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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This goes under the heading, “It would be funny if it weren’t so sad.”

Fin Min says Greek concession would strengthen Ireland’s hand
Ireland seeking ECB help in reducing sovereign debt burden

Feb 8 (Reuters) – Ireland would see any European Central Bank contribution to the restructuring of Greek debt as a precedent that would boost Dublin’s efforts to ease the burden of its own sovereign debt, the country’s finance minister said on Wednesday.

And why not? If the ECB is prepared to screw Greece’s creditors to get Greece off the hook, why not screw Ireland’s, too. And while they’re setting precedent, how about helping Spain, Italy and Portugal avoid their debt?

Ireland, widely seen as the poster child among bailed-out euro zone countries, has been lobbying the ECB to help it reduce the burden of its sovereign debt by cutting the cost to the government of bailing out its banks.

“If the ECB are prepared to make this kind of concession to Greece it would encourage me to think that they might be ready to make concessions on the promissory note to Ireland,” Finance Minister Michael Noonan told state broadcaster RTE.

“I see it, if it occurs, as a strengthening of our negotiating position.”

And fair is fair. If you’re going to reduce the debts of the most flagrant budget busters, how about doing something for countries that have had lower deficits, like France, Finland, the Netherlands, Austria, and please let’s not ignore the needs of Belgium, Estonia and Luxemborg.

And why not even Germany? Just because they arranged their finances, and made their citizens accept a lower standard of living, so the government could pay its debts, why should they have to continue? So long as “screw the private creditors” is now an accepted EU strategy, everyone should be able to slurp from that trough.

Officials from the ECB, European Commission and International Monetary Fund on Wednesday were attempting to broker a deal that would open the way for a 130 billion euro EU/IMF rescue for Greece and avoid a disorderly default.

While the ECB has ruled out joining private creditors in voluntarily accepting losses on its Greek bonds, it could provide indirect relief by renouncing profits from bonds it bought at below face value.

It works like this. The ECB, which being Monetarily Sovereign, so having the unlimited ability to create euros and pay any bills, will not accept losses on its Greek bonds. But private creditors, who do not have this unlimited ability, will take all the losses. If you understand that, kindly explain it to me.

The ECB’s 23-member Governing Council, which holds a regular monthly meeting on Thursday, has yet to adopt a position, but some policymakers are reluctant to share the burden, in part for fear of setting a precedent.

They don’t want to set a precedent??? See, I told you this would be funny.

A precedent already has existed for years. The precedent is this: Euro-using nations, being monetarily non-sovereign, have but two choices: Somehow create a positive balance of payments or drift into an austerity-induced recession. Monetarily non-sovereign governments succeed long term, only if they have money coming in from outside their borders. This applies to all euro nations, the American states, counties and cities.

Germany succeeds by sucking euros from its neighbors, but what are the neighbors to do? It’s highly unlikely that all euro nations can be net exporters. So where are the euros to come from if the EU won’t supply them?

Unfortunately, despite being able to create euros at will, the EU is afraid to run a deficit. They still live in a pre-1971 world – just as the U.S. government does. Debt-hawk ignorance is everywhere.

I award two clowns to the policymakers who fear setting a precedent more than they fear injuring the private sector. Advice to all prospective lenders: Make sure you get high interest rates for those high-risk bonds. Of course, lenders don’t need my advice. They definitely will demand more interest, which will make the next crisis come sooner, which will cause even higher interest rates, followed by an even sooner crisis. And the downward helix continues.

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

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

AARP, formerly, The American Association of Retired Persons is a huge organization that peddles many things. They peddle insurance, publish a magazine, peddle insurance, produce radio and TV programs, peddle insurance, offer travel packages, peddle insurance, provide tax preparation services and, oh yes, they peddle insurance. They also publish on line, various advice bulletins, some of which peddle insurance.

Like virtually all publishers to the masses, AARP is clueless about economics, so repeatedly gives its members wrong information. For instance:

Frequently Asked Questions, 2/10/12
Why can’t the government just print more money to get out of debt?

First of all, the federal government doesn’t create money; that’s one of the jobs of the Federal Reserve, the nation’s central bank.

The Fed tries to influence the supply of money in the economy to promote noninflationary growth. Unless there is an increase in economic activity commensurate with the amount of money that is created, printing money to pay off the debt would make inflation worse. This would be, as the saying goes, “too much money chasing too few goods.”

I wrote to them: “The Federal government DOES create money — by spending. Congress and the President authorize spending. When the government spends, it sends instructions to its creditors’ banks. The instructions tell the banks to increase the numbers in the creditors’ checking accounts. That creates dollars.

I notice that virtually all of AARP’s economic statements refer to the time prior to August 15, 1971 (when we became Monetarily Sovereign), and no longer are valid.”

This is not the first time AARP has given that same false information about the economy. On another post last fall, they said:

“First of all, the federal government doesn’t create money; that’s one of the jobs of the Federal Reserve, the nation’s central bank.”

I wrote to them: “Wrong. Think about it. The U.S. is 235 years old. The Federal Reserve was created on December 23, 1913 — only 98 years ago. The Federal Reserve’s main tasks involve interest rate and inflation control. So who creates dollars? The Treasury — on orders from Congress. It creates dollars by deficit spending. Every time you receive a federal payment, dollars are created.

In the same post, they said:

“… printing money to pay off the debt would make inflation worse.”

I wrote: “ Wrong. When someone buys a T-security, their checking account is debited and their T-security account is credited. No money is created or destroyed. Then, when the T-security is paid off, the process is reversed: Their checking account is credited and their T-security account is debited. Again no money is created or destroyed. It’s a simple asset exchange.

Since the U.S. went off the gold standard, there has been no relationship between federal debt and inflation. See: Oil causes inflation. It is very important that AARP not provide false information to its members.

Those of you who belong to AARP might write to them, urging them to at least try to understand Monetary Sovereignty.

And while I’m on the subject of false information, I couldn’t resist showing you this article:

Fla. Man Leaves Million Dollar Home to Uncle Sam
from: The Associated Press | December 12, 2011

A South Florida man willed his historic house worth $1 million to the U.S. government to help eliminate the country’s growing debt. The Miami Herald reports that Uncle Sam put the Coral Gables house up for auction Saturday. The winning bid was $1.175 million.

The house belonged to James H. Davidson Jr. who lived there from his teenage years until he died last December at 87. He also left $1 million to the government.

The Herald reports Davidson had nieces and nephews who live in the area. The government will auction off the contents on the home in January.

How sad. This guy thinks he’s doing a good deed. So instead of giving the money to his nieces and nephews, he destroys it by giving it to the government. Not only does this screw his relatives, but it screws the economy by removing millions from circulation – a double whammy.

I ascribe all this ongoing idiocy to the old-line economists, who continue to hypnotize the media and the politicians, who in turn, hypnotize the public into believing we are pre-1971, when the U.S. still was monetarily non-sovereign.

Be sure to contact AARP, and tell them they have been awarded two dunce caps, of which I have none, yet of which I never will run short. (Just like the federal government, which “has” virtually no dollars, but never can run short of dollars)

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