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●Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
●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.
The euro nations are dying. There is one word to describe the reason: Austerity.
Actually, there are two words to describe the reason: Monetary non-sovereignty.
Here are some data.
The solid maroon line represents quarterly U.S. growth in Gross Domestic Product (GDP). The dotted blue line represents quarterly euro nation GDP growth.
Every single quarter, since the great recession, the euro nations’ GDP growth rate has been lower than the U.S. growth rate.
Here is another way to look at the same basic data:
From the recession, through the 2nd quarter ofn 2014, U.S. GDP is up about 18% while the euro area is up only about 6%.
Unfortunately, despite being Monetarily Sovereign and having total control over its own sovereign currency, the U.S. also has been practicing some form of unnecessary and harmful austerity (though thankfully, less so than the euro nations).
The U.S. limited its federal deficit spending via sequestration (i.e. the “fiscal cliff”), partly through tax increases (especially the notorious FICA tax) and reduced federal spending.
Additionally, the so-called “debt ceiling” (which was not a ceiling on debt, but rather a ceiling on payment for already existing debt), forced unnecessary budget reductions.
(In reality, payment for federal debt requires no additional dollars; it merely requires the transfer of existing dollars from T-security accounts to checking accounts. But this fact is ignored by those who welcome austerity.)
Because deficit cutting (austerity) always impacts GDP negatively, you will not be surprised by this article:
Factory Prices Tumble in Europe as German Manufacturing Shrinks Before ECB
Bloomberg By Alessandro Speciale
Euro-area factories cut prices in September by the most in more than a year and German manufacturing shrank, underlining the mounting challenge facing Mario Draghi.
The European Central Bank president is on a mission to avert deflation as the euro region’s economic landscape deteriorates. Purchasing Managers’ Indexes from Markit Economics showed manufacturing also contracted in France, Austria and Greece, with a gauge for the 18-nation region pointing to near-stagnation.
A separate report showed spillover to the U.K., with factory growth there at a 17-month low.
(Though the UK is Monetarily Sovereign, having retained the British pound, it not only acts as though it were monetarily non-sovereign by adopting austerity, but its economy is affected by the economies of its neighbors.)
The euro not only is a disaster, not only a predictable disaster, but a predicted disaster.
(“Because of the Euro, no euro nation can control its own money supply. The Euro is the worst economic idea since the recession-era, Smoot-Hawley Tariff. The economies of European nations are doomed by the euro.” RMM June, 2005)
As the euro area’s economic weakness spreads to countries in the region’s core, the ECB will face increased scrutiny tomorrow when it unveils details of an asset-purchase plan.
The fresh round of stimulus comes against a backdrop of weak inflation and stuttering growth, with geopolitical uncertainty and high unemployment weighing on confidence and demand.
It will be interesting to see who will purchase assets and which assets they will purchase. The EU itself, being Monetarily Sovereign, has the unlimited ability to supply euros to member nations. And it should do so.
Instead, it has be asking for quid pro quo, either by lending (and demanding repayment) or by asset purchases (i.e. asset takeaways), both of which impoverish the nations that are in need of help.
The EU neither needs, nor should ask for, quid pro quo. It merely should give euros to nations as needed.
It is very hard to put any positive spin” on the data, said Howard Archer, chief European economist at IHS Global Insight in London. “Clutching at straws, the best that can be said is that it indicates that the manufacturing sector is still growing.”
Euro-area manufacturing expanded at the slowest pace in 14 months, according to today’s report. The gauge stood at 50.3 in September, just above the 50 mark that divides expansion from contraction, and below a preliminary estimate of 50.5.
Europe is dying, and it either is a murder by Europe’s leaders or a suicide by Europe’s masses.
Europe’s leaders, being owned by the upper .1% income/wealth/power group murder the euro nations with austerity. Because deficit cuts always affect the poor and middle more than the rich, austerity widens the Gap between the rich and the rest.
The rich wish to widen the Gap, for it is the Gap than makes them rich. (If there were no gap, no one would be rich, and the wider the Gap, the richer they are.)
Europe’s masses, having been brainwashed by the rich-owned media, the rich-owned politicians and the rich-owned university economists, commit suicide by accepting the euro as beneficial.
Meanwhile, the euro nations voluntarily have surrendered the single most valuable any nation can have: Monetary sovereignty. They have lost control over their money. So, the euro, by its very nature, requires austerity.
Europe is dying a slow painful death — painful to the lower 99%, while the rich prosper.
The only question: Is it a murder by the rich or is it a suicide by the rest?
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. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)
10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
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 growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.