–Absolute proof deficit reduction (austerity) works, even though you can’t.

Here is absolute proof deficit reduction (aka “austerity”) works in the United States and everywhere in the world (i.e. works to crush economies, destroy middle classes and widen the gap between the rich and the not-rich.)

This unblemished record of success demonstrates why President Obama and both political parties continue to advocate deficit cutting.

Obama budget would cut entitlements in exchange for tax increases
Friday, April 5, 8:00 AM
President Obama will release a budget next week that proposes significant cuts to Medicare and Social Security and fewer tax hikes than in the past, a conciliatory approach that he hopes will convince Republicans to sign onto a grand bargain that would curb government borrowing and replace deep spending cuts that took effect March 1.
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Factory Data Shows US Manufacturing Dead In The Water As Headlines Mislead
4 April 2013
Wall Street Examiner
The headlines today blared of a 3% increase in factory orders in February, completely obscuring the truth of just how bad the US manufacturing trend is. The real story lies in the fact that factory orders have been flat for two years and have trended lower for the last four months.
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Wall Street falls at open on weak payrolls
4/5/13
NEW YORK (Reuters) – Stocks fell more than 1 percent at the open on Friday, following a payroll report that was much weaker than expected, the latest in a series of reports to indicate that economic growth may be losing momentum.
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A vanishing middle-class — the new normal?
4/5/13 MONEYWATCH
Almost half of middle-class households today live paycheck-to-paycheck, according to a recent survey by financial services firm NestWise.
Sequester cuts already hurting small businesses
Most companies don’t expect to hire next quarter
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Hiring slowed to 88K jobs in March; unemployment rate drops to 7.6 percent
Washington Post 4/5/13
Businesses sharply reduced their pace of hiring in March, according to government data released Friday morning, deflating hopes that the nation’s economy is ready for takeoff. Gallup chief economist Dennis Jacobe said the recent spate of job growth has done little more than keep pace with population growth. “If you’re out there looking for a job, the dismal situation is no better now than it was a year ago,” he said.
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Moody’s sees gloomy outlook for Spain banks
The Economic Times 4/5/13
MADRID: Global credit rating agency Moody’s warned Friday that Spain’s battered banks face a grim outlook even after a European-funded rescue, with high levels of bad assets set to worsen “significantly” in the recession.
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Fitch sees bad loan charges to keep hurting Italy banks
By Reuters | 5 Apr, 2013, 12.13PM
MILAN: Fitch said on Friday it expected a rise in impaired loan charges at Italian banks to continue through 2013, adding this trend was unlikely to slow down until the economy improved. Italian banks have been forced to book writedowns and hike provisions against a steep rise in deteriorating company loans.
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Workers Protest to Get E.U. Leaders to End Austerity
By AP / March 14, 20133 Comments
(BRUSSELS) — Some 10,000 workers from across the European Union protested outside a summit of EU leaders Thursday, demanding they end years of austerity and focus instead on curbing runaway unemployment with more spending. Trade unions and an increasing number of economists say austerity has inflicted severe economic pain — the economy of 17 EU countries that use the euro are stuck in recession and joblessness is at a record high.
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Greek Unemployment Reaches Record 26%
By Associated Press March 14, 20133
(ATHENS, Greece) — Unemployment in debt-crippled Greece rose to a record of 26 percent in the last quarter of 2012, as austerity measures combined with a deep recession took a harsh toll on the workforce.
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Eurozone crisis: Portugal protests against austerity
Hundreds of thousands of people have taken part in protests across Portugal against government austerity measures. Huge crowds gathered in the capital Lisbon to demand the government resign. Many carried placards condemning the “Troika” of the IMF, the European Commission and the European Central Bank, which demanded budget cuts in return for a financial bailout. The conservative government has introduced steep tax rises as it tries to reduce a huge budget deficit. Unemployment is at a record 17.6% and the economy is expected to contract by 2% this year – the third straight year of recession.
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Where are the activists as austerity bites? They have been beaten back
Protesters face violence, arrest and serious charges. Only the brave dare face this savage suppression
The Guardian, Thursday 4 April 2013
As millions of people stare down the barrel of job losses, benefits sanctions, destitution and desperation and the rich are given tax cuts, I hear a lot of people asking why there isn’t more resistance going on. It was brutally and systematically put down. The students, the street-organising anti-cuts campaigners, the Occupy movement. They were cleared out, arrested and beaten back by police,

Ah, that good old austerity. Gotta love it. At least the rich do.

