–Thank you Russia for helping to save our economy.

Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Thank you Russia for helping to save our economy.

The super committee “failed,” meaning it did not succeed in cutting $1.2 trillion from our money supply, thereby causing the worst recession, possibly depression, ever. So with that so-called “failure,” we now can breathe a temporary sigh of relief.

Yes, the economy won’t improve much, it probably will decline for lack of money, but at least it may not immediately crash and burn as the result of a super committee deficit-cutting “success.”

However:

Huff Post
Super Committee Failure Complicates 2012 Election
Jim Kuhnhenn,11/23/11

Beginning in 2013, the federal government faces two oncoming trains. When the supercommittee was unable to find agreement by Wednesday, it triggered spending cuts of $1.2 trillion starting in January 2013 and extending over 10 years. Half of the cuts would come from defense spending, the other from education, agriculture and environmental programs, and, to a lesser extent, Medicare.

At the same time, tax cuts adopted during the presidency of George W. Bush will expire at the end of 2012, meaning an increase for every taxpayer.

Defense Secretary Leon Panetta has said the cuts would “tear a seam in the nation’s defense.”

So unless Congress does something positive (try to visualize that), defense, education, agriculture, environment and Medicare will take a hit. And there will be a tax increase. Understand that in debt-hawk terms, all of the above money cuts somehow, by some unknown magic, will reduce unemployment and improve the economy!

Anyway, Congress cares only for votes, not programs. And where are the votes? Medicare has votes, but Congress will be sneaky. It won’t cut benefits. It will delay benefits.

Taxes have votes, so Congress will raise taxes some, but not as much as a complete reversal of the Bush tax cuts – so the 99% will be assuaged. Voters will be told that only a partial reversal of Bush tax cuts actually is sort of, kind of, like a tax cut, and based on history, the voters will buy into it. (Hey, voters already think cutting the money supply will help the economy recover, so why not?)

As for education, agriculture and the environment, who cares? Certainly not Congress. How many votes do these programs have? A few teachers? A few tree huggers? A couple of parents who actually understand the adverse, economic effects of deficit reduction? Unimportant.

And then we come to defense:

Medvedev: Russia may target US missile shield
By Vladimir Isachenkov MOSCOW (AP), 11/24/11 — Russia’s president threatened on Wednesday to deploy missiles to target the U.S. missile shield in Europe if Washington fails to assuage Moscow’s concerns about its plans, a harsh warning that reflected deep cracks in U.S.-Russian ties despite President Barack Obama’s efforts to “reset” relations with the Kremlin.

So thank you, Russia. Our war-hawks will out-posture our debt-hawks, and demand that “something be done,” because the Russians are coming, the Russians are coming. (Remember, it was Russia’s Sputnik that sent us to the moon, and having beat Russia there, we never did much of significance, again.)

We seem to need Russia to force Congress to spend the money that stimulates our economy. (It is NASA’s most fervent hope that Russia will send someone to Mars. That would revive federal spending on space and the many related sciences.)

Now, Russia’s latest threat virtually assures no cuts in defense spending, and maybe even some growth, which would help grow our moribund economy, although employment-crushing cuts in other programs, along with tax increases, may well overshadow any increases in defense spending.

By the way, before readers tell me how awful defense spending is, let me assure you, I hate war as much as you do. I also hate poverty, unemployment, homelessness, sickness and illiteracy, recessions and depressions, all of which will result from the federal deficit reduction insanity being proposed by the Tea-whipped.

So again, thank you, Russia. Keep up your threats and we yet may recover from this recession.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

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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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY

–See the #OWS bat signal. They believe, sincerely believe, the 1% are screwing the 99%. Do you?

The people of Occupy Wall Street (#OWS) believe, sincerely believe, the 1% are screwing the 99%. Do you? They camp in cold, damp parks. They face sometimes brutal police. They are condemned, disparaged and mocked by the 1%, for the inconvenience they cause, and the “99%” clothing they wear. Not too many Armani suits in that group.

Some of the 99% are so accustomed to obeying the 1%, they join in the disparagement, condemnation and mocking, against their own best interests.

Who are the police? They are the 99%, yet they willingly, enthusiastically do the bidding of the 1%. They vote their abject submission with MACE, pepper spray, nightsticks and SWAT uniforms. They beat down the very people who try to lift them. “Oh those bedraggled rowdies, why dare they disturb the peace so carefully crafted by our masters, the 1%?”

Who are the media, the newspaper, radio and TV barons? They are the 1%, who write the editorials and twist the news to suit their own privilege? Their fortunes come from the pockets of the 99%, yet they show no respect. For them, the 99% are fools, cows to be milked, and when there is no milk left, to be sent to slaughter.

Have you seen the wonderful, #OWS Bat Signal? Check it out. Feel the enthusiasm, not just of youth, but of a righteous cause. I remember these marchers. They marched against Vietnam. They were right about Vietnam. They were condemned and disparaged by Nixon and the media and the politicians and Nixon’s henchmen, some of whom went to jail. But not Nixon. He was too big to jail.

And not today’s bankers who stole far more than Bernie Madoff ever dreamed of. Bernie is in jail. The crroked bankers are not. The friends of Timothy F. Geithner are not. The friends of Eric H. Holder, Jr. are not. The friends of Barack H. Obama, Jr. are not. Why not?

And why does #OWS march? Why do they endure the slings and arrows of the outraged 1%? Are you among those firing those slings and arrows? Are you part of the 1%, or do you merely obey the 1%?

Yes, the #OWS has not expressed itself clearly. They need to articulate these specific goals. They need to understand Monetary Sovereignty so they can answer the question, “How will you pay for this?”

