●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 motive.
“I’ve been applying leeches to cure your anemia, but for some reason, the more blood I draw, the weaker you become.” Barack Obama, MD
In The United States of Europe: The when and the how. (Monday, Apr 30 2012), we said:
The long term survival of any monetarily non-sovereign government requires money coming in from outside its borders. Germany, for instance, survives by exporting goods and services (i.e. importing euros).
Of course, Germany has to get those euros from someplace, and unfortunately for their neighbors, that “someplace” is them. The flow of euros toward Germany sucks the life blood from France, Greece, Portugal, Spain and other nations having negative balances of payment.
Apparently, Germany is confident it will continue to bleed its neighbors, because:
German cabinet approves drastic reduction in new debt
Germany would take on no new debt, while a budget surplus of five billion euros (will) be secured in 2016.
Translation: In 2016, five billion net euros will be taken from Germany’s private sector, impoverishing the middle- and lower classes.
“With all modesty, this is a result of historic proportion,” Economics Minister Philipp Rösler told reporters in Berlin. “The lesson from the sovereign debt crisis is that solid finances are essential.”
Translation: “I’m brilliant, because I have figured out how to run a surplus in a monetarily non-sovereign nation: Tax the hell out of the little people. But when things turn sour, don’t blame me. I’ll do a ‘Sergeant Schultz’ and deny I had anything to do with it.”
Finance Minister Wolfgang Schäuble used the occasion to once again brush aside accusations from fellow eurozone countries Germany had been insisting on too much austerity in southern Europe. He argued the Germany example was proof there was no contradiction between budget consolidation and growth.
Translation: There is no contradiction if you use the other guy’s money.
The cabinet said the strong performance of the German economy and its labor market had helped to boost tax revenue and produce a solid fiscal basis for the country. But it added increased tax income had not been used to increase spending.
Translation: “The spending increase came from the money we took out of our neighbors’ treasuries. But don’t tell them that. They are too stupid to figure it out for themselves.”
Rösler’s crowing aside, the Germany is building on the flesh and blood of its neighbors and its citizens. In a brilliant campaign, reminiscent of the American .1% income group’s campaign to impoverish the U.S. middle- and lower classes, Germany has convinced the world its success is based on “budget consolidation” and “solid finances.”
A growing Gross Domestic Product requires a growing supply of money. In the case of Monetarily Sovereign nations, like the U.S., Canada, China, Australia et al, that money can be created ad hoc by their sovereign governments.
But for monetarily non-sovereign nations, which have no sovereign currency and so the total supply cannot be increased, each nation must try to steal euros from the others, in a nationalistic riot of mutual cannibalism.
When the other euro nations finally surrender to the eventuality that they either return to Monetary Sovereignty and re-adopt their own currency, or merge into a financial version of a United States of Europe, Germany will run out of blood donors.
At that point, German citizens will begin to suffer so much they will seek out a strong, ruthless leader, who will identify and persecute scapegoats, then renounce the euro, so as to finance a war.
During the chaos, the German uber-reich will feed off the dying German populace, as salaries are diverted to taxes and the focus turns to saving the government. Soon there will be but two classes: The very wealthy and the very poor. The gap will be complete.
By the way, eurozone, how’s that austerity thing working out for you?
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
11 thoughts on “Germany: “Eat our neighbors, then kill our citizens.” WWII revisited.”
Won’t your “nine steps to prosperity” make the inflation rate go through the roof? Oil price is already very high. More demand is very unlikely to increase supply to keep up with the spending you propose.
mansoor h. khan
Mansoor – How did oil prices get high? By actual oil users bidding up the price, or by those in control of oil simply hiking the price?
Seems more like the economic consequences of the 1919 “peace” promulgated by Britain. The accountant’s minimalist version of reality is still going around, aimlessly looking for a purpose.
Enjoy your biting sarcasm, Rodger.
Outstanding, Rodger. Once again you simplify the lies so that we can all understand the truth.
France and Germany are able to bleed the other euro-zone nations because France and Germany have vast trade surpluses with the other nations. Why the surpluses? Because the ECB (based in Frankfurt) bribed the politicians of various other nations to set up the surplus.
Greece, for example, spends more money on arms-per-GDP (by far) than does any other European nation. In 2006, as the financial crisis was looming, Greece was the world’s third biggest arms importer, after China and India.
Most of those arms come from France and Germany, and are purchased on CREDIT, with the costs passed on to the Greek public in the form of AUSTERITY. Greece is the single biggest destination (in Europe) of French and German weapons. Thus, France and especially Germany are sucking Greece dry.
This scam continues because Greek politicians and military officers want it to. Greek politicians get kickbacks and bribes from French and German weapons makers, just as the politicians get bribes from bankers to support the euro currency.
Meanwhile the Greek military is the only place where one’s job is secure. Greece has a standing army of 156,000 men, more than the UK, which has 6 times its population. The army is a fraternity that sucks the Greek population dry. (Any Greek politician or general who questions this exploitation is quickly removed.)
To justify this scam, Greek politicians and military officers point to the “Turkish threat,” even though Greece and Turkey are NATO members, and share a number of mutual allies. Turkey routinely proposes a mutual reduction in arms spending, but Greek politicians and military officers will have none of that, nor will French and German weapons makers.
Also, Greek politicians and military officers claim that Greece needs more French and German submarines, fighter jets, and high-tech missiles to keep out “illegal immigrants.”
France and Germany sell twenty times more arms to Greece than Greece wants or needs. Simultaneously, France and Germany demand that Greece have austerity, because Greece is “living beyond its means.”
If you can impose a common currency on seventeen nations, then the two nations that produce the most goods will quickly enslave and impoverish the other 15 nations.
To impose the common currency, you merely create money on computer keyboards, and use it to bribe politicians in the target nations, promising to keep the politicians in splendor as long as they serve you.
(And still the MMT people claim that politicians are “misguided.”)
“With all modesty, this is a result of historic perversion,” Economics Miscreant Philipp Rösler told hacks in Berlin. “The lesson from the sovereign debt crisis is that stolen democracy is essential to the Fifth Reich. Really, getting the puppets into positions of power is crucial. The rest just happens on a spreadsheet. It’s so much more elegant. True, outside our gates there are some riots and death. It’s within acceptable levels and is to be expected. We even anticipate a good bit of revenue from the documentaries…”
” …But it added increased tax income had not been used to increase spending, except on our bar tabs, prostitutes and bribes. We even made the other pay for their own puppets. We just use the taxes to suck our own people dry, then blame it on one or the other ethnic group, said the Cabinet”. “It worked last time and it seems to be working just fine this time. And by using the financial approach, there will be no pits, no bones and no problems.”
I understand where you are coming from vis-a-vis sucking 5 billion euros from the private sector. And they would be better off not doing it. However, Germany currently has a 13.7 billion euro trade surplus. If they have roughly the same trade surplus in 2016 they can afford to cut 5 billion out of private sector without risking a contraction. As you know, only a nation with a trade surplus can balance or have a budget surplus.Of course, as you say, they are bleeding their neighbors dry so it is not clear how long they will be able to keep it up.
It appears that the outcome for a nation with monetary sovereignty is the same as for nations without monetary sovereignty (like Europe) unless money creation is totally restricted by the state for itself and run by the govt using civil servants (with the possible exception of credit unions and small banks with much larger fractional reserve requirements.) Plutocracy and corruption emerge in both.
“Plutocracy and corruption emerge in both.”
Yes, and in all cases, the corruption depends on concealing the facts of Monetary Sovereignty.
If average Europeans understood that the euro currency is killing them, then there would still be corruption, but the public would not submit to it so easily.
If average Americans understood that the U.S. government has no debt crisis, and that increased government spending is the only way out of this depression, then there would still be corruption, but the public would not submit to it so easily.
Meanwhile back in America, I’m sick of deficit doves and their self-contradictions. In a blog post, Paul Krugman says we have a jobs crisis, not a deficit crisis. He also says, “The U.S. government can’t run out of cash (it prints the stuff).”
Those are Krugman’s own words. But then he says, “Our government can borrow at incredibly low interest rates.”
So the government prints its money, but no…the government borrows its money.
With garbage like that, it’s no wonder Krugman was given a Nobel Prize. (Obama was given one too.)
I’m also sick of “liberal” politicians who promote austerity in order to serve the rich. Even the most “progressive” politicians uphold the lies about the national debt and deficit, plus the lie that the federal government runs on tax revenue, and on borrowed money.
For example, Raul Grijalva (D-AZ) is one of the most left-leaning members of Congress. Mr. Grijalva and the House Progressive (sic) Caucus have released a “Back To Work Budget” plan that says we must focus on creating jobs as the best way to REDUCE THE DEFICIT.
“Americans face a choice,” says the plan. “We can either cut Medicare benefits to pay for more tax breaks for billionaires, or we can close outdated tax loopholes and invest in jobs.”
Click to access Back%20to%20Work%20Budget%20-%20Executive%20Summary.pdf
And here is Micah Hauptman of Public Citizen on Grijalva’s plan:”Financial speculation taxes can raise substantial revenue to counteract devastating spending cuts.”
Taxes. Always more taxes. More austerity. Republicans want austerity via cuts in social programs. Democrats want austerity via increased taxes. Democrats want to create jobs, so Democrats can tax more workers. Austerity! Austerity!
MMT morons love austerity. They are always defending federal taxes.
The real purpose of federal taxes is to widen the wealth gap. All federal taxes hurt the middle and lower classes. (The federal government does not need or use tax revenue anyway.) FEDERAL TAXES OF ANY KIND = AUSTERITY FOR THE LOWER CLASSES. PERIOD.
Politicians impose austerity while reassuring the public, “Don’t worry, we want to tax the rich.” Most Americans fall for this lie, including most readers of Rodger’s blog. They scream “Tax the rich!” even when they know that federal taxes hurt only the lower classes. It’s a form of self-righteous masochism that characterizes all peasants. The poor sabotage themselves, while they blame the rich for all their problems.
If I were part of the One Percent, I would think, “Yes, we screw the peasants. It’s a favor we do for them. They’re not happy unless they’re miserable. Ask them yourself.”
Politicians also say, “Don’t worry; we want financial transaction taxes.”
This is more camouflage for austerity. Most stocks, bonds, commodities, securities, and currencies are traded in multiple markets around the world. Tokyo, Dubai, London, New York, Hong Kong — the list is very long. If one exchange is taxed, then speculators will simply operate in another.
If you favor federal taxes, then you are an inferior, as common as dirt. You are a peasant. Genuine nobility means genuinely helping the poor.
Rodger sums it up thus: “Focus on lifting the poor. Punishing the rich does nothing for the poor.”
http://www.businessinsider.com/cyprus-bailout-russian-angle-2013-3 and the EU saga grows even thicker with a 10% depositors surcharge in Cyprus…