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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.
Before we analyze the plan from the Organisation for Economic Co-operation and Development (OECD) let’s summarize the differences between a Monetarily Sovereign (MS) vs. a monetarily non-sovereign (MNS) entity.
1. The U.S. government is MS. You and I, Chicago, California and Greece are MNS.
2. An MS government has the unlimited ability to create its sovereign currency. An MNS government has no sovereign currency.
3. An MS government does not need to ask anyone for its sovereign currency – not lenders, not taxpayers.
4. An MS government creates its sovereign currency by spending; it destroys its currency by taxing; taxes received are not part of the money supply.
5. An MNS entity creates money by lending; it destroys money when loans are repaid; Taxes received remain part of the money supply.
6. An economy grows when its supply of real (inflation adjusted) money grows; it shrinks when its supply of money shrinks.
[The OECD is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade.]
OECD unveils plan to end ‘golden era’ of tax avoidance
By Philip Aldrick, 19 Jul 2013
David Cameron has called on the world’s leaders to get behind a global crackdown on tax avoidance and “break down the walls of corporate secrecy”.
The Prime Minister was throwing his support behind proposals to stamp out sophisticated tax dodging strategies. The Paris-based think-tank has drawn up a 15-point action plan to stop multi-nationals moving profits from one country to another to reduce their tax bill.
–What is the biggest problem facing the world’s economies? Lack of growth.
–When an economy is in or near recession, what is the worst thing a government can do? Suppress business.
–What is the surest way to suppress business? Increase business taxes.
The crackdown follows public outrage in the UK, the US and across Europe about the minimal amounts of tax paid by big businesses. In Britain, Google, Amazon and Starbucks have been accused by politicians of being “immoral” for not paying their “fair share”.
Forcing business to pay more taxes is counter-productive for any economy. An MS government neither needs nor uses tax money.
An MNS government does need and use tax money, but long term survival is not possible via local taxes. Long term survival for an MNS entity requires money coming in from outside its borders. (You are MNS. Visualize trying to support yourself by taxing yourself.)
Britain has been at the forefront of efforts to overhaul the antiquated global tax system, by pledging to contribute €400,000, alongside France and Germany, to help the OECD turn its proposals into concrete policies.
Translation: Britain, which is MS, will pay the OECD to weaken Britain’s businesses. Britain’s government can afford this waste. It has the unlimited ability to create its sovereign currency.
However, Britain’s businesses will suffer, meaning Britain’s economy will suffer.
France and Germany are MNS. They too will pay the OECD to weaken their businesses. Their governments cannot afford this waste. There will be a double loss: Their governments will lose the money and their businesses will be weakened.
Mr Cameron said, “I will call on fellow leaders to get behind this action plan to ensure that we break down the walls of corporate secrecy, once and for all, and that all companies pay their fair share.”
Translation: “Although I have no idea what a ‘fair share’ of taxes is, I will demand that our nation’s business be weakened, so that they will hire fewer workers and pay them less.
“That will increase the gap between the rich owners and the workers, which is our real goal.”
The OECD report said, “Existing domestic and international tax rules should be modified in order to more closely align the allocation of income with the economic activity that generates that income.”
Sandy Bhogal, head of tax at law firm Mayer Brown, said: “The aim of linking the revenues of multinational businesses to particular territories and requiring reporting on a multilateral basis will be extremely complex to agree and implement.
“This process will take a considerable amount of time, even with the cooperation of all the relevant parties.”
Translation: “The whole thing is foolish and harmful to your country, but if you want to spend your money this way, we’ll be glad to take it.”
Business groups such as the CBI (a business lobbying organisation in the UK) have disputed that there is a broad problem with tax avoidance and claim measures to address it could hit job creation, trade and innovation.
Translation: “We didn’t get the message. We still claim businesses paying more taxes will help our economy. Right?”
Tax avoidance has long been the bane of governments but, in the current austere times, it has come to be seen as totally unacceptable. Politicians in many leading countries – including the UK, US, France and Germany – want to tighten up the loopholes.
Translation: “Yes, we know the U.S. has no need for taxes, while France and Germany do need taxes — but the public doesn’t understand the difference.
“And yes, we know that when companies are weakened, the top brass continues to rake in its salaries and perks, while the lower employees are cut, which widens the income gap — but the public doesn’t understand that either.
“As long as we facilitate ignorant people demanding their own destruction, we’ll keep ruling them.”
And so, we are treated to yet another internationally acclaimed organization (Hello, EU and IMF), and not so acclaimed organization (Hello U.S. Congress and U.K. Parliament) spouting absolute rubbish, the intent of which apparently is to widen the gap between the rich and the rest.
OECD’s plan: The troika is lagging because two of its horses are sick. Please sicken the third — for “fairness.”
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