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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.
History is loaded with examples of people who are clever at one thing, and as a result, believe they are clever at all other things — but turn out to be really stupid at those other things.
This phenomenon is particularly prevalent among people who have made money, and who believe this proves their brilliance (perhaps because rich people surround themselves with praise-spewing sycophants).
A former client, the gum-making Wm. Wrigley Jr. Company, run by the Wrigley family, was a virtual money-printing machine. It spun off so many millions, the Wrigley’s invested in such endeavors as Catalina Island, the Arizona Biltmore Hotel, the Biltmore Fashion Park and the Chicago Cubs — all financial disasters.
So astute was patriarch Philip Wrigley that he died without having created a will, thereby allowing the federal government to gobble up many of those millions, which in turn forced the panic sale (in 1981) sale of the Cubs for only $20 million (most recent valuation: $845 million).
Clearly it was someone money-addled, who first used the line: “If you’re so smart, why ain’t you rich?”
In this same vein, eighteen months ago, we published Why Lower Corporate Taxes Won’t Create More Jobs. Oh, really? Friday, Feb 24 2012, in which we detailed some particularly ridiculous comments by the acclaimed stock-trading genius, Warren Buffett:
“The idea that American business is at a big disadvantage against the rest of the world because of corporate taxes is baloney in my view. In the 50s and 60s, corporate taxes were 52%, and we were making all kinds of [job] gains.”
In essence, Buffett who made his billions buying stocks astutely, though not actually running those businesses, had decided that high corporate taxes are not an impediment to corporate profits.
Apparently, the people who actually do run businesses, disagree:
Wall Street Journal
U.S. Firms Move Abroad to Cut Taxes
By JOHN D. MCKINNON And SCOTT THURM
More big U.S. companies are reincorporating abroad. One big reason: Taxes.
A few (companies) cite worries that U.S. taxes will rise in the future, especially if Washington revamps the tax code next year to shrink the federal budget deficit.
Aon expects to reduce its tax rate, which averaged 28% over the past five years, by five percentage points over time, which could boost profits by about $100 million annually.
Eaton (said) the tax benefits would save the company about $160 million a year.
Ensco followed rivals such as Transocean Ltd., RIG, Noble Corp. and Weatherford International Ltd. that had relocated outside the U.S. The company said the move would help it achieve “a tax rate comparable to that of some of Ensco’s global competitors.”
Despite protestations by Mr. Buffett, the “Wizard of Omaha,” taxes actually do cut company profits.
Even worse, corporate taxes remove dollars from the private sector and send them to Washington, where they no longer are part of the economy and effectively are destroyed.
Businesses do two very nice things for America:
1. They create goods and services that improve our lives.
2. They employ people, paying salaries that also improve our lives.
So one might think a government that cared about our lives, would do everything possible to encourage business success. And one of the things our Monetarily Sovereign government easily could do is eliminate corporate taxes.
Note the above phrase, “a government that cared about our lives.” This government does not care — at least not about the lives of the less-than-rich, for corporate taxes are not paid by top corporate executives.
Corporate taxes are paid by the lowly workers and by customers, and therefore help widen the gap between the rich and the rest.
As we have discussed so many times before, the need for federal deficit reduction is the BIG LIE, a monstrous and cruel lie, developed to widen that gap, and the people who promulgate that BIG LIE either are economically ignorant or are intentionally cruel.
Most “ordinary” Americans fall into the first camp; the President, Congress and the media mostly are in the second group.
Taxing corporations is like starving the goose that lays the golden eggs. It makes no sense unless — unless the goal of the President and Congress is to give the very rich even greater power over mainstream Americans.
Eliminating the corporate tax (including FICA) would:
1. Slash unemployment
2. Increase Gross Domestic Product
3. Reduce poverty
4. Increase the quality of life for every American (except for the very rich, whose lives cannot be improved).
5. Close the wealth and power gap between the rich and the rest
And that is why this President and this Congress, bribed by the rich (via campaign contributions and promises of lucrative employment), will not eliminate corporate taxes.
Rodger Malcolm Mitchell
Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
9. Federal ownership of all banks (Click here)
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
THE RECESSION CLOCK
As the lines drop, we approach recession, which will be cured only when the lines rise.