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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I first thought it was ignorance, then stupidity. Now, I’m convinced it is insanity: The notion that cuts in federal spending, along with increases in federal taxes, will is some magical way, grow the economy.

No rational human could believe applying leeches will cure anemia, but that is what Congress and the President tell the American people: Cut off the arms and legs and head and heart of the economy to create health, wealth and happiness. Yikes!

Here are a few excerpts from the latest folly:

White House threatens to veto student loan bill
By ALAN FRAM | Associated Press

WASHINGTON (AP) — The White House threatened a veto Friday of a Republican bill keeping the interest rates on federal student loans from doubling this summer, objecting that the measure would finance its $5.9 billion cost by abolishing a (preventive) health care program.

The veto warning came as GOP leaders hunted for votes for the measure, which they were trying to push through the House. They were running into opposition from outside conservative groups like the Club for Growth, which was pressuring Republicans to oppose the legislation because, they said, the government should not subsidize student loans.

Abolishing a preventive health care program will benefit the nation??? And the ironically named “Club for Growth” thinks the government should not subsidize education. Well, what should the government subsidize if not education?

Republicans noted that many Democrats had voted earlier this year to take money from the preventive health fund to help pay to keep doctors’ Medicare reimbursements from dropping. Obama’s own budget in February proposed cutting $4 billion from the same fund to pay for some of his priorities.

Hmmm . . . Pay doctors, but reduce illness prevention. Wonder who thought of that gem?? This is what happens when you begin with the false premise that deficits must be You confront economic realities.

The House bill would keep interest rates for subsidized Stafford loans at 3.4 percent . . . Senate Democrats (would extend) the lower interest rate and pay for by boosting payroll taxes paid by high-earning owners of some private firms. Republicans oppose it.

Sadly, neither the Democrats nor the Republicans understand or will admit that federal taxes do not pay for federal spending. If federal taxes rose to $100 trillion, gazillion or fell to $0, neither event would affect by even one penny, the federal government’s ability to spend.

So they run wildly in circles, trying to figure out how to pour two gallons of milk from a one-gallon bottle, when all they need do is buy an additional bottle. Those who do not understand Monetary Sovereignty do not understand economics.

Friday’s vote comes with congressional Republicans and Democrats, as well as Obama and his near-certain GOP opponent this fall, Mitt Romney, competing at every turn over who has the best prescription to wring jobs out of the still-struggling economy. The student loan battle fits nicely into that theme, with 7.4 million low- and middle-income students and their parents reliant on Stafford loans and a college education symbolizing the ticket to economic success.

Will someone please tell the “Club for Growth”?

On Thursday, Boehner tried putting the focus on Obama’s travel this week to three college campuses. He said Obama should repay taxpayers for the use of Air Force One for the trip.

Never mind that taxpayers do not pay for federal spending.. Boehner’s legacy will be as the fool who said the Monetarily Sovereign U.S. is “broke.”

For House Minority Leader Nancy Pelosi, D-Calif., the emphasis was the GOP’s cuts in the preventive health program, whose initiatives she said include breast cancer screening and children’s immunizations. She contrasted that with a Democratic bill extending the low student rates by cutting subsidies to oil and natural gas companies, which is opposed by the GOP.

Pelosi characterized the Republican view as, “‘We prefer tax subsidies for big oil rather than the health of America’s women.'”

These arbitrary trade-offs are amazing. Who decided on health vs. oil? How about Congressional salaries vs. oil? How about military cost overruns vs. Secret Service hookers? Who decides on these weird tit-for-tats?

Heritage Action for America, a conservative group, was lobbying Republicans to oppose the GOP bill and let interest rates rise, saying to do otherwise would burden taxpayers.

Another legacy established. How will the HAA explain their position when people begin to understand Monetary Sovereignty?

Several conservative GOP lawmakers said Thursday they hadn’t decided how to vote. Some Democrats were eager to vote to keep student loan rates low, though it meant accepting GOP health care cuts.

Rep. Gerald Connolly, D-Va., said some Democrats “may feel upon reflection that they’ve got to swallow hard but swallow” those health care reductions. He said he hadn’t decided how to vote.

I award Congress, the President and all those who subscribe to the “cut-deficit” philosophy, five dunce caps, which I will have to pay for by taxing Congress, the President et al, five of the dunce caps previously awarded:

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.
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Sometimes, people argue about one thing, when they really mean something else.

A father tells his daughter not to date John, because John has poor manners, or because John doesn’t have a job, or because John gets poor grades in school, or because John is too fat, or too old or too young, or because John dresses funny.

But what the father really means and doesn’t say is, “Don’t date John because he’s black and we’re white.” That’s personal bigotry. His daughter understands the message.