Here, deficits are “unsustainable” (even though the U.S. government can fund any deficit of any size), but austerity is sustainable because it only punishes the middle and lower classes.

Numbingly, it’s the middle and lower classes who believe austerity is necessary. Why? To prevent hyperinflation, like Germany and Zimbabwe had. Never mind that the German and Zimbabwe hyperinflation were not caused by deficits. And never mind that the U.S. never has had hyperinflation, not even during depressions and world wars — not even during the civil war.

And never mind that the Fed easily has been able to maintain inflation near its target level. And never mind that as a result, we are nowhere near an uncontrolled inflation, while recession and unemployment and poverty and the resultant crime are upon us.

And never mind that austerity widens the gap between the rich and the rest. And never mind that the politicians have been bribed by the .1% (via campaign contributions and promises of lucrative employment later) to widen that gap.

Let’s just keep doing what has not worked, cannot work, and never will work, anywhere in the world, anywhere in history: Cut those deficits. Cut Social Security. Cut Medicare. Cut Medicaid. Cut federal employment. Cut aid to the poor. Cut aid to education. Cut research and development. Cut food inspections, drug verifications and financial regulations. Turn once-great America into a 3rd world, banana republic, where the rich rule and the rest starve.

And while we’re at it, let’s keep cuting our own throats. That seems to work, while so many of us can’t.

Rodger Malcolm Mitchell
Monetary Sovereignty

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Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%

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 Imports

#MONETARY SOVEREIGNTY

–If President Obama really wants to reduce gun violence . . .

Mitchell’s laws:
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●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.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive.
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Jesus: “All they that take the sword shall perish with the sword.”
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In a June 22, 2011 post titled, “Actually, the 2nd Amendment doesn’t legalize private gun ownership, but so what? There is a solution to gun violence,” I wrote:

Chicago was home to one of the most murderous neighborhoods in America. It was called “Cabrini Green,” ironically named after Mother Cabrini. For three weeks, in 1981, then Mayor Jane Byrne, moved into Cabrini Green. She was surrounded by police. For that period, murders ended, demonstrating that sufficient numbers of police greatly can reduce the murder rate in even the worst area.

I also wrote:

I suggest that Congress and the individual states pass an “aid and abet” law that reads: “If a gun of any type and/or ammunition for that gun, is used in the commission of a felony, the manufacturer, distributor, importer and/or supplier of that gun and/or ammunition, shall be liable, civilly and criminally, in equal measure with the perpetrator of the felony.”</

I was wrong, or at least partially wrong, for focusing on the penal side of gun control without acknowledging the fundamental cause of gun violence.

Chicago, my hometown, notoriously has suffered from gun violence, most of it in its south and west sides, where the majority are lower income people, and where gun ownership is highest. Although more police are concentrated in these areas, their presence has not been sufficient to stop gun crime, or even slow it to reasonable levels.

Near Chicago, you’ll find a series of suburbs, together known as the “North Shore.” Aside from being north of, and close to, Chicago, they share two features: They are affluent and they are low crime, especially low violent crime.

The primary crimes seem to be exceeding the speed limit, DUI, illegal drug sales in high school and burglary. Gun crime is so rare as to rate headlines in the Chicago newspapers. In Wilmette, the southernmost of the North Shore villages, most burglaries are committed by people coming up from Evanston, a far less affluent suburb, which has a far higher crime rate.

The people on the North Shore are not killing each other. Drive-by shootings are unheard of. Very few people feel the need to carry a gun on the street, and “Stand your ground” is not an issue. Why?

The pattern is clear and undeniable: Gun crime is most often committed by people from the lower economic groups. The other pattern that is clear and undeniable: Despite NRA claims, gun ownership does not prevent gun crime; in fact, gun ownership exacerbates the problem.

