●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity starves the economy to feed the government
●Austerity leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
Why starve the economy to feed the government?
Federal spending sends dollars into the economy. Federal taxes take dollars out of the economy. When federal spending exceeds taxes, more dollars go into the economy than come out. This is the government’s deficit and the economy’s profit.
Our political leaders, the media and the old-line professors are fixated on the health of the federal government’s finances. They are fixated on what they call the “federal deficit” and the “federal debt.” But the problem is not the finances of the government which, being Monetarily Sovereign, never can run short of dollars. The problem is the finances of the economy which already has run short of dollars.
The bigger the so-called federal “deficit,” the bigger the economy’s profit. Why worry about the federal “deficit,” when we really should worry about the economy’s lack of profit?
The federal government is not in recession. The economy is in recession. So why starve the economy to feed the government?
Unemployment is not a problem for the federal government; unemployment is a problem for the economy. So why do the Tea Party, the Republicans and even the Democrats starve the economy to feed the government?
Poverty, loss of home, bankruptcy, illiteracy are not problems for the government; they are problems for the economy. So why cut the federal deficit and starve the economy to feed the government?
When federal spending exceeds taxes the economy makes a profit. To recover from the recession and to grow, the economy needs profits. So why cut spending and increase taxes? Why starve the economy to feed the government?
The right wing claims to love Americans and to hate big government. But their plans involve “deficit” cutting, which starves the economy and feeds the government. Why feed what you hate while starving what you claim to love?
We should stop worrying about the federal “deficit.” Instead, we must worry about the economy’s lack of profit. The government doesn’t need the money. The economy needs the money.
We must stop starving the economy to feed the government.
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
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports