Tag: cut deficits

–As a voter, do you want honesty or someone who only will say what he thinks you want to hear?

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 = 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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President Obama’s State of the Union speech told of the many federal spending initiatives and tax cuts he wants. Very impressive. The entire talk might be summarized in this single, 20-second excerpt, from smack dab in the middle:

In the last 22 months, businesses have created more than three million jobs. Last year, they created the most jobs since 2005. American manufacturers are hiring again, creating jobs for the first time since the late 1990s. Together, we’ve agreed to cut the deficit by more than $2 trillion.

That exercise in fantasy leaves us with three questions:

1. How is it possible to cut taxes and increase spending, while cutting the deficit? The President’s answer: Increase taxes on millionaires. Puleeeze! You could tax millionaires 100%, and you still wouldn’t get to $2 trillion, especially with the huge tax cuts on American industry and the federal spending projects he proposes.

2. Why should a Monetarily Sovereign nation, with the unlimited ability to create its sovereign currency, need to, or want to, reduce the life-blood of its economy: Money? What harm has the increase in the money supply (misnamed, the “deficit”) been causing?

3. How will cutting the deficit stimulate employment? There is no known mechanism by which a reduction in the money supply can grow the economy, improve business and increase employment.

So the speech was the usual assemblage of platitudes about the innate greatness of Americans (all of whom are descended from foreigners) and the wonder of America, and our manifest destiny to lead the world and set it free (despite the Patriot Act). The Democrats will be in awe and the Republicans will be in disgust. And the Tea Party . . . well does anyone really care about the Tea Party any more?

It brings to mind a fourth question:

4. When our leaders lie, exaggerate, misstate, cheat and otherwise tell us what we know simply could not be true, why do we calmly write it off as “politics.” Why aren’t we outraged? Why do we keep voting for the Obamas, the Gingrichs, and the Romneys of the world?

Is it simply that we Americans don’t want to hear the truth? Do we prefer to be lulled with fairy tales? Has it become impossible for an honest, intelligent, able, accomplished person to be elected?

If so, who is to blame?

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. 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

–How government regulators are devoted to helping the American people.

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 = 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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Yahoo News: Fannie, Freddie writedowns too costly: regulator
1/23/12

WASHINGTON (Reuters) – The regulator for Fannie Mae (OTC BB:FNMA.OB – News) and Freddie Mac (OTC BB:FMCC.OB – News) told lawmakers that forcing the two mortgage firms to write down loan principal would require more than $100 billion in fresh taxpayer funds.

“Taxpayer funds” is a code phrase meaning, “I want you to think you would have to pay for this, rather than understanding that federal payments do not cost you taxpayers one cent.” Generally, when people say “taxpayer funds,” they oppose federal spending, feeling our Monetarily Sovereign government needs money more than do the monetarily non-sovereign people.

In a letter sent on Friday to the Republican and Democratic leaders of a U.S. House of Representatives government oversight panel, the Federal Housing Finance Agency explained why it has long opposed principal reductions for borrowers who owe more than their homes are worth. It said it had determined that such reductions would be more costly for the two firms than allowing those troubled borrowers to default.

Costly for the government, which as the money-creator, can afford anything, and what about the millions of borrowers, whose lives Fannie and Freddie helped destroy?

The regulator has been under pressure from Democrats to permit the write-down of principal by the two government-controlled mortgage finance providers as a way to help some of the millions of U.S. homeowners who are “underwater.”

FHFA has maintained widespread principal forgiveness would undercut the finances of Fannie and Freddie, which have already received about $169 billion in taxpayer aid. Republicans have supported FHFA’s decision.

Again, the “taxpayer” money myth. Total BS. It’s impossible to “undercut the finances of Fannie and Freddie.

“FHFA has a statutory responsibility as conservator to preserve and conserve the assets and property of the regulated entities,” FHFA’s acting director, Edward DeMarco, wrote in the letter to lawmakers dated January 20.

At last, the real truth: “Conserve the assets and property” of Fannie and Freddie and the federal government.

“Given that any money spent on this endeavor would ultimately come from taxpayers and given that our analysis does not indicate a preservation of assets for Fannie Mae and Freddie Mac substantial enough to offset costs, an expenditure of this nature at this time would, in my judgment, require congressional action,” DeMarco said in the letter.

Translation: Screw the public. Screw the people who lost everything, while bankers made billions. My job is to protect Fannie and Freddie. If Congress wants to help the poor people, they can do it. I won’t. Not my job.

