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

As I’ve been harping on, the debt-hawk effort to reduce the federal deficit has absolutely nothing to do with fiscal prudence, living within our means, not indebting our children, or any other fiscal platitude. It is part of a program designed to increase the gap between the rich and the not-so-rich. Period.

In that vein, here is a survey I received from my Senator, Mark Kirk:

Should Congress cut contributions to the Social Security Trust Fund (replacing these losses with downgraded Treasury debt) in effort to stimulate the economy?
Yes_____
No _____
Do not know _____

He accompanies this survey with a letter that reads, in part:

Social Security is not a welfare program. It is a retirement security program funded by contributions from each American worker to support senior citizens who met their Social Security obligations when they were asked to contribute to the system.

Congress is considering both Democratic and Republican proposals to cut contributions to the Social Security Trust Fund (also called the “payroll tax”) to stimulate the economy. The government would attempt to recoup these new losses to the Social Security Trust Fund by borrowing more, using downgraded U.S. government bonds. Democratic Senator Joe Manchin (D-WV) and I agree that we should protect Social Security’s Trust Fund . . .

So far, 83.97% of the respondents answered, “No,” meaning they do not want the FICA tax to be reduced. They want more money taken from their pockets and added to a mythical Trust Fund. You can’t fool all the people, all the time, but apparently you can fool 83.97% of them.

First, there is no trust fund. It is an accounting fiction, debited and credited at will, by the federal government.

Second, FICA doesn’t pay for Social Security any more than you can identify which of your tax dollars pay for any other federal spending. The government spends by crediting bank accounts, without regard to taxes, then debiting the general fund. Payroll taxes are not held separate from income taxes. (Truth be told, no taxes are “held.” They all are destroyed upon receipt. But that’s another story.)

Third, the government, being Monetarily Sovereign, doesn’t need to borrow dollars it has the unlimited ability to create.

Fourth, S&P’s downgrading of U.S. debt is yet another fraudulent act by the company that rated worthless mortgage securities, “AAA.”

Fifth, downgrading U.S. debt has no adverse effect on the U.S. economy. It doesn’t affect interest rates (the Fed controls rates), and even if it increased rates, the effect would be positive. High rates are stimulative, because they add federal dollars to the economy.)

Sixth, the question itself is a dishonest, two-part exercise in obfuscation. Most two-part questions are dishonest. Consider: “Should you send your child to school, thereby intentionally exposing him to the risks of deadly, communicable diseases, serious accidents, rampant crime, relentless bullying and bad teaching?” Yes or no?

Is this an honest question about school attendance? Is the statement that SS Trust Fund losses must be replaced with “downgraded Treasury debt” honest? Of course not.

All of this is part of the attempt to have you willingly flush your money down the toilet, increase the gap, and not blame the Republicans for increasing SS taxes. It is a scam far greater than anything Bernie Madoff ever dreamed of.

Think of the trillions that have been taken from working people under the guise of “insurance.” Even the name “FICA” — Federal Insurance Contributions Act — is a lie. It’s not insurance.

FICA, and indeed the entire tax system, is nothing more than a financial version of the Stockholm Syndrome.

In psychology, Stockholm Syndrome is an apparently paradoxical psychological phenomenon in which hostages express empathy and have positive feelings towards their captors, sometimes to the point of defending them. These feelings are generally considered irrational in light of the danger or risk endured by the victims, who essentially mistake a lack of abuse from their captors for an act of kindness. (Wikipedia)

Do you defend politicians, who vote to tax you a bit less, mistaking the reduced tax abuse for kindness? Do you accept your tax abuse, because you believe the government’s fables about the need for austerity?

If so, welcome to tax mythology, where you, the voter, are a puppet, and the richest 1% pull your strings.

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
b>Gross Domestic Product = Federal Spending + Private Investment + Private Consumption + Net exports

#MONETARY SOVEREIGNTY

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

Chutzpah (pronounced with a gutteral “H.” It rhymes with foots pah, and is a yiddish term, meaning unashamed gall. The classic example is the child who kills his parents, then begs the court for mercy because he’s an orphan.

Here is the text of a letter signed by Newt Gingrich:

To Bob Vander Plaats and the Executive Board of The FAMiLY LEADER:

I appreciate the opportunity to affirm my strong support of the mission of the FAMiLY LEADER by solemnly vowing to defend and strengthen the family through the following actions I would take as President of the United States.

