●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, and the motive is the gap.
Readers of this blog know the U.S. federal government (unlike state, local and euro-nation governments) is Monetarily Sovereign. It has the unlimited ability to create its own sovereign currency, the dollar.
The U.S. government never can run short of dollars, so never needs to ask anyone for dollars — not you, not me, not China. Neither taxes nor so-called “borrowing” support federal spending.
The twin notions that federal spending is “unsustainable” and that less federal spending (i.e. “small government”) somehow is beneficial, are part of the BIG LIE. It is a lie promulgated by the very rich, right-wing owners of the media and of the politicians. The purpose: To widen the gap between the rich and the rest.
Look at one example of where the right-wing sponsored BIG LIE has taken America:
The Detroit Water and Sewerage Department (DWSD), itself millions of dollars in debt, has begun shutting off water to 3,000 people a week, and could soon cut off access to drinkable water for 150,000 Detroit residents who have failed to pay recent water bills.
This despite an acknowledgement by DWSD spokeswoman, Curtrise Garner, that most of those who have not paid simply cannot afford their water bills.
Crippling unemployment, a focus on corporate interests and institutional racism in Detroit are partially to blame, as is the fact that water rates in Detroit are nearly double the national average at $75 per month (as compared with $40 per month for most Americans).
In addition, the Detroit City Council just raised the price of water by nine percent, exacerbating an already dire situation.
Think about it. The poor of Detroit cannot afford potable water. The federal government has the unlimited ability to create dollars, never can run short of dollars, and does not use tax dollars to pay its bills.
An American would say, “We can’t let our fellow Americans, including helpless children, die of thirst and disease, especially since the federal government could pay for the water, and most especially since it won’t cost the rest of us one dime.”
But the right-wing would say, “The poor are at fault for their own misery. They are lazy “takers.” They should just get jobs and work for the money they need. Let ’em suffer.”
The right-wing also would say, “The federal government, which could supply the needed money at no cost to any of us, actually is a burden on us, so spending should be reduced, even if it means people will die.”
Let’s get this straight. Federal taxing is a burden, which is why FICA, the most regressive tax in American history, should be eliminated. But federal spending is not a burden, which is why Social Security, Medicare, Medicaid and other social programs benefit America.
So why do the right-wingers object to federal spending? After all, it costs them nothing. Because the right-wing is owned by the rich, and they want to widen the GAP between the rich and the rest of us.
By falsely claiming the federal government “can’t afford” social spending, and even more falsely claiming that helping the middle and the poor will cause Weimar hyper-inflation, the right wing has been widening the GAP.
This is right-wing America, where businesses and the rich thrive, while the middle and the poor slide down, down, down.
I don’t blame only the rich for their cruel selfishness. They couldn’t do it without the collaboration of the middle — those ignorant and mean-spirited, who happily accept the BIG LIE so long as those below them on the income scale are punished more.
Without the participation of the middle, the rich wouldn’t have been able to turn Detroit into a banana republic.
Who’s next, middle?
Rodger Malcolm Mitchell
Ten 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. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (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
Vertical gray bars mark recessions.
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.