Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty 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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Economics has more data than the human mind can comprehend. So economists (including this one) tend to focus on small clumps of data we can visualize, and from them, we draw conclusions: For instance, consider these data:

1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.

I conclude, from these data, federal surpluses cause depressions. I even offer a rationalle: Surpluses remove dollars from the economy, and a growing economy requires a growing supply of money, while a shrinking supply of money causes economic shrinkage (a depression). I see ample proof of this in many places, and currently the euro nations are on track to provide even more proof.

But wait a minute. The 1819 depression began after just two years of surplus, while the 1929 depression waited for nine years of surplus. Why?

And then there was the Clinton surplus of 1998 -2000, that only caused a recession in 2001. So was there something else that triggered, or outright caused, these depressions?

I discuss this at: What triggers recessions and depressions?? But that discussion barely brushed the surface of the question.

Why didn’t I go deeper? Too many variables of indeterminate weights.

Read any paper, book or blog post on economics, and you will see conclusions, possibly supported by data, but you’ll not see all the related data along with historically proven weights. You might even see formulas on the order of X = 1a + 2b + 3c . . . N, but how predictive are those formulas? Commodity and stock chartists provide seemingly infinite graphs, and how predictive are they?

While I feel confident that federal surpluses, and even reductions in deficit growth, hurt the economy, and I offer data to support this conclusion, I do not offer proof. No economist ever has proved much of anything, though we all argue mightily for our positions. If this reminds you of religion, where nothing is proved and everyone is absolutely certain, you’re right. Economics is closer to religion than to science, and the reason is complexity.

It doesn’t have to be this way. The human brain is limited in the number of related factors it consciously can organize. Show me a formula based on a dozen variables, and I will not be able to visualize it.

But ask me to catch a fly ball, in which my brain subconsciously must analyze such variables as the speed and trajectory of the ball, wind speed, wind direction, ground (running) conditions, ball weight and size, plus all the past experiences I’ve had in running and catching a ball, and my brain can predict exactly where my glove has to be, and when — usually.

I’ll run at exactly the right pace, neither too slowly nor too fast, so that the trajectory of my glove intersects the trajectory of the ball, right on time — an amazing feat made even more amazing by the thousands of decisions and predictions my brain must make when signalling each my muscles to contract the right amounts at the right moments, just so I can take one step, let alone intercept a fly ball.

Why can I make all those predictions, involving thousands of weighted variables , but am unable to visualize a handful of variables simultaneously? I believe the answer is: Feedback.

Last year, the IBM computer named “Watson,” defeated the two greatest human players in Jeopardy history. Those who know the game, understand that this achievement was orders of magnitude beyond winning at chess. Jeopardy questions are filled with linguistic misdirections puns, rhymes, puzzles and verbal tricks.

English by itself is a complex language. Consider the real headline, “English Left Waffles on Falklands.” What does it mean? Did the English cook up a stack of waffles and leave them on some islands? Or did it mean the English left (i.e. liberals) were undecided about what to do with the Falklands?

Add that misdirection to the need to understand facts, slogans and ideas we all take for granted, and you can visualize of the kind of complexity Watson conquered. How did it do it?

Well, I can tell you what didn’t happen. There weren’t an infinite number of programmers inputting an infinite number of possible questions, in the hopes that one would match the latest Jeopardy question.

No, instead they used machine learning. Here’s an example: One of the questions named two people and asked what they had in common. The answer was supposed to be what state (Iowa, Ohio, etc.) they came from. Watson missed the first question, because it found something else the two had even more in common. The human contestants answered correctly.

Then Watson was told the correct answer, but not the reasoning behind it. The same thing happened with the second question. Watson gave the wrong answer. Humans gave the right answer. Watson was told the right answer.

But, on the third question, Watson answered correctly. It had “learned,” from the first two answers, that a state name was wanted. Thereafter, Watson answered all similar questions correctly. Given all possible answers, Watson offered the answer having the highest probability.

There would have been no way for programmers to anticipate that question, then program Watson with the answer. Machine learning accomplished in seconds, what ordinary programming never could.

