–Then, now, and soon. Why the Greek tragedy plays out — to become a blessing

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
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.
●Austerity is the government’s method for widening
the gap between rich and poor.
●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.
●Everything in economics devolves to motive,
and the motive is the Gap.

Then: :

“The Meteorology of Economics” A talk at UMKC, June 5, 2005: “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.”


Germany prepared to let Greece leave euro zone
Jan 4 2015, 05:15 ET | By: Yoel Minkoff, SA News Editor

Both Chancellor Angela Merkel and Finance Minister Wolfgang Schaeuble believe the euro zone has implemented enough reforms since the height of the regional crisis in 2012 to make a potential Greece exit manageable, said Der Spiegel magazine on Saturday.

According to the report, the German government considers a Greece exit almost unavoidable if the left-wing, anti-austerity party Syriza led by Alexis Tsipras wins an election set for Jan. 25.

And soon:

Why Greece will look back at the other euro nations and laugh. Sunday, May 13 2012

Within two years after Greece leaves the euro, and re-adopts the drachma, its economy will grow, while the other euro nations sink deeper and deeper into austerity.

Why the tragedy plays out:

Euro Countries Take Tough Line Toward Greece

European officials are taking an increasingly hard line toward Athens, saying they want to keep Greece in the single currency, though not at any cost.

To the evident dismay of European officials, and international markets, the narrow front-runner for the Jan. 25 election appears to be Alexis Tsipras, the head of the leftist Syriza party.

Though Mr. Tsipras has made it clear that he would like to keep Greece in the eurozone, he has also vowed to repudiate parts of the nation’s debt, roll back the austerity measures required by Greece’s international creditors, and renegotiate deals with them that have given Greece access to billions in aid.

Following through on such pledges could cost Greece’s creditors, and European taxpayers, tens of billions of dollars.

What cost are (European leaders) willing to bear to keep Greece in the eurozone? Their answer, for now, has amounted to a tough line, particularly from the austerity-minded Germans.

It is mathematically impossible for austerity ever to grow an economy or benefit the poor and middle-income populace. Removing dollars from an economy, by definition, cannot increase GDP, and taxes + reduced spending punish the lower economic groups most.

It’s not so much the German people who like the austerity that has brought them low wages. It’s the German (and other nations’) rich and powerful, who like the austerity that widens the Gap, and gives them a ready supply of cheap, desperate labor.

The euro is the perfect “austerity forever” device for the rich and powerful. That’s why you repeatedly will read:

Wolfgang Schäuble, the German finance minister, (said): “If Greece takes another path, it will be difficult. Any new government will have to stick to the agreements made by its predecessor.”

Officials in Brussels emphasized that membership in the euro bloc was “irrevocable.”

“The euro is here to stay,” said a European Commission spokeswoman, Annika Breidthardt.

Guy Verhofstadt, who leads the Liberal group in the European Parliament, called the idea of a Greek exit from the eurozone “nonsense,” not only because most Greeks do not want to leave the euro, but also because European taxpayers would wind up losing billions of euros that Greece owes them.

President François Hollande said that though the Greeks were “free to choose their own destiny,” there were “certain engagements that have been made and all those must be of course respected.”

Preventing a Greek exit is also still desirable for Germany and other countries, since billions of euros in European taxpayer money could be wiped out if Greece were to leave the euro.

Of course, Greek taxpayers would have to pay those billions, but that’s the point. So long as the rich and powerful of Europe can continue to bleed the taxpayers of Greece, all is happiness in euroland.

And soon (we hope) the Greek people will wake up to the fact that they are enslaved by the euro — enslaved to a never-ending future of paying the rich and powerful, while they themselves sink deeper into poverty.

And soon (we hope) the Greek people will find a leader who takes them into Monetary Sovereignty by re-adopting their own sovereign currency.

Then the Greek will have the unlimited ability to grow their own economy, unencumbered by tribute being paid daily to foreign and domestic, rich and powerful, lenders.

And they will look back at those poor souls remaining in the euro and laugh and laugh and laugh, all the way to the bank.

Ah, what a blessing it will be.

Rodger Malcolm Mitchell
Monetary Sovereignty

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. (Refer to this.)
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.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

Monetary Sovereignty

Monetary Sovereignty

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.


22 thoughts on “–Then, now, and soon. Why the Greek tragedy plays out — to become a blessing

  1. Greece must be careful, if they leave the Euro, not to carry over debts denominated in Euros. They must accept Euros for taxes at 1:1 with Drachma, and pay the Euro bondholders off, perhaps swap for Drachma bonds, as they begin spending their new currency. Or default, depending on their moral views. Keeping large debts in a foreign currency is a recipe for hyperinflation.


  2. I will be back to laugh at you when the Greek economy collapses into oblivion due to the far left agenda policies that will be implemented. The funny thing is that although Greece has one of the worst economies in the world, the population is full of communist fanatics. The Greek “right” is probably as right as Karl Marx…

    I am sure we won’t have to wait too long to see the collapse. I’ll grab my popcorn in the mean time.


  3. The Greek don’t have an easy way out by the way. I put my money in that they will indeed default because they don’t have the means to repay the money owed. I think that’s the good par because it will free the Greek of debts that cannot be repaid. However, as I stated above – all political parties in Greece are far left socialists – Syriza, Pasok – all are socialists.

    These fools will think they are in heaven when the leave the Euro without any debt and will do exactly what Rodger has prescribed – spend, spend, spend. Soon after, their economy will halt to a stop and their entire system, along with the Drachma or whatever currency they implement will collapse.

    I’m willing to place a wager that Rodger will say that the cause of the collapse was not enough government spending….


