–The Dems are right. The GOP is right. And the 1% laugh all the way to the bank

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 motivation.
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The Dems are right. The GOP is right. And the 1% laugh all the way to the bank

The Dems are right to deplore federal program cuts, virtually all of which would dramatically burden the middle and lower classes. Spending cuts not only limit dollar growth in the economy. Further, because most spending benefits the 99%, spending cuts directly punish all but the top 1%.

The GOP is right to insist there be no tax increases (other than, tellingly, Obama’s outrageous increase in FICA, which already has begun to burden the middle and lower classes). Tax increases on anyone, rich or poor, remove dollars from the economy, thereby depressing the economy.

So, in a way, everything the Dems and GOP propose is right, and everything they plan to do will dramatically burden the middle and lower classes.

So who came up with this truly harmful sequester idea? The Dems conspired with the GOP. For those who may doubt there is a conspiracy to widen the gap between the 1% and the 99%, the sequester is prima facie evidence. Both parties voted for it and now for political purposes, both parties deny they voted for it.

The purpose of today’s political jockeying merely is to disguise the fact that both parties want austerity. Why? It’s what the 1% pay them to do. That’s what the Citizens United decision was designed to facilitate.

And while the 99% voters buy into the nonsense that the deficit and debt are too big, the 1% laugh all the way to the bank.

Examples:

Washington Post
Pentagon warns workers may need to take unpaid leave if sequester kicks in
By Zachary A. Goldfarb and Ernesto Londoño, Published: February 20

The Pentagon warned 800,000 civilian employees worldwide Wednesday that they will be forced to take unpaid leave if deep budget cuts take effect next week, fueling growing anxiety about the impact of the automatic spending reductions on the nation’s economy and security.

In the most detailed account of the ramifications of across-the-board cuts, called the sequester, Defense Department officials said civilian personnel could be put on leave one day a week for 22 weeks — effectively cutting their pay by 20 percent for nearly six months.

And the 1% laugh all the way to the bank.

Budget cuts could result in up to 20 percent pay cut for federal workers
Joe Davidson

Agriculture: Plans to furlough about one-third of its workforce, which would lead to “a nationwide shutdown of meat and poultry plants during a furlough of inspection personnel.”

Commerce: “Up to 2,600 NOAA (National Oceanic and Atmospheric Administration) employees would have to be furloughed, approximately 2,700 positions would not be filled, and the number of contractors would have to be reduced by about 1,400.” Census vacancies would remain vacant.

Justice: “The Department estimates that it would lose the equivalent of more than 1,000 federal agents . . . as well as 1,300 correctional officers.”

Education: The sequester “would likely require the Department to furlough many of its own employees for multiple days.”

Energy: “Sequestration would affect thousands of jobs among Federal, contractor and grant awardee personnel.”

Homeland Security: “Sequestration would necessitate furloughs of up to 14 days for a significant portion of our frontline law enforcement personnel, and could potentially result in reductions in force at the Department.”

Housing and Urban Development: “Furloughs or other personnel actions may well be required to comply with cuts mandated by sequestration.”

Interior: Sequesters would limit the department’s “ability to sustain a full complement of seasonal employees needed for firefighting, law enforcement and visitor services.”

NASA: Some inspector general vacancies would go unfilled.

National Science Foundation: The agency would have to cut nearly 1,000 research grants.

Social Security Administration: Sequestration would lead to more than 5,000 positions lost through attrition and termination of more than 1,500 temporary and other employees and a general elimination of overtime.

Transportation: The vast majority of the Federal Aviation Administration’s nearly 47,000 employees would be furloughed for about one day per pay period through September.

Treasury: Most Treasury employees would face furloughs, which would have a cascading effect on employees’ families as well as on the economy at large.

And it’s not “just” the massive job losses. These agencies perform valuable functions, the lack of which will negatively affect you as a member of the 99%. Want less inspection of meat and poultry? Done.

Want fewer law enforcement personnel? Done.

Want less scientific research? Done.

Want less help from Social Security personnel? Done.

Want fewer air controllers? Done.

And the list goes on and on. All the services the federal government provides, reduced. That is what austerity means.

Middle- and lower class voters. You demanded austerity. Now, you have austerity. The deficit will be reduced; the government will be reduced; your lives will be reduced. Enjoy.

And the 1% laugh all the way to the bank.

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

–Kings, serfs and Congress

The true story of an ordinary man who wins the queen’s heart and starts a revolution. Centering on the intriguing love triangle between the ever more insane Danish King Christian VII, the royal physician who is a man of enlightenment and idealism Struensee and the young but strong Queen Caroline Mathilda.

A Royal Affair is the gripping tale of brave idealists who risk everything in their pursuit of freedom for their people.”

The movie also is about a menagerie of butt kissing, boot licking sycophants, whose sole mission in life is to agree with whomever has most power currently, so as to gain power for themselves, despite horrible damage to their nation and its people — in short, exactly like the U.S. Congress.

