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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.
The oft-mentioned “Big Lie” includes the false claim that your children and grandchildren will be saddled with the federal debt. So, cutting the federal debt will protect your precious descendants. There even are “debt clocks” that purport to show how much each of us “owes.”
Federal debt is nothing more or less than deposits in T-security accounts at the Federal Reserve Bank — essentially the same as your savings account at your local bank (Your savings account is a debt of your bank).
How does your bank “pay off” its savings debt to you? Simply by transferring dollars from your savings account to your checking account.
That is exactly how the federal government pays its “debt.” It just transfers dollars from T-security accounts to checking accounts. Your children and grandchildren are not involved.
In previous posts, we have discussed how, “You never will know what you have lost” as a result of unnecessary and harmful federal debt ceilings and deficit cutting.
Well, the beat goes on. Here are a few excerpts from the January/February 2014 issue of Discover Magazine:
The spending cuts known as “sequestration” sliced $9.3 billion from federal research and development projects. The 24 federal agencies that conduct research slowed the pace of lab work, instituted hiring freezes and cut grant programs.
Yet, sequestration is only a small part of overall austerity. Deficit and debt cutting and limitation have been with us for many, many years — essentially since the end of WWII. (And before then, austerity was the primary cause of the Great Depression. See: Items 3 and 4.)
At the National Institues of Health (NIH). the sequester led to $1.6 billion in cuts and the loss of 20,000 jobs. With less grant money and fewer scientists, research stalled on cancer, the influenza virus, Alzheimer’s disease and more.
Do you think reduced research on such diseases will have any effect on your children and grandchildren’s futures?
The National Science Foundation (NSF) cut up to 600 grants, and NIH offered about 700 fewer than it did in 2012.
Steven Warren, vice chancellor for research at the University of Kansas predicts the most severe effects could come years in the future, as a generation of young faculty struggles for funding or pursues more conventional, less innovative projects, in an effort to win limited dollars.
How will less innovative research affect your children and grandchildren?
The 16-day, partial shutdown of the federal government stopped projects midstream and postponed the beginning of the five-month research season in Antarctica, where scientists are looking into everything from climate change to earthquakes.
The effects of sequestration and the shutdown have further eroded federal investment in science, which already had seen a 16% drop in the previous 3 years.
Mention this to any of your friends who tell you how they hate big government, and that government never created anything, and that the federal deficit and debt are too big, and that they worry about our children’s and grandchildren’s futures.
Remind your friends that they are parroting the very rich, who would like nothing better than to reduce federal spending on all things that could benefit the middle and the poor, so as to widen the gap between the rich and the rest.
The debt hawks say they want to protect your children and grandchildren, but instead, are destroying their futures, and doing the dirty work of the very rich.
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) 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)
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. Federal deficit growth is absolutely, positively necessary for economic growth. Period.