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●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 ultimately 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.
Do this: First read the short post: An interesting and timely graph that may signal a coming recession, Apr 6 2012.
It explains the following graph, which predicted all seven recessions since 1968. (Soon after the line dips below 0.0, we have a recession):
Now here’s a similar graph. It blends “Chicago Fed National Activity Index (CFNAI), Monthly, Not Seasonally Adjusted” with “Real Potential Gross Domestic Product (GDPPOT), Quarterly, Not Seasonally Adjusted”
It shows pretty much the same thing as the above graph, except the data are a few months more current. Again, soon after the line drops below 0.0, and almost immediately after it drops to -0.2, we have a recession.
Here is a better view of just the most recent years:
After the recession of 2008-2009 “officially” ended, the line rose just to the 0.0 mark, and since then has hovered below, reflecting the sick reality of our economy.
We have continued in an unofficial, though economically real recession, exacerbated by deficit reduction (i.e. austerity). The question now is: What, if anything, is the government doing to turn that red line up?
The answer: Nothing. Not one thing.
The sequester continues. Austerity continues.
The President, the Democrats and the Republicans continue to focus on cutting Social Security, cutting Medicare, cutting Medicaid, cutting federal employment, cutting research and development, cutting investment in the infrastructure, cutting investment in education, cutting even school lunches and food stamps — all steps to remove money from your pockets and from the economy.
Congress can’t even decide whether to increase student loan interest or leave it at its current excessive level. Eliminating student loan interest, as we should, hasn’t entered the conversation.
And all the while, Americans buy into the fiction that they have too much money, while the government has too little money, so the people are told to send more to the government, while the government sends less to the people!
And as this near-recession grinds on, I hear the whining and bleating growing louder: “How did this happen? Whose fault is it? Why am I struggling? Why are my children suffering? What will become of us?”
The blame for that dipping red line belongs to all those accept the government’s BIG LIE that the deficit should be reduced.
So long as the government believes it can continue to fool the voters, it will continue to fool the voters. Only when the voters realize that increased federal deficit spending is absolutely necessary to grow the economy, will the government take the steps to improve our lives.
Until then, why should it? Financially, the politicians are doing just fine. You don’t really believe they care about you and your loved ones, do 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. Click here
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%
10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt
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:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports