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

Last year, this blog published four posts, all with the same title: “You never will know what you have lost.” They describe the invisible effects of deficit cutting, aka “austerity.”

Our wealthy, ruling class continues to promulgate the flat-out lie that the federal government can run short of dollars, and that deficits and the debt must be cut, because they can’t be allowed to grow “forever.”

The exact opposite is true: The federal government never can run short of dollars, and to grow the economy, the deficit must grow — forever.

If you find those facts difficult to swallow, it’s because you don’t understand the differences between Monetary Sovereignty and monetary non-sovereignty. Fortunately for you, this blog contains 950+ posts that describe those differences in simple, complex, technical and non-technical, mathematical and non-mathematical terms.

So there is no reason for you not to understand, if you wish to understand what is happening to you.

One difficulty in exposing the destructive myths of austerity is our inability to detail the hidden harm of deficit cutting. Yes, we can show how deficit cutting causes unemployment and recessions and depressions, how deficit cutting impoverishes the middle class and the elderly and the sick, and further impoverishes the already poor.

And we can show how the whole deficit-cutting enterprise is a scheme funded by the wealthy, to widen the gap between them and us, to increase their already vast power over us.

But we can’t show all the negative effects, because some of them are beyond our ability to predict. Consider research:

Sequester Threatens University Research Funding And Federal Student Aid
The Huffington Post | By Tyler Kingkade 02/27/2013

The impending federal budget cuts known as the sequester, which will go into effect on Friday without action by Congress, are poised to have a significantly negative effect on both public and private universities nationwide. Some forms of federal student aid and funding for a variety of research programs are likely to find themselves on the chopping block.

Several critical revenue streams for universities are at risk: The National Science Foundation, National Institutes of Health and the National Endowment for the Humanities are all subject to cuts that fall within both the 7.6 percent cut to mandatory spending and the 8.2 percent cut to discretionary spending.

Many forms of research will be cut, but what does this mean in practical terms? What will it cost you? How will your life, and the lives of your loved ones, be any worse, because thousands of research projects will be delayed or ended? What does research accomplish, anyway?

No one knows, and since no one knows, I can’t tell you much about the cost of deficit cutting other than to say, “It will cost you plenty, and your life will be much worse than it could have been, and your children will suffer greatly.”

I was reminded of this when I read an article in FT.com:

Telepathic rats solve problems together
By Clive Cookson

Rats have collaborated telepathically across continents in the first use of neurotechnology to transmit thoughts directly between animals’ brains.

Scientists trained rats in Durham, North Carolina and Natal, Brazil to work together to solve problems in return for a drink of water. In the first experiment they had to press the correct lever corresponding to a particular indicator light; in the second they had to distinguish between wide and narrow openings.

Electrodes picked up the brain activity of the first rat, the “encoder”, and fed it over the internet into the brain of its partner, the “decoder”, which had the same levers in its cage but received no visual cues about which one to press. The best decoder rats correctly mimicked their corresponding encoder partners 70 per cent of the time.

Did you see that “electronic empathy” coming? I didn’t. I didn’t expect to see the transmission of thoughts via the Internet – certainly not in my lifetime.

But so what? A rat reads another rat’s thoughts. How does that affect you? No one knows.

Miguel Nicolelis, a pioneer of research into brain-computer interfaces at Duke University in North Carolina, said the experiments could lead to the creation of a biological computer – or “brain-net” – linking multiple brains.

“We cannot even predict what kinds of emergent properties would appear when animals begin interacting as part of a brain-net,” he said. “In theory, you could imagine that a combination of brains could provide solutions that individual brains cannot achieve by themselves. One animal might even incorporate another’s sense of self.”

The words, “brain-computer interfaces” tell me that one day – perhaps one day soon, unless the deficit-cutters have their way – your children may be able to run distant factories at the same time they are eating breakfast at home, simply by thinking. (Visualize the reductions in transportation costs, pollution and global warming. And that’s only the beginning.)

But Nicolelis is talking about interconnected groups – a human brain net – solving problems we cannot even begin to imagine, today.

Or what about interconnecting a human mind with the mind of an animal, and sending that animal to Mars, so that the human can stay safely at home, but simultaneously explore Mars through the eyes of a living creature. By comparison, the Mars Rover is a child’s toy.

Where does research lead us? We don’t know. That’s why it’s “research.” We only can say this: Our world was created by research – a myriad of beneficial surprises that lifted us from bare animal survival to the ruling creatures of this planet. Research is what differentiates humans from all other living creatures.

It will be research that feeds us, houses us and helps us keep from destroying ourselves. Losing research is a disaster of immeasurable proportions.

Research reduction is yet another negative effect of austerity – a penalty for you and your children, courtesy of our wealthy rulers.

Two questions: Who tells you all kinds of research should be cut? What is their motive?

