Tag: Economics

–Fed profits. You lose.

The debt hawks are to economics as the creationists are to biology. Those, who do not understand monetary sovereignty, do not understand economics. Cutting the federal deficit is the most ignorant and damaging step the federal government could take. It ranks ahead of the Hawley-Smoot Tariff.
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When the Fed profits, you lose.

1/10/11: WASHINGTON (Reuters) – The Federal Reserve is turning over a record $78.4 billion to the U.S. Treasury Department after its swollen securities portfolios generated big profits in 2010, the central bank said on Monday.
The remittance to the Treasury for 2010 is $31 billion more than a year earlier.
“The increase was due primarily to increased interest income earned on securities holdings during 2010,” the Fed said in a reference to portfolios that have been fattened by buying aimed at stimulating a slow-paced recovery.

That’s $78.4 billion taken from the economy and lost forever. Last year $47 billion was lost. True, much of this money was interest on T-securities, which was paid by the government, so the money merely recirculated. But had that money been paid to private holders, rather than to the Fed, it would have stimulated the economy.

The Fed turns over profits to the Treasury annually and has never posted a loss.

In short, every year the Fed removes money from the economy, an annual anti-stimulus action. While many people will cheer the Fed’s “profits,” this money is identical with a tax on the private sector.

No, these so-called profits do not reduce your taxes. No, these so-called profits do not increase the federal government’s ability to pay its bills. No, these so called profits do not have a positive effect on our economy. They are a dead loss to the money supply — exactly the opposite of the stimulus spending. They are the worst financial news of the day.

When it comes to federal financing, “profit” is bad and “deficit” is good. That has been true since 1971, when we became Monetarily Sovereign. One day, the government and the mainstream economists will get it.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind me of the guy whose house is on fire. A neighbor runs with a garden hose and starts spraying, but the fire continues. The neighbor wants to call the fire department, which would bring the big hoses, but the guy says, “Don’t call. As you can see, water doesn’t put out fires.”

–Ignorance: Why you will pay more taxes and receive less service in the coming years.

The debt hawks are to economics as the creationists are to biology. Those, who do not understand monetary sovereignty, do not understand economics. Cutting the federal deficit is the most ignorant and damaging step the federal government could take. It ranks ahead of the Hawley-Smoot Tariff.
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Here is an article from the Washington Post, demonstrating how ignorance of Monetary Sovereignty is destroying our economy.

Recession-bruised states’ revenue sank 30 percent in 2009, Census Bureau reports

By Michael A. Fletcher, Washington Post Staff Writer , Wednesday, January 5, 2011; 11:09 PM

The recession blew a huge hole in the already shaky finances of state governments, causing them to lose nearly one-third of their revenue in 2009, according to a Census Bureau report released Wednesday. . .

At the same time, states are grappling with swollen social service caseloads, underfunded pension funds and flat revenue – a situation that will worsen as federal stimulus aid comes to a halt in the coming months.

Future federal help is considered highly unlikely, as Congress and President Obama have put a greater emphasis on reducing spending and trimming the huge federal budget deficit.

The new census report adds to the bleak portrait that has emerged from other studies documenting the damage caused by the economic downturn, while making plain that states are likely to continue struggling fiscally for years.

“This report paints a fairly compelling picture of the impact of the recession on states,” said Susan K. Urahn, managing director of the Pew Center on the States. “There are many states predicting that they’re not going to return to pre-recession levels of revenue until 2014.”

Our Monetarily Sovereign, federal government, which has the unlimited ability to create money and pay bills of any size, refuses to give the states the support they need. Meanwhile the monetarily non-sovereign states, which do not have money-creating ability, suffer, and more importantly, we citizens suffer from reduced services and increased taxes.

Education, police and fire protection, roads and bridges, medical services, pensions and on and on, all reduced while our federal government sits on its unlimited pile of cash. Our federal leaders believe they are being fiscally prudent, while in fact, they are destroying America.

