Mitchell’s laws:
●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity starves the economy to feed the government, and 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.
==========================================================================================================================================

Every so seldom, a notorious debt-hawk will publish an admission that well, yes, not just federal debt, but growing federal debt is necessary for the survival and growth of our economy.

Washington Post
The reality of trying to shrink government
By Lawrence Summers, Published: August 19, 2012
Lawrence Summers, a professor and past president at Harvard University, was Treasury secretary in the Clinton administration and economic adviser to President Obama from 2009 through 2010.

There is a widespread view in both parties that it is feasible and desirable that in the future the federal government should be no larger as a share of the overall economy than it has been historically.

RMM: Yes, it is the widespread view – the wrong view, but widespread. Unfortunately, no one in either party explains why the government’s share of GDP should be no greater than it “has been historically.” The reason for this omission: There is zero economic significance to the debt/GDP ratio.

Second, exactly what has that “historical” ratio been?

(“FGSDODNS” is federal debt. “GDPA” is Gross Domestic Product)

As you can see, the Debt/GDP ratio has had no relationship with Gross Domestic Product growth, and has bounced all over the place — and there is no “historical” ratio.

For structural reasons, even preserving the amount of government functions that predated the financial crisis will require substantial increases in the share of the U.S. economy devoted to the public sector.

First, demographic change will greatly expand federal outlays unless politicians decide to degrade the level of protection traditionally provided to the elderly. Between Social Security, Medicare, Medicaid and some smaller programs about 32 percent of the federal budget, or about 7.7 percent of gross domestic product, is devoted to supporting those over 65.

RMM: Or we can accept the right-wing extremism of self sufficiency – until those same right wing “John Waynes” reach elderly status, at which time they pitifully will cry, “Help me, help me, I’m old and sick and broke.”

As Americans’ health and life expectancy improve, it may be appropriate to revise upward the assumed retirement age. That would, however, be unlikely to counteract the expected 34 percent increase in the share of the population over the next generation who will be within 15 years of estimated life expectancy.

RMM: “Revise upward” expresses the extreme right-wing, “Work ‘til you drop” philosophy, which again, they are guaranteed to disavow, once they get there. (“What? I have to work until I’m 75? Who will hire me? I’m too weak for the physical labor I once did. Wah wah wah.”)

Second, the accumulation of more debt and a return to normal interest rates will raise the share of federal spending devoted to interest payments.

RMM: Yes, those who invested in Treasury securities, will expect to earn interest on their investment. And then, they will spend that interest money, which will stimulate the economy. And by the way, what is a “normal” interest rate”?

Third, increases in the price of what the federal government buys relative to what the private sector buys will inevitably raise the cost of state involvement in the economy. Since the early 1980s the price of hospital care and higher education has risen fivefold relative to the price of cars and clothing, and more than a hundredfold relative to the price of televisions.

RMM: Fundamentally correct, though the private sector pays for most higher education, which is why we have all those excessively indebted college graduates. In truth, the federal government should finance higher education.

If government is to continue providing the same level of these services, government spending as a share of the economy has to rise, by at least 3 percent of GDP.

RMM: Or, we can do as the Tea/Republican Party wishes, and cut government benefits for the 99%, ala European austerity. That seems to work nicely for Greece, France, Italy, Spain et al, whose people very soon may begin to build guillotines for their leaders.

Fourth, several methods that have been used to repress the deficit, such as federal pension liabilities and the deferred maintenance of federal infrastructure, will soon be unsustainable.

RMM: Right: Spending of pension dollars grows the economy, while infrastructure spending reduces unemployment. And by the way, our Monetarily Sovereign federal government can afford both.

Meanwhile, there is a steady decline in the fraction of tax returns that are audited and evidence of growing tax noncompliance. Both reflect unsustainable cuts in spending. And on almost any reasonable view of the state’s responsibility, large increases in inequality such as those observed in recent years should call forth increased government activity.

RMM: Almost buried in the article is the media-denied fact that federal deficit reductions always increase the gap between the upper income 1% and the 99%. (Yet, in the next election, millions of Americans will vote to reduce the federal deficit. Go figure.)

Defense spending, which represents 4.7 percent of GDP could be reduced significantly. But our military is badly stretched by sustained deployments.

Technology could greatly reduce government costs in some areas, the largest parts of the federal budget involve cash or in-kind transfers (which) are far less susceptible to productivity-enhancing technologies. (Also) efforts to identify waste, fraud and abuse invariably come up with only negligible savings.

RMM: In short, even Lawrence Summers has come to understand there is no economically sound way to reduce deficits and many reasons not to. But that won’t change the minds of most politicians and right wing extremists (Is there a difference?), who will continue to claim, “It is feasible and desirable that in the future the federal government should be no larger as a share of the overall economy than it has been historically.”

For the next three months the nation will debate the merits of growing vs. shrinking government. But for the next three decades the United States will confront the reality that major structural changes in its economy will compel an increase in the public sector’s fraction of the total economy unless the functions that the federal government has long performed are substantially scaled down.

RMM: “The merits of growing vs. shrinking the government” should be the debate, but unfortunately it is not. The debate has devolved to: “How to shrink the government” aka “How to send us into depression while increasing the gap between the 1% and the 99%.”

But at least and at last, Lawrence Summers seems to get it. That’s one. Is there now hope for the rest of the 300 million?

Rodger Malcolm Mitchell
Monetary Sovereignty

Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America

==========================================================================================================================================
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 Imports

#MONETARY SOVEREIGNTY

Mitchell’s laws:
●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity starves the economy to feed the government, and 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.
==========================================================================================================================================

Every so seldom, I need a good laugh. So I read an article by one of the right-wing, high-paid apologists for the upper 1% income group. Take Charles Krauthammer (please). Although what Krauthammer preaches is . . . no other word for it . . . stupid, he himself is not stupid.

No, he’s a smart, bought-and-paid-for prostitute, who apparently has become so rich and so successful duping the innocent, he is sydicated in hundreds of newspapers (most owned by the 1%), and is a panelist on (of course) Fox news (owned by Rupert Murdoch and his family).

Am I too harsh? Should I temper my remarks with civility? You be the judge:

Charles Krauthammer says Ryan could become a major political force
By Charles Krauthammer Washington Post

Krauthammer sneering at you

Vice-presidential picks are always judged by their effect on the coming election. They rarely have any. They haven’t had a decisive influence since Lyndon Johnson carried Texas for John Kennedy in 1960. (That and Illinois put Kennedy over the top.)

Translation: “This is a subtle reminder to you liberals that your hero, Kennedy, stole his election. It’s irrelevant to this article, but I never miss a chance to ‘dis’ the liberals.”

This time, however, the effect could be significant. The Democrats’ ‘Mediscare’ barrage is already in full swing. Paul Ryan, it seems, is determined to dispossess Grandmother, then toss her over a cliff.

Translation: “A ‘Mediscare barrage’ is when you people learn the Ryan plan screws, not Grandmother, but Grandmother’s kids and grandkids. We hope you’re as callous as we are, so will be pleased, when we assure you our dreadful plan doesn’t apply to you, but only to your children.”

Republicans have a twofold answer. First, hammer home that their Medicare plan affects no one over 55, let alone 65. Second, go on offense. Point out that President Obama cuts Medicare by $700 billion to finance Obamacare.

Translation: “The Ryan plan is so wonderful, we want to assure those of you over 55 it will not affect you. No, it only screws those under 55. Feel better?

“And as for that mythical $700 billion, we keep talking about, O.K. Ryan has proposed exactly the same “cuts” in his own budget proposal. (From the Washington Post: “Paul Ryan says he never would have included a $700 billion Medicare cut in his budget if President Barack Obama hadn’t done it first. ‘He put those cuts there,’ Ryan said. ‘We would never have done it in the first place.’”)

Too sad for words

“And O.K., the money doesn’t come out of Medicare benefits, but rather payments to hospitals, which hospitals requested in exchange for the reduced emergency room costs Obamacare provides. But don’t let facts get in the way of my good story.”

For a country with stagnant growth, ruinous debt and structural problems crying out for major entitlement and tax reform? Obama’s “plan” would cut the deficit from $1.20 trillion to $1.12 trillion. It’s a joke.

Translation: “The Romney/Ryan plan would cut the deficit more, by increasing your taxes and reducing your federal benefits, thereby assuring a recession if we are lucky and a depression if we are not. The debt is “ruinous” only if you don’t understand Monetary Sovereignty, which I’m sure you don’t.”

Ryan represents a new constitutional conservatism of limited government and individual opportunity that carried Republicans to victory in 2010, not just as a rejection of Obama’s big-government hyper-liberalism but also as a significant departure from the philosophically undisciplined, idiosyncratically free-spending “compassionate conservatism” of Obama’s Republican predecessor.

Translation: “We don’t want the government telling us what to do and not to do . . . er, ah, except for abortion, which kills babies. (But do carry guns — big guns — which kill everyone.) There, we want the government telling you what not to do.

“And as for ‘compassionate conservatism,’ compassion is for sissies, not for real Americans.”

Ryan’s role is to make the case for a serious approach to structural problems — a hardheaded, sober-hearted conservatism that puts to shame a reactionary liberalism that, with Greece in our future, offers handouts, bromides and a 4.6 percent increase in tax rates.

