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 motive.
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What if you learned the upper .1% income group – the world’s super-rich – had entered a chemical into the economy that will degrade your physical and mental abilities – and not just yours, but your children’s your grandchildren’s — innocents not yet born?
All your future generations are being made physically and mentally weaker. The rich alone have the antidote, so they are not affected. The Plan: To increase the super-rich’s power over you, making you and all your descendants permanently impaired slaves.
Would this make you angry?
Incredibly, it’s happening, and that “chemical” is called “austerity.”
On April 10th, we published: Epigenetics: How Today’s Austerity Can Degrade Humanity, Forever
Shortly after that article was posted, we read this:
Cost of cuts: Austerity’s toxic genetic legacy
by Andy Coghlan, NewScientist.
Here are a few, pertinent excerpts:
From financial breakdown in Portugal to the UK’s so-called bedroom tax, the harsh effects of austerity measures are hitting people in ways unseen in decades.
New insights into how genes linked with disease are triggered in times of stress suggest that we should be paying attention to the long-term effects of austerity on our health.
The more immediate health impacts of economic cuts — suicides in Europe have soared since the financial crash in 2008. Likewise, the incidence of mental health disorders has increased in countries worst hit by debt crises, such as Greece and Spain.
Greece has also seen a surge in HIV infections among intravenous drug users, from about 15 per year before 2010 to 314 in 2012. Some people in Greece are even suspected of purposefully infecting themselves with HIV to obtain healthcare otherwise unavailable as a result of budget cuts.
Austerity, which everywhere is imposed and defended by the rich, has led to suicide and self-mutilation, while the people, in their ignorance, defend austerity as necessary and even therapeutic.
But there are more subtle, and just as concerning, effects on health. Psychological stress leads to long-lasting changes in genes that trigger chronic inflammation (which) can raise the risk of heart attacks, depression and even cancer.
Our genes may be partly responsible for links between financial crises and health,” says George Slavich of the University of California at Los Angeles, a co-author of the review (Clinical Psychological Science, doi.org/k4f). A 2006 study in the Netherlands covering the years 1815 to 2000 showed that generations born during recessions have abnormally high rates of early death.
During stressful events, the brain and other parts of the central nervous system flood the body with stress hormones such as cortisol. These activate cell surface receptors that instruct the cell to switch on genes that stoke inflammation.
There is more and more research showing the effects of prenatal stress on the long-term development of children. It’s likely that if people are feeling more stressed because of austerity, unemployment and so on, it will have a damaging effect on the next generation.
It is very likely that austerity can have persistent effects across generations,” (says) Isabelle Mansuy of the Swiss Federal Institute of Technology in Zurich, who has previously demonstrated that the effects of stress can be passed down through three generations of mice.
Austerity is no accident. It is deliberate. It is The Plan by the upper .1% to create a permanent underclass, an everlasting breed of menials, who obediently will do as they are told, because they neither have the wit nor the means to do otherwise.
The Plan: Force people to labor endlessly, by reducing and delaying their retirement funds. Force people to plead for medical care, by reducing health care options. Force children into brain and body-damaging starvation by reducing aids to the impoverished.
Make the people come, with begging cups in hand, and they will do and believe anything and everything they are told.
Look around you. Access to Social Security slowly is being delayed from 65 years to who knows when? Access to healthcare is diminished as underpaid doctors switch to boutique plans, requiring uninsured annual payments.
Medicare supplemental plans have become more expensive. Unemployment and homelessness have become the norm. The costs of college education have grown. The quality of basic public education is disgraceful. Only the rich are immune.
And while austerity has had no historical benefit anywhere in the world, the people believe what the rich tell them, and even argue for more and more deprivation.
Keeping privatisation in check appears vital. David Stuckler at the University of Oxford says that death rates increased significantly during a period of rapid mass privatisation in Russia in the 1990s. Half of all factories were privatised practically overnight and death rates doubled as a result of unemployment and heavy drinking. In Belarus, where privatisation was implemented more gradually, death rates edged up only slightly.
Stuckler says that the paths chosen by Iceland, Finland and Sweden may demonstrate a healthier way of dealing with an economic crisis.
