–“We’d be better off leaving the euro and returning to the pound. We don’t want to end up like Greece.”

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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Euro zone urges Cyprus to spare smaller savers from bank levy
By Michele Kambas and Harry Papachristou
NICOSIA/ATHENS | Mon Mar 18, 2013 5:22pm EDT

(Reuters) – Euro zone ministers urged Cyprus to let smaller savers escape a levy on bank deposits, before a parliamentary vote on Tuesday that will either secure the island’s financial rescue or threaten default.

A weekend announcement that Cyprus would impose a levy on bank accounts as part of a 10 billion euro ($13 billion) bailout by the European Union broke with previous practice that depositors’ savings were sacrosanct.

Translation: To a bankster, “sacrosanct” is money in their pockets. These are the same criminals President Obama refuses to prosecute. Mr. Obama doesn’t bite the hand that feeds him.

Under the deal struck in Brussels on Saturday, bank deposits under that level would have faced a levy of 6.7 percent, ripping up the protection savers thought they enjoyed on insured deposits up to that limit, while those above would be stung for 9.9 percent.

“All Eurogroup ministers said today they wished there was no tax below 100,000 euros but you can’t force a country to not do that,” the Greek source told Reuters.

“Cyprus doesn’t want to impose a large tax above 100,000 because the money will flow out. Two thirds of deposits are from abroad.”

Translation: A tax on deposits below 100,000 euros is economically destructive. A tax on deposits above 100,000 euros also is economically destructive. So let’s do both.

The decision to target bank accounts stunned Cypriots . . . Residents emptied cash machines over the weekend and investors feared a precedent had been set that could reignite turmoil in the single currency area that the European Central Bank has calmed in recent months with its pledge to do whatever it takes to save the euro.

Translation: The ECB calmed the eurozone with a pledge to do “whatever it takes” – i.e. “takes” from the people and gives to the banks.

“It is up to the government alone to decide if it wants to change the structure,” European Central Bank policymaker Joerg Asmussen, who was pivotal in the weekend negotiations, told reporters in Berlin. “The important thing is that the financial contribution of 5.8 billion euros remains.”

Translation: It’s not up to the people; it’s up to the government. The people are not important; the banks are.

“They are treating us like guinea pigs,” said Takis Georgiou, 49. “We’d be better off leaving the euro and returning to the pound. We don’t want to end up like Greece.”

Translation: We’d be better off if our government had not voluntarily surrendered the single most valuable asset our nation has – its Monetary Sovereignty. Who would have thought?

“The most important question is what would happen the following day if the bill isn’t voted,” Cyprus central bank governor Panicos Demetriades told parliament.

“What would certainly happen is that our two big banks would need to be consolidated. This doesn’t mean that they would be completely destroyed.”

Translation: Oh horrors. Consolidate our banks? We would rather punish our citizens than inconvenience the banksters.

“If I were a saver, certainly in Spain or maybe Italy, I think I’d be looking askance at these measures and think this could yet happen to me,” said Peter Dixon, global financial economist at Commerzbank.

U.S. Treasury Secretary Jack Lew, who has talked with his EU counterparts, was monitoring developments closely and expected a “fair” solution, Washington said.

Translation: As a member of the Obama team (following the the footsteps of Tim Geithner), Lew feels a “fair” solution is one that rewards criminals at the expense of the public.

Cypriot President Nicos Anastasiades, a conservative elected just three weeks ago, said in a TV address that the tax was an alternative to a disorderly bankruptcy. It was painful, but “will eventually stabilize the economy and lead it to recovery”.

Translation: “Disorderly” means the banksters would lose money. “Stabilize” means the public will lose money.

“Essentially parliament is called to legalize a decision to rob depositors blind, against every written and unwritten law,” said Yiannakis Omirou, speaker of parliament and head of EDEK, the small Socialist party.

Translation: Right. That’s the Obama/Geithner approach. Any problem?

And then something amazing happened:

Cyprus lawmakers reject bank tax; bailout in disarray

(Reuters) – Cyprus’s parliament overwhelmingly rejected a proposed levy on bank deposits as a condition for a European bailout on Tuesday, throwing euro zone efforts to rescue the latest casualty of the currency area’s debt crisis into disarray.

Translation: The battered woman refused to be raped again by her attackers, throwing the criminals into disarray.

The vote by the small state’s legislature was a stunning setback for the 17-nation euro zone, after lawmakers in Greece, Portugal, Ireland, Spain and Italy had repeatedly accepted unpopular austerity measures over the last three years to secure European aid.

Translation: “We screwed our citizens. Why can’t you do the same?”

French Finance Minister Pierre Moscovici said the euro zone could not lend Cyprus any more, since the country’s debt would become unmanageable.

Translation: “Your debt is too big. You can’t pay it back. So, we suggest making your debt even bigger. But first you must impoverish your people further.”

The one smart person in the eurozone: “We’d be better off leaving the euro and returning to the pound. We don’t want to end up like Greece.”

We could use his wisdom in the U.S. Here, the President and Congress pretend we are not Monetarily Sovereign. The purpose: To widen the income/wealth gap between the rich and the rest.

The people are unemployed, but bribery works.

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

–Another great Bill Black article, needing just one addition

Bill Black is a professor at the University of Missouri, Kansas City, a school that seems to have a near monopoly on economics professors who understand economics.

While the U. of Chicago, Harvard, Stanford et al, have seemed to receive the accolades, UMKC has the single best economics department in America, if not the world.

Put the names Bill Black, Randy Wray, Mat Forstater and Stephanie Kelton, all UMKCers, on your list of economists who know what they are talking about (There are more, but I don’t know them well enough). One day, someone should tell me who is responsible for all these people coming together into one department.

Anyway . . .

Bill Black recently wrote another in a long list of terrific articles that appeared in

New Economics Perspectives, titled, “Slate Agrees that Obama’s Vanity Drives the Grand Betrayal – and Praises the Betrayal.

Quoting from the article:

Obama is driven by concerns for his “legacy.” In more human terms, he is intensely vain about how history will perceive him. . . Obama sees inflicting the “Grand Bargain” on the Nation as his means of achieving his legacy.

The “Grand Bargain,” which Black calls the “Grand Betrayal” is Obama’s willingness (lust, actually), to effect a so-called compromise with Republicans by doing what he always has wanted to do: Gut social programs and dismantle the New Deal and Great Society – programs that have benefited the 99.9% and helped close the income/wealth gap between the ultra rich and the rest of us.

I urge you to read Black’s artile.

After reading the article, I wrote Bill the following note:

Bill,

As usual, your most recent article (“Slate Agrees that Obama’s Vanity . . . Betrayal”) was brilliantly written. I take issue with one conclusion, however.

While I agree that legacy is Obama’s motivation, there is more to it.

As a lifelong Chicagoan, I understand the Chicago political way. Consider how Obama rose from “community organizer” (whatever that means??) through state Senator, federal Senator and President of the United States, all without doing anything of significance.

How? By doing exactly what he was told by the moneyed interests. He was, in short, “dependable.”

The moneyed interests want the income/wealth gap, between the .1% and the 99.9% widened. The gap is what makes them rich, as without the gap, no one would be rich, and the wider the gap, the richer and more powerful the rich are.

Yes, Obama craves his legacy, but merely cutting the deficit won’t do it, especially when the economy will suffer. Austerity is not a legacy vehicle.

So how does he get his legacy? It must be bequeathed to him by the .1%.

They must build an impressive Obama Library, here in Chicago, that will provide an everlasting memorial to his greatness, and Chicago billionaire Penny Pritzker will make sure it’s built.

The media, virtually all owned by the rich and powerful, must write about him in Godlike terms. They must anoint him a saint. They must re-write history.

Since the rich have the power to re-write history, and Obama knows this, he will continue to do what the rich want. It lifted him to where he is today. Why change now?

It even got him his Chicago house. And though the guy who gave it to him (Tony Rezko) languishes in jail, Obama was lifted up and up to glory, by obeying the rich and powerful.

Rodger Malcolm Mitchell

It worked for Bill Clinton, who left office in the midst of a personal disgrace, and who caused a recession by running a federal surplus at the end of his term. But, because he widened the gap, he was rewarded by the rich, and was resurrected by the (rich-owned) media into a very wealthy, and much honored and revered ex-President.

Heroes and saints are not created by the masses. They are created by the rich and powerful.

Obama may be a weak President who punishes the poor, but he understands politics and he takes orders well. So as his reward, the media and the .1% just might give him that beautiful legacy he so desperately craves.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

As I said, Congress has been bribed.

After Watering Down Financial Reform, Ex-Senator Scott Brown Joins Goldman Sachs’ Lobbying Firm
By Josh Israel on Mar 11, 2013 at 3:45 pm

During his nearly three years in the U.S. Senate, Scott Brown (R-MA) frequently came to the aid of the financial sector — watering down the Dodd-Frank bill and working to weaken it after its passage — and accepted hundreds of thousands of dollars in campaign cash from the industry.

Now, the man Forbes Magazine called one of “Wall Street’s Favorite Congressmen” will use those connections as counsel for Nixon Peabody, an international law and lobbying firm.

As I was saying, Congress has been bribed, BRIBED, via campaign contributions and promises of lucrative employment later, to widen the income/wealth gap. The right wing Supreme Court aided and abetted the crime.

Any doubts?

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

Question of the day: Why is it easier to believe in worldwide ignorance than in conspiracy?

Of our leaders – the President and his many advisors, the Secretary of the Treasury and his many advisors, the Chairman of the Fed and his many advisors, the Counsel of Economic Advisers and their 400+ economic PhDs, and Congress, 535 strong – not one of these thousand-plus leaders admits to understanding Monetary Sovereignty.

Not one admits to knowing the federal government cannot run short of dollars. Instead, 100% of them falsely claims the government is “broke” and the federal deficit is “unsustainable” and the debt will be paid by our children.

Not one admits to knowing the U.S. government, being Monetarily Sovereign, is different from the monetarily non-sovereign governments of Chicago, Ohio, Greece and France.

Not one admits to understanding why personal finances are unlike federal finances. So our leaders lie, as President Obama did, when he said, “You have to live within your means, so the federal government should live within its means.”

The followers of Modern Monetary Theory (MMT) reject the notion that this is a conspiracy, perhaps because conspiracy theories, in of themselves, so often have lacked proof. MMT says this simply is an example of massive and unimaginable ignorance, which can be cured by education.

So they try to educate our leaders with ever simpler and clearer explanations – all to no avail. Somehow, strangely, our leaders just can’t seem to “get it.”

Meanwhile, the charade in Washington, DC continues, as each political party competes to destroy the American middle class, by cutting benefits.

Recently, I read an article by Chris Cook, a senior research fellow at University College London and a former director at the International Petroleum Exchange. The piece is titled, THE MYTH OF DEBT. I urge you to read it.

Here are a few excerpts:

The fiscal myth of tax and spend shared by virtually all schools of economics is that tax is first collected and then spent. This has never been the case: the reality has always been that government spending has come first and taxation later.

Taxation acts to remove money from circulation and to prevent inflation: it does not fund and never has funded public spending.

THE clearing banks have their own power to create money, for the purposes of lending. They are responsible for most new money in the modern system They, too, are the subject of a well-peddled myth, which is that deposits are first collected by banks and then spent or loaned into circulation on the basis of requiring a certain reserve level of deposits to be maintained.

In fact, there is no constraint on UK credit/money creation of reserves: the constraint on modern money creation by private banks is the capital required to cover losses on loans. Private banks first lend . . . and then fund their dated interest-bearing loans (assets) with dated interest-bearing deposits (liabilities).

Putting most money creation into the hands of organisations whose raison d’etre is to make money from lending (and more recently, from speculation) is behind much of what has gone wrong with the financial system. As with all historic bubbles, the profit motive drove excessive credit creation.

Bank lending departments were abetted by everyone from bank lobbyists persuading the authorities to allow dangerously low capital ratios to trading departments devising increasingly complex instruments for shifting loans off bank balance sheets to make more and more lending possible.

From these observations, I reach two conclusions. First, the clearing banks cannot be trusted to freely create the credit which is modern money. If money is to be created by a middleman or intermediary then it should be either the central bank or the Treasury itself.