Rodger Malcolm Mitchell
Monetary Sovereignty

====================================================================================================================================================

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

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

What are your most important concerns? I’ll bet health and finances come near the very top of the list. You are concerned for your own health and for the health of those you love. The same is true of finances. You spend eight hours a day, for an average of 45 years — more than half your life — thinking about money, working to make money, saving and spending money — so you can support yourself and your loved ones.

Clearly, you violently will reject anything that will make you sicker or poorer.

In that vein, how would you feel if your children were sick, and a politician told you they are not allowed to see a doctor? Or if a hospital refused your wife admittance? Or if you were not allowed to purchase the medicine they desperately need? Are you angry? Frustrated? Incredulous? Are you ready to march on Washington?

Probably not. If you’re like the majority of Americans, you don’t give a damn.

Quoting from an article in the February 28th SunSentinel:

Cuts to bruise health care
By Noam N. Levey

As the Obama administration begins to implement $85 billion in cuts to federal spending this year, no part of the federal budget other than defense will take a bigger hit than health care.

And the sequester appears likely to have a disproportionate effect on areas of the health system already hobbled by years of retrenchment and under-funding, including public health and medical research.

Laboratories at major universities and medical centers are laying off scientists and local public health officials, hit by years of cutbacks, are scaling back immunization efforts to track and control infectious diseases.

“They are doing cuts on top of cuts on top of cuts,” said Dr. Eric Hoffman, director of the Center for Genetic Medicine Research at Children’s National Medical Center in Washington. Hoffman’s labs have had to delay several projects, including new research into muscular dystrophy in children.

Nationwide, as many as 46,000 public health jobs have been eliminated in the past five years. Now, the federal Centers for Disease control and Prevention plans more cuts.

So, I ask again: How would you feel if your children were sick, and a politician said you are not allowed to take them to a doctor? Or if a hospital refuses you admittance? Or if you can not purchase the medicine they desperately need? Are you angry? Frustrated? Incredulous?

Here is the answer, as told by this NBC News/Wall Street Journal poll of 1,000 U.S. adults conducted Feb 21-24. (Margin of error is +/- 3.1 percentage points:) The subject was the sequester.

Opinion on the Best Way for Congress to Handle the Deficit
–A plan that has more cuts: 39%
–The current automatic cuts: 14%
–A plan that has fewer cuts: 37%
–None/not sure: 10%

How shall we explain 53% of Americans wanting a plan that has more cuts than even the sequester demands?

You of the 53%, your elected politicians have voted to cut back immunization, so your children will have a greater likelihood of suffering from or even dying from a disease. Your politician also has voted to cut back medical research, so you and your family will suffer needlessly from heart disease, cancer and the myriad other ailments that kill us too young

Congress and the President demand that you have available to you, fewer doctors, fewer nurses, fewer hospitals, less research and more sickness. Yet, you 53% of Americans not only welcome it, but you want even greater cuts. America is on the edge of becoming a 3rd world country, and Americans not only are satisfied, but become angry at anyone who protests — thus is the power of brainwashing.

Barack Obama, Peter Peterson, the Koch Brothers — these are the people who are sickening and killing your loved ones, and half of America doesn’t give a damn. The rich bribe the politicians, via campaign contributions and promises of lucrative employment, to cut medical services.

The rich don’t care. They always can pay for doctors, nurses and hospitals. They can fly to foreign lands, where the care and the research are better.

All the rich care about is depressing you, pushing you and your children down into the gutter, making you suffer and beg for help — all to widen the income gap and increase their power over you.

And there you 53%ers sit, with you fingers in your noses, worrying not about your loved ones, but rather worrying about the federal government’s unlimited ability to pay its bills, or about the scant likelihood of a hyperinflation this nation never has had in its history. While you fret about gay marriage and left vs. right, the 1% are stealing your health and financial life.

But, you are perfectly content to sacrifice your health, your family’s health and all your money, just so the federal government, which creates dollars, is unnecessarily given even more of your dollars, for which the government has no need.

You can’t point to a single instance of austerity bringing a nation anything but misery, yet you want austerity for your nation and your family.

Congress, the President and the upper .1% income group are sickening and murdering your children, yet all that concerns you is whether the Democrats’ method or the Republicans’ method is better.

Are you angry? No. You subscribe to the immortal words of Alfred E. Neuman, “What, me worry?“

How very clever you of the 53% are.

Rodger Malcolm Mitchell
Monetary Sovereignty

====================================================================================================================================================

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

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

Fair or not, the names Hoover, Smoot and Hawley forever will live in infamy as representing wrong-headed legislation that worsened the Great Depression.

History will view Obama, Bowles and Simpson similarly, but perhaps even more harshly, for while the HSH bunch harmed America with innocent ignorance, the OBS gang harms America with deliberate, knowing and selfish malevolence.