Unlike many other countries, their governments decided to let banks fail post-2008, rather than bailing them out. They then nationalised all of them, restricting the banks’ risky investment activities. They also retained all health and welfare budgets, as opposed to cutting them back, and introduced schemes to retrain and redeploy sacked workers.
The “small government” myth is part of The Plan. Brainwashing has induced the populace to believe the private sector is better at everything than the public sector. So people are left to purchase from private industry, what the government easily could and should give them: Health care, financial security, food, basic housing, education, anti-poverty measures. By using the epithet, “socialism,” to describe every government effort, the rich have convinced the populace to reject needed benefits.
And then there are taxes. FICA is a monster, regressive, 15% tax on middle-income salaries — only up to $113,700 for 2013. The rich not only don’t notice such a tax, but they don’t receive salaries at high tax rates. They receive capital gains, dividends and interest at sheltered rates. Who devised the tax code? The rich.
Austerity, by destroying an economy, causes greater deficits, which in turn cause an increasing call for more austerity, in an endless economic death spiral. Austerity is no secret. Its negative effects are not hidden from you. I have no special inside knowledge that allows me to reveal all this to you. The damage is obvious, plain to see everywhere in the world.
Meanwhile the U.S., which never can run short of dollars, and so has no need whatsoever for deficit cutting, has implemented austerity. The super-rich bribe Congress, bribe the President, own the newspapers, own the TV stations, and financially support the universities and college professors, so that all tell you austerity is needed — more and ever more austerity.
If you accept this, it is you who are complicit in the super-rich’s enslavement of your progeny. It is you who have given consent to The Plan.
If poisoning your children and grandchildren doesn’t make you angry, what will?
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
#MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
“… by using the epithet, socialism …”
how did “socialism” (and, for that matter, communism) become epithets?
i think that novel 1984 by that prophet, george orwell, provides an (allegorical) explanation in a conversation between “winston” and his neighbor, “syme”:
“‘How is the Dictionary getting on?’ said Winston, raising his voice to overcome the noise.
‘Slowly,’ said Syme. ‘I’m on the adjectives. It’s fascinating.’
…
‘The Eleventh Edition is the definitive edition,’ he said. ‘We’re getting the language into its final shape — the shape it’s going to have when nobody speaks anything else. When we’ve finished with it, people like you will have to learn it all over again. You think, I dare say, that our chief job is inventing new words. But not a bit of it! We’re destroying words — scores of them, hundreds of them, every day. We’re cutting the language down to the bone.’
…
‘Don’t you see that the whole aim of Newspeak is to narrow the range of thought? In the end we shall make thoughtcrime literally impossible, because there will be no words in which to express it.'”
it’s really hard to talk about alternatives to the economic system or the monetary system if you can’t use the words to describe it. and to think that orwell saw this coming 60-odd years ago is amazing, to put it lightly.
if you want the whole exchange btw. “winston” and “syme” as well as the rest of the novel, go here:
http://george-orwell.org/1984/4.html
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“Liberal” and “stimulus” also became epithets, courtesy of the .1% “Reform” and “save” now mean “destroy,”
“Deposit” has been transformed into “debt.”
And when people receive money from the government, they are “freeloaders,” but when the government receives money from the people, it is being “prudent.”
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AIR AUSTERITY
(Flights depart every hour.)
U.S. hospitals are legally mandated to care for all patients who need emergency treatment, regardless of citizenship status or ability to pay. But once a patient is stabilized, federal funding ceases, along with the requirement to provide care. Many immigrant workers without citizenship are ineligible for Medicaid, the government’s insurance program for the poor and elderly. And Medicaid itself is being cut, as part of health care “reform.”
Thus, if you enter a hospital for medical treatment, and you cannot prove that you are legally in the USA, then even if you have medical insurance, the hospital may put you on a plane when you are comatose, and dump you in a foreign country against your will.
It’s called “medical repatriation,” and it has no connection to government activity. Hospitals do it all by themselves.
How widespread is this? We don’t know, since it’s private and unregulated. No government agency or organization keeps track. (Doubtless it is expanding rapidly.) However, it is known that some of the victims subsequently died in hospitals that weren’t equipped to meet their needs. Others suffered lingering medical problems because they never received adequate rehabilitation.