Their ignorance hurts us all.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind me of the guy whose house is on fire. A neighbor runs with a garden hose and starts spraying, but the fire continues. The neighbor wants to call the fire department, which would bring the big hoses, but the guy says, “Don’t call. As you can see, water doesn’t put out fires.”

–Playing politics with your life, your health and your finances

The debt hawks are to economics as the creationists are to biology. Those, who do not understand monetary sovereignty, do not understand economics. Cutting the federal deficit is the most ignorant and damaging step the federal government could take. It ranks ahead of the Hawley-Smoot Tariff.
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Rep. Fred Upton(Republican) said, “If we pass this bill with a sizable vote, and I think that we will, it will put enormous pressure on the Senate to do perhaps the same thing.” “This bill” is the attempt to repeal the health care bill. He went on to say, “But then, after that, we’re going to go after this bill piece by piece.”

So, he expects to fail in his attempt to repeal the entire bill, but then he will try to gut it. If he is successful in either attempt, here is what will happen to you:

–Your children may be denied health insurance because they have a pre-existing condition.
–Your insurance company might put a ceiling on the claims you can submit, during your lifetime.
–You can be charged extra for an emergency room visit to a hospital not in your insurance company’s network.
–You will lose coverage of your children through age 26.
–Your coverage can be cancelled if you get sick.
–When you are a senior, you will not receive free screening for cancer, the biggest killer of Amercians.
–Millions of Americans will lose insurance coverage.

And other bad stuff too numerous to mention.

So why do the Republicans want to do this to the American public? Four reasons:

1. Through time, this bill will gain in popularity, and become known as a signature Democratic initiative, on a par with Social Security, Medicare and the civil rights bills. Since most recent Republican initiatives have been to go to war with Iraq based on a lie, deport undocumented aliens and the Bush tax cuts, the Republicans are desperate either to come up with something great or to destroy whatever the Democrats do. They need an issue, and this is all they can think of (Heaven forbid they come up with something beneficial to the lives, health and finances of the general public.)

2. The stated belief the “individual mandate” is onerous or illegal, in that you can’t penalize people for not buying something. Really? Try driving in my state, Illinois, without buying significant amounts of liability insurance. Try buying anything without paying the retailer sales tax. (And unless you think this is just a tax, it isn’t. The retailer actually makes a profit on it, because he pays against total sales, while he receives a rounded up amount from each sale.) True, the self-styled “originalists” on the Supreme Court may rule against it, because it does not meet their right wing agenda, but this will just open the door to a single payer option, which the right wing will hate even more.

3. Pandering to the Tea Party. Unfortunately for the Republicans, the bloom is going off the Tea Party rose, and soon Sarah Palin and the rest of the gang will be remembered laughingly in the same terms as the infamous “Know Nothing” party, which the Tea Party closely resembles. See: Know Nothing party

4. The bill is “too costly” or “unsustainable” or will force tax increases on taxpayers. Those who have read the posts on this blog have learned that taxpayers do not pay for spending by a Monetarily Sovereign government, taxes will not need to be increased, there is nothing that is unsustainable for the federal government, and all the talk about affordability is utter nonsense. If you have not read the posts, you can begin with: Introduction and work your way forward.

Although I have spend most of my life voting Republican (because I didn’t like the “tax” part of the Democrats’ tax ‘n’ spend policies), I find myself drifting leftward, partly because of the mean-spirited, hate filled, ultra-political beast the Republican party has become. So it will be entertaining to watch the Republicans try to destroy one of the great human initiatives in American history. Yes, the health care bill is not perfect. I’ll repeat that: The health care bill is not perfect. But it’s an excellent start toward doing what any great nation must do – protect its citizens – whether against foreign invaders, poverty, illiteracy or sickness. It’s the reason we have a government.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind me of the guy whose house is on fire. A neighbor runs with a garden hose and starts spraying, but the fire continues. The neighbor wants to call the fire department, which would bring the big hoses, but the guy says, “Don’t call. As you can see, water doesn’t put out fires.”

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–More “Constitutional” phony baloney from the Tea Party

The debt hawks are to economics as the creationists are to biology. Those, who do not understand monetary sovereignty, do not understand economics. Cutting the federal deficit is the most ignorant and damaging step the federal government could take. It ranks ahead of the Hawley-Smoot Tariff.
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Each day I become more convinced that being a member of the Tea Party is a litmus test for childishness. Back in April, I wrote the post “What does the Tea Party want?” in which I explored some of the truly inane pronouncements by this group. It is an amazing attribute of the human species that anything sober and logical (Monetary Sovereignty) will be rejected by a large group, but anything outrageously juvenile (Lady Gaga) will be revered by an even larger group.

In the earlier post, I commented not only on the Tea Party’s adoration of such sages as Sarah Palin and Christine O’Donnell, but it’s hopelessly confounding message:

Unfortunately for Tea Party “logic,” they not only want lower taxes, but lower deficits and less government. At the same time, they want a stronger army, better schools, federal supervision of banks and other financial firms, better roads, defense of our borders, less crime, more guns, defense against terrorism, safer food, better retirement, better unemployment insurance, police, health care, rescue from hurricanes and other disasters, more jobs and a better environment.

I reminded readers that what the Tea Party wants costs money, the money they don’t want the government to spend. But now that bit of TP logic has been superceded by the next puerile demand, to which the eagerly submissive GOP has agreed. Not only must the House of Representatives waste an hour or a day listening to someone read the U.S. Constitution aloud (“Now follow along, children. See Spot jump.”), but every new bill must contain a statement by the lawmaker who wrote it citing his constitutional authority to enact the legislation.

Puleeze. The most contentious bill passed by Congress – hated by the TP – already contains such a statement, and that hasn’t prevented two judges from ruling one way and a third judge from ruling the other. What is called the “Individual Mandate” of the Patient Protection and Affordable Care Act already includes these sentences:

The individual responsibility requirement provided for in this section (in this subsection referred to as the requirement) is commercial and economic in nature, and substantially affects interstate commerce . . . In United States v. South-Eastern Underwriters Association (322 U.S. 533 (1944)), the Supreme Court of the United States ruled that insurance is interstate commerce subject to Federal regulation.

Well, I guess that should satisfy the TP.

The problem is that the Constitution was written 200+ years ago to address problems of the time, and must be interpreted to address today’s problems. And while “originalist” Justices Antonin Scalia and Clarence Thomas claim to have special insight into the original intent of the Constitution framers, they don’t, they don’t even try, and anyway, why should anyone want that?

The Supreme Court has nine members rather than just one, because the Constitution, like the Bible, is either vague, outdated or repeatedly misconstrued concerning almost all we wish to know. Every Justice has pledged to obey the Constitution, yet seldom do we see a 9 – 0 decision. Does this mean some Justices intentionally disobey the Constitution every business day?

Reality check: The true issue is not whether a law obeys or disobeys the Constitution, but rather, whether the sponsors are Democrats or Republicans (aka TP sycophants). But that bit of truth does not perturb the TP members, who live in a magical world of dreams, where all wishes come true, even (especially?) those that are self-conflicting.

It seems our Representatives prefer time-wasting, populist, pandering nonsense, to actually learning about, and coming to grips with, real problems, which is why the recovery has been so slow, and why millions of Americans have no jobs, no homes, no health insurance and no retirement.

What next from the Guns ‘n’ God Group? A rule that the House must stand and recite the Pledge of Allegiance every day?

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind me of the guy whose house is on fire. A neighbor runs with a garden hose and starts spraying, but the fire continues. The neighbor wants to call the fire department, which would bring the big hoses, but the guy says, “Don’t call. As you can see, water doesn’t put out fires.”