●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.
Erskine Bowles and Alan Simpson are Co-Chairs of what ironically is named, “The Moment of Truth Project.” If ever there was a moment when these two spoke the truth, that time is well past and long forgotten. A more appropriate name would be, “The Years of Deceit Project.”
On April 19, 2013, they published an Email addressed to “Dear Colleagues and Friends.” The entire letter is reprinted in the Comments section of this post, but I’ll discuss a few passages:
This morning, the two of us are releasing a detailed plan to control our mounting debt and grow the economy.
When you read their letter, you’ll see not one proposal for growing the economy. All their proposals are for deficit cutting, i.e. austerity, which has been an economic disaster everywhere in the world it has been tried.
Our plan, the Bipartisan Path Forward to Securing America’s Future, fleshes out the framework we released this February, which built on the negotiations between Speaker Boehner and President Obama in December. Our plan would save an additional $2.5 trillion over the next ten years, address all areas of the budget, and would put the debt on a downward path over the long-term.
Calling something “bipartisan” is supposed to give it credentials. The reality: “Bipartisan means: The right wing demanded it, the President always wanted it and the left wing acceded to those demands.
No discussion ever is made of how removing $2.5 trillion from the economy can possibly benefit America.
The failure to get our debt under control, reform our tax code, and put our entitlement programs on a fiscally sustainable course is robbing us of the ability to invest in our future and will leave us without the resources we need to meet other challenges facing our nation.
Translation: The failure to reduce the money supply, tax the middle class more and gut Social Security and Medicare, is robbing the upper .1% of the ability to widen the gap between the rich and the rest.
Focus on the incredible notion that increasing taxes and reducing federal benefits somehow would help us invest in the future. It’s like saying, “We need to lighten up by chopping off our legs, so we can run faster.”
That is what passes for a “Moment of Truth” to Bowles and Simpson and the rest of those bought-and-paid-for by the upper .1% wealth group.
It is critical that leaders in both parties come together to put our fiscal house in order if they have any hope of addressing the other challenges and opportunities that we face as a nation.
Translation: “Fiscal house in order” means cut social programs and increase middle-class taxes.
. . . despite multiple efforts from Speaker Boehner and President Obama to reach a “grand bargain,” the country has still done nothing to make our entitlement programs sustainable for future generations, make our tax code more competitive and pro-growth, or put our debt on a downward path.
Translation: The “grand bargain” is President Obama’s long time dream of destroying the New Deal social programs. “Entitlement programs sustainable” means gut Social Security, Medicare, Medicaid and aids to the poor, in order to save them.
This entire program is based on the theory that the United States federal government is short of money, but you poor and middle classes have too much money. So you must give more of your money to the government.
Last December, the negotiating parties were as close as they’ve ever been on a plan to put our fiscal house in order.
When you read the full text, you’ll see repeated use of such vague, meaningless euphemisms as, “fiscal house in order,’ “grand bargain,” “sustainable for future generations, “moment of truth,” “more competitive and pro-growth,” “addressing our challenges, “principled compromise,” “better future for our grandchildren.”
These phrases are the Simpson/Bowles equivalent of Orwell’s: “War is peace. Freedom is slavery. Ignorance is strength.”
Taken together, these policies would put our debt on a clear downward path as a share of the economy while protecting the recovery, promoting long-term economic growth, protecting the most vulnerable in society, and ensuring our entitlement programs remain fully available to future generations.
What you will not see is any evidence that tax increases and spending decreases “protect the recovery, promote long-term economic growth,” blah, blah, blah. No, you will not see even one ounce of data showing how this plan would grow the economy, reduce unemployment or in any way at all, better the lives of the poor and the middle classes. The reason: Such data do not exist.
At the end of their letter is a table showing their recommended deficit cuts. Here are just a few. As you read them, ask yourself, “Whom they will impact most, the rich or the rest?”
Health Care: $585 billion
Military health and retirement: $100 billion
Higher education: $35 billion
Increase User Fees: $50 billion
Chained CPI: $280 billion
In summary, here is your “Moment of Truth”: Simpson/Bowles is a lie — a prescription for economic disaster, a destruction of the lives of Americans living and yet to be born, and a spectacular widening of the gap between the rich and the rest.
The names of these men will live in infamy. The program they propose is a disgrace, exceeded only by the disgraceful ignorance of those who believe 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