In short, gun crime is due to the income/wealth gaps between the economic groups, and the lower the group, the more gun crime it will suffer.

Although periodic mass shootings in schools attract national headlines, those are not symptomatic of daily gun crime. Those mass shootings are symptomatic of individual mental breakdowns; gun crime is symptomatic of financial need – two completely unrelated problems.

When the NRA demagogs claim that arming school teachers is the best way to protect our children, they simply are wrong, and they know it. Adding guns consistently and predictably increases gun crime. Homes, neighborhoods and towns that have guns are more likely to encounter gun violence.

The NRA has the statistics, but they are paid to ignore or to lie about them. Rather than spending millions to convince America that more guns = more safety, the NRA would do its members a great service by focusing on the fundamental reason for gun crime: The gap.

It is the gap in income, the gap in wealth, the gap in education, the gap in health, the gap in food and shelter and in hope and opportunity. Those are the gaps that cause gun violence.

When President Obama and Congress eliminate jobs and cut spending on Social Security, Medicaid and other social programs, they essentially are creating criminals and putting guns in their hands. The real criminals are those who voted for deficit reduction, and those who vote for its continuance.

The focus should not be on gun ownership or gun registration or background checks or shotguns in school or on the 2nd Amendment. The focus should not be on the guns at all. Perhaps the NRA is onto something when they say, “Guns don’t kill people; people kill people.” The focus should be on people.

If President Obama really wants to reduce gun violence, he will focus on increasing deficit spending for social programs to reduce the gaps.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–Demagogs, guns and kangaroos

Mitchell’s laws:
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●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.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive.
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Jesus: “All they that take the sword shall perish with the sword.”
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Those who appeal to the emotions, prejudices, and ignorance of a population in order to gain power are known as “demagogs.” They call for immediate action, often counter-productive, to cure a national crisis, often distorted or exaggerated. They create and accuse scapegoats. They appeal to the public’s lowest common denominator.

In that regard, I give you Wayne LaPierre, CEO of the National Rifle Association, who says this:

“Our individual liberty is the very essence of America. It is what makes America unique. If you aren’t free to protect yourself — when government puts its thumb on that freedom — then you aren’t free at all.

“But they insult, denigrate and call us crazy for holding fast to that belief. In their distorted view of the world, they are smarter than we are. They are special and more worthy than we are. They know better than we do and if we dare disagree, they scorn us, demonize us and try to shut us up. We will not be demonized, we will not be silent.”

Of which historical leader do these paranoid rantings remind you? Think about it.

“There isn’t a mom or a dad anywhere who wouldn’t feel better seeing a police car in the parking lot when they drop their kids off at school. But the powerful elites, who will always have their own security, called our proposal absurd.

Notwithstanding the fact that “a police car in the parking lot” is not at all like arming teachers, in Wayne’s world, the solution to gun violence is more guns.

NRA-commissioned study supports having armed guards in schools
By Peter Finn, Published: April 2

A 225-page study commissioned by the National Rifle Association has endorsed and amplified the gun rights group’s immediate response to the mass killing in Newtown, Conn.: that all schools in the United States should have police or armed staff members trained to confront a shooter.

Former congressman Asa Hutchinson (R-Ark.), who led the $1 million study, said schools could use “school resource officers” — typically local police trained to work in schools — or arm teachers or administrators designated by school boards or superintendents.

The report does not provide specific recommendations for the ratio of armed personnel to students or what kind of guns school personnel should carry. Hutchinson said those are local decisions, but weapons could include handguns, shotguns or semiautomatic rifles.

Just what we need in our schools: Handguns, shotguns and semi-automatic rifles. Visualize firing a shotgun in a school. But why stop at semi-automatic rifles? Why not fully automatic machine guns? Isn’t that also part of “freedom”?

For sane people, there is a better way:

Australia’s gun controls a political template for the U.S.