Defending Marriage. As President, I will vigorously enforce the Defense of Marriage Act, which was enacted under my leadership as Speaker of the House, and ensure compliance with its provisions, especially in the military. I will also aggressively defend the constitutionality of DOMA in federal and state courts. I will support sending a federal constitutional amendment defining marriage as the union of one man and one woman to the states for ratification. I will also oppose any judicial, bureaucratic, or legislative effort to define marriage in any manner other than as between one man and one woman. I will support all efforts to reform promptly any uneconomic or anti-marriage aspects of welfare and tax policy. I also pledge to uphold the institution of marriage through personal fidelity to my spouse and respect for the marital bonds of others.

Translation: Who knows better than me how to defend marriage? I have cheated on three consecutive wives already, so I always have to defend something. I love cheating so much I was in the midst of one affair, when I began an investigation of President Clinton for obstruction of justice and perjury regarding Ms. Lewinsky. Elect me, and I’ll even cheat you. I will, trust me. I am Newt Gingrich. CHUTZPAH!

Defending the Unborn. I believe that life begins at conception. On day one of my administration, I will sign an executive order reinstating Ronald Reagan’s Mexico City policy that prevents taxpayer dollars from being used to fund abortions overseas. I will also work with Congress to repeal Obamacare, defund Planned Parenthood so that no taxpayer dollars are being used to fund abortions but rather transfer the money so it is used to promote adoption and other pro-family policies, and enact legislation that provides greater protections for the unborn.

Translation: I will prevent government-paid abortions, but have no objection to privately funded abortions. In short, let the poor and middle classes suffer; the rich can pay for anything they want. Oh, you’re in the middle class? Too bad. Because I am going to repeal the law that helps pay for your medical care. But, trust me. I am Newt Gingrich. CHUTZPAH!

As President, I will vigorously defend the First Amendment’s rights of religious liberty and freedom of speech against anyone who would try to stifle the free expression of believers.

Translation: None of the First Amendment applies to atheists or non-Christians, or any people who don’t want their kids indoctrinated in school or court, nor does it apply to #Occupy Wall Street, who are protesting against the wealth gap. Hey, I am rich and am paid millions as a political “consultant” (aka bag man). So, you can trust me. I am Newt Gingrich. CHUTZPAH!

I will also promote legislation that protects the right to conscience for healthcare workers so they are not compelled to perform abortions and other procedures that violate their religious teachings.

Translation: Yes, I know. Doctors and nurses are not required to perform abortions. But some nurses are asked to care for a patient who has had or will have an abortion, and I say, let these mothers die if your religious teachings demand it. Death is good, if it’s of mothers. Trust me. I am Newt Gingrich. CHUTZPAH!

As President, I will undertake vigorous policies to maximize capital investment and job creation, along with common sense entitlement reforms, to dramatically turn around the nation’s fiscal situation. Building upon the same principles I championed during my four years as Speaker, when we reduced the national debt by over $400 billion and dramatically reduced the national debt as a percentage of the GDP, we will reduce the enormous burden upon American families of the public debt and unfunded liabilities.

Translation: And please do not remember that those debt reductions led to a recession, and that I accomplished debt reduction by cutting the capital gains tax on the rich and reducing public welfare for the poor. See how I help the rich at the expense of the poor? The rich trust me. You should too. I am Newt Gingrich. CHUTZPAH!

Today, as federal courts have intervened in sectors of American life never before imaginable, including the intervention in the definition of marriage as well as when unborn life can be protected under the Constitution, the public has increasingly come to view them as an usurpative device for unelected rulers. This abuse of power and loss of public confidence amounts to a constitutional crisis. I believe the executive and legislative branches each have an independent responsibility to interpret the Constitution, and in those rare circumstances when they believe the federal courts, including the Supreme Court, have engaged in a serious constitutional error, they can choose among an array of constitutional powers to check and balance the courts. As President, I will nominate for federal judgeships, including justices of the Supreme Court, only those individuals who are committed to an originalist understanding of the Constitution. Judges with an originalist understanding will subordinate themselves to the meaning of the Constitution as it was intended by the framers, and not substitute their own judgments about its meaning. The inherent judicial self-restraint that comes from an originalist approach to the Constitution offers the best long-term assurance that federal judges will not exceed their powers and trample on individual liberties.