  4. One wonders whether the Libertarians ever will tire of preaching hyper-inflation. They have been predicting it in the U.S for 200 years.

    Perhaps it’s because austerity has “worked so well” everywhere in the world. But facts seem to mean little to the debt-clock crowd.


  5. So when the federal government gives money to the states there is no need to for the states to repay but each state still is not sovereign and must collect and spend tax monies.
    Why isn’t the euro set this way?


    1. A solution is expressed at the end of the article:

      Greece can regain its sovereignty by defaulting on its debt, abandoning the ECB and the euro, and issuing its own national currency (the drachma) through its own central bank.

      But that would destabilize the eurozone and might end in its breakup.

      That is one of the two available solutions to the disaster known as the euro, the other being a financial union similar to the United States.

      And Greece wouldn’t even have to default — at least not totally. It could say that it will repay its euro debts with drachmas on a one-to-one basis. Take it or leave it.

      Everyone would take it (as opposed to getting nothing), which immediately would create both supply and demand for the drachma.


  6. Run on Greek banks underway. Rodger may get his wish soon.

    If i were Greek, I’d have all my savings in gold. Oh yes i would…


          1. I agree we are no where near having any inflation, there’s essentially no way for it to happen in the US.

            We are loaded with debt that will consume a good chunk of incomes for a long time. I also agree that the government can spend as much as it choses and it wont cause inflation anytime soon, because of the same reason – debt loads consume future incomes. But i disagree in that government spending is always beneficial, its not. If your income is being consumed by debt, government spendng will consume more of it via devaluation.

            The quicker approach would have been letting people and banks default in 2008 and destroy the debt that cannot be repaid. We will have slow growth for a long long time.


          2. Apparently you have no desire to learn the facts of Monetary Sovereignty, otherwise you would not have written:
            ” . . . debt that will consume a good chunk of incomes for a long time.”

            If you’re talking about federal debt, it does NOT consume any incomes. It is nothing more than DEPOSITS in T-security accounts at the Federal Reserve Bank — almost identical with savings account deposits.

            And again if you’re talking about federal debt, you would not have written:
            “the debt that cannot be repaid.”

            The federal debt is repaid the same way that any savings account is repaid. Dollars already in the savings accounts simply are transferred to the holders’ checking accounts. No new dollars needed.

            Not to sure how to educate someone who refuses to learn, but federal finances are different from personal finances.

            While personal debt may be a burden on people, and state debt may be a burden on state governments, and business debt may be a burden on businesses, federal debt is NOT A BURDEN on the federal government.


          3. “While personal debt may be a burden on people, and state debt may be a burden on state governments, and business debt may be a burden on businesses, federal debt is NOT A BURDEN on the federal government.”

            I believe Federal Debt is exactly what it says it is, debt. The government of the United States owes somebody or some institution that money. It is extremely easy to prove that this is accurate, I have purchased some treasury securities. I lent the government funds in exchange for a piece of paper stating that I own treasury securities. For that I receive interest payments. Not sure where you are getting that the government is free of this debt.

            If you can somehow disproof that what I state above is a lie, than wouldn’t government spending be synonymous with counterfeiting then? And isn’t counterfeiting illegal. The government can, at any time, pass a bill to create money out of thin air and avoid the counterfeiting legality; however, the government hasn’t done so.

            The interest payments on the debt are still pretty minute; however, the higher the level of debt – the more meaningful these interest payments are.

            And it’s not only the interest payments that eat up at people’s incomes, government spending in a fractional reserve world has the same impact. The government spends trillions – which is a considerable amount of money and does have a major impact on the devaluation of incomes. Government spending is what has made the middle class non-existent.


          4. Bum, When asked where the Fed got the money to buy bonds, Bernanke said “out of thin air”. That’s the way it is done. They type on a computer and increase the number in someone’s bank account.


          5. As always, Bum parrots the Libertarian mantra which claims that all so-called “paper” money actually is counterfeit, and that the only “real” money is gold.

            It’s utter nonsense, of course, but some of these web sites have an axe to grind: They sell gold to suckers.

            BTW, Bum doesn’t own gold; he uses “counterfeit.”

            That tells you all you need to know about Bum


  7. Bum, I know my response will fall your deaf ears, but there may be others who wish to learn.

    When you deposit dollars in your bank savings account, you do create a debt. Do you believe this debt is a burden on your bank? If it’s a burden, why do banks solicit this “burden.” They used to give toasters in order to accumulate more “burden.”

    And federal debt (i.e. deposits in T-security accounts at the Federal Reserve Bank) are even less of a “burden” than that. While private banks are monetarily non-sovereign and can run short of dollars, the federal government is Monetarily Sovereign, and can not run short of dollars.

    How are T-securities paid off: Existing dollars in T-security bank accounts are transferred to holder’s bank checking accounts. No new dollars needed.

    You referred to, “(federal) interest payments that eat up at people’s incomes.” If you owned T-securities, and received interest, would that “eat up your income.”

    But of course, you are talking about inflation, aren’t you, because you believe in your heart (not your head) that federal spending causes inflation. But it isn’t true. See: http://goo.gl/v09EuQ

    As I said, this all is worthless to you, because you appear to have no desire to learn anything. Rather, you wish to prove how smart you are, while ironically, you repeatedly prove the opposite.

    If you have questions I’ve not answered, please pose them as questions. I’ll be glad to answer them. But, don’t make positive statements that prove you have no idea what you are talking about. It’s annoying.


    1. “the federal government is Monetarily Sovereign, and can run short of dollars.”

      Can you edit that? Seems to be an important word missing.


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