Britain promises more suicide (but just for the middle and the poor)

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Twitter: @rodgermitchell; Search #monetarysovereignty
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Mitchell’s laws:
●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.
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Britain, like the U.S., is ruled by those who wish to widen the gap between the rich and the rest. Here are excerpts from a New York Times article:

UK Needs 25 Billion Pounds of Spending Cuts After 2015 Vote, Osborne Says
By REUTERS, Published: January 6, 2014 at 4:20 AM ET

Chancellor George Osborne said on Monday, “We need to find a further 25 billion pounds of cuts after the election. We have to make decisions about where those cuts are to be found.“

“After the election” is better than “before the election.” That way, the voters will not realize how screwed they are.

“This enormous welfare budget, that ultimately is where you can find substantial savings.”

He already has made “decisions about where those cuts are to be found”: Payments to the poor — of course.

You see, in the world of the rich, the poor have too much money, so the poor and middle classes continually must be beaten down, lest they gain any power at all. To a bribed politician, there is no greater danger than an informed and powerful middle- and lower class.

The UK uses its own currency, the pound. So it is Monetarily Sovereign. Unlike the euro nations, which have no sovereign currency, the UK never can run short of its sovereign currency.

The fundamental formula for Gross Domestic Product is: GDP = Federal Spending + Non-federal Spending + Net Exports. So, do the math:

1. How will a 25 billion pound reduction in Federal Spending affect Britain’s GDP?

2. How will a 25 billion pound reduction in the welfare budget affect the already-too-wide gap between the rich and the rest?

Sadly, the British education system must not have taught its people simple mathematics, else the people long ago would have tossed toadies-to-the-rich Osborne and Prime Minister David Cameron out of office.

Which brings me to the politicians in the US, which are doing much the same thing as the British . . .

Rodger Malcolm Mitchell
Monetary Sovereignty

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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) Or institute a reverse income tax.
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)

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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
Monetary Sovereignty Monetary Sovereignty

As the federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise.

#MONETARY SOVEREIGNTY

Published by Rodger Malcolm Mitchell

MBA Northwestern, business turnaround expert, economist

Published

16 thoughts on “Britain promises more suicide (but just for the middle and the poor)”

  1. Christian Science Monitor
    Income inequality: Does wider gap between rich and poor threaten capitalism?
    Since mid-2009, some 95 percent of all US income gains have gone to the top 1 percent. Now, even powerful financiers are alarmed by the increased income inequality between rich and poor.
    By Harry Bruinius, Staff writer / January 5, 2014

    And still, the Republicans, the Democrats and Obama wish to cut federal spending even further.

    And the people most affected go along with it.

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  2. Hi Roger,
    What evidence do you have that shows that the elite, power players, etc., are intentionally widening the income gap between rich and poor, austerity, etc., to benefit themselves? I actually believe that most of this economic mismanagement is just due to ignorance in which they do not understand monetary sovereignty and MMT.

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    1. See:

      Is this the end of austerity . . . where I said, “For many years, I had agreed with MMT that the problem we faced was one of ignorance, and if only we could phrase our beliefs in ever simple enough terms, politicians, economists, the media and the people eventually would ‘get it.’

      Though we were right about the people — theirs really is a problem of ignorance — it was a great conceit on my part to believe that of the President of the United States, every member of Congress, every member of the Counsel of Economic Advisers, every mainstream economist and media writer — every single one of them — not one was bright enough to understand what I understood: The clear and obvious facts of Monetary Sovereignty and the disaster of austerity.”

      Question: Do you have that conceit?

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      1. I still think it’s hard to tell what some people are thinking, if they are truly ignorant or indeed being malevolent and deceptive. Do Glenn Beck and Mark Levine for example, the conservative radio hosts, really do not understand monetary sovereignty and MMT? If the fed. government were managed properly according to these economic principles, don’t they understand that the economy would increase immensely in prosperity benefiting them as well as everybody else? They would still be rich – they would still have their mercedes, mansions and yachts. They would do better financially since more people would be able to afford their products and services if they are business owners.

        And thanks for your website, finding this information has drastically changed my viewpoints on these economic issues.

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  3. Average Britons should celebrate. For the next year and a half they will suffer from existing austerity, but not from severe increases in austerity.

    In the parliament, members of the Conservative party will tone down their calls for more austerity so they can keep their majority when the British public votes for their MPs on 7 May 2015.

    Instead of talking endlessly about the “deficit crisis” and “national debt crisis,” politicians will talk about the need to address “terrorism” and “immigration reform.”

    After the election, the Conservatives will triple or quadruple the austerity they have already imposed on the masses. They have already reduced welfare (the British equivalent of Social Security), and they want to continue doing so.

    They will also continue to reduce funding for the National Health Service, so that British health care is forced to go 100% private. It will be even more private than in the USA, since many counties in the USA have health services, paid for by local taxes.

    As I have said before, when it comes to imposing more austerity, and widening the wealth gap, the British conservatives put US Republicans to shame.

    Of course, there is always the outside chance that Conservatives will lose their majority in parliament in May 2015.

