Tag: federal deficits are unsustainable

–Debt is bad; debt is good. Take your pick.

The debt hawks are to economics as the creationists are to biology.

There is no functional difference between a federal tax cut and a federal spending increase. Some might argue that federal spending is superior or inferior to private spending, though evidence for either is slim, and either has the same result. They both increase the amount of federal money in the economy. (Mistakenly called the federal “debt.”)

Further, increasing the federal money supply stimulates the economy, and decreasing the money supply depresses the economy. So it is both laughable and sad to see how debt hawks squirm between wanting a lower debt, higher taxes and lower taxes, along with less federal spending, more spending and improved GDP. As the song says, “Something’s gotta give.”

Here are quotes from the always confused editors of the Chicago Tribune, in the editorial dated 8/1/10, titled “Out of debt.”

“. . . Democrats and Republicans are very good at doing one thing: running up the debt. That’s the reason for the National Commission on Fiscal Responsibility . . . to find ways to stem the red ink.” O.K., so federal deficits are bad.

“. . . at this stage (a tax increase) would be a terrible mistake, not only for the health of the economy, but for the nation’s long-term fiscal health.” O.K., so federal deficits are good, in both the short term and in the long term.

“More likely, Congress and the president would spend every nickel (from a tax increase) – and then spend some more.” Oh, oh. Now federal deficits are bad, again.

“Nor does it make sense to place a new (tax) weight on the economy when it is already struggling to grow.” Woops, deficits are good, again.

“Congress can’t afford to indulge the notion that endless borrowing is a sustainable strategy.” So deficits are bad.

“The wisest option is to extend tax cuts for a year . . . “ Deficits are good

“. . . then see what the deficit commissions proposes to curtail our addiction to debt.” Deficits are bad.

“ . . . Erskine Bowles suggests a healthy ratio of $3 dollars in spending cuts for every $1 in tax increases . . . it’s essential if we hope to foster lasting prosperity . . . “ Deficits now are awful. Mr. Bowles “scientific” suggestion equals $4 in spending cuts or $4 in tax increases, or anywhere in between. Guarantee: He has zero data to support his 3/1 ratio, but hey, who need facts?

“ . . . while sparing the taxpayers of tomorrow an unsupportable debt burden.” Deficits are bad.

And here is my favorite: “Coupled with spending discipline, revenue measures can be on leg of the journey back to fiscal sanity. But if they are the first and only leg, they will be a fatal detour.” Huh? They are saying spending cuts and tax increases are good, but first we should have spending increases and tax cuts!

All of the above is classic debt hawk double talk. Federal debt is a taxpayer “burden,” but necessary to grow the economy, but “unsupportable,” even though taxpayers don’t pay for federal debt, and the government has the unlimited ability to service its debt.

That kind of muddy thinking is what needlessly has extended this recession and the unemployment that goes with it. Ignorance may be bliss, but it sure is harmful. As the theme at the top of this post reads, “The debt hawks are to economics as the creationists are to biology.”

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

No nation can tax itself into prosperity

–Economic disaster: Congress in agreement

The debt hawks are to economics as the creationists are to biology.

By Z. BYRON WOLF ABC News; July 27, 2010; “Debt Commission: Dealing With Federal Debt Likely To Require Tax Hikes, Spending Cuts. On both sides of the aisle, lawmakers are coming to terms with hard political fact: services are going to have to be cut and taxes are going to have to go up to keep the $13 trillion-plus national debt from skyrocketing into infinity and beyond.”

Our leaders have no idea what they are talking about. Cutting services and raising taxes is not a “hard political fact.” These are the absolute worst steps we could take, not just unnecessary, but massively harmful to our economy. The infamous DEBT COMMISSION, whose assignment it is to reduce the economy’s money supply, is akin to a “blood commission,” whose job it is to reduce the blood supply. Money is the lifeblood of an economy.

The same people who complain there are not enough jobs, also want to reduce money creation, the very thing that creates jobs. Our leaders act like doctors, who apply leeches to cure anemia. The country needs lower taxes, not higher. The country needs more federal spending, not less. These politicians, totally ignorant about economics, make economic decisions with the expected result.

And don’t be fooled by statements that taxes only will be increased on the rich. That simply is not true. All taxes destroy money. Period. Destroying any money, whether currently owned by rich or poor, decreases the total money supply, which hurts the entire American economy. You cannot drain water from only one end of a bathtub. A tax on Bill Gates hurts us all. It benefits no one.

And what are the “unnecessary” services that will be cut? See: SERVICES, and decide what we should eliminate — remembering that eliminating any federal spending reduces the money supply.

I cannot express in stronger terms how outrageously harmful this all will be. I urge you to contact your Senators, your Representatives and your media, and tell them to learn economics before making these terrible economic decisions that absolutely, positively will injure us all.

If Congress were employed by Al-Qaeda, they could not hurt America more than they now wish to do. If someone told you, “I have a plan to destroy billions or even trillions of American dollars,” you rightfully would brand him a traitor. More countries die from enemies within than from enemies without.

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

No nation can tax itself into prosperity

–$1,000 reward

The debt hawks are to economics as the creationists are to biology.

Politicians continue to worry about the size of the federal debt:

“The president knows that Republicans support extending unemployment insurance, and doing it in a fiscally responsible way by cutting spending elsewhere in the $3 trillion federal budget,” said Representative John A. Boehner of Ohio. “At what point do we pivot and start being concerned about our children and our grandchildren?” said Senator Mitch McConnell of Kentucky.

I will pay $1,000 to the first person (including you, Representative Boehner) who can demonstrate why the U.S. federal government will be unable to service its debts.

Wait, I’ll make it even easier. I’ll pay $1,000 to the first person (including you, Senator McConnell) who can demonstrate why the U.S. federal government will be unable to pay its debts, even if all taxes and all federal T-securities were eliminated. And I’ll throw in an extra $1,000 if you can show how the U.S. taxpayer and/or taxpayers’ grandchildren owe the federal debt.

Readers, please feel free to pass this on to your political representatives. I have my checkbook in hand.

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

No nation can tax itself into prosperity

–Politics vs. people

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.

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

Today’s headline: “Fears grow as millions lose jobless benefits”
Body copy: Senate Republican leader, Mitch McConnell of Kentucky, said: “The fastest-growing parts of this Democrat economy aren’t jobs — they’re the crushing burden of the national debt and the size of the federal government.”

The “crushing burden” is not national debt, which crushes no one. The crushing burden is the false belief the national debt is a crushing burden.

As a result of this false belief, millions will lose jobless benefits, taxes will be increased, Medicare doctors will receive less than they should, Social Security payments will begin later, Medicaid payments will be cut, defense spending will be reduced, federal funding of K-12 education and school breakfast programs will be cut, mass transit funding will be cut and federal assistance to the states will be reduced — all because of a myth with no factual support.

So you, dear reader, will suffer a significantly degraded life style, all because the debt hawks say the federal debt is a crushing burden and the debt causes inflation, neither of which is supported by any data.

Go to any debt hawk web site and ask them for data proving the U.S. federal debt is unsustainable or causes inflation. If they answer you at all (unlikely), they merely will give you statistics regarding the size of the debt, but no evidence it has a negative effect on America.

Here are a couple debt hawk sites you can visit:
Concord Coalition
The Cato Insitute
The Heritage Foundation
The Manhattan Institute
The Hoover Institution

Go ahead. Contact any of them. Despite impressive doctoral credentials, and oodles of statistics, they have no evidence to back their claims. Why? No such evidence exists, though massive evidence shows the misnamed “debt” (should be called “net money created”) is necessary for economic growth.

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

No nation can tax itself into prosperity