My second conclusion is that we must revisit the concept of the national debt itself and recognise it for the national equity it is in reality. We have only saddled ourselves with this debt delusion because we have forgotten what the true relationship actually is between public spending and taxation.

Mr. Cook’s article appeared March 5th, 2013, in the Scottish newspaper, the Herald. Clearly, he understands Monetary Sovereignty. His Scotland is part of the UK, which remains Monetarily Sovereign, while much of Europe surrendered its most valuable asset, its Monetary Sovereignty, by adopting that alien currency, the euro.

Why did Mr. Cook feel compelled to write this piece? Because, the leaders of the UK, and all their economic advisers, even now, debate the best way to sacrifice their middle class, while also debating the forfeit of their Monetary Sovereignty via entry into the eurozone.

So, is this an example of worldwide ignorance or worldwide bribery and conspiracy?

Aside from their provably wrong statements, there is no evidence these thousands of economics-educated people do not understand the basics of economics. There is no evidence telling us these people do not understand the clear and obvious facts expressed in Mr. Cook’s article and in thousands of other such articles written under the MMT banner and in this very blog.

While zero evidence tells us these people are ignorant, what is the evidence for conspiracy?

Slate
The Failure of Peterson-ism
By David Weigel|Posted Monday, Dec. 10, 2012

For 20 years, a coalition of wealthy people—Pete Peterson chief among them—has spent hundreds of millions of dollars to build public support for austerity.

Hundreds of millions of dollars? Where did those dollars go? Many went into the campaign funds of politicians. Hundreds of millions will buy a great many politicians.

Then there are the Koch brothers.

According to

OpenSecrets Blog here are a few Koch political expenditures:
–Political Action Committee Spending (1989 to 2010): Koch Industries: $5,938,993
–527 Group Contributions (2001 to 2010): Koch Industries: $574,998
–Lobbying Expenditures (1998 to 2010): Koch Industries: $50,972,700

So well more than $55 million dollars were spent, most of them on “lobbying.” That too will buy you a great many politicians.

Then there is George Soros:

http://www.politico.com/news/stories/1010/43157.html Politico quotes him as saying, “Admittedly, consumption cannot be sustained indefinitely by running up the national debt …”

According to OpenSecrets blog: Individual donations to 527 organizations (2001 to 2010)
George Soros: $32.5 million

Hundreds upon hundreds of millions of dollars, given to politicians by people who claim the federal deficit and debt are, or soon will be, too large. Are these billionaires, with all their access to economic facts, also ignorant of economics?

Finally, the rich own the media, which promulgate the lie that deficits must be reduced.

So, which is more likely: Universal ignorance of economics by economics experts and the media or worldwide bribery of politicians and ownership of the media? All the evidence is on the side of bribery; no evidence supports worldwide ignorance.

What is the motive? Why do billionaires, who if anything, are experts in money, “waste” their valuable, and much beloved, dollars spreading the lie that deficits must be reduced? Because that lie will widen the wealth and income gap between the rich and the rest.

If you earned $50,000 per year, would you be rich? Yes, if everyone else earned $10,000. But no, if everyone else earned $50,000. It is the gap that makes the upper .1% rich and powerful, and the wider the gap, the richer and more powerful they are.

Without the gap, no one would be rich. That is why the rich are willing to spend millions, even billions, to widen the gap and to increase their power over the middle- and lower-classes.

Do we really believe we are so brilliant that we understand a Monetarily Sovereign government cannot run short of money, but these thousands of intelligent leaders simply cannot understand? A reporter in Scotland understands, but the leaders of the UK do not? Really?

These leaders are not stupid people. They are bribed people.

The public has been misled and brainwashed. The people do not want to learn economics, but rather wish to rely on their leaders. When the bribed leaders lie, the public believes.

So to change the world, and to save the middle- and lower classes, we who understand Monetary Sovereignty first must explain to the people how and why they have been lied to. We must not fear to explain the conspiracy and the motive.

Only when the people see the bribery and the lies, will they be willing to accept the truth.

And it is the truth that will save them from the ever growing disaster known as the “gap.”

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

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