Recently, I’ve been in touch with Warren Mosler and Stephanie Kelton, two of the more influential people in Modern Monetary Theory. They are interviewed repeatedly, though sadly, I don’t see as much positive result as one might hope.

Here is the text of my 2/15/13 note to Stephanie:

Hi Stephanie,

You may be our best hope. I just wrote to Warren, and gave him my usual doubts that Obama, Bernanke, the Counsel of Economic Advisors et al don’t understand economics. Warren’s response was, “they are afraid the deficit will bring down ‘the whole house of cards’ like greece“

I then said, All of them are afraid? The thousands of political leaders in America and around the world, and their economists, all are ignorant of the economic facts? I have trouble believing that you and I and a few dozen professors (mostly from UMKC) and a handful of others are the only knowledgeable people on earth.

His response was, “yes, bunch of sheep. some might not be, but they are ‘team players’ who follow their leader and don’t think at all.”

So there it is. All those politicians and PhD economists are “ignorant, sheep or team players.”

My belief: It’s more than ignorance and “sheepness.” Has to be. The 1% are paying politicians to create austerity and widen the gap, and the sooner we all accept that, the sooner we’ll be able to do what’s necessary to turn things around.

In short, I believe it’s not ignorance but rather bribery. Warren agrees it’s not ignorance, but he thinks it’s “sheep following their leader,” something like King Christian VII’s kiss-ups.

Stephanie, then wrote me today:

I can tell you that I had lunch with a WH aide last month. He told me that everyone in Congress is a total wimp. no one — not a single one — wants to make a decision or think for themselves. He was quite adamant. Everyone wants to be told what to do. Both sides of the aisle.

The D’s divide into two camps: those who view their mission as supporting the President 100% — cheerleaders for Obama — and those who are concerned only with attacking the R’s. On the other side of the aisle are those who care only about attacking and undermining Obama and those who care only about brand loyalty and the Rep. base.

It is only about “winning” as defined by these narrow missions. No one cares about policy — only politics. He is very well connected and totally disgusted.

So when you ask whether it is possible that no one understands the economic facts, I wonder if that is even the right question. They seem to have ZERO interest in economic facts or economic policy itself. They are minions on a mission.

I believe Stephanie, her White House contact and Warren all are correct. The sheep know the truth, but they follow the leader. Their motive is the same as the King’s followers, i.e. no one ever got fired (or beheaded)for laughing at the King’s jokes.

All of which begs the question, “What is are motives of the leaders?” I can think of two:

1. The leaders suck up to the voters who are absolutely, positively certain the federal deficit is too high, and demand that something be done about it.

and

2. The leaders are being bribed by the upper .1% income group to widen the income gap by legislating against the best interests of the 99.9%.

Why do the voters believe the Big Lie that the deficit is to large? Partly its a feedback mechanism. People tend to listen to and believe ideas they already believe. That’s why anti-black, anti-brown, anti-poor, anti-immigrant and anti-gay bigots and gun nuts are more likely to watch Fox “News” and less likely to watch MSNBC — more likely to believe what Republicans say and less likely to believe Democrats.

Of equal importance is the fact that most media are owned by the upper .1%, who want austerity, because austerity injures the middle class and widens the gap between the very rich and the rest.

So, if the media continually (for more than 40 years) pound away at the Big Lie, that the deficit must be reduced, the voters believe it, and the politicians reinforce what the voters already believe, especially when the .1% pay them to do so.

Where does that leave us if we wish to save America, especially the middle and lower income groups? Trying to educate the politicians and their lackeys is useless. They already know the truth, but are motivated not to admit it.

Trying to educate the voters also is useless, because they will not listen. They want to hear what they already believe.

Which brings us back to my suggestion made several weeks ago. We first must shock the public with a scandal — the scandal that the politicians are being bribed by the rich to screw the poor.

We must make the voters angry enough for them to open their minds to a different idea.

Once we get them angry enough so they are shouting out their windows, “I’m mad as hell and I’m not going to take it any more,” then we come to them and say, “If you’re that angry, here’s the solution.” And we explain the simplicity of Monetary Sovereignty.

Scandal first; educate after.

By the way, I believe Stephanie agrees with this, and if I’m right and she does, and if she will have the courage to say so, again and again, and if UMKC and the rest of MMT support her, she may become the most important economist in America.

Let us pray.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–“Shotgun Joe” solves the gun problem

Joe Biden’s is President Obama’s point man on gun control. Here is his advice to his wife:

“I said, ‘Jill, if there’s ever a problem, just walk out on the balcony here … walk out and put that double-barrel shotgun and fire two blasts outside the house, I promise you whoever’s coming in is not going… you don’t need an AR-15.’”

Then, go directly to jail, because shooting someone who is standing outside your house very likely will be considered murder, almost everywhere except perhaps, Texas.

