●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.
Here is absolute proof deficit reduction (aka “austerity”) works in the United States and everywhere in the world (i.e. works to crush economies, destroy middle classes and widen the gap between the rich and the not-rich.)
This unblemished record of success demonstrates why President Obama and both political parties continue to advocate deficit cutting.
Obama budget would cut entitlements in exchange for tax increases
Friday, April 5, 8:00 AM
President Obama will release a budget next week that proposes significant cuts to Medicare and Social Security and fewer tax hikes than in the past, a conciliatory approach that he hopes will convince Republicans to sign onto a grand bargain that would curb government borrowing and replace deep spending cuts that took effect March 1.
Factory Data Shows US Manufacturing Dead In The Water As Headlines Mislead
4 April 2013
Wall Street Examiner
The headlines today blared of a 3% increase in factory orders in February, completely obscuring the truth of just how bad the US manufacturing trend is. The real story lies in the fact that factory orders have been flat for two years and have trended lower for the last four months.
Wall Street falls at open on weak payrolls
NEW YORK (Reuters) – Stocks fell more than 1 percent at the open on Friday, following a payroll report that was much weaker than expected, the latest in a series of reports to indicate that economic growth may be losing momentum.
A vanishing middle-class — the new normal?
Almost half of middle-class households today live paycheck-to-paycheck, according to a recent survey by financial services firm NestWise.
Sequester cuts already hurting small businesses
Most companies don’t expect to hire next quarter
Hiring slowed to 88K jobs in March; unemployment rate drops to 7.6 percent
Washington Post 4/5/13
Businesses sharply reduced their pace of hiring in March, according to government data released Friday morning, deflating hopes that the nation’s economy is ready for takeoff. Gallup chief economist Dennis Jacobe said the recent spate of job growth has done little more than keep pace with population growth. “If you’re out there looking for a job, the dismal situation is no better now than it was a year ago,” he said.
Moody’s sees gloomy outlook for Spain banks
The Economic Times 4/5/13
MADRID: Global credit rating agency Moody’s warned Friday that Spain’s battered banks face a grim outlook even after a European-funded rescue, with high levels of bad assets set to worsen “significantly” in the recession.
Fitch sees bad loan charges to keep hurting Italy banks
By Reuters | 5 Apr, 2013, 12.13PM
MILAN: Fitch said on Friday it expected a rise in impaired loan charges at Italian banks to continue through 2013, adding this trend was unlikely to slow down until the economy improved. Italian banks have been forced to book writedowns and hike provisions against a steep rise in deteriorating company loans.
Workers Protest to Get E.U. Leaders to End Austerity
By AP / March 14, 20133 Comments
(BRUSSELS) — Some 10,000 workers from across the European Union protested outside a summit of EU leaders Thursday, demanding they end years of austerity and focus instead on curbing runaway unemployment with more spending. Trade unions and an increasing number of economists say austerity has inflicted severe economic pain — the economy of 17 EU countries that use the euro are stuck in recession and joblessness is at a record high.
Greek Unemployment Reaches Record 26%
By Associated Press March 14, 20133
(ATHENS, Greece) — Unemployment in debt-crippled Greece rose to a record of 26 percent in the last quarter of 2012, as austerity measures combined with a deep recession took a harsh toll on the workforce.
Eurozone crisis: Portugal protests against austerity
Hundreds of thousands of people have taken part in protests across Portugal against government austerity measures. Huge crowds gathered in the capital Lisbon to demand the government resign. Many carried placards condemning the “Troika” of the IMF, the European Commission and the European Central Bank, which demanded budget cuts in return for a financial bailout. The conservative government has introduced steep tax rises as it tries to reduce a huge budget deficit. Unemployment is at a record 17.6% and the economy is expected to contract by 2% this year – the third straight year of recession.
Where are the activists as austerity bites? They have been beaten back
Protesters face violence, arrest and serious charges. Only the brave dare face this savage suppression
The Guardian, Thursday 4 April 2013
As millions of people stare down the barrel of job losses, benefits sanctions, destitution and desperation and the rich are given tax cuts, I hear a lot of people asking why there isn’t more resistance going on. It was brutally and systematically put down. The students, the street-organising anti-cuts campaigners, the Occupy movement. They were cleared out, arrested and beaten back by police,
Ah, that good old austerity. Gotta love it. At least the rich do.
Here, deficits are “unsustainable” (even though the U.S. government can fund any deficit of any size), but austerity is sustainable because it only punishes the middle and lower classes.
Numbingly, it’s the middle and lower classes who believe austerity is necessary. Why? To prevent hyperinflation, like Germany and Zimbabwe had. Never mind that the German and Zimbabwe hyperinflation were not caused by deficits. And never mind that the U.S. never has had hyperinflation, not even during depressions and world wars — not even during the civil war.
And never mind that the Fed easily has been able to maintain inflation near its target level. And never mind that as a result, we are nowhere near an uncontrolled inflation, while recession and unemployment and poverty and the resultant crime are upon us.
And never mind that austerity widens the gap between the rich and the rest. And never mind that the politicians have been bribed by the .1% (via campaign contributions and promises of lucrative employment later) to widen that gap.
Let’s just keep doing what has not worked, cannot work, and never will work, anywhere in the world, anywhere in history: Cut those deficits. Cut Social Security. Cut Medicare. Cut Medicaid. Cut federal employment. Cut aid to the poor. Cut aid to education. Cut research and development. Cut food inspections, drug verifications and financial regulations. Turn once-great America into a 3rd world, banana republic, where the rich rule and the rest starve.
And while we’re at it, let’s keep cuting our own throats. That seems to work, while so many of us can’t.
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