I have been uging followers of Modern Monetary Theory (MMT) to stop hinting around, and instead come right out and say: The rich are bribing politicians, via campaign contributions and promises of lucrative jobs later, to widen the income gap between the rich and the rest.

(Like economists who suddenly discover Monetary Sovereignty, then claim they knew it all the time, most of MMT says they said it all the time, while forgetting to include the bribery part)

The rich care more about the gap than about their absolute income, because it is the gap that makes them rich. If there were no gap, no one would be rich, and the wider the gap, the richer and more powerful the top .1% is. A .1%er would be glad to see his income cut if the income of the 99.9% was cut even more. (For instance, the rich don’t mind inflation, because it hurts the poor, more.)

It is as easy, perhaps easier, to widen the gap by depressing the middle- and lower-classes as by raising the incomes of the rich, so the politicians are bribed to do both. And further to indoctrinate the public, the rich own the media.

Consider USA Today, owned by Gannett Company, Inc., a publicly traded media holding company and the largest U.S. newspaper publisher

USA Today: Simpson-Bowles’ Greatest Service

The latest plan from Simpson, a former Republican senator from Wyoming, and Bowles, who served as President Clinton’s chief of staff, usefully rattles the cages of both parties.

Somehow, the rhetoric of “don’t touch my Medicare, don’t touch my Social Security, and don’t make me pay” has to end. Simpson and Bowles’ greatest service is to give elected officials cover for telling people the truth: The primary beneficiaries of those programs will have to fund them or see them shrink.

Translation: “We have to cut Medicare, cut Social Security and institute tax increases (as with the increase in FICA). Don’t ask “Why?” But, you poor and middle class suckers will be to forced pay more and receive less. And just to show you who’s boss, we will increase unemployment and send you to starve in another recession.”

And then there is the wealthy and esteemed Washington Post, owned by wealthy The Washington Post Company, which also owns Kaplan, Inc., a leading international provider of educational services, The Slate Group, Express, El Tiempo Latino, The Gazette and Southern Maryland newspapers, The Herald (Everett, WA), Post-Newsweek Stations (Detroit, Houston, Miami, Orlando, San Antonio and Jacksonville), Cable ONE—a cable TV and Internet service providerand Avenue100 Media Solutions.

The blame game over sequestration

FORMER SENATOR Alan Simpson (R-Wyo.) and former Clinton White House chief of staff Erskine Bowles administered a dose of realism to Washington on Tuesday, announcing an update to their eponymous 2010 deficit-reduction plan. This new Simpson-Bowles outline seeks $2.4 trillion in ten-year savings, on top of the $2.7 trillion already achieved — thus potentially bringing the ratio of debt-to-gross domestic product below 70 percent by early next decade and putting it on a downward path thereafter.

Translation: “Here is the true ‘dose of realism:’ The debt/GDP ratio has absolutely no economic meaning, but it makes our arguments sound ever so scientific.

“While that scary, old sequester would cut a terrible $85 billion from our economy, our beneficial BS program would cut only $2.4 trillion over 10 years ($240 billion every year).

“We assume that because we cut funds for education, you will not be able to calculate that $85 billion is less than $240 billion, or that taking dollars out of the economy will depress the economy and increase unemployment.”

Simpson-Bowles 2.0 would take some steps Mr. Obama has already contemplated — such as adjusting federal tax brackets and benefits by a more realistic inflation measure — as well as some he would not — such as going above $400 billion in health-program savings over 10 years.

Translation: “’Adjusting’ federal tax brackets and benefits is our clever code for making you poor pay more, and receive less, but since we are liars, we don’t want to tell you that.

“And as for that ‘more realistic’ inflation figure, it’s called ‘chained CPI,’ an arbitrary, convoluted, cockamamie device whose sole purpose is to pay you lower, already-way-too-low benefits. One day, we’ll do away with all inflation measures, and justify it with the lie that Social Security is ‘unaffordable.’

“Sure, you people work in the factories and the farms and those little office cubicles, and you do the real work, while we of the .1% sit back and collect dollars. But we have convinced you that we are the “makers” and you are the “takers” — and you believe it!

The sequester would slash $85 billion between now and Sept. 30, half from discretionary programs and half from defense. Both of these have already been trimmed in previous budget deals — defense to the point where Pentagon leaders predict damage to national security if the sequester goes through on March 1. Entitlements, meanwhile, remain unreformed. deals.

Translation: “’Unreformed’ means we plan to charge you more and pay you less, but there still are some crumbs, which we also plan to take, if you let us get away with it.

“Fortunately for us, you don’t understand that the federal government’s finances are different from your personal finances. While you struggle to find the dollars to pay your bills, the federal government never can run short of dollars (unless we impose a stupid Debt Ceiling or even stupider austerity). So we tell you the debt is ‘unsustainable,’ and the deficit must be reduced, and you never even have the curiosity to ask, ‘Why?’