Translation: Don’t worry about an independent Supreme Court, which derives its independence from lifetime appointments. We want “orginalist” judges who will do exactly as we tell them. And, because Congress and the White House are not originalist, you can trust us to overrule the Supreme Court whenever we damn well feel like it. Trust me, even though I was disciplined by the House of Representatives for lack of ethics, I brought ethics charges against Speaker Jim Wright, for using a book deal to get around campaign-finance laws.

And yes, I also engaged in check kiting. I had overdrafts on twenty-two checks, including a $9,463 check to the IRS. And I had 84 ethics charges filed against me, and I was fined $300,000. But trust me to understand the law. I am Newt Gingrich. CHUTZPAH!

I will also work with Congress to use the Constitutional means available to reassert the right of the elected branches of government to defend their understanding of the meaning of the Constitution, including limiting the jurisdiction of the federal courts to decide on certain issues, when they believe the federal courts have engaged in a serious constitutional error.

Translation: Here’s how it works: Members of Congress, not the Supreme Court, will decide what’s constitutional. Doesn’t that make you feel better? Trust me. I am Newt Gingrich. CHUTZPAH!

Sincerely,
Newt Gingrich

Translation: In Newt-speak, “sincerely” means: I’m just mouthing what people want to hear. I don’t really mean it. I’m a very pious, multiple cheater, often liar, often sanctioned crook, who has changed positions more often than I change my underwear – much more often. So when I say “sincerely,” put your hand on your wallet and hide your wives and daughters. Trust me. I am Newt Gingrich. And vote for me. All the suckers do.

Would this face lie to you? CHUTZPAH!

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
b>Gross Domestic Product = Federal Spending + Private Investment + Private Consumption + Net exports

#MONETARY SOVEREIGNTY

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

A persistent message on this blog is that calls for deficit reduction have nothing to do with fiscal prudence, but rather are attempts to increase the gap between the upper 1% and the middle to lower income classes.

Again and again, the media and the politicians tell you the government, like you, must “live within its means,” or “can’t afford” something, whether it be Social Security, Medicare, health insurance, housing and food for the poor, federal employment — the list goes on and on. What they’re really saying is the middle and lower classes either must do with less, or pay more.

Here’s but one of many examples:

Washington post

What the Republican payroll tax plan would mean for federal workers
Federal unions oppose House GOP payroll tax plan
By Ed O’Keefe

House Majority Leader Eric Cantor (R-Va.), left, and House Speaker John A. Boehner (R-Ohio) announced a plan to extend the payroll tax reduction. Talk about timing: Just as most federal employees were leaving the office Friday afternoon, House Republicans announced the details of a plan to extend the payroll tax reduction that would force feds to face another year of frozen pay and to increase contributions toward their retirements.

The broad package would extend the tax cut for another year. It also would extend unemployment insurance and reimbursements for doctors who see Medicare patients . . .
Under the plan, federal workers would face a one-year extension of the current two-year pay freeze, meaning no raise until January 2014 at the earliest, and a 1.5 percent increase in employee pension contributions that would be phased in over three years starting in 2013.

For those who retire in 2013 or later, the government would eliminate the Social Security supplement for workers who retire before 62, unless the employee is in a position with a mandatory retirement age (including law enforcement personnel, for example).

The bill also would create new retirement rules for federal workers hired beginning in January 2013 who have less than five years of previous government service. Those employees would be forced to pay 3.2 percent more of their salaries toward their retirement savings starting in 2013 (although they would not be subject to a further increase as higher contributions are phased in for everyone else). Their retirement benefits would be based on their highest five years of compensation, rather than the highest three, with the net effect that those employees would be paying more for less.

[…]Colleen M. Kelley, president of the National Treasury Employees Union, said it is “outrageous” that Republicans “would single out hard-working middle-class federal employees to bear such a disproportionate burden while continuing to oppose even the smallest sacrifice by the most affluent.”

And then there’s this article:

Christian Science Monitor

Republicans will tax anyone but the rich
By Robert Reich, Guest blogger / December 6, 2011

For years, Republicans have been telling us tax cuts pay for themselves by promoting growth. If they believe what they say, why should they worry about paying for a one-year extension of the payroll tax holiday?
[…]
Here are the details: The payroll tax will increase 2 percent starting January 1 – costing most working Americans about $1,000 next year – unless the employee part of the tax cut is extended for another year.