So you are a Mexican national minding your own business when a drunk gringo smashes into your car, rendering you comatose. The next thing you know, you’re waking up somewhere in Mexico.
It’s all part of austerity.
Remember, the U.S. government is “broke.”
http://www.washingtonpost.com/national/health-science/us-hospitals-send-hundreds-of-immigrant-patients-back-to-home-countries-to-curb-cost-of-care/2013/04/23/8cce5224-abe4-11e2-9493-2ff3bf26c4b4_story.html
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UK, a nation wise enough to remain Monetarily Sovereign, nevertheless is in the clutches of the .1%. Their children and their children’s children will suffer
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hey roger
I didn’t read the article in the link but how could they write “inflation eroded incomes”? Deflation is more like it, we are so far away from full output utilization and general inflation its disgusting….am i missing something or was the article wrong about that (not that most articles reporting about national finances and economics arent wrong)?
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You are correct, Rodger, and if I may, this brings up my annoyance with the MMT dream world, where the rich and their puppet politicians mean well, but are “misguided.”
For example, yesterday at the NEP blog there was a post in which we read this…
“Only economists themselves can reform their discipline.”
No. Wrong. Only the rich can reform economists, since (most) economists are toadies for the rich. Most economists keep their jobs and earn “respect” by justifying the 1%, rationalizing their thefts and genocides (e.g. austerity). Modern “economics” is dedicated to keeping the rich in power, and the peasants at each other’s throats.
Mitchell’s Law #7 is correct: “Everything in economics devolves to motive.”
That is, economics is a function of politics, i.e. competition for a place in the social pecking order. Logic is irrelevant. Analysis is chatter. Theory is propaganda. Economics is all about POWER. If we do not understand this, then we do not understand economics.
(Religion is the same. In the fight for wealth, resources, and power over others, religion is simply the team jersey.)
Sometimes economists squabble, but that’s okay, since it maintains the illusion that modern economics is a “serious discipline.” The only requirement is that all squabblers serve the rich. For example, the paper from the Univ. of Mass. Amherst challenged the Harvard propaganda of Reinhart and Rogoff, yet both papers favor deficit reduction, and both have erroneous definitions of “national debt.”
Continuing with the NEP blog…
“When two quantum physicists disagree, and the wrong theory wins out, at worst some funding may be misallocated until the mistake is corrected. But when two economists disagree and the wrong theory wins out, we are apt to get recessions, depressions, inflations, hyper-inflations, wars, tyrannies, mass starvation, genocides, and sometimes civilizational collapse.”
Wrong. To repeat, economic theory is not created by economists. It is dictated by the rich. Today, the will of the rich is austerity. Economists and politicians promote austerity to please the rich. The under-classes promote austerity because they are envious. They want austerity for others, not themselves, and thus doom everyone to austerity.
However, in the MMT dream world, economists are autonomous. They are not toadies for the rich. Economists mean well, but are “mistaken.”
Continuing with the NEP blog…
“Bad economic policies collapsed the economy of the Weimar Republic in 1923, and helped create the climate of chaos and desperation which ultimately made a Hitler possible. At least fifty million died.”
More MMT fantasy. This implies that economists caused WW II, when in fact economists only say what society’s rulers (i.e. bankers and the rich) require them to say. The NEP post even admits this when it mentions Weimar Germany…
“Politicians on both sides of the Atlantic, backed by the most influential economists of the day, imposed a modern version of the Carthaginian peace that Rome imposed on its defeated enemies after the Punic Wars.”
That’s sloppy thinking. A moment ago the NEP blog post implied that economists alone caused WW II. But now the real culprits were politicians “backed by economists.” Inconsistency saturates the MMT dream world.
Continuing with the NEP blog…
“If the world had somehow found the wisdom, back then, to heed the advice of one economist instead of a different one, then fifty million people might not have died in WW II. So, yes, we all have good reason to listen to our economists.”
Only if we live in the MMT dream world.
http://neweconomicperspectives.org/2013/04/modern-monetary-theory-overview-part-1.html#more-5233
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Here’s a comment from a frequent contributor to the NEP blog…
“No one in the Washington/New York/global ‘village’ has a clue, since they only talk to and read each other. They are prisoners of their own mutual illusions about reality.”
