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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.
1. What happens to the federal deficit in the years preceding recessions?
2. What happens to the federal deficit during recoveries?
————————–FYFSD is the federal deficit————————–
Inspect at the above graph, and consider your answers to those two questions as you read these excerpts from a Washington Times article:
Federal deficit below $1 trillion for first time in Obama’s tenure
By Stephen Dinan
Powered by tax increases and deep budget cuts that held spending in check, the federal deficit dropped to $680 billion in fiscal year 2013. Taxes grew to $2.774 trillion, marking an all-time high.
All those who think tax increases stimulate the economy, please raise your hands.
All those who think reduced federal spending stimulates the economy, please raise your hands.
The deficit is less than half the record $1.413 trillion figure Mr. Obama and President George W. Bush shared in fiscal year 2009.
That is still higher than economists say is healthy, but it’s far more manageable than at the height of the recession.
All those who can explain how deficits “at the height of the recession” were not manageable, please raise your hands.
All those, in classes taught by the above-mentioned economists, please tell me their names and contact info.
White House budget director Sylvia Mathews Burwell said the figures mean Mr. Obama has made good on his pledge to cut the deficit in half.
She said the credit belongs to Mr. Obama for fighting to raise taxes in the January “fiscal cliff” deal, and for drawing down troops in Afghanistan.
All those who wish to give Mr. Obama a nice, big pat on the back, for starving our economy of money, please raise your hands.
The 2013 deficit figure would have been worse if the government hadn’t borrowed nearly $40 billion from the Social Security trust funds.
The deficit also benefited from a $83.5 billion credit from federally backed housing programs Fannie Mae and Freddie Mac.
First translation: In government-speak, “worse” actually means “better,” as in, “If the government had not borrowed from the Social Security trust funds, $40 billion more dollars would have entered the U.S. economy. Somehow, this would have made the economy “worse.”
Second translation: “Deficit benefited” actually means “economy injured,” as in Fannie and Freddie pulled $83.5 billion out of the private sector, which injured the economy.
Now for a bit of irony: Fed Chairman Bernanke falsely claims the Fed stimulates the economy by purchasing $85 billion worth of T-securities each month. The world believes him, and panics when he threatens to stop.
(The claim is that this causes $85 billion new dollars to enter the economy every month.) If the claim were true (It isn’t), adding all those dollars would be quite stimulative.
But (here’s the irony), while bragging about how stimulative the Fed is, with its phony $85 billion supposedly entering the economy every month, the government also brags about more than a trillion dollars leaving the economy, via increased taxes and reduced federal spending.
The populace is thrilled about the Fed adding dollars to the economy, and equally thrilled about Obama taking dollars from the economy.
And no one, including those economists mentioned above, sees anything contradictory about this.
That’s why we’re so thrilled with reduced deficits. We hate deficits but we are O.K. with unemployment, poverty, recessions and depressions.
It’s what we’ve been taught.
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 federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise.