There is one thing the GOP is doing right, and they even don’t talk about it. Monday, Mar 6 2017 

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

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It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders..
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There is one big thing the Republicans are doing right (no pun intended), and not only don’t they talk about it, some of them may not even realize it:

IRS income tax audits plummet as agency faces budget cuts
Christian Science Monitor, Ben Rosen, March 6, 2017

Americans filing income tax returns this year can worry less about being audited, after the Internal Revenue Service said budget cuts and a reduced staff are to blame for it auditing the fewest number of people in 13 years in 2016.

The lower number of audits the IRS performed in 2016 – down 16 percent from the year – are part of a six-year trend started by Republicans in Congress.

After they took control of the House and Senate in the 2010 elections, Republicans shrunk the agency’s budget from $12.2 billion to $11.2 billion last year, citing the IRS alleged singling out conservative political groups for extra scrutiny when they applied for tax-exempt status in the 2010 and 2012 elections.

The Republicans hate federal taxes, as well they should. Unlike state and local tax dollars, which are recirculated through the economy, federal tax dollars are removed from the money supply the instant they are received.Image result for sucking dollars

By definition, federal taxes (i.e.sucking dollars from the economy) reduce Gross Domestic Product, and that is why federal taxes are recessionary. (GDP=Federal Spending + Non-federal Spending + Net Exports)

So the Republicans are right to cut IRS funding, as a way to reduce tax collections. It makes economic sense.

But the IRS Commissioner, not a part of the controversy, says the cuts are costing the federal government between $4 billion and $8 billion a year in uncollected taxes.

“We are the only agency if you give us more people and money, we give you more money back,” John Koskinen told the AP.

Translation: “If you give us more money, we will remove more dollars from the economy. Give us enough dollars and we will give you a depression.”

In the face of budget of cuts, the IRS lost more than 17,000 employees since 2010, nearly one-fifth of its total staff. This includes the loss of nearly 7,000 enforcement agents.

Losing employees does exacerbate unemployment. But collecting more taxes is really bad for the economy.

Republican lawmakers have defended the IRS cuts, mentioning the alleged mistreatment of conservative groups.

“Go look at all the areas where they’ve wasted money, mismanaged taxpayer resources,” said Rep. Jim Jordan (R) of Ohio. “Not to mention the fact that, you know, one of the reasons we went after them so hard is they did target people for their political views.”

See, it’s like this:

We, the GOP,  tell you that more taxes should be collected (to balance the budget) even though this isn’t true.

But, we’ll overlook what we tell you is good for the economy because we are angry at the IRS. So there!

We cut the IRS budget because they picked on conservatives, even though we want more taxes to “pay for” additional military spending. (O.K., federal taxes don’t pay for anything, but you don’t know that.)

So here is what we plan to do. We’ll cut spending for Social Security and Medicare benefits, because the rich don’t care about those, and we’ve convinced you the federal government is running short of dollars.

We also will cut spending for Medicaid, ACA, and all benefits for the poor, because the rich don’t collect those, either, and again, you think the federal government can run out of its own sovereign currency.

And we’ll cut tax ratesbecause the rich pay the highest rates, and because we know federal taxes don’t pay for anything. (We also will create more loopholes for the rich, because they give us lots of money.)

And you, the public, will go along with all this because we have brainwashed you into believing federal taxes are necessary to fund federal spending, and the rich supposedly are the “makers” while the poor are the “takers.”

If you go along with the GOP’s “reverse Robin Hood” (take from the middle and poor, and give to the rich), you are going to love the next four years.

Rodger Malcolm Mitchell
Monetary Sovereignty

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ECONOMICS LAWS

•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.

•The more federal budgets are cut and taxes increased, the weaker an economy becomes..

•No nation can tax itself into prosperity, nor grow without money growth.

•Cutting federal deficits to grow the economy is like applying leeches to cure anemia.

•A growing economy requires a growing supply of money (GDP = Federal Spending + Non-federal Spending + Net Exports)

•Deficit spending grows the supply of money

•The limit to federal deficit spending is an inflation that cannot be cured with interest rate control. The limit to non-federal deficit spending is the ability to borrow.

•Until the 99% understand the need for federal deficits, the upper 1% will rule.

•Progressives think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

•The single most important problem in economics is the Gap between the rich and the rest.

•Austerity is the government’s method for widening the Gap between the rich and the rest.

•Until the 99% understand the need for federal deficits, the upper 1% will rule.

•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

MONETARY SOVEREIGNTY

Trump smarter than mainstream economists? Maybe. Tuesday, Aug 9 2016 

Donald Trump may have, as he claims, “a very good brain,” but way too many of his comments originate in his gut.

He is all over the place, a former Democrat, now a Republican, but at odds with the Republican Party.  He is so unfocused he needs a Vice Presidential candidate to “explain what Trump really meant.”

That said, like the proverbial stopped clock, which is right twice a day, he may have some good ideas that mainstream economists would be well to examine.

Chicago Tribune:  Trump’s economic proposals were split between traditional GOP policies, like rolling back taxes and easing federal regulations, scrapping trade pacts and pouring new money into railways, highways and other infrastructure.

Trump’s plans left many economicst skeptical, as did the absence of detail on how he would pay for his proposals.

Rolling back federal taxes is a good idea if it is done from the bottom up, to narrow the Gap between the rich and the rest. Unfortunately, it’s unlikely to work that way, as his previous proposals aided the rich more than the non-rich.

Easing federal regulations is a terrible idea that caused the Great Recession of 2008. It allows the money barons to set the rules — the sharks in charge of the bathing beach.

Scrapping trade plans is a bad idea — and overly simple solution, made to appeal to simpletons. We can’t leave American trade rules in the hands of the big corporations, but trade plans are needed. They should be designed to ease trade while benefitting the lower income groups.

Deficit spending on infrastructure is more than a great idea; it is an absolute necessity. Those arguing against this spending are arguing for the rusting and destruction of America.

But the key problem comes with the phrase, “how he would pay for his proposals.” It is a version of the “Big Lie” (the lie that federal taxes are needed to fund federal spending.)

The federal government, being Monetarily Sovereign, can pay for anything, and do it without collecting taxes. That is what being Monetarily Sovereign means.

All decent economists are well aware that asking how the federal government would pay for spending, is almost like asking how the Pacific Ocean will supply salt water (except that our Monetarily Sovereign federal government has a greater ability to supply dollars than the Ocean’s ability to supply salt water).

Trump also promised a major buldup of the military at an unspecified price, and he has vowed to resist pressure by fellow Republicans to curb Social Security and Medicare, a pledge he did not mention Monday.

Building the military not only protects our interests but stimulates the economy. Complaining about terrorists, while cutting defense  spending, is like complaining about mosquitos while cutting holes in the screens.

The right-wing desire to “curb” Social Security and Medicare is a disgrace. It would impoverish millions of Americans for no reason at all. Neither Social Security nor Medicare could run short of dollars, unless Congress and the President wished it.

“It can’t add up is the bottom line,” said Roberton Williams, a senior fellow at the Urban-Brookings Tax Policy Center, and nonpartisan think tank.

Translation: “Nonpartisan” always means: Being neither Republican nor Democrat, but doing exactly what the rich want done, and saying exactly what the rich want said. 

And “add up” means: “We hope you’ll believe the Big Lie that federal spending is funded by federal taxing. In that way, we can give you phony excuses to prevent the government from helping close the Gap between you and the uber-rich.”

He initially proposed simplifying individual income tax rates with three brackets — 25 percent, 20 percent and 10 percent.  Trump increased those Monday to align with House Republican plan that calls for rates of 33 percent, 25 percent and 12 percent.

Prior to those changes, a Moody’s Analytics report concluded that Trump’s economic agenda would thrust Americans into a lengthy recesslion, create “very large deficits” and burden the country with “a much higher debt load.”

Trump is far more liberal than the Republican leaders, who want the 99% less wealthy / less powerful Americans to pay as much tax as possible.

The 33% tax rate on the rich is fake; no rich person pays the highest rate. That’s what tax shelters, tax havens, and tax dodges are for.

The biggest tax shelter for the “not-rich” is the 401K plan, which is taxed at the highest form of income rate, as soon as money is taken out. (Even if your 401K investments have long-term capital gains, which normally are taxed at a low rate [for the rich] you will be taxed at the higher rate when you take the money.)

And then we come to Moody’s, one of the three credit rating agencies that rated worthless securities AAA, which helped cause the Great Recession of 2008. Thank you Moody’s. Why anyone believes anything they say, is a mystery.

“Very large deficits” are the method by which the federal government grows the economy. “A much higher debt load” means much higher investments in T-security accounts at the world’s safest bank.

Neither federal deficits nor federal debt are a burden on the government, on taxpayers or on anyone else. The government cannot run short of its own sovereign currency.

In summary, Moody’s comments are as diametrically wrong as it is humanly possible;  Trump, as wrong as he is, is much closer to being correct.

Bottom line: Trump has no coherent economic plan, and what little plans he offers are riddled with inconsistencies and false assumptions.

Nevertheless, Trump’s inconsistent and false plans are closer to reality than the gigantic, humongous lies of the Republican Party, the Urban-Brookings Tax Policy Center, and Moody’s.

When you’re farther from reality than Donald Trump, wow, that is saying something.

Rodger Malcolm Mitchell
Monetary Sovereignty

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Ten Steps to Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich afford better health care than the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefiting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be an good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY

Opportunity lost: UK and Greek versions. What do they have in common? Wednesday, Jul 8 2015 

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
**Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
**The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
**Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
**The single most important problem in economics is
the gap between rich and poor.
**Austerity is the government’s method for widening
the gap between rich and poor.
**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.
**Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

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In the U.S., and perhaps elsewhere, we speak of “snatching victory from the jaws of defeat,” but it is the ironic anagram, “snatching defeat from the jaws of victory” that is most appropriate, here.

Here is the UK version:

Osborne spells out new, post-election spending cuts
LONDON | BY WILLIAM SCHOMBERG AND DAVID MILLIKEN

Chancellor George Osborne, fresh from a decisive election victory, pledged to recast the country’s economy by chopping welfare spending, lowering the tax bill for workers and tackling low productivity that could undermine the recovery.

In the first solely Conservative budget for nearly 20 years, Osborne used the turmoil in Greece to argue that the world’s fifth-largest economy needed less spending and less borrowing.

“Britain still spends too much, borrows too much,” Osborne told parliament.

“You only have to look at the crisis unfolding in Greece as I speak, to realise that if a country’s not in control of its borrowing, the borrowing takes control of the country,” he said.

Osborne pushed the target of achieving a budget surplus into the 2019/20 financial year from the 2018/19 financial year as projected under his previous budget plan.

Osborne, who has previously said he wants to tackle Britain’s hefty bill for tax rebates to low-paid workers, said he would freeze working-age benefits for four years.

“The benefits system should not support lifestyles and rents that are not available to the taxpayers who pay for that system,” he said.

Anyone reading that article would assume the UK is a monetarily NON-sovereign, euro user.

The line, “Britain still spends too much, borrows too much,” is exactly what the leader of a euro nation legitimately might say.

Even Osborne pretends Britain is monetarily non-sovereign like Greece.

But, of course, Britain is not Greece. Far from it. Britain did not surrender its Monetary Sovereignty (MS) to the troika, instead wisely retaining its own sovereign currency.

That was a brilliant move.

As a MS nation Britain retained total control over its money supply. Britain never can run short of its own currency. It creates money ad hoc, by spending.

Contrary to what Osborne claims, British taxpayers do not fund British spending. Even if all tax collections fell to zero, the British government could continue spending, forever.

The only reason — and I mean the ONLY reason — to cut spending, is in response to the threat of inflation. Even then, one should try other means first, i.e. increasing interest rates.

And borrowing cannot “control” a MS nation. First, the nation never needs to borrow; it has the unlimited ability to create its currency.

And second, even if it does borrow, it has the unlimited ability to service any debt of any size.

So Osborne lies — and lies — and lies.

He and his conservative party “chop welfare spending,” the spending that benefits the UK’s poorest citizens.

Why? What kind of morality causes a government to punish its weakest and poorest?

The conservatives cut spending for the poor, because they can. The poor have no power; the rich have the power, and greedily, wish to have even more.

Cruelty to the poor never is punished. It is rewarded.

Finally, the notion of achieving a surplus (taxes greater than spending) is outrageous for a MS nation. Why would a government that can create money at will, want to take more money from its own economy than it gives back?

What does this do to an economy? Shrink it, of course. What else could a reduction in funds possibly do?

Why shrink the economy? Because the rich are less affected than the rest, so the Gap widens. In a shrinking economy, the middle class becomes more desperate for work, thus increasing the power of rich employers.

In summary, the UK might just as well have adopted the euro, become monetarily non-sovereign and lost control over its money supply, because its government acts as though it has done just that.

Given its retention of Monetary Sovereignty, the UK could have been the greatest, most powerful nation in Europe.

Ah, those sad words, “could have been.”

Instead, the UK government has snatched defeat from the jaws of victory. Watch as the UK slowly sinks into recession, then depression.

Opportunity lost.

And now comes Greece:

Greece news live: Athens submits three-year rescue request after Alexis Tsipras is torn apart by euro MPs

Greece applies for a new three-year bail-out program after Tsipras is warned banking collapse and humanitarian crisis are four days away

George Saravelos at Deutsche Bank thinks Athens will have to bow down and accept much harsher bail-out conditions than those they have previously had rejected by creditors.

With banks closed, economic activity stalled, and the prospect of IOUs only days away, Mr Saravelos estimates any new three-year bail-out will come with harsher fiscal measures attached.

Greece has come within inches of pulling away from the slavery of euro-imposed austerity, only to see its leaders “bow down” to the troika, and submit a new bail-out plan.

Greece could have been Monetarily Sovereign. It could have had the unlimited ability to control its money supply, pay all its bills and support its own citizenry.

Instead the Greek leaders have caved to the rich bankers, and Greece will return to even worse poverty and misery.

What do the UK and Greece have in common? They are controlled by the very rich, whose primary goal is to widen the Gap between the rich and the rest.

Remember, it is the Gap that hands power and control to the rich. Without the Gap, no one would be rich, and the wider the Gap, the richer they are, and the more power and control they have.

[If everyone had $1 million, no one would be rich and no one would be in control. But if one man has $1 thousand, while everyone else as only $1, that one man is rich, powerful and has control.]

It is power and control that the rich want, and a widening Gap gives it to them.

So the UK and Greece will continue to do the bidding of the rich, widening the Gap, handing ever more power and control to the rich.

The Greek people voted. They wanted freedom from troika-imposed austerity. They wanted more control over their lives.

But their government will hand it back.

As for the British people, they have a history of bowing to royalty, don’t they?

Weep for the people.

Opportunity lost.

Rodger Malcolm Mitchell
Monetary Sovereignty

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Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
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10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

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.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

–Will the Greek people finally stop being the geese who lay golden eggs for the rich? Tuesday, Jul 7 2015 

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
**Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
**The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
**Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
**The single most important problem in economics is
the gap between rich and poor.
**Austerity is the government’s method for widening
the gap between rich and poor.
**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.
**Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

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Will the Greek people finally stop being the geese who lay golden eggs for the rich?

Sometimes I feel we’re in an endless, time-loop, “Groundhog Day” movie, when I read articles like the following:

Greece faces last chance to stay in euro as cash runs out
Reuters: By Paul Taylor and Renee Maltezou

Greek Prime Minister Alexis Tsipras had a final chance to present credible reform proposals to an emergency euro zone summit on Tuesday to persuade skeptical creditors to reopen aid talks before his country’s banks run out of money.

With Greek lenders down to their last few days of cash and the European Central Bank tightening the noose on their funding, Tsipras must convince the bloc’s other 18 leaders, many of whom are exasperated with five years of crisis, to authorize negotiations fast on a new loan to rescue Greece.

