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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.
Berlin attacks EU’s easing of austerity demands
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.
12 thoughts on “–Germany wants Spain and France to remain “bile bears””
Off topic – how does venezuela have high inflation? sure their currency is fixed, but they are one of the leading exporters of oil (100bn a year). and why the need for such strict currency controls?
i answered my own question, thanks.
but on second thought, i’d like to hear your reasoning on Venezuela’s inflationary problems. compare and contrast, but hopefully not.
Thank you for this post, Rodger.
Since has the biggest trade surplus in Europe (by far), Germany has always been the loudest voice for maintaining the euro, and thus for maintaining austerity in the euro-zone nations. The euro is Germany’s means for sucking the other euro-zone nations dry. And it was no accident that the ECB is located in Germany.
However, let’s remember that politicians in the other euro-zone nations are complicit in enslaving their peoples to Germany. It’s very lucrative for the traitorous politicians.
Consider exports of weapons, which is a large part of Germany’s trade surplus. You will never hear Germany scold Greece for “living beyond its means” when it comes to buying German weapons. The Greek people are starving, yet Greek politicians keep buying expensive German weapons that the Greek military does not want or need. Greece has for years been paying Germany for four faulty German Class 214 submarines, only one of which was ever delivered. From 2002 to 2006, Greece was the world’s fourth biggest importer of weapons, mainly from Germany. Greece has 1,300 tanks, which is more than twice the number in the UK. The tanks come from Germany. As a proportion of GDP, Greece spends twice as much as any other EU member on defense. And Greece buys all these German weapons on credit, which means that Greece must continually ask for more “bailouts” (i.e. debt bombs). Hence the Greek government must keep imposing more austerity on the Greek people.
Greek politicians keep buying these German weapons (on credit) because German weapons makers pay them bribes to keep doing it. Greek politicians get away with this scam because the Greek procurement process is the most secret in Europe. If anyone asks questions, Greek politicians say that the German weapons must be purchased because of the “Turkish threat.”
Is that rich, or what? Greece and Turkey are allies, and both have been members of NATO since 1952, yet there is a “Turkish threat.”
Meanwhile Germany scolds Greece for bribery and corruption, which Germany depends on in order to maintain Germany’s trade surplus.
If any Greek politician angers other politicians, or rich Greeks, he is thrown to the wolves. For example, in 2011, Akis Tsochatzopoulos (a Greek politician) was charged and later convicted of accepting bribes from German firms (e.g. Siemans and Ferrostaal) to buy German weapons.
And still the scam continues.
As Rodger says, the euro is “The greatest device ever invented for draining a nation’s life-blood and widening the gap between the rich and the rest.” Yes, and not just in Germany, but in all nations that use the euro.
In the UK, rich people and their toadies do not need the euro to widen the gap between themselves and the masses. They have the Anglo-American Big Lie. (So does Canada and Australia.) “The government is broke and in debt!”
British finance minister George Osborne says the UK will never adopt the euro, and if the EU (i.e. Germany) doesn’t like it, then the UK will withdraw from all treaties and agreements with Europe.
Osborne says this flat-out, yet nobody stops to ask why.
The problem here and there has much less to do with policy and much more to do with the system itself. Until that is understood events will continue to unfold as one repetitive circle jerk.
Looking at Ukraine:
““The West doesn’t have a lot of ‘free’ cash lying around – we and the Europeans don’t,” Hormats said.”
Unbelievable. When are these ignoramuses going to wake up to the realities of MMT and MS?