Another barrier to principal writedowns, aside from pushing losses at the two firms even further, DeMarco said, was the costs associated with new technology and training to servicers that would be needed to launch a program that offers principal forgiveness. FHFA told lawmakers that forbearance, which allows the borrower to reduce or suspend payments on a loan for a specific amount of time, is a less costly option. Principal forbearance limits accounting losses and allows Fannie and Freddie to recoup the principal at some later point, according to the letter.

The housing regulator also assured lawmakers that FHFA remains committed to helping borrowers to stay in their homes and will continue to work on such principal forbearance plans and government initiatives to modify or refinance loans.

The key words are “recoup the principal at some later point.” It’s something like debtors prison, where the people never stop owing the government.

The Fed stopped short of endorsing such an initiative and noted concern that writing down loan balances would create a moral hazard – the concept that rescue efforts breed further behavior that exacerbates the existing problem – and could prompt other borrowers to stop making timely loan payments.
(Reporting By Margaret Chadbourn)

The irony of Fannie, Freddie and the regulators, criminals all, worrying about moral hazard, is not lost.

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. 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

–What do you think about the issues and candidates?

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 = 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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Presumably, people favor candidates whose views on the issues parallel their own. Which of the following is the single most important issue for you?

Pro or con?

Abortion
Adultery
Aid to other nations
Aid to the poor
Anti-terrorist security
Big government
Cutting the federal budget
Defending Israel
Gay marriage
Gun control
Immigrants
Marijuana
Preventing global warming
Protecting the ecology
Reducing Social Security benefits
Religion in government
School prayer
Tax cuts
Unions
Universal health care insurance

Speaking of issues and the candidates associated with those issues, what does this graph tell you about the issues and the voters?

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. 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

–The art of misdirection: How to keep the 99% in bondage, by seeming to punish the 1%.

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 = 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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The wealthiest 1% domination over the other 99% is based, in part, on misdirection. Never allow the 99% to understand the real reasons they are dominated. Make them think their situation is natural, even inevitable, and that some other, unrelated situation should be the focus of their anger. Example:

Mr. Paul Krugman, noted Nobel winner, wrote about the federal tax code, specifically that the wealthy 1% paid the lowest rates – and how unfair this is.

Writing about the “unfairness” of the tax code is classic magician’s misdirection. Get people talking about raising taxes on the rich and they’ll miss the whole point. Federal taxes on the rich being too low is much less an issue than federal taxes an the non-rich that are too high. When people fret about rich people’s taxes, they forget about their own taxes.

Here are a few excerpts from Krugman’s article:

Taxes at the Top
By Paul Krugman, Published: January 19, 2012

Although disclosure of tax returns is standard practice for political candidates, Mitt Romney has never done so, and, at first, he tried to stonewall the issue. Then he said that he probably pays only about 15 percent of his income in taxes, and he hinted that he might release his 2011 return.

But the larger question isn’t what Mitt Romney’s tax returns have to say about Mitt Romney; it’s what they have to say about U.S. tax policy. Is there a good reason why the rich should bear a startlingly light tax burden?

In 2008, the most recent year available, the 400 highest-income filers paid only 18.1 percent of their income in federal income taxes; in 2007, they paid only 16.6 percent. The rich pay little either in payroll taxes or in state and local taxes, implying that they faced lower taxes than many ordinary workers.

Most of their income takes the form of capital gains, which are taxed at a maximum rate of 15 percent, far below the maximum on wages and salaries. Mr. Romney’s tax dance is doing us all a service by highlighting the unwise, unjust and expensive favors being showered on the upper-upper class.

Like a stage magician, Mr. Krugman misdirects us. He points our eyes at the rich paying too little, rather than at the BIG issue – the less-than-rich pay far too much.

Raising tax rates that most affect the rich, will do nothing for the middle class and the poor. You could tax every millionaire at the 100% on all their income, and that would not improve the average American’s lifestyle or wealth by even $1.

Almost every tax you can name — FICA, payroll tax, income tax, sales tax — not only is unnecessary, but it hurts the economy and the lower classes far more than the wealthiest.

Visualize this analogy. Each day, the richest 1% buy and wear brand new wardrobes of opulent clothing, and each day throw away the old. The clothing is made by the 99% — that’s their source of income — who themselves wear old rags.

Mr. Krugman tells the 99%, this is unfair; he suggests the 1% change clothing every two days instead of one. The 99% are mollified, because something has been done to hurt the rich, so forgetting they still wear rags.

The moral: If you truly want to keep the 99% in bondage, turn their focus to increasing taxes on the 1%, and make them forget about their own, unnecessary taxes – just as Mr. Krugman has done.

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. 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