Similarly, though I have caught thousands of balls in every weather, on every kind of field — balls of different sizes and shapes (beachballs, footballs, marbles) –balls going at different speeds, different distances — the next time I catch a ball, the situation will be unique. But I will receive feedback — continuous feedback. And the odds are, I either will catch the ball or quickly will realize I can’t.

With every step I take, my brain will recognize thousand of things familiar enough to analyze, and based on that familiarity, will make appropriate adjustments, perhaps millions of adjustments per second. And this feedback will allow me to predict exactly where my glove needs to be and how my muscles need to move.

Bottom line: Economics never will be a complete science so long as economists rely solely on conclusions drawn from limited data. The solution is to use a super computer, of Watson capacity or greater, that is given every conceivable piece of data prior to every important result — a super computer that is told to correlate all that data with each result (i.e. “correct answer”), and to learn from each result (feedback), the most likely next result.

IBM spent millions on Watson. They achieved some measure of publicity, but they now can achieve so much more. If IBM would create an “economics Watson,” pumped full of data and engaged in machine learning, IBM could predict, and thereby change, the world.

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

==========================================================================================================================================
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:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports

#MONETARY SOVEREIGNTY

Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
==========================================================================================================================================

While I empathize with the basic desires of the “Occupy” movement (i.e. lift the poor), I repeatedly have criticized their lack of direction. Marching, chanting, camping in the park and bating police is not an economic proposal.

In this vein, here are excerpts from an article in COMMENTARY

The Class War Goes Hot
Abe Greenwald| @abegreenwald
05.03.2012

There are two wellsprings of class warfare in America. There is Barack Obama, whose reelection strategy is to taunt Americans about their rich neighbors. And there are the indignant loiterers of the Occupy movement, who married aimlessness to anarchism and produced a half-witted crime spree that boomer liberals then declared “meaningful.”

The few existing articulate defenders of the Occupy movement note the peace-and-love vibe that abounds at protests. “I go down there every day, and I see sweet, compassionate, politically astute people,” said hippie businessman Russell Simmons about Occupy Wall Street. “I participate in their meditation daily. I see people who have high aspirations for America, who are idealistic. I see the most inclusive group that America has to offer.”

There is only one entry requirement for the Occupy movement: a consuming resentment of the guy who has more than you. It is a grudge cult, a movement created to ennoble mankind’s worst impulse, and it must inevitably lead to violence. The class war must go hot.

. . . it is the same corrosive idea behind the White House webpage urging Americans to “Just enter a few pieces of information about your taxes, and see how many millionaires pay a lower effective tax rate than you.”

The Obama campaign has the class-warfare brains, the credentialed thinkers (and the enlightened billionaire) who’ve drawn up a plan to make someone else pay for the fundamental unfairness of your life. If you think it’s a stretch to compare them to the class-warfare thugs of the Occupy movement just look at Europe, where the brains and thugs re-couple in strong political parties every time a bad-economy election is held.

In Greece, where the evil 1 percent du jour are immigrants, the fascist Golden Dawn party may enter parliament in a few days. In the current French elections, extremists on the right and left have ratcheted up nativist rhetoric. Hungary’s Nazi-nostalgic Jobbik party recently held an EU flag burning rally to protest their longtime scapegoats, the Gypsies.

Yes, it’s true, we’re not Europe. But that’s the point. We’re America, so why are we flirting with this garbage?

I agree, phony class warfare is obnoxious, except when there is a real class war. There is, and the poor are losing. As the gap between the rich and poor grows, are we to believe this merely is a result of hard work by the 1% and sloth by the 99%, or is it a bit more insidious than that?

Sadly, the author is mostly right about the “#Occupy” movement, not because they are evil, but because they don’t understand economics, don’t want to understand economics, and have no plan, other than “we’re angry, so do something about it.”

If they had read and understood Monetary Sovereignty, they would have proposed specific solutions to the growing gap — solutions such as: Eliminate FICA, provide Medicare to everyone, increase Social Security payments, annually increase the standard income tax deduction, etc. And they would be able to answer the typical, debt-hawk “inflation” concerns about social spending.

But no. #Occupy prefers protest-and-party to learn-and-propose. So “#Occupy” will fail the legitimacy test, the gap will grow, and Mr. Greenwald will continue to blame the class warfare on the victims.