    No matter. The Labour Party also wants more austerity by cutting social programs. The Liberal Democrat Party wants more austerity by increasing taxes.

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  4. –Off topic – Off topic—

    I FOUND IT!

    I have always said there is no such thing as a Social Security “trust fund.”

    I was wrong!

    I found the actual fund! It is physical. It is solid, and has mass. It really exists. You can hold it in your hand!

    Well, sort of.

    According to USA Today, there is indeed a physical “trust fund.” It consists of $2.7 trillion in Social Security IOUs, which themselves are notations on a few sheets of paper, contained in an ordinary three-ring binder that is kept in a filing cabinet in a small town in West Virginia.

    That’s right. The “trust fund” is a few numbers printed on a few sheets of paper. What a let-down, aye? It’s like discovering that Almighty God lives in a one-room cabin in the woods.

    In 2005 president W. Bush visited this sacred (and meaningless) three-ring binder, and declared, “Imagine — the retirement security for future generations is sitting in a filing cabinet.”

    Can you believe such silliness?

    USA Today says that, “The actual Social Security balance is kept electronically, but a 1994 law requires that the Treasury maintain a ‘paper instrument’ as evidence that it is borrowing from Social Security. Susan Chapman, director of federal investments, is the official who signs those IOUs. ‘We understand the symbolism of these,’ Chapman said.”

    So the physical “trust fund” is not physical after all. Indeed, it is merely symbolic. That is, IT DOES NOT EXIST. It is an example of what Rodger calls, “Accounting sleight of hand.”

    You can see a photo of the magical three-ring binder (worth a fictitious $2.7 trillion) at the link at bottom.

    Notice, by the way, that USA Today claims there is a “Social Security balance.”

    Nonsense.

    There is no Social Security “balance.” There are only Social Security benefits that the US Treasury creates out of thin air by sending electronic instructions to banks that have beneficiaries’ checking accounts.

    Notice further that USA Today claims that the US Treasury is, “borrowing from Social Security.”

    More nonsense.

    The US Treasury borrows from no one. Instead, the Treasury creates its money out of thin air, by crediting accounts.

    The magical three-ring binder is in a federal building in Parkersburg, West Virginia.

    Parkersburg (population 31,492) is West Virginia’s third-largest city. Its largest employer is the US government.

    In one building, 1,800 employees collect an average salary of $68,077 for guarding the sacred three-ring binder with its symbolic (i.e. non-existent) “trust fund” and its symbolic (non-existent) $2.7 trillion. 162 of those employees are paid more than $100,000 per year.

    These drones also account for investor deposits at Fed saving accounts. One of those investors is the Fed itself, which “buys” many T-securities.

    Everything in the Parkersburg building is automated. Computers do all the work. However, we’re talking about managing the (non-existent) “national debt,” so that’s worth a measly $100,000 a year for a salary, no?

    According to USA today, the (fictitious) “national debt” is so huge that it takes a team of 19 accountants to calculate it each day. Clad in jeans and sweaters, they work in cubicles, compiling data from “hundreds of sources” to calculate the “debt.”

    Those “hundreds of sources” are the Fed savings accounts of people who buy T-securities.

    The other 1,781 employees stare at computer monitors that register the auctions of T-securities. The screens log the “national debt” (i.e. they log people’s deposits in their Fed saving accounts). Just like the magical team of 19 accountants.

    The screens also register the interest that the Treasury pays on the T-securities it sells (about $415 billion in interest per year, created out of thin air). Since everything is automated, the human drones do nothing but drink coffee in front of the screens. For this they are paid $68,000 per year and up. The lucky ones have cubicles on exterior walls, with windows.

    USA Today also claims that, “More than $5 trillion of the national debt is money the government owes to itself — borrowing from various pension funds and trust funds to pay for ongoing expenses.”

    Yet more garbage. If pension funds deposit some of their money in Fed savings accounts, then so what? This has nothing to do with running the federal government. Also, if a third of the “national debt” is money the government supposedly owes itself, then what is the “crisis”? Why not simply erase the awful “debt”?

    The West Virginia building is the Bureau of the Fiscal Service, formerly known as the “Bureau of the (fictitious) Public Debt.” It is part of the US Treasury. This is the location of the sacred (and meaningless) three-ring binder.

    Wikipedia says that the bureau’s function is, “To borrow the money needed to operate the federal government, account for the resulting debt, and provide reimbursable support services to federal agencies. Financing the federal government is accomplished by selling Treasury bills, notes, bonds, Treasury inflation-protected securities, and U.S. Savings Bonds.”

    Nonsense!

    Once again for you people in the back rows, THE US GOVERNMENT DOES NOT BORROW A SINGLE POENNY FROM ANYONE TO RUN ITS OPERATIONS. The so-called “debt” is simply the amount of money that investors have deposited in their Fed savings accounts.

    By the way, if the US government runs on borrowed money, then where do people get the money that they supposedly lend to the US government? Where do people get the money to pay taxes? From China? No. It comes from the US government. So where is the “crisis”?