Right. Sure. The rich and their puppet politicians mean well, but they are “mistaken.” They have “illusions.”
That’s straight from the MMT dream world.
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ARE SOME HAWKS CHANGING INTO DOVES?
Most economists are toadies for the rich. They know that their snake oil is deadly. They know that austerity is genocide. The devastation is such that some economists and media hacks would tell the truth if they knew it wouldn’t cost them their jobs.
We know this because there are signs that some are beginning to cautiously test how much honesty they can get away with. Consider the widespread gloating when the Reinhart-Rogoff fraud was exposed. Media critters disparaged the Harvard hucksters as not being smart enough to properly use an Excel spreadsheet.
The point is that some economists and media hacks are beginning to change from deficit hawks into deficit doves. They attack austerity while pretending to support it. They say we need more austerity, but not right now.
EXAMPLE 1: a “report” by John Makin of the American Enterprise Institute (a right-wing propaganda mill) says that austerity has “proceeded far enough for now.” Makin says the USA has achieved enough deficit reduction to get our “fiscal house in order in the short and medium term. It is important for the US Congress to take yes for an answer to the question of whether it has already achieved substantial deficit reduction.”
Makin’s “report” was discussed by the right-wing US News & World Report in a post titled, “More Evidence Spending Isn’t the Problem.” (However the USNWR author contradicts his own title by saying we must continue to focus on “fiscal reform” – i.e. spending cuts. That’s the timid caution again.)
http://www.usnews.com/opinion/blogs/robert-schlesinger/2013/04/23/more-evidence-spending-and-the-budget-deficit-are-well-under-control
EXAMPLE 2: A 204-page IMF document titled, “World Economic Outlook 2013” criticizes Washington for imposing too much austerity TOO SOON. (Emphasis mine.) “While the sequester has decreased worries about debt sustainability, it is the wrong way to proceed. There should be both less and better fiscal consolidation now, and a commitment to more fiscal consolidation in the future.”
Click to access text.pdf
EXAMPLE 3: An article in the Investor’s Business Daily says, “The federal deficit has never fallen as fast as it’s falling now without causing a recession.”
Titled, “The Deficit Chart That Should Embarrass Budget Hawks,” it includes a chart showing that the more austerity, the worse the depression. (Who’da thunk it?)
“The economy shrank slightly in the fourth quarter of 2012, largely because government spending fell. As federal spending continues to fall and the effects are compounded by new tax increases (the payroll tax cut expired in January, for instance), it wouldn’t be a huge surprise to see more quarters of negative growth.”
“Hence, there are two things to remember in the deficit conversation: First, the deficit is expected to fall faster in 2013 than at any time in the last 60 years. Second, that kind of austerity tends to be accompanied by recessions.”
http://news.investors.com/blogs-capital-hill/021213-644063-chart-should-embarrass-deficit-hawks.htm?p=full
Wow! That’s news to us! (Not.)
For the moment, however, austerity continues.
From the New York Times…
“Goldman Sachs analysts started the year projecting that the FY 2013 deficit would be about $900 billion. Then they lowered the estimate to $850 billion. Now they have lowered it again to $775 billion, or about 4.8 percent of GDP.”
http://economix.blogs.nytimes.com/2013/04/22/the-incredible-shrinking-budget-deficit/
The CBO concurs with these figures. Thus, the depression will continue to worsen.
Still, anything is possible. In the near future we might get a miracle from Republicans in districts that are being destroyed by austerity. Remember, deficits are only a “crisis” when a Democrat is in the White House. And remember, Republicans (like the general public) only want austerity for others, never themselves. Republicans scream when austerity hurts their own districts. After Hurricane Sandy, Congress delayed sending aid for three months, so that private firms could come in and position themselves to profit from misery. Republican governors in the affected districts screamed. (Chris Christie of NJ called the delay a “disgrace.”) When Congress finally sent a paltry $50.5 billion-dollar aid measure, Republicans outside the Hurricane Sandy area whined that it “significantly worsened the deficit.” Today, all Republicans are whining about the loss of control towers and air traffic controllers in their districts.
Again, Republicans only want austerity for other districts, not their own. If their district has a lot of military contractors that depend on federal spending, then Republicans oppose cuts, on the grounds that the cuts are not “deep enough.”