Apparently, nothing has been learned. Still there remains the belief that Greece should have yet another “loan rescue,” so as to remain with the euro.

Still there remains the belief that Greece should present “credible reform proposals” (i.e more and more punishing austerity), so it can bleed its own people to pay the troika loan sharks.

Those “other leaders” of the block have become “exasperated” with five years of crisis, a crisis they created by inventing a financial union without a political union.

In my personally gratifying “I-told-you-so” mode, I repeatedly remind you of what I first said in a June 5, 2005 talk at the University of Missouri, KC:

“Because of the Euro, no euro nation can control its own money supply. The Euro is the worst economic idea since the recession-era, Smoot-Hawley Tariff. The economies of European nations are doomed by the euro.”

And now, it is ten years later, and still we read an article about how Greece must convince its rapacious lenders to allow it to burn in the frying pan of economic ignorance and misery.

So deeply in debt you cannot pay? Well, then borrow some more. That is the troika’s self-serving solution.

And now it is four years after I posted: There are two, and only two, long-term solutions for Greece and the other euro nations. (Thursday, Nov 3 2011), which included these lines:

In giving up the drachma, and taking on the euro, Greece voluntarily surrendered the single most valuable asset any nation can have: Its Monetary Sovereignty.

Greece now is monetarily non-sovereign. There is an absolute rule in economics: No monetarily non-sovereign government can survive long term without money coming in from outside its borders. Germany, another nation that gave up its most valuable asset, the mark, and also is monetarily non-sovereign, survives on exports.

Nevada, which also is monetarily non-sovereign, survives mostly on tourism (aka gambling). No monetarily non-sovereign can survive long-term on internal taxes or borrowing.

By contrast, Monetarily Sovereign nations do not need money coming in from outside their borders, because they create unlimited money simply by paying bills.

For Greece and the other euro nations, long term survival requires one of two, and only two, events:

1. Adopt some form of a sovereign currency, and become Monetarily Sovereign
or
2. The EU give (not lend) euros to its member nations as needed.

Event #1 requires reversing the ill-fated switch to the euro.

If Greece re-adopts the drachma, and becomes Monetarily Sovereign again, it can free itself of the appropriately despised austerity, and build its economy.

Other euro nations, especially those with a negative balance of payments, soon will follow.

Or, if Europe adopts event #2, and creates a political union, perhaps a form of “United States of Europe,” it could become the most powerful economic force in the world, surpassing even the U.S. and China.

Long term, which path will Europe follow?

Europe will follow the path the bankers and the super-rich feel will be most profitable for them.

Very little consideration will be given to the welfare of the populace, the same lack of consideration for the people that led to the creation of the euro.

Despite you have been told, the purpose of the euro never was to ease trade, nor was it to establish peace in Europe. The purpose was to give the rich bankers, the troika (European Central Bank [ECB], the European Commission [EC], and the International Monetary Fund [IMF]), absolute control over the people.

Remember, Monetary Sovereignty is the most valuable asset any nation can have. With Monetary Sovereignty, a nation can buy anything it wishes. It can buy prosperity. It can buy health, housing, education, food, convenience and pleasure for its citizenry.

By adopting the euro, each member nation handed over its most valuable asset to the small group of politicians. And oh, how the bankers loved it.

They could lend euros to nations already deeply in debt, knowing they had the financial blackjack of the troika on their side. They could suck the life out of the people, via ever-greater taxes and ever-smaller benefits — and it all was in the name of “fiscal prudence.”

If the people complained about austerity, it became a moral issue. They were “lazy takers,” who were part of a “welfare society” and who “expected the government to take care of them.”

It was a no-lose, highly profitable situation for the rich, so long as the populace didn’t get wise to the scam.

Now, that the Greek people have wised up, the rich desperately are trying to hang on to the geese who have been laying those golden eggs.

My prediction: The rich will find a way to continue the racket, just in a different form. The only way this could change is in the rare circumstance where a strong and caring leader emerges.

Do you see any such on Europe’s horizon?

Or will the geese keep on a’layin’?

Rodger Malcolm Mitchell
Monetary Sovereignty

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Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
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10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

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.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

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