    That same building in Parkersburg WV is where you can donate money to pay down the (fictitious) “national debt.” Directions for donating money (to be destroyed) are buried on page 93 of the instructions for Form 1040.

    Or you can go to this web site and let the US government debit your bank account…
    http://www.fiscal.treasury.gov/fs_gifts_to_govt.htm

    Or you can send your checks to Dept G, Bureau of the Fiscal Service, P. O. Box 2188
    Parkersburg, WV 26106-2188

    You can give money to a starving person in the street, or you can be a true American, and give your money to the human drones of Parkersburg WV, so they can destroy it. In 2013, Americans donated $1.8 million for this. They would have done better to drop $1.8 worth of paper bills in a dumpster and set it on fire, so it would have provided some heat at least. Or better yet, give it to starving people in the street. But then, helping your neighbor wouldn’t be “patriotic.”

    Rep. Rodney Davis (R-Ill) wants to make it even easier for you to throw your money away. On 23 March 2013, he introduced H.R. 1336: the “Voluntary Debt Reduction Act of 2013,” which will let you make donations for the (fictitious) “national debt” by giving up your tax refund, or by increasing your tax payment. IRS forms would have an added box where you note how much extra money you will pay for the (fictitious) “national debt.” Anything to suck more money out of this depressed economy, aye?

    Mr. Davis’s bill has five co-sponsors. Two are Republicans from Illinois, two are Republicans from Ohio, and the fifth is a Democrat from Ohio. Liars and morons, one and all.

    BELOW: See the magical three-ring binder that contains the (non-existent) $2.7 trillion, and the (non-existent) SS “trust fund”…

    http://www.usatoday.com/story/news/politics/2013/10/31/national-debt-is-good-for-parkersburg/3288103/

    By the way, Rep. Mick Mulvaney (R-SC) says the top priority of Congress should be tackling the (non-existent) “national debt” by “reforming entitlements” (i.e. by cutting social programs even FURTHER).

    Mulvaney says that many Democrats are likewise interested in “reforming” social programs.

    He says his other top priority is “tax reform” (i.e. further lowering taxes on the rich, while further increasing taxes on everyone else).

    http://video.foxnews.com/v/3003091590001/why-tackling-the-national-debt-should-be-a-priority/

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    2. “There’s a lot of optimism around town that Public Debt will continue to grow,” (Current Parkersburg Mayor) Bob Newell says.

      quatloosx, if only the rest of those entrusted with economic policy (the politicians, economists and educators) could understand this. Of course for all the RIGHT reasons. (I have no problem with 1,800 paid drones. They do SPEND most all that ‘taxes don’t pay for’ govt money.)

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      1. Thanks for the comment, Steve. Actually I don’t have a problem with 1,800 overpaid drones either. I would like to see more people have good-paying jobs like them.

        Regarding that other item (“There’s a lot of optimism around town that Public Debt will continue to grow”), yes I saw that too.

        And here I was thinking that the “national debt” was a “crisis.”

        Fortunately, deficit spending is still a “crisis,” so I still have an excuse to hate poor people and unemployed people, i.e. the “takers.”

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        1. Freedom Industries, a West Virginia company that distributes chemicals used in coal mining, is behind a massive chemical spill that has deprived people in nine WV counties of tap water, plus water for bathing. This has gone on for four days. Much of Charleston, the state capitol, has shut down. All restaurants are closed, unable to use water to prepare food, wash dishes, or clean employees’ hands. Bars and hotels are empty.

          Freedom Industries stored chemicals in 14 storage tanks along the Elk River, which has now been poisoned.

          Fortunately the disaster has not affected Parkersburg WV.

          Thus, the Social Security “trust fund” is safe. 🙂

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  5. The British should follow the lead of our President who said, “Dangerous and growing inequality and lack of upward mobility that has jeopardized America’s middle-class . . . is the defining challenge of our time.”

    [Never mind that he massively increased FICA (the payroll tax on the middle class) and repeatedly has said he wants to cut Social Security and other social benefits, while “broadening the tax base.”]

    See, in American politics, it’s the words that count, not the deeds.

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  6. So what happens when the 99% is sucked dry by taxation, automation and job expatriation? Where do thousands of graduates go every semester with diplomas worth zero? Sooner or later the political leadership will have to find a way to suddenly recognize a whole new discovery of macroeconomics– Affordability and Monetary Sovereignty!! Either that or shoot thy neighbor and it’s every man for himself. The Wild West may just be around the corner.

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  7. There is a story out today with the headline “FHFA Says Recovered $8B on Behalf of Taxpayers in 2013” . So our taxes are being reduced by $8B. When do we see the refund check?

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    1. The bad news is that there will be no tax reductions or refund checks for average people.

      The good news is that the $8 billion will be used to help pay off our “national debt,” which is now over $17 trillion.

      Just think: we can finally retire the “national debt” with just a couple more payments of $8 billion. (A “couple” meaning 2,125 more payments.)

      Off course, even without the “national debt crisis,” we will still have the “deficit crisis.” And Social Security will still be “unsustainable.”

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