–Poland debates the economic suicide of austerity

Mitchell’s laws:
●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.
●Everything in economics devolves to motivation.

Poland’s Monetarily Sovereign economy has been, and remains, far healthier than the monetarily non-sovereign economies of the euro nations. That may change according to an article in Der Spiegel. Here are a few excerpts:

Core or periphery?: Poland’s Battle Over Embracing the Euro

Since the fall of communism in 1989, Poland has become an EU member that has developed from a backward, agricultural country into a prosperous nation. Now liberal-conservative Prime Minister Donald Tusk wants to take the next step.

He has announced his intention to hold a “national debate” in the spring over Poland’s accession to the euro zone. “How should we decide?” he asks. “Do we want to be part of Europe’s core in the future or remain along its periphery?”

Note the use of the words “next step” and “accession” which imply progress, and the words “core” vs. “periphery,” which imply that Poland is being left out of something good.

Europe’s “core” is in an economic death spiral, drowning in a whirlpool caused by monetary non-sovereignty and slavish adherence to obsolete ideas like deficit/GDP limits. So yes, by all means, let’s dive right in, and drown along with them, rather than stay safe on the “periphery” shore.

With its national debt at only 56 percent of GDP and its currency, the zloty, relatively stable, the stability criteria are hardly an issue for Poland. The only minor sticking point is that last year’s 3.1 percent budget deficit is slightly higher than the deficit-to-GDP ratio of 3 percent demanded by the Stability and Growth Pact.

Except not one human on this planet can explain why a Monetarily Sovereign government’s deficit spending should be limited to 3%, or to any other percentage, of a nation’s product.

The government camp argues that the country needs the euro to remain competitive. But the conservative-nationalist opposition believes that Poland’s independence is at risk. It argues that, owing to German dominance, if Poland joins the euro zone it will lose the national character it developed in difficult struggles that claimed many victims.

Not just “national character,” Poland will lose its economy if it joins the failed eurozone. It would be akin to a move from the safe, posh suburbs to the crime-ridden, inner city slums, just to be part of “the core.”

About 75 percent of Polish exports go to EU countries. If the country joined the euro zone, one of the most important benefits is that the transaction costs caused by fluctuating exchange rates would disappear.

Exchange rates can help or hinder exports, depending on whose money is weaker. Currently, those “fluctuating exchange rates” don’t seem to have hurt Poland. And anyway, how about hedging on the futures exchanges? That’s why they were created.

All sovereign nations deal with exchange rates. So? Is this a reason to surrender your single most valuable asset: Your Monetary Sovereignty?

Despite the Europe-wide recession, Poland consistently generated high growth rates, but now the crisis has arrived. Poland’s 38 million people are holding onto their money, triggering a sharp drop in domestic demand. The Polish economy grew by only 2 percent in 2012, compared to 4.5 percent in 2011.

Let’s see. When the euro nations faltered, Poland prospered. Now the euro nations are drowning in depression, while Poland has “only” 2% growth. Anyone see a reason Poland should dive into that euro maelstrom?

The first showdown is expected in late February and early March, when the Polish parliament, the Sejm, will vote on ratification of the European fiscal compact, the agreement championed by German Chancellor Angela Merkel that obliges signatories to implement balanced-budget legislation and accept automatic sanctions for violating the new deficit rules.

Ah, good old Merkel. Here motto is, “If we couldn’t beat ‘em in the war, let’s beat ‘em down in the peace.”

“We think that EU integration goes much too far,” says Krzysztof Kawecki, a member of the center-right Right Wing of the Republic party.. “We don’t want a United States of Europe, but a confederation of independent national states.”

The fiscal compact, he says, gives Brussels a say in fiscal and budgetary policy. Kawecki believes that it would be “suicidal” to introduce an ailing currency like the euro today.

A “United States of Europe” would work.. Member nations would surrender their Monetary Sovereignty in exchange for receiving euros from the central government. But the EU proposes something far worse.

