●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which 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.
●The penalty for ignorance is slavery.
Britain was much smarter than the euro nations. It kept its Monetary Sovereignty. The euro nations surrendered their Monetary Sovereignty. They have no sovereign currency. Instead, they use an “alien” currency, the euro. No euro government can create euros. Each can, and already has, run short of euros. So, each can be forced into bankruptcy.
Britain, like the U.S., has the unlimited ability to create its sovereign currency, in its case, the pound. It never can run short of pounds. It can pay any bill denominated in pounds. It never can be forced into bankruptcy.
Unfortunately, Britain’s leaders and the U.S.’s leaders act as though their nations are like the euro nations: Monetarily non-sovereign. Each pretends they are running short of their sovereign currency, and each offers the same “solution” to this non-existent problem.
A commentator, Roger Erickson, called the following article to my attention:
“Everyone must make contribution’ towards deficit,” says Cameron
By Christopher Hope and Rowena Mason
Speaking at the end of a special Cabinet meeting to discuss this afternoon’s Autumn statement, Prime Minister Cameron said: “Britain is on the right track. “We are dealing with the deficit and debts in a fair way. Everyone must make a contribution. We are equipping Britain to succeed in the global race.”
The Chancellor of the Exchequer George Osborne will say there is “no miracle cure” for the UK’s economic problems as he misses his own targets on reducing the national debt and deficit this afternoon.
Translation: “My solutions didn’t work, so I am doing the right thing.”
Setting out his annual Autumn Statement, Osborne will ask households to bear more financial pain while the economy struggles to get back to growth.
Translation: “Just like our American friends, we are going to screw the middle and lower income groups, by convincing them that getting screwed is patriotic. They have been trained to believe anything.
After weeks of negotiations within the Coalition, the Conservatives have vetoed a Liberal Democrat plan for a mansion tax, but could still raid pension pots. Mr Osborne is also expected to freeze or limit benefits to send out a stronger message that work should pay.
Translation: “The Americans taught us this one. No new taxes on the wealthy, but cut benefits for the poor and middle income groups. You see, giving people pensions turns them into sloths. People should be made to work until they die. (That’s why the Americans keep raising the Social Security age.)”
The Chancellor will also have to admit that his record on paying down Britian’s debts is not as good as he might have hoped when the Coalition came to power. This year alone, Britain will have had to borrow around £10 billion more than expected, because of a lower tax take and welfare pressures.
Translation: “Even though we have the unlimited ability to create our sovereign currency, the pound, we need to borrow the pounds we previously created. We already know this makes no sense, so please don’t ask us why we do it.”
Mr Osborne will also reveal independent figures on the UK’s growth, which are likely to show the economy has stagnated this year and will be sluggish in 2013.
Translation: “Tax increases and/or spending cuts (aka “austerity”) don’t work. Austerity never works. In the history of the universe, austerity never has worked. So let’s continue our austerity.”
Paul Johnson, an economist at the Institute of Fiscal Studies, said the outlook for growth will remain gloomy. “Back in March the Office for Budget Responsibility thought the economy would grow by about 0.8 per cent this year, not very much but at least positive. The average of independent forecasters is now that it is actually going to go down this year. The OBR back in March looked relatively optimistic compared with what most people think now. Most importantly a significant part of that loss in growth is it looks like we are never going to get it back.”
Translation: “We know we are destroying the economy, and we have no plan to grow the economy. So trust us.”
Chris Leslie, one of Labour’s shadow Treasury ministers, said Mr Osborne is now entering a period of reckoning and urged him to change course with slower cuts and more spending to boost growth. “Today I think is going to be the period in which [the Chancellor’s] philosophy is blown out of the water,” he told ITV’s Daybreak.
Translation: “You may think that one day, the public might discover that spending cuts and tax increases always destroy an economy. But let’s face it. The public is so brainwashed, I doubt they ever will understand what we are doing to them.
“Look at America. They ran deficits, so they are recovering, while we are shrinking. Yet, the Americans argue about the best way to cut deficits and send America back into recession.”
Our politicians, here in America, have learned a great deal from our British cousins. They have learned how to screw the American lower and middle income groups, while widening the gap between the rich and the rest. They have learned how to brainwash the American public into believing the federal government’s finances are like personal finances.
They have taught the American public that suffering is patriotic, and that in some unknown, mysterious way, the people’s financial pain will benefit their children and their grandchildren.
The UK has their Cameron. We have our Obama. They have their Osborne. We have our Geithner. All preach the same failed lessons. And we have learned those lessons well.
The euro nations are doomed by their austerity. Britain is doomed by its austerity. America is doomed by our austerity.
Austerity is dooming us all. The only question: Will we die by the Democrat’s knife or by the Republican’s gun. That is what the two parties now are debating.
Rodger Malcolm Mitchell
Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%
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 Imports