Therefore, as the austerity-genocide continues, we may see more Republican deficit hawks morph into deficit doves. “We must have austerity! Always MORE! (Only not right now.)”
Here is the pitch…
“Since I am dedicated to fiscal responsibility, I oppose the current austerity policies, on the grounds that the cuts are not deep enough.”
Some Republicans are already playing this game. Oregon Republican Greg Walden opposes Obama’s cuts to Social Security on the grounds that the cuts are not deep enough. (Mr. Walden is the head of the National Republican Campaign Committee, meaning he is responsible for making sure that Republicans hold their House majority in 2014. A Democratic president who wants Social Security cuts is a winning issue for Republicans.)
This shows that the public is still not ready to surrender Social Security. (The elderly are much more likely to vote than are the young. If you doubt this, go to any polling place during a major election and see for yourself.)
This also vindicates my claim that morons like Paul Ryan are only in the spotlight temporarily. As Republicans start playing the game I just described, Ryan will have to change his tune. If he does not, then in November 2014, when Ryan runs for re-election, he will be discarded in favor of a Republican who defends Social Security.
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Slowly, ever so slowly, a few independent voices begin speak the obvious truth.. But will they be quieted by their bosses?
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An article in the Atlantic Magazine attacks austerity.
Incredibly, it has only four major errors, which is pretty good for a mainstream source.
ERROR 1: “Austerity has been a policy in search of a justification ever since it began in 2010.”
>>Began in 2010? The U.S. government has engaged in austerity many times, always causing a recession. Remember the Clinton surplus? What about Roosevelt’s austerity in 1937, which turned an economic recovery into a severe depression? Also, Rodger has shown that Obama believed in stimulus until late 2012.
ERROR 2: “Reinhart and Rogoff’s Excel imbroglio hasn’t exactly set off a new Keynesian moment. Governments aren’t going to suddenly take advantage of zero interest rates to start spending more to put people back to work.”
>>Huh? The US government does not need to “take advantage” of zero interest rates or anything else. The Fed chooses the overnight interest rate, plus the interest rate on T-securities.
ERROR 3: “The austerity fever has even broken in Europe, at least a bit. Now, eurocrats can loosen the fiscal noose by giving countries more time and latitude to hit their deficit targets.”
>> Please. Giving more time and latitude to euro-zone nations will just put them deeper in debt. Instead, the nations must dump the euro currency.
ERROR 4: “Elites were happy to pursue obviously failed policies as long as they were the right failed policies. But now austerity doesn’t look so conventional. It looks like the punchline of a bad joke about Excel destroying the global economy. Maybe, just maybe, that will be enough to free us from some defunct economics.”
>> Whoops. Austerity is not a “failed policy.” It has succeeded in widening the gap between the rich and the rest. Nor is austerity “defunct economics.” It is propaganda, nothing more. Most economists are toadies for the rich.
…Other than that, it’s a pretty good attack on austerity. I recommend it.
http://www.theatlantic.com/business/archive/2013/04/who-is-defending-austerity-now/275200/
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Read how Ms. vanden Heuvel’s comments above are disputed by her bosses.
The Plan still is in operation, as 100% bullshit flies through the media air. The Washington Post claims that since austerity doesn’t work, and indeed is harmful, and the RR “research” was a fraud, what the U.S. needs is more austerity.
Remind me, is it the 99% or the 1% who own the Washington Post?
See, it’s this way: Reduced federal spending and increased taxes actually help the jobless. Got it? (We never will explain how that works, but as long as you’re stupid enough to believe it, we really don’t have to explain, do we?)
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“We never will explain how that works, but as long as you’re stupid enough to believe it, we really don’t have to explain, do we?”
Actually they do explain how it works, and quite clearly.
We must have austerity because…
The US government is “broke.”
The US government has a “debt crisis.”
The US government runs on tax revenue.
The US government runs on loans from China.
The US government runs on loans from the Fed.
The US government must save, rather than spend.
The US government must lower its debt-to-GDP ratio.
The US government must get its fiscal house in order.
…and so on.
It may all seem like bullshit, but it’s absolutely true bullshit, pure and unalloyed.
