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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.
We all should very happy. Washington has moved away from angry, Tea Party, take-no-prisoners, destroy-America-to-save-it rhetoric, and now is in compromise mode.
Ryan pleads with conservatives as budget deal heads to Senate
Republicans plan to use debt ceiling fight as a bargaining chip in 2014
By Jacqueline Klimas-The Washington Times Sunday, December 15, 2013
As the bipartisan budget deal moves to the Senate, where it faces opposition from some Republicans, Rep. Paul Ryan is telling those on the right that the compromise is good for core conservative values.
(“Bipartisan” is a much-loved word these days, as supposedly it stands for something good, though no one knows what.)
O.K., so it’s not exactly the friendliest of compromises, but at least it’s better than all that fighting. At least something will get done. Right?
“Look at the details, I say to those who are criticizing it. This is keeping our principle intact: no tax increases, net deficit reduction, permanent spending cuts in place of the across-the-board approach,” Mr. Ryan said on “Fox News Sunday.”
The Wisconsin Republican joined Sen. Patty Murray, Washington Democrat, last week to announce the two-year, $1.012 trillion plan, which would alleviate some of the sequester cuts and reduce the deficit by $23 billion over 10 years.
In August of this year, we published The Recession Clock. It showed two graphs and asked four questions:
1. What does the federal government do in the years leading up to recessions? (Answer: Cut growth in deficit spending)
2. What does the government do that cures recessions? (Answer: Increase deficit spending growth)
3. What is the government doing now? (For a clearer picture, here is a closeup of the most recent past):
4. Why is the government cutting deficit spending growth, despite overwhelming evidence this causes recessions? (Because of the false premises that the federal government can run short of dollars, or by creating dollars, could cause inflation.)
Now the Republicans and the Democrats, in the spirit of collegiality, plan to compromise. They will reduce the deficit. The Republicans want to kill us by shooting, and the Democrats want to kill us by poisoning. The compromise is all about how best to kill the lower and middle income groups.
So we head toward another recession, which will impact the poor far more than it impacts the rich (as recessions always do). It will be a wholly avoidable, entirely unnecessary recession. For our Monetarily Sovereign nation, the deficit is no burden. Your children will not pay the federal debt.
The federal deficit is the economy’s surplus. The deficit stimulates economic growth. (GDP = Federal Spending + Non-federal Spending + Net Exports)
On average, the U.S. negative balance of trade is $40 billion per month. We import $40 billion more each month than we export. Month after month, $40 billion flows out of America.
This means, that just to break even, i.e. for Net Exports to = $0, the federal government needs to run a $40 billion monthly deficit — a $360 billion annual deficit.
What is our current deficit?
Six hundred billion . . . and dropping fast.
So, the “compromise” is a cousin to President Obama’s rightfully scorned “grand bargain.” Like the “grand bargain,” the “compormise” will continue to reduce the deficit with massive cuts to spending.
What exactly will be cut? I don’t yet know. But this is absolutely, positively certain: The cutting will affect the lower and middle income groups far more than the top .1%
The rich will get richer. The poor will get poorer. The middle will fade away. The politicians will prance and preen and congratulate themselves on how they made a bipartisan deal to save America (i.e. save their rich donors).
And the public, will buy into the myth that helping the poor makes them lazy “takers”, unmotivated and deserving of their suffering, while the rich are hard working, beneficial “makers,” deserving of their wealth, and even deserving of thanks for allowing the little people enough to keep alive.
It’s a lie, a Big Lie. The poor are not lazy. They are not sloths looking for handouts. Their lives are hard and unrewarding. Their hopes are diminished. It’s a daily effort just to get by. It’s a Big Lie promulgated by the rich.
And as for those “makers,” the presidents and top executives of General Motors or A.T.&T. or General Electric or Exxon or Apple — they haven’t made anything or hired anyone. It’s the corporation that does the making and the hiring.
The executives themselves were hired by the corporations to do jobs, for which they are well rewarded. These executives, these well-paid employees, are the ultimate takers, receiving massive benefits from the toil and sweat of their subordinates, and from the government.
It’s not the rich executives who pull 100 boxcars filled with freight. It’s the engine. All the executives do is pull the levers and watch the scenery. Is their job so much harder than yours, that they should be paid 10, 100, 1000 times more than what you earn?
Unless you’re among the very rich, cutting the deficit hurts you. It widens the gap between you and the rich. That is what the rich want, and to effect it, they gave you the Big Lie.
If you’ve bought the Big Lie, you and your children will spend the rest of your lives paying for it.
Rodger Malcolm Mitchell
Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded 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.