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●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.
We just read this article:
European Ministers Go to the Brink to Avoid Greek Bankruptcy and Euro Exit
Geoffrey Smith/Fortune Feb. 16, 2015
Finance ministers from around the Eurozone are meeting in Brussels Monday for what will be the third session of fraught talks in less than a week on how to talk Greece’s new government off the window ledge and persuade it to carry on servicing its crushing debt burden with a deal that would keep it from defaulting and leaving the currency union.
Let’s parse this overly long sentence:
” . . . talk Greece’s new government off the window ledge . . . “
That sounds like Greece is about to commit suicide. But is it?
The so-called window ledge is: Leave the euro and re-adopt your own sovereign currency, the drachma. That would make Greece Monetarily Sovereign — able to pay any debt denominated in drachmas.
No more would Greece need to impose destructive austerity on its helpless citizens. Greece would have the unlimited power to control its money supply, and spend to grow its economy.
Does that sound like Greece is standing on a “window ledge”?
” . . . carry on servicing its crushing debt burden . . . “
Yes, Greece, they want you to carry on servicing the debt that is crushing your citizens, so you can preserve the euro. Why? Because the German bankers don’t want to lose money. To hell with Greece’s citizens.
” . . . keep it from defaulting and leaving the currency union.”
Keep Greece from defaulting, because if a sovereign nation defaults and re-adopts its own currency, no one will sell them goods and services. NOT!
The exact opposite is true. Once Greece defaults, and begins to use its own sovereign currency, suppliers will flock to it. Why? Because they know Greece will have no problem paying its bills in the future.
The article continues:
Negotiators have been at work over the weekend trying to find some kind of face-saving formula that will allow all sides to claim a victory.
That’s what’s important? A face saving formula? Does that exceed in importance the lives of the Greek citizens? To the EU, apparently so.
Greece’s bailout program is due to expire at the end of the month. From that moment, it will lose access to the final €7.2 billion earmarked for it that haven’t been paid out yet because the previous government failed to meet all of the conditions for disbursement.
It goes like this: “We will lend you the final €7.2 billion so long as you use all of it to repay us what you already owe us. Don’t you dare give any money to the Greek people. In fact, you’ll have to take more from them.
“And after all is said and done, you still will owe us big money. See it never will end. It never is supposed to end. That’s how we keep you on a permanent leash.“
Greece’s Finance Minister Yanis Varoufakis repeated Monday, that Greece is essentially bankrupt and that there is no point in asking for more loans to cover that up.
“The ‘extend and pretend’ game . . . will end,” he wrote. “No more loans — not until we have a credible plan for growing the economy in order to repay those loans, help the middle class get back on its feet and address the hideous humanitarian crisis.”
Varoufakis uses the sole voice of common sense in the entire EU, with one exception: When he says, ” . . . in order to repay those loans . . . “ he still assumes Greece needs the euro.
But, Greece does not need the euro. Never did.
If anything, the euro needs Greece, because once other euro nations see how well Greece does when it is freed from the heavy yoke of the Troika, there will be a mad dash for the door.
And that is what frightens the EU.
The weakness of Greece’s negotiating position is becoming increasingly clear.
That is what the EU wants Greece to think. A number of articles have run with this headline:
The ball is in Greece’s court
That is the clear message after talks broke up overnight earlier than expected and with no agreement.
Jereon Dijsselboem, chair of the Eurozone Finance Ministers Committee, told a news conference after the meeting: “There was a very strong opinion across the eurogroup that the next step has to come from the Greek authorities.”
That is true. The ball is in Greece’s court. In fact, Greece owns the ball, and if Greece is smart, it will take its ball and go home.
And that is what scares the hell out of the useless European bankers, who have been living on the backs of the impoverished populace.
Go Greece. Take your ball and go home to the drachma. And Godspeed.
Rodger Malcolm Mitchell
The 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. Federally funded, 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)
Initiating The Ten Steps sequentially 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.
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.