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And then there’s this (Could it be the beginning?):
What? Could it be that some columnists, chafing under the iron rule of their publishers, actually are ready to speak the truth? (Although withdrawing from the euro would not require default, the truth is here. Right?) Well, sort of:
It’s the truth that is gasping for air. Suddenly “many leading economists” have been saying it “for years now.” (“Many” means about half dozen, mostly from UMKC. I’ve been saying it for about 15 years, but my voice has been a tiny squeak while standing next to a roaring jet engine built by Koch, Peterson et al.)
We now are at the stage where:
1. Austerity is bad
2. But, austerity also is good, only not right now
3. We knew it all the time.
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Good article Rodger, but as you note, it has some goofs. Can I chew on some of them?
“Voters in France, Greece and even Germany told their political leaders, in no uncertain terms, that boosting economic growth is more important than cutting government spending.”
>> No, voters voted for more austerity, since no European leader wants to give up the euro currency. I wonder if anyone in the euro-zone understands that the euro causes all their problems.
“On Sunday, French voters elected Socialist Party candidate Francois Hollande as president, ousting center-right incumbent Nicolas Sarkozy in what amounted to a referendum on Sarkozy’s embrace of austerity.”
>> As I said, French people voted for more austerity. Hollande’s austerity is far worse than was Sarkozy’s, just as Obama is far worse than Bush, and David Cameron is far worse than Gordon Brown. In France, Mr. Hollande and the Socialist Party correspond to Obama and Democrats. Conservatives and Sarkozy correspond to Romney and Republicans. Both sides want more austerity. Always more.
“On Sunday, even Merkel got a message from voters: Her party was punished in local elections in the northern German state of Schleswig-Holstein, where it appeared that a center-left, anti-austerity coalition would end up in control.”
>>Please. That was a local and temporary phenomenon in Germany’s northernmost state, where the people are as much Danish as they are German. The rest of Germany’s 82 million people love austerity, as long as it is imposed on other nations, not Germany. Likewise, Germans love the euro currency, which they use to exploit and enslave the other nations. (Germans control the money supply, since the euro is issued by the ECB in Frankfurt.) We see these attitudes in the extreme arrogance of average Germans, who regard other Europeans as lazy and inferior, and who explode with anger when their victims call them Nazis. The average German claims to be a saint who carries the entire euro-zone on his back, when in reality Germany has enslaved the other nations (with the help of those nations’ corrupt politicians). That’s why Merkel and Schnauble and Jens Weidmann (head of the Bundesbank) keep calling for more austerity for the euro-zone, but not for Germany. It makes them wildly popular with the German public. Merkel is more popular than ever in Germany.
“One obviously bad option would have been to withdraw from the euro, default on a mountain of debt and slowly climb back from a deep economic depression.”
>> That’s not a bad option. It’s a good one. Also, as Rodger has often noted, dumping the euro does not mean defaulting on debt. This is a bogeyman that idiots use to defend the euro. “We will default on our debt to the rich! It will be the end of the world!” And even if a nation DID default, so what? The debt was odious in the first place. Creditors can ask the ECB for money.
“One lesson from the Greek experience is that there are limits. There is a point at which deficits become too large, debt too crushing and social spending too generous. The lifestyle a nation enjoys must bear some relationship to what that nation produces.”
>>Yikes! What point is that? The only lesson from the Greek experience is that the euro-zone cannot have a common currency unless the ECB gives (not lends) money to all member states.
“Another clear lesson is that austerity has to be seen as a means, not an end.”
>> No, austerity has to be seen as a program to widen the gap between the rich and the rest.
“The goal is to recover from the massive blow inflicted by the global financial meltdown and return to prosperity. This may involve a measure of austerity — but definitely requires considerable economic growth, which should be policymakers’ first priority.”
>> Fine, but you can’t have austerity AND growth. They are polar opposites.
“If you can get the economy growing again, all other aspects of the crisis become more manageable. Debt and deficits shrink as a percentage of national output. Unemployment declines, as does the need for social spending.”
>> Okay, but the reality is that the crisis is gratuitous and engineered, debt is not a problem for the USA, and deficits must grow for the economy to grow.