If you happen to know any of the #Occupy leaders (are there any?), you might remind them that even the dopey Tea Party offered a specific agenda, wrongheaded as it was, and they didn’t need to break store windows to accomplish their goals.

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

==========================================================================================================================================
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:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports

#MONETARY SOVEREIGNTY

Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
==========================================================================================================================================

O.K., I admit it. I hope we discover some form of life on Mars, or barring that, evidence that life once existed no Mars — or on one of Jupiter’s or Saturn’s moons, or on an asteroid, or somewhere.

O.K., I admit it. Years ago, I hooked up to SETI (Search for Extra Terrestrial Intellegence) and sat fascinated as the graph spun across my computer, irrationally hoping, like a lottery ticket holder, I (or really, my computer) would be the one to discover a signal.

And I admit to being disappointed that we have found nothing, nothing and more nothing. But I was encouraged by a recent article titled, “Odds of Finding Alien Life Boosted by Billions of Habitable Worlds.”

Yes, I find this reassuring, and perhaps you do too. But I don’t know why, because finding intelligent life elsewhere would be the worst thing that ever could happen to planet earth. Finding lower life forms would be fun and exciting, but intelligent life would be a disaster.

Think of all the nations on earth. Have any of them not been involved in a war? Is there one that has not attacked or been attacked? I doubt there ever has been a time in human history, when there has been no war or something very similar to war.

Our sports involve winning and losing — quasi war. Our children play with electronic war games. Back when I was young, we played cowboys vs. Indians. Today, kids play me vs. aliens. And there were our wars with Britain and Mexico. Heck, we even invaded Guatemala and Panama, for heavens sake, not to mention (please don’t) Vietnam and Korea. And remember Desert Storm?

And just think; we’re the good guys!!

Not only do we kill humans in wars and drive-by shootings and assorted other crimes, but we kill the less intelligent animals. We do it just for the pleasure of killing. It’s called “hunting.” And we kill for research. And for food.

The “lower” animals kill each other for food and they butt heads for sex. Bacteria kill. Viruses, which are at the lowest end of the life scale kill. It is in the nature of life as we know it, to kill.

And now we wish to find not just life, but intelligent life (“intelligent” meaning almost as smart as, or smarter than, us). Are we nuts?

If alien, intelligent life in any way resembles terrestrial life, the first thing that will happen is, it will want to kill us. For sport. For research. For food. Or simply to take over our planet’s resources. There simply is no question about this. We did it to native Americans. The British did it everywhere. Genghis Khan, Hannibal, Alexander, Japan. We kill.

If we’re lucky or unlucky, depending on how you look at it, they won’t kill us; they’ll enslave us — then kill us and eat us. We’ve done the enslaving thing, too.

The universe has existed for a bit under 14 billion years. The earth has not existed for even half that time, at less than 5 billion years. Homo sapiens have walked the earth for only 200,000 years and evidence for what we call “civilization,” i.e. permanent settlements, is merely about 10,000 years old — less than one millionth of the age of the universe.

Then consider the massive advances in our war capabilities in less than the past 100 years. The America of today could destroy the World War II America in an hour. Keep that in mind as you consider the likelihood we would discover intelligent life only 100 years more advanced than us. They would rule us at the twitch of their little fingers (assuming they have little fingers). They’d enslave us, or eat us or experiment on us or use us for hunting or other amusements.

Or what if they were 100 years less advanced than us. We’d do the same to them. It’s in our nature; it’s in the nature of life as we know it, “red in tooth and claw” (Tennyson).

So while finding some form of life might be exciting, finding intelligent life could destroy us, and our only hope is that the universe is so large, they couldn’t get to us. Yet even knowing this, there is in the back of my mind, that nagging hope we find them, somewhere. And I don’t know why.

Do you feel the same?

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

==========================================================================================================================================
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:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports

#MONETARY SOVEREIGNTY

Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
==========================================================================================================================================

Huff Post
Nancy Pelosi Says She’d Back Simpson-Bowles Plan
04/27/2012

WASHINGTON — Two progressive organizations have found themselves in the unusual position of being on the opposite side of House Democratic Leader Nancy Pelosi. Over the course of the past two years, the former House Speaker has been the most significant obstacle to the ongoing effort to slash entitlements and cut social spending.