Translation: “Yes, I know. The U.S. cannot become like Greece, with the former being Monetarily Sovereign and the later being monetarily non-sovereign, but since you are ignorant of economics, I can use the “Greece” word to scare you, and you will believe me.

“And please forget that Obama wants to increase taxes only on the richer people, while I want to “spread the tax base” which will increase taxes on the poorer people, and lower them on the richer people.”

If Ryan does it well, win or lose in 2012, he becomes a dominant national force. Mild and moderate Mitt Romney will have shaped the conservative future for years to come.

Translation: “‘Mild and moderate’ means: ‘I take all positions on all arguments. I agree with you no matter what you think. I even once loved Ryan’s budget, but now I’m not sure whether I do or I don’t, but then again, I’m not sure I don’t or I do – but don’t hold me to that. All I ask is for you to accept my budget, though it doesn’t exist. And please vote for me, whoever I am today or tomorrow.”

The problem with the new conservatism is that it’s fundamentally cold-blooded, describing “freedom” as the freedom from government assistance (which the 99% all need), the freedom to shoot people, especially with really big guns, the freedom to deport aliens, the freedom to force women to raise unwanted children and the freedom to be a bigot.

The old “compassionate conservatism” wanted to improve the welfare of all Americans. The new conservatism makes no such pretense. Rather than “me-first,” it is “me-only,” a conservatism that sneers at the needy for being needy.

It is a rich, white man’s selfish philosophy, and unless you are all four – rich, white, male and selfish — you only will hurt yourself to follow it.

But if you do believe what Krauthammer says, he will sneer at you, ignorant peasant.

Rodger Malcolm Mitchell
Monetary Sovereignty

==========================================================================================================================================
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 Imports

#MONETARY SOVEREIGNTY

Mitchell’s laws:
●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity starves the economy to feed the government, and 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.
==========================================================================================================================================
Sorry for insulting whores, who work hard for their money, but how do you know when a politician is lying? Aside from “When he’s moving his lips,” he will use certain buzz words that tip you off.

In the post, “No, it’s not your imagination. The upper 1% really are screwing you more,” we listed ten ironic “suggestions” for how the upper income 1% can continue to increase the income gap.

Here are those suggestions, together with examples of how they are being followed. The purpose is to show you the context in which politicians use their buzz words to destroy the 99%. Listen for them the next time you hear a politician open his/her mouth:

1. Raise taxes via a national sales tax or VAT. Poorer people devote a greater percentage of their income on consumption.

April 6, 2010: Speaking at a New York Historical Society event, Obama adviser Volcker said a VAT is “not as toxic an idea” as it has been in the past and concluded: “If at the end of the day we need to raise taxes, we should raise taxes.” (Newsmax)

2. To “save” Social Security, tell the 99% it’s “insolvent”, so you must reduce benefits and continue to increase the SS starting age. Also, continue to tax SS benefits, as these benefits are most important to lower income people. Maintain or even increase the FICA tax. This tax directly punishes lower salaried people.

(Mitt) proposes that Social Security should be adjusted in a couple of commonsense ways that will put it on the path of solvency and ensure that it is preserved for future generations.

First, for future generations of seniors, Mitt believes that the retirement age should be slowly increased to account for increases in longevity.

Second, for future generations of seniors, Mitt believes that benefits should continue to grow but that the growth rate should be lower for those with higher incomes.

3. To “save” Medicare, tell the 99% it’s insolvent, so you must reduce payments to doctors and hospitals. That way, more of the best doctors will opt for “boutique” practices that only the 1% can afford. Don’t pay for expensive procedures (that only the rich can manage). Continue to tax medical expenses based on percentage of income. (Poor people get no benefit at all.)

The Obama administration’s own Medicare actuary, Richard Foster, has explained that the Obamacare Medicare cuts could make unprofitable 15 percent of hospitals serving Medicare patients. “It is doubtful that many [hospitals and other health care providers] will be able to improve their own productivity to the degree” necessary to accommodate the cuts, Foster has written. “Thus, providers for whom Medicare constitutes a substantial portion of their business could find it difficult to remain profitable, and, absent legislative intervention, might end their participation in the program (possibly jeopardizing care for beneficiaries.

4. Cut federal salaries and benefits to “save taxpayers’ money.” Federal agencies employ the 99%. Military equipment production companies hire the 99%. Cut postal and other government employment. Cut domestic spending, as the vast majority of domestic spending benefits the 99%.

As the chief architect of the House Republicans fiscal 2013 budget proposal, (Paul) Ryan proposed extending the current federal pay freeze through 2015, cutting the size of the federal workforce by 10 percent through attrition and increasing employee contributions to retirement plans. Ryan says this would save taxpayers approximately $386 billion over 10 years.

Note: Federal taxpayers do not pay for federal spending.

