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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.
What do Greece and Chicago have in common? First, they both are monetarily non-sovereign.
Unlike the U.S., UK, Canada, China, Japan, Australia et al, neither Greece nor Chicago can create their sovereign currency. Why? Neither has a sovereign currency.
Greece uses the euro and Chicago uses the dollar, which are, to them, “alien” currencies. By contrast, the Monetarily Sovereign nations mentioned above, each has a currency over which it is sovereign.
Each can create as much or little of its sovereign currency as it wishes, and give any value to that currency it wishes. None ever can run short of its sovereign currency, even if all national government taxes were 0. That is what “sovereign” means.
O.K., you knew that. But, what else?
You also may have known that a monetarily non-sovereign entity cannot survive long term without more money coming in than going out.
You are monetarily non-sovereign. You can’t survive long term without more money coming in than leaving you. A company too, being monetarily non-sovereign, needs more income than outgo to survive long term. States, cities, counties and euro nations have the same requirement.
But what happens when a city or a euro nation has more outgo than income, year after year. Well, it could raise taxes, i.e. take more money from the citizens. But that is only a short-term, and ill received measure.
Eventually the citizens run short of money, and become a bit restive (as in bloody riots and Guillotines). So the monetarily non-sovereign entity eventually resorts to another short-term fix: It sells pieces of itself.
Christian Science Monitor, 2009
The great sell-off: Chicago auctions city assets
The city is auctioning private assets to the highest bidder. But private ownership of parking meters stirs a backlash.
No city in America beats Chicago when it comes to selling public assets – garages, bridges, even parking meters. the Windy City under Mayor Richard M. Daley has sold or leased out public institutions such as the Chicago Skyway ($1.83 billion), underground garages beneath Grant and Millennium Parks ($563 million), and, more recently, city parking meters ($1.15 billion).
That’s not exactly chump change, especially for a city still grappling with a $469 million budget shortfall from last year, not to mention an estimated $300 million deficit this year.
“It’s fraud; it’s extortion,” says Sam Wolfson, owner of String-A-Strand, a crafts-supply store in the Lincoln Square neighborhood, where meter rates have jumped from one quarter to four quarters for one hour.
There are two problems with selling piece of yourself.
1. You may run out of pieces, without solving the income/outgo imbalance.
2. You may sell your profit-making pieces, which exacerbates the income/outgo imbalance, and steals even more money from taxpayers.
And, oh yes, there’s a third problem:
3. The populace might become thoroughly irate at crooked politicians (are those synonyms?) forcing ever-higher taxes AND higher costs for services.
In Chicago, the sale of assets not only didn’t solve any long-term problems, but forced users to pay far more for tolls and parking.
[As an aside, the politicians usually tell the taxpayers a little white lie: That privately owned services are more efficient than public ownership, which is true right up until the private, for-profit services raise prices sky high — generally on the first day after the sale.]
Greece faces collapse of second key privatisation
By Kerin Hope in Athens, June 27, 2013
Greece is struggling to avoid the collapse of a second big privatisation deal, amid threats and pressure from bidders for the state gaming monopoly to change key terms of the deal they agreed last month.
The problems with the €700m sale of Opap (Greek Organization of Football Prognostics) threatens to add to tension with Greece’s international creditors, who fear the slow pace of privatisations will require further spending cuts to keep the country’s bailout programme on track.
Greece’s privatisation agency, Taiped, failed to deliver one flagship privatisation this month when Gazprom unexpectedly pulled out of the bidding for the state natural gas supplier Depa.
Taiped has pulled off one sizeable deal this year: the €400m sale of Desfa, the natural gas grid operator to Socar, the state gas operator of Azerbaijan.
A review of Greece’s bailout by the IMF this month found that income lost through slippage of the privatisation programme would contribute to a hole in Athens’ budget and “additional financing will need to be identified”.
Now ask yourself. Why does Greece have a state gaming monopoly? Right. It’s an alternative to raising taxes, but accomplishes the same thing: It takes money from the poor private sector and gives it to the public sector.
But if Greece sells its monopoly, the money will go from poor private to rich private, and the Greek government will have to beg taxpayers for more money.
The IMF continues to coerce Greece into selling its income-generating assets, as a “solution” to its past and future budget shortfalls.
This would be akin to the neighborhood bakery selling its ovens hoping to cover past and future operating losses. And the people in Greece are buying this IMF nonsense!
I pity the current mayor of Chicago, Rahm Emanuel, who inherited this mess from the previous mayor, Richard Daley. Emanuel cannot control the monetary non-sovereignty problem. Only the federal government can do that. (The state government could help, but it has its own monetary non-sovereignty problems.)
But, I have no pity for the Greek government (though my heart goes out the the Greek people.) The government could solve the problem tomorrow, simply by taking back its most valuable former asset: Its Monetary Sovereignty.
Simply dump the euro and reinstate the drachma. The process would be no more difficult than was the original foolish surrender of the drachma to adopt the euro.
Will Greece do it? The rich people don’t want it, because it instantly would solve Greece’s financial problems. An impoverished populace is easier to dominate.
The people — the poor people — they have been poisoned with so many lies, they don’t know what is best for them. (Something like the American public). They may already have been beaten down into acquiescence (Also, something like the American public).
Whenever you read or hear the word “privatizing,” know that it means selling public property to rich, political graft payers, explained by the myth that private ownership always is more efficient than public ownership.
Privatization might delay, but definitely will exacerbate, financial income/outgo imbalances. And it has no financial benefit to a Monetarily Sovereign nation.
Is privatizing being proposed, or has it already happened, in your state, county, city or village? If so, heaven help you.
Your politicians won’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. 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