes has helped economic growth, and the stimulus spending has helped moderate the recession, but the rich still could do better, and I’m going to help them.

He also hinted at major changes to the corporate income tax code that would lower rates and curtail, if not end, the United States’ worldwide corporate income taxation, but would tighten rules that allow American companies to shift income to offshore tax havens. Instead of automatically extending dozens of temporary business tax breaks, he said, Congress this year must pick which breaks should live and which should lapse.

Translation: For corporations, the subject is: Which taxes to cut. For the people, the subject is: Which taxes to raise.

“Tax reform is a once-in-a-generation opportunity,” he said. “We can cement America’s preeminence.”

Translation: We can cement the 99%’s feet and drop them overboard.

“The tax piece of the debt puzzle is going to be given equal prowess with entitlement reform,” said Former Senator Pete V. Domenici, Republican of New Mexico, who, along with the Democratic economist Alice Rivlin, has his own broad deficit reduction plan. “You can’t have one without the other.”

Translation: “Entitlement reform” is our way of saying, “Cut Social Security; cut Medicare; cut Medicaid; cut aid to education; cut all the benefits to the 99%, but do not raise taxes on corporations or on the 1%. Alice Rivlin is part of the old-line, Brookings Institution, that to this day, has not understood what happened on August 15, 1971, when the U.S. became Monetarily Sovereign. She may be a dope, but she’s our perfect tool for fooling the 99%.

[Aside: Cutting taxes on corporations is a great idea, but the rest is bad economics.]

Wanted: One person in Congress who has the intelligence and the integrity to shout from the rooftops: “Cutting the deficit is the dumbest thing any Monetarily Sovereign nation can do. The more budgets are cut and taxes increased, the weaker an economy becomes.”

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

#MONETARY SOVEREIGNTY

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