●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.
The headlines are dramatic:
They are designed to make you believe there is a dramatic struggle between the forces of good and evil – the powerful President of the United States and the Senate on one side, and House Speaker John Boehner on the other — to determine the fate of America.
It’s all theater. Both sides want, and are paid to achieve, exactly the same thing: To widen the gap between the rich and the rest.
As we have seen in previous posts, the President has the power to eliminate all federal debt, bypass the debt limit, and pay for all federal services, while decreasing federal taxes and preventing inflation.
He can do all this at the stroke of his pen, without even asking permission from Congress. And he knows he can do it. But he does not.
Instead, he and the Speaker of the house engage in a charade.
Why? Because the rich pay for this service, via campaign contributions, aided and abetted by the Supreme Court’s decision which allows the rich to bribe politicians as much as the politicians wish to be bribed.
A person considers himself rich, not because he owns a great deal, but because he owns a great deal more than others. It’s the “more” that counts, and how much “more” determines how rich you feel you are. The rich focus on the comparison, not on absolute numbers.
So they bribe politicians to widen the gap, and the politicians oblige. We discussed this in more detail at: “No, it’s not your imagination. The upper 1% really are screwing you more”
Here is one of the graphs from that post, showing you how the income gap has grown (Higher numbers mean a wider gap):
Here you see a dramatic increase in the gap between the rich and the rest, all orchestrated by a series of bought-and-paid-for Presidents and Congresses.
Bottom line: Don’t believe the headlines. Both Obama and Boehner, the Democrats and the Republicans, are using the mythical “debt crisis” to do the bidding of the upper .1% income group. Their “good cop, bad cop” act is just that: An act.
Had they merely come out and said, we are going to cut the spending that benefits the lower 99.9%, you would have been outraged. But by making the results a “grand bargain,” a hard-fought “compromise” to “solve a serious problem,” they make you feel all is fair — grateful even.
Of course, since deficit reduction (also known as “austerity”) not only is unnecessary, but very harmful, and since that austerity always hurts the 99.9% more than it does the .1%, every outcome will push you down further.
And as for that proposed top rate tax increase on the rich: They never pay the top rate. Just ask Warren Buffett, whose tax rate is lower than his secretary’s. Ask Mitt Romney, who has parked his money overseas, and had to fake his tax return, just to get his rate up to 14%.
It’s all Kabuki theater that damages you and America. I hope you enjoy the show. You’re paying for it.
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