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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.
Introduction: Per Wikipedia, China uses bear bile as an ingredient in Traditional Chinese Medicine. To facilitate the bile milking process, the bears are commonly kept in extraction cages, also known as crush cages. The cages prevent the bears from being able to stand upright, or in some cases even greater restriction. Farmed bile bears are often malnourished and in poor health, living to an average age of five years.
France and Spain are among the many bile bears of the eurozone.
The German and Finnish finance ministries have issued a stinging rebuke of Brussels’ attempt to ease austerity demands on struggling eurozone countries, saying such flexibility improperly provided France and Spain with additional time to cut their budgets to meet EU deficit limits.
Translation: “Yes, we know the euro is a disaster. We know Euro users have surrendered the single most valuable asset they have: Their Monetary Sovereignty. So unless a monetarily non-sovereign nation has positive net exports (not all can), its money supply dwindles and its economy (the majority not part of the upper 1% income/power group) suffers.
“But, the 99% do not suffer enough. The gap between the rich and the rest does not grow fast enough. We want more, more, more blood from the ‘little’ people.”
The German and Finnish position is likely to reignite a bitter fight over whether the EU’s austerity-led crisis response has exacerbated economic stagnation in the eurozone, a debate that largely faded last year after Olli Rehn, the EU’s economic commissioner, awarded France, Spain and four other eurozone countries extra time to reduce their budget deficits below the EU-mandated cap of 3 per cent of economic output.
Translation: “There was a fight about whether reducing money growth cuts economic growth. There also is a fight about whether bleeding a sick patient further reduces the patients energy.
“But the fight ‘faded’ when the doctors agreed to bleed the patient more slowly than originally planned, allowing the patient to die more slowly.”
The memo comes the same week Mr Rehn issued economic forecasts that showed both France and Spain, even with an extra two years, were still failing to cut their deficits in line with EU recommendations.
Translation: “How dare these nations resist having their life-blood drained away. Don’t they understand that this is all for the benefit of their richest and most powerful?”
If you go to that truly excellent web site, http://www.tradingeconomics.com, you’ll find this graph demonstrating France’s financial bleeding:
and this graph demonstrating Spain’s:
These two countries are hemorrhaging euros, but their good neighbors feel they are not bleeding fast enough. (None of this would be a problem if France and Spain still were Monetarily Sovereign and could create their own money. It became a problem when they bound themselves to an alien currency, the euro.)
When the bleeding becomes so bad that the nations teeter on the precipice of death, they will be “saved” by a new loan from the EU or a “moderation” of the terms. Thus France and Spain (and the other euro nations with a negative balance of trade) will be kept alive as trading partners, but little else.
And it’s all to save the euro, the greatest device ever invented for draining a nation’s life-blood and widening the gap between the rich and the rest.
France and Spain (and Italy and Greece et al), you have volunteered to be Germany’s bile bears.
Enjoy your cage.
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. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (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.