CANBERRA (Reuters)– The battle for gun control in Australia, after the country’s worst massacre in which 35 people were shot dead, was risky both personally and politically. Former Australian Prime Minister John Howard alienated a large part of his conservative, rural base and was almost thrown from office.

But the gun reforms made Australia a safer place, with fewer homicides and suicides.

“Penalizing decent, law-abiding citizens because of the criminal behavior of others seemed unfair…I understood their misgivings. Yet I felt there was no alternative,” wrote Howard.

“It was the right thing to do, but people had to be persuaded of it. And this is why our friends in the United States … should now consider seriously taking it in a big way to the public square.”

Australia had 13 gun massacres in the 18 years before the 1996 gun reforms, but has not suffered any mass shootings since. Studies found a marked drop in gun-related homicides, down 59 percent, and a dramatic 65 percent drop in the rate of gun-related suicides, in the 10 years after the weapons crackdown.

But some Australian gun owners, like hunter Stephen O’Donnell, still oppose Howard’s gun control laws O’Donnell, a license kangaroo shooter, can only use a single shell, bolt-action rifle, limiting his ability to control mobs of kangaroos. “If I could have a semi-automatic, that would be a much more efficient way of doing it. You could take multiple targets a lot quicker,” he said.

Australia had its “Wayne LaPierres,” its demagogs, who convinced the populace that the only path to safety and freedom was to own a big gun. But Australia’s politicians were brave enough to say what obviously, clearly and factually is the truth: More guns = more killings. Fewer guns = fewer killings.

So, what should America do? Hmmm . . .

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–Looking down. The disdain for those below us, Ireland version.

We humans admire and envy those who have more. Though we may protest, we subconsciously or consciously try to emulate the rich and famous. They set society’s standards, and one of the standards they set is the desire to widen the gap between “us” and those “below us.”

Were there no gap, no one would be rich, and the wider the gap, the richer they are. The middle classes feel that way about the poorer classes, and one common belief is that in some way, the poorer must be at fault for their poverty.

They are lazy. They are ignorant. They are criminal. They are unmannerly. They look, smell, dress and act “wrong,” and if only they were more like us . . . If only.

The real winners in the gap widening exercise are the super-rich. The rest of us are pawns in their game. They allow us to do their dirty work.

Some time ago, I saw the movie, “Les Miserables,” the Liam Neeson verson. No singing and dancing, here. It made a great impression on me, as I had been too lazy to read the 1500 page book by Victor Hugo, the well-known preface of which is:

“So long as there shall exist, by virtue of law and custom, decrees of damnation pronounced by society, artificially creating hells amid the civilization of earth, and adding the element of human fate to divine destiny; so long as the three great problems of the century—the degradation of man through pauperism, the corruption of woman through hunger, the crippling of children through lack of light —are unsolved; so long as social asphyxia is possible in any part of the world;—in other words, and with a still wider significance, so long as ignorance and poverty exist on earth, books of the nature of Les Misérables cannot fail to be of use.”

The following article reminded of the poverty created by the dishonest and greedy richest class, and enforced upon the people by the dishonest and greedy somewhat-less-rich classes:

Irish News
31 March 2013

A single adult will be allowed less than €30 a week to participate in sports activities and social events such as going to the cinema, according to austere insolvency guidelines.

Stop here and think about that sentence. Some powerful people have decided how much pleasure less powerful people are allowed.

An estimated 100,000 households will be told to live in what Fianna Fail leader Micheal Martin has described as the “fiscal equivalent of penal servitude” for between three and seven years.

Critically, the guidelines state that any decision to be made about the “reasonableness or otherwise” of living expenses under 15 separate categories will be a matter for “the creditors” to decide on a case-by-case basis.

If you are in debt, you will beg your creditors for their measure of mercy. They, from on high, will judge what level of mercy you deserve.

Banks, therefore, will have the final say on what thousands of heavily indebted individuals and families will be allowed to spend on what are widely accepted to be household basics if they wish to avail of debt relief, settlement or personal insolvency.

Under the guidelines, a single adult is to be prescribed per month: food (€274.04), clothing (€35.73), personal care (€33.73), health (€31.09), savings and contingencies (€43.33).