Member nations would surrender their Monetary Sovereignty in exchange for nothing. They would become slaves to the EU’s incessant demands for austerity, an economic black hole from which no nation emerges.

Austerity is everywhere (including the U.S.) a black hole designed by the rich to increase their power over the poor. And the euro is an income gap widening machine, guaranteed to impoverish all but the upper .1%.

God help the Polish people if their leaders manage to drag them into the EU’s austerity abyss.

(Then again, God help the American people, as our upper 1% income group drags us down into the austerity abyss.)

Rodger Malcolm Mitchell
Monetary Sovereignty


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


2 thoughts on “–Poland debates the economic suicide of austerity

  1. That article is from Der Spiegel, which is radically pro-euro, since Germany uses the euro to dominate Europe.

    Q. Poland’s economy is great when compared to other European nations. Why should Poland change its currency?
    A. So Poland can join Europe’s “core.”

    Q. How will that help average Poles?
    A. Poles won’t be outsiders.

    Q. Why should Poles care about being “outsiders”?
    A. They just should.

    Q. The euro will bring austerity to Poland. Austerity is genocide. Why should Poland have genocide?
    A. Genocide would bring prosperity if only Europe had more genocide.

    Meanwhile back in the USA, the sequestration will begin at the end of next week with an initial $85 billion removed from the economy.

    This is nowhere near enough for Erskine Bowles and Alan Simpson, who are now circulating a petition to eliminate $2.4 trillion from an already depressed U.S. economy.

    Alan Simpleton refers to Social Security as a “milk cow with 310 million tits.” He says, “Social Security was never meant for retirement.”

    Simpleton vows to impose austerity, saying, “A lot of blood, hair, and eyeballs have to lay (sic) on the floor before we finish.”

    He says, “This country is gonna go to the bow-wows unless we deal with entitlements, Social Security and Medicare.”

    And this: “The irony is that the veterans who saved this country are not now helping us to save the country in this fiscal mess.”

    Simpleton and Bowles started the Fix-the-Debt group, which collaborates with Pete Peterson fronts such as the Committee for a Responsible Federal Budget, and the Pew Commission on Budget Reform. All of them want radical austerity for average Americans, who Simpleton refers to as “the little people.”

    It is not clear if Simpleton agrees with Obama, who says, “We can’t just cut our way to prosperity.” (We must also increase taxes.) However Obama in his state-of-the-union speech said he wants to cut Medicare by the same amount as Simpson and Bowles.

    (Incidentally, many politicians wore green ribbons on their lapels during Obama’s speech, supposedly in honor of victims of gun violence. I suspect it was also in honor of austerity mania.)



    Martin Wolf (associate editor at the Financial TiMES) is a typical media maggot who receives a paycheck as long as he serves the 1% at the expense of the 99%. Consider, for example, Mr. Wolf’s latest post, titled, “Why the Euro Crisis Is Not Yet Over.”


    Wolf admits that austerity has been slightly challenging for some people.

    (Challenging? Average Greeks are dismantling bridges and railways, desperately seeking metal to sell. Metal thieves are swarming across Europe like starving ants, cannibalizing their own infrastructure. Spaniards are eating out of garbage cans.)

    Although conditions become worse by the day, Mr. Wolf claims that conditions would become even worse if countries started dumping the euro currency.

    His reasoning goes like this: the patient has anemia. The more leeches we apply, the worse the anemia becomes — but if we stop applying leeches, the anemia will become even worse. In fact, the only thing that is keeping the patient alive is leeches. Therefore we must apply more leeches. (We must bleed the patient to stop the hemorrhaging. We must kill him to save him. We must have more austerity.)

    This is the basis of ALL claims in support of austerity. If we don’t destroy Social Security today, there will be no Social Security tomorrow. If we don’t apply more austerity today (always more) we will need even more austerity tomorrow. No matter how much damage is done by austerity, the damage would be even worse without austerity.

    This lie doesn’t depress me, since it never changes. It is 100% predictable. I expect it.

    What depresses me is that average people fall for it EVERY TIME.


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