But a series of recent comments, and reports that Pelosi was willing to accept draconian cuts as part of a debt-ceiling deal, have liberals worried that their most powerful and passionate defender may be buckling on the issue.

I’m no longer surprised that Pelosi (as stalking horse for President Obama) would sacrifice Social Security and Medicare in favor of the ridiculous, completely unnecessary anachronism, known as the “debt ceiling.”

Obama is a liberal only by comparison with the Tea/Republicans. Today, we have no liberals. The liberals are conservatives and the conservatives are fascists.

During a recent press conference, and again during an interview with Charlie Rose, the California Congresswoman said that she would support what’s known as the Simpson-Bowles plan. The co-chairs — former Republican Sen. Alan Simpson of Wyoming and Morgan Stanley director Erskin Bowles, a Democrat — have worked recently to revive it, and the political class speaks of it as if it passed and is an official recommendation of the commission.

The “political class” speaks of it as though it actually made any sense, which of course, it doesn’t.

At the end of March, a version of the Simpson-Bowles plan was given a vote on the House floor. It was annihilated, 382-38, with Pelosi and most Democrats voting against it.

But Pelosi, the day after the vote, said that she could still support the plan if it stuck more closely to the original version put out by Simpson and Bowles. “I felt fully ready to vote for that myself, thought it was not even a controversial thing … When we had our briefing with our caucus members, people felt pretty ready to vote for it. Until we saw it in print,” she said. “It was more a caricature of Simpson Bowles, and that’s why it didn’t pass. If it were actually Simpson-Bowles, I would have voted for it.”

Heaven help the working poor. Or the non-working poor. Or the working or non-working middle class. Or all of America.

Yet when the Simpson-Bowles plan had been originally unveiled, Pelosi called it “simply unacceptable.”

The Simpson-Bowles plan is a mix of tax increases and spending cuts that trims four trillion dollars off the deficit in ten years. Its cuts to social spending and entitlement programs made it “simply unacceptable” to the Democrats’ liberal base almost as soon as it was announced. Pelosi’s rhetorical retreat from that hard-line position has progressives worried they’ll have nobody left to defend the social safety net, even Medicare and Social Security.

Wake up, America. Obama is not whom you thought he was. He’s far right wing on everything except, perhaps, Israel. The problem is, Romney is exactly whom you think he is: A clueless rich man, who will say anything, no matter how nuts, to tell you what he thinks you want to hear.

So the November choice will be: The Fraud vs. the Sleaze. You decide who is who.

The Washington Post reported:

[President Obama] warned Senate Majority Leader Harry M. Reid (D-Nev.) and House Minority Leader Nancy Pelosi (D-Calif.) that he might return to the position under discussion the previous Sunday — that is, cuts to Social Security, Medicare and Medicaid in exchange for just $800 billion in tax increases.

Perfect: Cut Social Security, Medicare and Medicaid, and additionally increase taxes by $800 billion, thereby assuring a recession if we are lucky and a depression if we’re not.

The Democratic leaders “kind of gulped” when they heard the details, [White House chief of staff William] Daley recalled.

Gulped? How about them having the backbone to shout: “This if f*cking stupid. How can you grow the economy with spending cuts and tax increases?”

Remember, Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports

But cuts to Social Security and Medicare will decrease Federal Spending, decrease Private Investment and decrease Consumption, while a tax increase also will decrease Private Investment and decrease Consumption. With all elements of GDP decreased, what would increase GDP?

I’m just coming around to thinking that Obama will be remembered as the worst President since Jimmy Carter — maybe worse, yet. And then, I start to think of Romney as President . . .

Yikes.

Please folks, contact your Senators and Representatives. Don’t bother trying to explain Monetary Sovereignty to them. They never will understand it. Just tell them: “If you cut entitlements and/or raise taxes, I won’t vote for you.” That, they’ll understand.

Five dunce caps to Pelosi, each to be shared with Obama. (Two people can share one hat if the heads are small enough.) Fortunately there is no Simpson-Bowles committee on dunce caps.

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

==========================================================================================================================================
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:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports

#MONETARY SOVEREIGNTY