“Amazingly, there still are innocents among you who actually believe the government wants to help you and to grow the economy and to reduce unemployment. You even doubt that the politicians are being bribed to vote against you.

“Well, will the following convince you, or are you hopeless?”

Billionaires for Austerity: With Cuts Looming, Wall Street Roots of “Fix the Debt” Campaign Exposed

A new investigation reveals how billionaire investors, such as Peter Peterson, have helped reshape the national debate on the economy, the debt and social spending.

Between 2007 and 2011, Peterson personally contributed nearly $500 million to his Peter G. Peterson Foundation to push Congress to cut Social Security, Medicare and Medicaid — while providing tax breaks for corporations and the wealthy.

Peterson’s main platform has been the Campaign to Fix the Debt. While the campaign is portrayed as a citizen-led effort, critics say the campaign is a front for business groups. The campaign has direct ties to GE, JPMorgan Chase, Morgan Stanley and Goldman Sachs. Peterson is the former chair and CEO of Lehman Brothers and co-founder of the private equity firm, The Blackstone Group.

Translation: “Pete Peterson is a great and generous patriot, who unselfishly spends an astounding $500 million of his own money, just to better the lives of us American citizens. Right? So, please don’t assume he really is spending all that money to better his own life by increasing the gap between the rich and the rest, thus growing his power over us. No, he’s just a benevolent soul, wanting to help you. (Help you starve, that is.)”

Anyone who thinks Pete Peterson’s millions are not bribing politicians (Hello, MMT), can be the proud owner of a bridge I plan to sell.

Hoover, Smoot and Hawley. Obama, Bowles and Simpson. You who helped destroy the lower- and middle-income classes and who helped raise unemployment to starvation levels: Your names long will be remembered.

Your legacy is assured.

Rodger Malcolm Mitchell
Monetary Sovereignty

====================================================================================================================================================

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

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

Quantitative easing (QE) is economics jargon for a process few non-economists understand. That, after all, is the purpose of jargon. Sadly, few economists understand it either.

To paraphrase from Wikipedia:

Quantitative Easing (QE) is used by central banks to stimulate the national economy. A central bank implements QE by buying long term bonds from commercial banks and other private institutions, thus creating money and injecting a pre-determined quantity of money into the economy.

Quantitative easing increases the excess reserves of the banks, and raises the prices of the financial assets bought, which lowers their yield.

Risks include the policy being more effective than intended in acting against deflation – leading to higher inflation, or of not being effective enough if banks do not lend out the additional reserves.

Utter nonsense on all counts.

Fed Chairman Bernanke, being among the nation’s experts in the effects of federal finances, is well aware of the following:

1. QE does not stimulate the economy. It depresses the economy. When the Fed buys T-bonds, it takes those T-bonds out of private hands, thereby reducing the amount of federal interest paid to the private sector.

Rather than being stimulative, these money supply reductions depress the economy.

2. Banks neither need nor use additional reserves. They can obtain all the reserves they want, directly from the Fed, at near zero rates. So adding to reserves does not stimulate lending.

3. Reductions in interest rates are not stimulative. In the blog post Low interest rates do not help the economy we show that there is no historical relationship between low interest rates and economic growth. In fact, the opposite is true. Higher rates force the federal government to pump more interest into the economy, which is stimulative.

So why does Chairman Bernanke, knowing the above, institute repeated rounds of QE, and pretend he is doing this to help grow the economy, when he really is depressing the economy? Because it’s what his bosses (the President and Congress) want.

And why do the President and Congress want QE? Because recessing the economy widens the income gap between the rich and the rest.

And why do the President and Congress want the income gap to be widened? Because that is what the uber-rich bribe them to want (via political contributions and promises of lucrative employment, later). The world’s Pete Petersons and Koch brothers et al, want the gap widened, because it is the gap, not absolute income, that makes them rich and powertful.

If there were no gap, no one would be rich, and the wider the gap, the richer they are and the more power they have over you and me.

So they are quite pleased with Bernanke and the Fed, not only for depressing the economy, but also for brainwashing the voting public into believing this actually stimulates the economy.

It’s the perfect con. Get the victim to demand his own losses. Bernie Madoff knew this well, when he tricked people into demanding they be allowed to invest with him.

So you demand “deficit” reduction, “debt” reduction and QE, all in the name of economic stimulus, when in fact, all three are economically depressive.

The uber-rich reward the Fed and the politicians for using jargon to trick the public into believing that the treatment for anemia is to apply leeches. Owning the compliant media completes the con.

And the rich have succeeded. You believe what you’ve been told, don’t you?

Are you ready for another round of leeches to cure your anemia?

Rodger Malcolm Mitchell
Monetary Sovereignty

====================================================================================================================================================

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