Democrats want to pay for this with a temporary – not permanent – surtax on any earnings over $1 million, according to their most recent proposal . . . . Republicans say no to the surtax. “The surtax is something that could very much hurt small businesses and job creation,” says John Kyl of Arizona, the Senate’s second-ranking Republican.
[…]
Not even a resolute, doctrinaire follower of GOP president Grover Norquist has any basis for preferring millionaires over the rest of us.. . . So Republican leaders are trying to get rank-and-file Republicans to go along with an extended payroll tax holiday . . . According to their latest proposal, they want to pay for it mainly by extending the pay freeze on federal workers for another four years — in effect, cutting federal employees’ pay even more deeply — and increasing Medicare premiums on wealthy beneficiaries over time.

For years, Republicans have been telling us tax cuts pay for themselves by promoting growth. So if they believe what they say, why should they worry about paying for a one-year extension of the payroll tax holiday? Surely it will pay for itself.

The upper 1% want to increase the gap because widening the distance between them and the 99%, enlarges their power. They can use this augmented power to solidify their control over an already bought-and-paid-for Congress. Absolute wealth is far less meaningful than comparative wealth, so keeping the 99% down is as important as lifting the 1% – at least to the 1%.

This has the support of a right-wing Supreme Court which, for instance, ruled recently that corporations have the same Constitutional rights as American citizens. (Remember, the largest corporations are groups run by tiny and wealthy cabals, whose personal interests may not reflect the interests of their shareholders or employees.)

In short, all the misleading talk about fiscal prudence, discipline and austerity, merely is a covert attempt to put a wise face on a worldwide effort to grow the gap and steal the freedoms of the middle- and lower-classes.

The payroll tax debate is a tiny piece of an ongoing war. You’ll see evidences again and again. The next time you read or hear any debate about national finances, ask yourself: “Is this liable to increase the gap, that is will it help the 1% more or damage the 1% less, than the 99%?”

Keep your eyes open and you’ll see most Congressional money decisions, whether regressive taxes like FICA or regressive tax cuts like capital gains, or efforts to eliminate the health insurance law, all manage to increase the gap. Remember, those Congressional and Presidential votes have been paid for by the 1%.

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
b>Gross Domestic Product = Federal Spending + Private Investment + Private Consumption + Net exports

#MONETARY SOVEREIGNTY

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

The single, most valuable asset any nation can have is Monetary Sovereignty – the unlimited ability to create its sovereign currency, the unlimited ability to pay any bill any time and the unlimited ability to grow economically.

Monetary Sovereignty is more valuable than all the land and all the buildings in a nation. Until now, “only” 17 out of the 27 members of the EU had voluntarily surrendered their Monetary Sovereignty – their most valuable asset. Many are paying the price. Now, all but Britain seem to have joined them in a monumental fiscal suicide pact.

Washington Post:
European Union leaders agree to forge new fiscal pact; Britain the only holdout
By Anthony Faiola, Published: December 9/ 11

BRUSSELS — A landmark summit of the 27-nation European Union ended here Friday with both a pledge and a wedge: A pledge among nations to work toward a new treaty binding them more closely in a pact to save the euro, and a wedge between the continent and Britain, which opted to sit it out.

Rather than trying to save the euro, these nations should be trying to save their economies. Classic tail wagging the dog

In a summit portrayed by leaders as a make-or-break moment in the decades-long march toward European unity after World War II, the outcome signaled the growing clout of Germany and a potentially wayward path for Britain.

In euro-speak, “wayward” describes a nation with the sense not to destroy its own sovereign currency, over which it has total control, in exchange for the failing euro, over which it has no control.

After marathon talks, nations unveiled a deal to quell a debt crisis that is threatening the global economy. The summit organizers announced early Friday that they had agreed to try to forge a new pact centering on strict caps on government spending and borrowing to shore up the euro’s foundations.

In other words: Strict caps on your economic growth together with no ability to recover from recessions and depressions, together with loss of control over your money supply. What could be wrong with that?

But the veto by British Prime Minister David Cameron, a Conservative euro-skeptic who cherishes the pound and looks askance at a heavy European hand in British affairs, underscored his nation’s long unease with relinquishing national powers to the E.U. and left London isolated in a region now moving toward deeper integration without it. His move left Britain’s Guardian newspaper asking, “Will it be splendid isolation or miserable?”

One day, the British will erect a statue of Minister Cameron, alongside that of Churchill and Nelson, and celebrate him as a man who saved Britain.

Without Britain on board, the 26 other E.U. nations face potentially complicated legal obstacles to meet one of the prime objectives of a new treaty: giving fresh powers to E.U. institutions to slap automatic penalties on governments that recklessly spend and borrow.