5. “Broaden the income tax base” (code words for increasing the number of lower income people forced to pay taxes). Continue the Alternative Minimum Tax (AMT); it catches more of the 99% every year, and the 1% know how to avoid it.

The Romney plan would reduce individual marginal income tax rates across the board by 20%, while keeping current low tax rates on dividends and capital gains. In addition, he would broaden the tax base to ensure that tax reform is revenue-neutral.

6. Cut federal spending to “stop spending money we don’t have” and to reduce “big government.” The reason: Most federal spending creates jobs for the 99%. Especially cut food stamps, unemployment compensation, Medicaid, aid to education, job training and all other federal aid programs. The upper 1% don’t use them.

“We need to stop spending money we don’t have,” said Paul Ryan at the Iowa State Fair on Monday. “President Obama has given us four years of trillion dollar-plus deficits. He is making matters worse, and he is spending our children into a diminished future.”

7. Cut financial assistance to the states, Medicaid, food stamps and farmers. Virtually everything the states do benefits the 99%, and since the states are monetarily non-sovereign, they have nowhere to get money except by taxing their own people. The rich know how to avoid this.

The House Agriculture Committee on Thursday unveiled its approach for a long-term farm and food bill that would reduce spending by $3.5 billion a year, almost half of that coming from cuts in the federal food stamp program.

8. Continue to spread the myth that the U.S. government — a government having the unlimited ability to create dollars — is, or soon will be insolvent, like Greece, and that federal taxes pay for federal spending. These false ideas confuse the 99% and give you a good excuse to cut anything that benefits them. Continue the federal debt limit exercise. Pretend federal finances are the same as personal finances.

“Washington isn’t broken — it’s broke.” By EDWIN FEULNER and SEN. JIM DEMINT

“The United States is becoming too much like Greece and could easily end up in the same place.” By Peter Morici, June 15, 2012 FoxNews.com

9. Continue to allow banks to trade for their own accounts, and always bail them out when their investments go sour. Never accuse any banker of criminal activity. Banks are special.

Republican congressmen vented Wednesday that a signature aspect of President Barack Obama’s financial reform has become too costly and complex to enforce. The so-called “Volcker Rule”— named after former Federal Reserve Chairman Paul Volcker — would restrict banks from trading for their own accounts, a move intended to prevent them from making risky bets with deposits insured by the government.

At a joint House Financial Services subcommittee hearing, Rep. Spencer Bachus (R-Ala.) attacked the rule as being a “self-inflicted wound” for the entire economy, warning that Wall Street jobs could migrate abroad to Canada after the rule starts to go into effect in July.

10. Nominate more arch conservatives to the Supreme Court. Scalia, Alito and Thomas are good models, who have turned the Court into a right wing political organization. The “Citizens United” decision was an excellent step forward. This assures that the agenda favoring the 1% over the 99%, will have the reinforcement of Supreme Court decision.

New York Times: The Supreme Court examined the Arizona immigration law in minute detail, but when it came to revisiting the damage caused by its own handiwork in the 2010 Citizens United case, it couldn’t be bothered. In a single dismissive paragraph on Monday, the court’s conservative majority refused to allow Montana or any other state to impose limits on corporate election spending and wouldn’t even entertain arguments on the subject.

It is not as if those five justices could have missed the $300 million in outside spending that deluged the 2010 Congressional elections or the reports showing that more than $1 billion will be spent by outside groups on Republican candidates this year, overwhelming the competition.

They might also have seen that many of the biggest donations are secret, given to tax-free advocacy groups in defiance even of the admonition in Citizens United that independent contributions should be disclosed.

The court’s five conservative justices struck down a Montana law that prohibited corporate spending in elections — a law passed in 1912 not out of some theoretical concern about money corrupting elections but to put an end to actual influence-buying by copper barons.

But the frustration of the dissenters, led by Justice Stephen Breyer, was clear. He said grave doubt had been cast on the majority’s belief, expressed in Citizens United, that independent expenditures do not give rise to corruption or even give the appearance of corruption. But he said the majority had made it plain that it hasn’t the slightest interest in reconsidering or altering its decision.

While the real anti-99% dirty work is done by Republicans, Democrats cannot claim complete innocence. They consistently have failed to disseminate the truth, namely that the federal government easily can support all social programs, without taxes and without borrowing.

Yes, it takes courage to argue against popular wisdom, especially when courting voters. But, think back, Mr. & Ms. politician. Why the heck did you run for office, originally? Do you remember when you hoped to do good for America? Do you feel pride, now that you’ve become a crass, meaningless party servant, who “goes along to get along”?

Is political power really worth becoming a lying whore?

Rodger Malcolm Mitchell
Monetary Sovereignty

==========================================================================================================================================
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 Imports

#MONETARY SOVEREIGNTY