Off-topic I know, but I just had to post this suggestion:
Two major ways to promote MMT/MS:
1. People like money, right?: Place prominent ads in major newspapers (or even just small local newspapers – I know that this can be expensive) and the internet and wherever (perhaps even TV commercials? Hire a local PR rep. to help?) offering a sizable money prize, something like, $100, $500, $2,000 or $5,000, or $10,000, to anyone (target not just the academics and professionals, but the general public as well) who can factually prove first that various misconceptions about economics are true. For example:
a. Offer $100, $500 or $1000 to the first person that can prove that just “printing” dollars increases inflation.
b. …. prove that the federal government needs money from federal income taxes to fund itself.
c. … prove that having a deficit is harmful to the economy.
d. … prove that the federal government can run out of dollars.
e. … prove that the federal government can default on its debt and become bankrupt.
f. … prove that the federal government even needs to issue debt to fund itself.
g…. prove that social security, medicare and other federal programs are funded by (or need) tax dollars.
h. … prove … (I think you get the idea, I’m sure there are other so-called “facts” that we could challenge people to “prove” about their understanding of economics.).
Of course they won’t be able to prove any of their “facts” and misconceptions – but that’s the point – this exercise will get their attention and hopefully get them to rethink and to start asking questions.
(At the very least, I think this plan of action would make some buzz and start to pierce the seemingly impenetrable solid wall of stupidity and ignorance regarding understanding of modern economics among the public.)
(Isn’t Warren Mosler a retired rich hedge fund manager, couldn’t he fund a nation-wide operation like this? – Didn’t he fund his own campaign to run for office a while ago? – Yes, I’m also hoping Warren Mosler reads this blog.).
2. Start working on the 1% in educating them as to how they can benefit from MMT/MS (appeal to their own self interest) – Again, people like money right?: For example, even if MMT/MS understanding was in full effect, they (being business owners) would still make more money since average people would have more money to spend, their employees would be healthier, and therefore more productive, etc., for example. Contact the 1% people directly or start an MMT/MS lobbying group, or contact existing lobbying groups to target them with education. MMT needs a group that is more active and assertive, rather than just academics (UMKC) and bloggers. Networks could be made with MMT-proponents in other countries, and information, such as on promotion, shared. Could a non-profit MMT/MS lobbying group be set up for this purpose?
God, I wish someone would take the suggestions in the blogpost and just run with it. I would give my left nut to see this happen.
I really think that these proposals could start to get attention and work, and start to change America and the world.
Any takers? What other real options do we have?
P.S. Warren lost the election.
There is no short answer why the branded talking heads, or incumbents, refuse to address facts concerning our current monetary operations. The money supply shrinks when the government spends less and people pay loans back , and from fear fail to revamp. A trade deficit adds to this shrinkage of currency. The conundrum surrounding loan origination jump starting a recessed economy in a credit constrained environment is hardly addressed as well. . Instead we’re encouraged to pay our excessive private debts down while working longer and harder for less, while the earnings per share of our public companies creep upwards, rewarding executive management and shareholders, and of course followed by increasing margin accounts. Though awesome that redundant mindless factory jobs have been replaced by robotics and other technologies, obviously more productive and efficient, but subsequently many good paying jobs are scarcer. , Also less skilled positions are outsourced to emerging economies , which may be a disadvantage of the new global economy, though it shouldn’t be. Opportunities, outside of medical, computer, energy, and government, just aren’t plentiful enough. That middle class wealth was eviscerated in the real estate depression by the same banking executives whose mismanagement and dereliction provided themselves handsome profits, thanks to their friends in government, and whom now stand hypocritically as judge and jury over their victims financial futures, might perpetuate misunderstanding and disinformation concerning relationships between government spending , tax revenues, government debt, money creation, and the wealth of our country. . The truth widely understood might start a revolution. .
@RMM: What about targeting university students, like undergraduate and graduate economics, business and finance majors? School newspapers, student organizations and such could be contacted. Has this been done? Must be more persistent.
@RMM: What would the economic effect be, if any, if the federal government just forgave or canceled issued debt, like student loan debt and foreign aid debt to foreign countries, etc.? Inflation or deflation, etc.?
I don’t know what foreign aid debt is.
Cancelling student loan debt would, over time, increase the money supply, because repayment dollars otherwise would be destroyed. So there would be a slight inflationary effect, which would be lost in the noise of all other Treasury operations. It would be identical with reducing taxes.