Thanks for the advice, Shotgun Joe. That clarifies the Obama position. Rather than calling the police and letting the law take care of the situation, take the law into your own hands and murder someone with a double barreled-shotgun.

We don’t need no dang courts ‘roun hyar, right Joe?

And do be careful not to let the spray hit anyone else.

Here, I thought the NRA was nuts.

Rodger Malcolm Mitchell
Monetary Sovereignty

P.S. On Thursday, the Vice President will be at a conference on ways to prevent gun violence just outside Newtown, Connecticut.
Hank Weinbloom, FOX News Radio.
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#MONETARY SOVEREIGNTY

–Poland debates the economic suicide of austerity

Core or periphery?: Poland’s Battle Over Embracing the Euro

Since the fall of communism in 1989, Poland has become an EU member that has developed from a backward, agricultural country into a prosperous nation. Now liberal-conservative Prime Minister Donald Tusk wants to take the next step.

He has announced his intention to hold a “national debate” in the spring over Poland’s accession to the euro zone. “How should we decide?” he asks. “Do we want to be part of Europe’s core in the future or remain along its periphery?”

Note the use of the words “next step” and “accession” which imply progress, and the words “core” vs. “periphery,” which imply that Poland is being left out of something good.

Europe’s “core” is in an economic death spiral, drowning in a whirlpool caused by monetary non-sovereignty and slavish adherence to obsolete ideas like deficit/GDP limits. So yes, by all means, let’s dive right in, and drown along with them, rather than stay safe on the “periphery” shore.

With its national debt at only 56 percent of GDP and its currency, the zloty, relatively stable, the stability criteria are hardly an issue for Poland. The only minor sticking point is that last year’s 3.1 percent budget deficit is slightly higher than the deficit-to-GDP ratio of 3 percent demanded by the Stability and Growth Pact.

Except not one human on this planet can explain why a Monetarily Sovereign government’s deficit spending should be limited to 3%, or to any other percentage, of a nation’s product.

The government camp argues that the country needs the euro to remain competitive. But the conservative-nationalist opposition believes that Poland’s independence is at risk. It argues that, owing to German dominance, if Poland joins the euro zone it will lose the national character it developed in difficult struggles that claimed many victims.

Not just “national character,” Poland will lose its economy if it joins the failed eurozone. It would be akin to a move from the safe, posh suburbs to the crime-ridden, inner city slums, just to be part of “the core.”

About 75 percent of Polish exports go to EU countries. If the country joined the euro zone, one of the most important benefits is that the transaction costs caused by fluctuating exchange rates would disappear.

Exchange rates can help or hinder exports, depending on whose money is weaker. Currently, those “fluctuating exchange rates” don’t seem to have hurt Poland. And anyway, how about hedging on the futures exchanges? That’s why they were created.

All sovereign nations deal with exchange rates. So? Is this a reason to surrender your single most valuable asset: Your Monetary Sovereignty?

Despite the Europe-wide recession, Poland consistently generated high growth rates, but now the crisis has arrived. Poland’s 38 million people are holding onto their money, triggering a sharp drop in domestic demand. The Polish economy grew by only 2 percent in 2012, compared to 4.5 percent in 2011.

Let’s see. When the euro nations faltered, Poland prospered. Now the euro nations are drowning in depression, while Poland has “only” 2% growth. Anyone see a reason Poland should dive into that euro maelstrom?

The first showdown is expected in late February and early March, when the Polish parliament, the Sejm, will vote on ratification of the European fiscal compact, the agreement championed by German Chancellor Angela Merkel that obliges signatories to implement balanced-budget legislation and accept automatic sanctions for violating the new deficit rules.

Ah, good old Merkel. Here motto is, “If we couldn’t beat ‘em in the war, let’s beat ‘em down in the peace.”

“We think that EU integration goes much too far,” says Krzysztof Kawecki, a member of the center-right Right Wing of the Republic party.. “We don’t want a United States of Europe, but a confederation of independent national states.”

The fiscal compact, he says, gives Brussels a say in fiscal and budgetary policy. Kawecki believes that it would be “suicidal” to introduce an ailing currency like the euro today.

A “United States of Europe” would work.. Member nations would surrender their Monetary Sovereignty in exchange for receiving euros from the central government. But the EU proposes something far worse.

Member nations would surrender their Monetary Sovereignty in exchange for nothing. They would become slaves to the EU’s incessant demands for austerity, an economic black hole from which no nation emerges.

Austerity is everywhere (including the U.S.) a black hole designed by the rich to increase their power over the poor. And the euro is an income gap widening machine, guaranteed to impoverish all but the upper .1%.

God help the Polish people if their leaders manage to drag them into the EU’s austerity abyss.

(Then again, God help the American people, as our upper 1% income group drags us down into the austerity abyss.)

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

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