“That loud chorus of ‘Duh!’ you just heard came from the many leading economists who have been screaming at political leaders for years now that we’ll never cut our way out of this economic slump and instead must grow our way out.”
>>Other than Paul Krugman and the UMKC folks, what “leading economists” are those? They all preach austerity. (Krugman wants austerity, but in the future.)
“It is obvious that deficits, debt loads and entitlement spending have to be brought under control — but equally obvious that the necessary adjustments should be made when the economy is going great guns, not when it’s gasping for air.”
>> “Under control”? “Entitlement spending?” Why use austerity-speak? Either you are for austerity, or you are against it. You can’t have it both ways. And if you apply austerity “when the economy is going great guns,” you will cause another recession.
Look, I know that you want less austerity, but by agreeing that we need more, only not right now, you leave the door wide open for the austerians. Deficit doves are ultimately as bad as deficit hawks.
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THE EMPIRE SQUAWKS BACK
[1] Goldman Sachs boss Lloyd Blankfein says the (Monetarily Sovereign) UK government has no choice but to impose more austerity (always more), or face a negative reaction from global investors. Reason: the UK government still has not reached a balanced budget.
http://www.bbc.co.uk/news/business-22260949
[2] ECB Vice-President Vitor Constancio says that to ease austerity would not help euro zone. Instead of triggering growth, it would merely increase countries’ borrowing costs.
(Actually he’s correct. Euro-zone nations have no choice but to impose more austerity. Reason: the euro currency. All those marchers and demonstrators who say, “Keep the euro, but end austerity”are barking at the moon.)
http://www.foxbusiness.com/news/2013/04/24/ecb-says-ditching-austerity-would-not-help-euro-zone/
[3] Erskine Bowles dismisses the U Mass paper that shamed Reinhart & Rogoff.
“I know they had a worksheet error, and my understanding is that does make a difference. But what it doesn’t change is the common sense that when any organization has too much debt, that is an enormous risk factor, and your risks go up, then people lending you money will want more money for their money.”
See? The US government doesn’t have MS. It is a mere “organization,” like the Girl Scouts or Salvation Army.
“My best guess is that whether the 90 percent number is the number or not the number, I don’t know. But the fact that adding more leverage to a company or a not-for-profit or a government’s balance sheet does increase risk, and therefore increases the return that somebody is going to expect on their capital is absolutely a fact.”
Note the stammering. How does Bowles account for the FACT that even though there is a $16.7 trillion “national debt,” the overnight rate and the T-security rates are at zero or near zero? Bowles doesn’t. He doesn’t need to. He has “common sense” on his side.
http://www.cnbc.com/id/100665895
[4] “Foreign Policy” magazine says we must have more austerity.
“The big spenders are wrong: Maintaining sustainable budgets is essential to economic growth.”
This article is filled with so many lies, errors, and blatant reversals of reality that to analyze it would be to insult you.
http://www.foreignpolicy.com/articles/2013/04/23/think_again_austerity
[5] German political party opposes the euro (Not)
Financial Times: “In the campaign for September’s parliamentary poll, Angela Merkel risks being squeezed between the Social Democrats (SPD), calling for more emphasis to be put on growth, and a new anti-euro party campaigning for the return of the Deutschemark.”
>>Emphasis on growth means more austerity for the peripheral nations. As for the “anti-euro party,” this is the Alternatives for Germany (AfD) Party. Its members, like all Germans, love the euro, because the euro lets them enslave the other nations. However the AfD politicians also want to be in power in Germany. Therefore they claim (falsely) that because of the euro, German “tax dollars” are being stolen by lazy, worthless slugs outside Germany. “We’re propping them up!”
This is garbage, of course. Since the ECB issues euros as loans, every new “bail out” is another step in the enslavement of other nations. Meanwhile German tax dollars are irrelevant outside Germany. The ECB creates loans on its keyboard.
Nonetheless, the AFB Party seeks to exploit German arrogance. “Vote for us, and we will no longer prop up foreigners with your tax dollars!”
Obviously they have ZERO chance of being elected. The money masters won’t support them, and the average German knows he has a great scam going with the euro.
http://www.ft.com/intl/cms/s/0/cf7536d6-acef-11e2-9454-00144feabdc0.html#axzz2RPcViTKf
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Gee, who could have imagined that?
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