But they believe, sincerely believe. There are easier ways to live than camping in a hostile park, being pepper sprayed and herded about. Would you do it? Would you be ready to sacrifice your human comfort for an ideal? I wouldn’t, and most of the 99% wouldn’t either, though this ideal benefits them.

But there is something we can do. We can stand by #OWS. We can cheer rather than jeer. We can support rather than ignore. We can write to our Congresspersons and tell them we’re angry at those misguided attempts to reduce the federal deficit, as each cut will take money and benefits, not from the 1%, but from the 99%.

Cutting military budgets hurts the 99%, as does cutting Medicare, Social Security, Medicaid, food stamps, aid to the poor, construction projects, aid to education — they all hurt the 99% while barely laying a glove on the 1%.

The 1% try to brainwash you into believing the federal budget is like your personal budget, so must be reduced. It’s a lie, a damn lie. In August 1971, the federal budget became the exact opposite of your personal budget. Did the 1% ever let you know?

While you pay your bills by spending money, the federal government now pays its bills by creating money. You must live within your means. The federal government has no means to live within. You can run out of money. The federal government cannot. You need income, in order to spend. The federal government spends without needing income.

Make no mistake, this is not a class war. It is not the 99% versus the 1%. Destroying the 1% will not help you. This is the 99% versus the current status, which was created by the 1%. This is the 99% versus a lawless system, that presses down on the 99%. It is the system #OWS marches against. It is the system they hope you will oppose.

How? Write. Call. Demand. Vote. Support #OWS. Oppose anyone who says “the federal deficit must be cut,” because that is their code phrase for, “Your benefits must be cut, your life must worsen, your money must be taken from you and from your children and from your grandchildren.”

The deficit-cut austerity preached by the 1% will not be suffered by the 1%; it will be suffered by you.

So, march with #OWS, if not in person then in spirit. Write. Call. Demand. Vote. Support. Oppose government cuts. Oppose austerity. Oppose the gap. Demand prosperity. The 1% are cowards who will yield if they see your resolve. Your voice can be loud. Your life can be better. The tide of history is with you.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

MONETARY SOVEREIGNTY

–The supercommittee “failed,” thank goodness. Now what?

After ‘Supercommittee’ Failure, Burden Falls on Full Congress to Prevent Scheduled Tax Increases, By Pablo Martinez Monsivais/AP

Before lawmakers pack up for Christmas, they must first decide whether to extend the payroll tax break and long-term unemployment benefits, both of which expire Dec. 31.

Extending the payroll tax break and extending long-term unemployment benefits have the essentially same effect on the overall economy. Both keep the deficit from shrinking. A failure to extend these two programs would reduce the deficit, reduce federal money creation and reduce economic growth.

“I find it very hard to believe they would end the benefits all together,” said Dean Baker, the co-director of the Center for Economic and Policy Research. “I don’t think they want to have more people see more money pulled out of their paycheck come Jan. 1.”

President Obama jetted to New Hampshire today to urge Congress, or more pointedly, Republicans in Congress, to extend the 2 percent payroll tax cut that he championed last year. That lower rate, which Obama said put about $1,000 into the average American’s pocket in 2010, is set to rise back to 6.2 percent in 2013.

“If Congress refuses to act, then middle-class families are going to get hit with a tax increase at the worst time,” Obama said. “We can’t let that happen. Not right now. It would be bad for the economy. It would be bad for employment.”

Exactly the same can and should have been said about the supercommittee assignment to reduce the federal deficit. All deficit reductions pull money out of the average American’s pocket. Those who favor deficit reduction, in effect are saying, “I have too much money and assets. I want to pay more taxes and receive fewer benefits from the government.”

In the president’s jobs plan, he not only extends the payroll tax cut, but further decreases the rate from the current 4.2 percent down to 3.1 percent. “That isn’t a band-aid, that is a big deal,” Obama said, adding that the additional cut would save the average taxpayer $1,500 next year.
[…]
The payroll tax break alone accounted for about one-fourth of the 2 percent growth in GDP this year, Baker said. In the unlikely event that Congress decides not to extend the cuts, he said it would be a “fairly big hit to the economy.”

Right. So why is Congress trying to reduce the deficit? Why appoint an economic-growth reduction committee?

Extending them, on the other hand, is not likely to boost economic growth either. “It’s not going to make anything better than it is,” said Roberton Williams, a senior fellow at the Tax Policy Center. “It is just going to keep things from getting worse.”

This is something the debt-hawks, who say “the stimulus didn’t work” should understand. The various stimulus efforts, which as I predicted (way back on April 9th, 2008) were too little, too late, did keep things from getting worse.

“One of the things we know about unemployment benefits is they are spent,” Baker said. “If they are not extended, it could lower [GDP] growth again by about half a percent.”

I don’t know where his calculation of ½% came from, probably thin air, but the concept is correct. Reduce the deficit and you reduce economic growth. Period. Reduce the deficit and you exacerbate unemployment. Period.

Both payroll tax rates and unemployment benefits were expected to be included in the supercommittee’s plan to reduce deficits by $1.2 trillion in five years.

A more correct sentence would be: “Increased payroll tax rates and reduced unemployment benefits were expected to be included in the supercommittee’s plan to destroy economic growth, worsen unemployment and bring on a recession or depression, in five years.”

Now that the committee has abandoned any hope of reaching a deal, these two measures could be rolled into the third, and arguably most important, item on Congress’s pre-Christmas to-do list: to pass a budget. “These are all fairly clear items,” Baker said. “They know what they’re talking about and both sides have probably already thought through the next step. I would be very surprised if they don’t pass.”

“Know what they are talking about?” “Thought through the next step?” “Congress?” Pul-eeeze!

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

MONETARY SOVEREIGNTY

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