Now, long after Arkansas Governor Orval Faubus sent the Arkansas National Guard to block school integration, and Alabama’s Governor George Wallace stood in the schoolhouse door, institutionalized bigotry has become somewhat more subtle.

Our Supreme Court’s hearing on Arizona’s disingenuous immigration law is an example. You will hear many comments, explanations and excuses for this law, all of which skirt the central issue: Arizona’s bigots don’t like Mexicans. Period.

Think of the words used to describe illegal immigrants. “Rapid population growth and demographic transformation, downward pressure on wages, the burgeoning crime wave, deteriorating public services and increasing tax-payer burden.” I cut and pasted from a “reasonable,” anti-immigrant web site. The South knows these deceptive words well. They were used to describe the “nigras” of yesteryear.

What is the difference between a legal immigrant and an illegal immigrant? A piece of paper. Nothing more. Otherwise, they look the same. They act the same. They have the same traditions and mores. Undocumented aliens are no more likely to commit a crime than documented, in fact, less likely. They pay taxes, just like the legals, and they aren’t stealing jobs. They create jobs by being consumers. They came here to create a better life — just as your parents did.

There simply is no meaningful difference between an illegal immigrant and a legal immigrant. The lives of Arizona citizens are not affected by the legality or illegality of any immigrant.

The laws on immigration are not like other laws. They are not based on real harm to other people. They are an exclusionary effort by xenophobes, who were lucky enough to have their citizenship, and now invent excuses for why others shouldn’t enjoy the same benefits. It’s what the British term, ‘I’m all right, Jack.”

The legality of an immigrant is just an arbitrary definition that has no effect on you, me or on any other citizen. A change in the law could make all those illegal immigrants, legal tomorrow. How would that change the life of any Arizona citizen? Not at all. Our archaic immigration laws require years and years of jumping through hoops, but serve no useful function for our society. There is no valid reason why a person cannot become a citizen in just a few months.

And, now comes Supreme Court Justice Scalia with the rest of his notorious band. You remember, Justice Scalia, he of the strictly interpreted Constitution (i.e. “I don’t care about people. I only care about 18th century law.”) This is the strict interpreter who presumably would vote for slavery, because our founders had slaves.

During the hearing, he asked sarcastically:

“The state has no power to close its borders to people who have no right to be there?” And, “What does ‘sovereignty’ mean if it does not include the ability to defend your borders?” And, “Are you objecting to harassing the people who have no business being here? Surely you’re not concerned about harassing them.” And, “We have to enforce our laws in a manner that will please Mexico?”

Ah, the innocence of his “reasonable” questions. Why of course a state can close and defend its borders. We see it all the time — those gates and guards on every road between states — don’t we? And no, we don’t have to please Mexico; we can act like the boorish, bullying gringos the rest of the Americas thinks we are.

His “reasonable” comments remind one of another reasonable idea from yesterday: “separate-but-equal.” Bigotry gets its power from “reasonable” people.

This 2nd worst Justice, on one of the truly inferior Supreme Courts in history, tells us he is oh-so-concerned about Arizona’s ability to defend itself and it’s borders. Indiana, in the center of our country, has a similar law. Do they also need to “defend” their borders? Perhaps from Tennessee?

While Scalia is our 2nd worst Justice, he is not alone in his exercise in bigotry and truculence. I predict many on the Supreme Court will assume police have sufficient clairvoyance to determine just by looking, whether a person is illegal, so that without evidence or warrant, they can demand proof of citizenship.

Of course, none blonde and blue-eyed will be interrogated.

This court that gave us Citizens United (because money doesn’t buy elections) and Bush v. Gore (because states’ rights, which suddenly have become important, were meaningless, then) now aches to besmirch its already shameful legacy with yet another outrageous decision.

I predict this Court, with its young, activist (yes, activist) justices, will continue eroding our human and civil rights, and in the future, the Lazarlus poem on Statue of Liberty America will be lost to memory.

Apparently, it already is.

I award Justice Scalia two traitor images.

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.
==========================================================================================================================================

The belief that taxpayers pay for federal spending is so common and so ingrained, there probably is no cure, yet we keep trying.

INSIDE WASHINGTON: Who pays when prez politicks?
By NANCY BENAC | Associated Press – 7 hrs ago

WASHINGTON (AP) — President Barack Obama flies Air Force One when he leaves town. So does Candidate Barack Obama.
Either way, taxpayers are on the hook for a hefty amount.

The souped-up Boeing 747 that typically serves as Air Force One costs $179,750 an hour to operate, according to the latest Pentagon calculations, meaning that expenses for presidential travel mount quickly.

And, no matter what the reason for the president’s trip, there are all sorts of other necessary big expenses anytime he moves around the country: advance teams, cargo planes, armored cars, Secret Service protection, communications and medical staff and more.

Presidents always are quick to stress that they reimburse the government for the costs of their political travel.
That’s true, but they do so under rules that still leave taxpayers paying most of the tab.

Interview 1000 people and 999 will tell you that taxpayers indeed do pay for Presidential travels. And of those, 999 will be wrong. Federal taxpayers don’t pay for anything.

When the U.S. became Monetarily Sovereign in 1971, the government gave itself the unlimited ability to pay any bill of any size — without taxes or borrowing — in fact, without having income of any kind. So who pays for federal spending. The answer: Nobody pays for federal spending. It’s the ultimate free lunch.

The government pays its bills by sending instructions to banks to mark up creditors’ checking accounts. No taxes necessary. No borrowing necessary. Just instructions. Taxpayers don’t pay for federal salaries. Taxpayers didn’t pay for the GSA’s infamous Las Vegas trip. Taxpayers didn’t pay for the Secret Service hookers. Taxpayers didn’t pay for military cost overruns. Federal taxpayers simply do not pay for anything. Period.

The next time you read an article telling you how taxpayers’ money is being spend on any federal project, know this: The author of that article is clueless about Monetary Sovereignty, the basis for all economics. Now repeat after me: Taxpayers do not pay for federal spending.

So why does the federal government require us to pay federal taxes? They have not yet figured out the differences between a Monetarily Sovereign nation and one that is monetarily non-sovereign.

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.
==========================================================================================================================================

On August 15, 1971, the U.S. government became Monetarily Sovereign. The entire world of economics changed on that day. Sadly, the University of Chicago (the school whose economics professors lead in Nobel Memorial Prizes in Economic Sciences), seems never to have learned the difference between Monetary Sovereignty and monetary non-sovereignty.

Professor Gary Becker (one of those Nobel winners), wrote an excellent article that ended on a sour note. The excellent part outlined why the Presidential candidates’ pandering to the manufacturing sector is as economically misguided as was the earlier (and still) pandering to the agricultural sector.

Here are a few excerpts:

Yahoo Finance
A farewell to U.S. factories
By Gary Becker | MarketWatch | 4/25/12

BEIJING (Caixin Online) — Manufacturing employment as a fraction of total employment has been declining for the past half century in the United States and the great majority of other developed countries.
.
Concern about manufacturing jobs has become magnified as a result of the sharp drop in the absolute number of jobs since 2002. . . .if past trends continue, the share of American jobs in manufacturing will probably be lower in the future than it was even as late as 2007.

Past trends have continued. [See the comment section of the previous post, for a graph of this trend.]

Commentators have always lamented a sizable fall in jobs in any large sector of an economy. A prominent example is the huge decline in farm employment during the 20th century in all developed countries.

In 1900, about 40% of American jobs were in agriculture. This fraction continued to drop during that century, despite a host of special subsidies and tax breaks to the farm sector. Only 2.5% of the American labor force has worked on farms during the past couple of decades.

U.S. President Barack Obama, in his State of the Union address, advocated special tax breaks and support for the manufacturing sector. I do not see any more convincing case for subsidies to manufacturing than there was for the special treatment of agriculture during the long decline in farm employment.

So far, so good. I agree wholeheartedly. In fact, there are far better reasons to support a more educated workforce via paying salaries to students.

Instead of singling out manufacturing for special privileges, the U.S. government should get behind certain general policies. High on the list would be raising the rate of growth of the American economy, for this will tend to create jobs in most sectors of the economy.

More government support may be justified for basic research in science and other areas that would also benefit all sectors, not just manufacturing. Local and state governments, along perhaps with the federal government, could try to reduce the dismally high dropout rates from American high schools. Dropouts have trouble finding good jobs even in the best of times, and they suffer the most during recessions.

Looking good. The three posts titled “Salary for attending school” (I, II and III) are most appropriate to the goal of minimizing dropouts.

But, after this great start, Professor Becker ends badly:

Many other steps can be taken to help the American economy, especially by limiting the growth of entitlements and the federal budget.

Yikes! “Help the economy by limiting the growth of entitlements and the federal budget”???!! Is this the kind of nonsense the highly respected, often rewarded U. of C. still teaches?

Does their astronomy department teach astrology? Does their psychology department teach phrenology? Why does their economics department believe the federal government is monetarily non-sovereign?

There is no known mechanism by which a reduction in entitlements and the federal budget can “help the economy.” None. Zero. Zip.

I agree with his conclusion, “The call by many for special treatment of manufacturing jobs is basically misguided,” but why did he have to ruin it by displaying total ignorance of Monetary Sovereignty?

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