This is under the theory that you not only are at fault for being in debt, but your indebtedness is proof you have a child’s mind, and cannot be trusted to run your own affairs. Instead, omnipotent strangers will run your life, your spouses life and the lives of your children.

In the Sunday Independent today, Labour Senator John Whelan writes: “How this has got through a Cabinet, much less a Cabinet with Labour ministers, is beyond me.

The Irish Labour party is somewhat analogous the U.S. Democratic party, professing to be liberal but in actuality having adopted the cruelty toward the poor of the conservatives. Sound familiar, Mr. Obama?

“It will not only be the final nail in the coffin of so many people’s lives and hopes and aspirations, but it will also be a final nail for the Labour Party.

“They demonstrate that the despairing cries of many people have clearly fallen on deaf ears. We have lost our way as a party. People feel we have abandoned them. We abandoned the disabled and the carers and low income families dependent on child benefit.

“It is high time – and past it – for senior Labour people, long-serving and experienced, to stand up and be counted. We promised and pledged to protect the most vulnerable. I can’t see how we can stand over this.”

Those very words could have been spoken about Barack Obama and his followers. On one side of his mouth he pledged to protect the most vulnerable, while the other side of his mouth wants to cut social spending, negatively impacting the 99%, while widening the gap between them and the 1%.

Fianna Fail finance spokesman Michael McGrath said: “If the domestic economy is to recover, people will need to have reasonable levels of income.”

To grow the economy, people must have more spending money. Simple and obvious. Yet, the conservatives and the compliant faux-liberals, have convinced the 99% that having less money is beneficial.

People who wish to avail of the new personal insolvency legislation will have their spending restricted not only on food, clothing, personal care, health, savings and contingencies, but also on household goods, services and energy as well as communications, education, transport, insurance, housing and childcare as well as what is called “social inclusion and participation”.

The Insolvency Service of Ireland adds that its model “does not allow for the cost of a holiday”; only €2,000 is to be allowed for the cost of a car, but it will be prohibited if an applicant lives in an urban area with “adequate public transport links.”

In “Les Miserables,” starving people were reduced to begging in the streets. They were disdained by those above — inn owners, shop keepers, factory owners, who in turn, were disdained by the aristocracy.

Michael McGrath said guidelines would create a “debtors’ gaol” where more than 100,000 families will live “a subsistence-style existence” for up to seven years.

Seven years? Perhaps seven and seventy. When does it end, and how does it end?

The U.S. Republicans are the party of caste-system contempt — contempt for the poor, contempt for non-white, contempt for those whose education is lacking, contempt for gays, contempt for women, contempt for foreigners, contempt for those whose religiosity is “insufficient,” contempt for those “weak” enough to care about people rather than caring about the flag.

But the Democrats, ah the Democrats — the party that created Social Security, Medicare, Medicaid and civil rights activism and legislation, what of them? They have disappeared.

Today, in our two-party system, we have Republicans and Republicans-lite.

Compassion has disappeared. The lost American dream was for silly dreamers, not for cold-hearted “patriots.”

Ireland has an excuse, of sorts. Years ago, it surrendered the single most valuable asset any government can have: Its Monetary Sovereignty. Today, predictably, it is dying, ruled by bankers and the rich.

The U.S. government still has its Monetary Sovereignty, but at the behest of the rich, it pretends it is like a euro nation. It pretends its misnamed “debt” is “unsustainable,” and that the banks, not the people, must be protected.

Way back, on June 5, 2005, I spoke before Randy Wray’s class at UMKC, when I said, “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.”

Little did I know then, that the economy of America would be doomed by the same mentality that created the euro. In the eurozone, including Ireland, austerity is the inevitable result of monetary non-sovereignty. Austerity begets more austerity and a deepening death spiral of economic despair.

In America, austerity is the result of the cruelty and greed of those “above.” It appeals to our baser instincts. It allows us to feel superior, while we grow more inferior.

So we join the 1% in punishing the 99% for being members of the 99%. If you would like to see the future of America, look to Ireland. Look to Les Miserables.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

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