Rather than coming up with a plan to help nations grow, the EU developed a plan to do the exact opposite, and to enforce that recession-generating plan with penalties. Sort of reminds me of the U.S. Congress and the terrible debt ceiling. Apparently, the Atlantic is no barrier to ignorance.

Leaders have tried, and repeatedly failed, to come up with grand plans to fix the region’s two-year-old debt crisis, allowing troubles that began in Greece to spread to much bigger economies such as Italy and Spain.

As I’ve said repeatedly, there are two, and only two, long-term solutions for euro nations:

1. Return to Monetary Sovereignty by re-adopting their sovereign currencies, or
2. The EU to give (not lend) euros to member nations as needed.

Hungary, the Czech Republic and Sweden agreed to Friday’s deal at the last minute. Along with Denmark, Latvia, Poland, Lithuania, Romania and Bulgaria, they committed only to the possibility of taking part in a treaty after consulting with their national parliaments.

Six more lemmings dive over the cliff. Let us pray these nations’ parliaments have more intelligence than do the negotiators, who have traded their absolute guarantee of eternal solvency for a guarantee of future insolvency.

The leaders of Germany and France, the anchors of the 17 nations that share the euro and the two largest economies in the European Union, hailed the accord as a “breakthrough” that would restore confidence in the euro.

Ah, the “confidence fairy” rears her lovely head. Note to EU: Confidence is something you earn, after you have proven solvency, not before. Reminds me of the guy who dives out a window, and on the way down, shouts, “So far, so good.” That’s the EU brand of confidence.

German Chancellor Angela Merkel declared herself indifferent to whether Britain signed or not. (She) said she had no intention of giving in to a British demand — a written promise that Britain would be free from potentially cumbersome European rules and regulations that could hamper London’s vast financial district. Instead, her message to the British was clear: If you want to be part of Europe, you must submit to its rules.

“I have achieved what I wanted to achieve,” Merkel said.

Yes, Chancellor, if you wanted to achieve the financial destruction of Europe, you’re doing a fine job, perhaps better even than that noted, historic countryman of yours.

French President Nicolas Sarkozy was less delicate, suggesting that the rest of Europe was growing weary of Britain’s independent streak.

What? A Frenchman who doesn’t like another nation’s “independent streak.”?

Cameron, who is one of Europe’s leading advocates of austerity and has enacted historic cuts at home, is actually seen as more moderate on Europe than many fiercely anti-E.U. members of his Conservative Party. . . . In recent days, he had incurred the wrath of his party by suggesting that his primary consideration now should be helping his neighbors save the euro. . . .

Uh oh. Cameron is a leading advocate of austerity? His primary consideration is saving the euro, not saving the pound? There goes his statue. Sic transit gloria.

Rodney Barker, professor emeritus of government at the London School of Economics, said Cameron was in a “precarious position.” While trying to placate his party’s right wing, which wants less involvement in Europe, Cameron also risked making Britain irrelevant with its neighbors.

“You can’t leave a club then complain you’re not involved in its meetings,” Barker said.

What a “risk.” Being “irrelevant” to a group of nations wearing suicide vests. A few years from now, as the euro nations continue to battle insolvency, recession or even depression, and assuming Britain is wise enough to use its Monetary Sovereignty for growth, the British won’t have to worry about “irrelevancy.” They will be the most powerful nation in Europe, and the euro nations will beat a path to their door.

Addressing the problem of high borrowing rates in countries such as Italy, though, may require greater intervention from the European Central Bank, which could print money to lend to countries at affordable rates, or from Germany, which could allow countries to borrow money with guarantees from the full euro zone.

Merkel has previously hinted that she might accept euro bonds — regionwide instruments like U.S. Treasurys that could require German taxpayers to back up the debts of Greeks and Italians — but only as long as other countries bind themselves to deep fiscal overhauls.

Clever: Lend more money to insolvent nations, thereby increasing their insolvency, while simultaneously preventing them from growing. Visualize your brother-in-law, who has maxed out credit cards, now coming to you for a loan – and you give it on the condition he doesn’t invest the money! That’s the EU solution.

The craziness of the EU negotiators qualifies them to run for U.S. Congress, or even the U.S. Presidency, where ignorance of Monetary Sovereignty seems to be a condition of election.

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
b>Gross Domestic Product = Federal Spending + Private Investment + Private Consumption + Net exports

#MONETARY SOVEREIGNTY