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

If I told you world hunger is a serious problem, would your first thought be: We should cut food rations to the people, who already are amply nourished, to “even things out”?

If I told you air pollution is a terrible problem in Beijing, China, would you suggest that China pollute other cities, to “even things out”?

If I told you deforestation is a serious problem in Brazil, would you suggest that the solution is to deforest Canada, to “even things out”?

If I told you that polio remains a problem in parts of India, would you suggest we introduce polio to other parts of India, to “even things out”?

No? Then you don’t think like Nobel Prize winner Joseph Stilgitz, New York University professor of economics Nouriel Roubini or Warren Buffett.

Consider these excerpts from an article in policymic.com, Income Inequality in America: What We Should Be Doing About It:

Recent studies are finding that inequality is not just a matter of ethics or justice, but a serious economic issue contributing to many of America’s current financial problems.

Inequality makes an economy inefficient and unstable, and limits the opportunities and mobility of its citizens.

New research is challenging economists’ traditional view that inequality is a necessary evil for an efficient capitalist society. Nobel Prize winner Joseph E Stiglitz leads the charge in his 2012 book The Price of Inequality, concluding that unequal societies are inefficient and tend to have unstable, unsustainable economies.

Absolutely true. Preaching to the choir, here. But continue reading.

A 2011 International Monetary Fund study agrees and adds that inequality tends to cause economic volatility. Stiglitz further argues, echoing a point raised by economist Christopher Brown of Arkansas State University, that income inequality hinders consumption spending and therefore causes “a shortfall in aggregate demand.”

What can we do about it?

Good conclusion and good question. Here is their answer:

Joseph Stilgitz and New York University professor of economics Nouriel Roubini, among others, agree that higher taxes, particularly for the upper-middle class and up, will help even things out, thereby “unlocking the U.S. economy’s growth potential in a sustainable way.”

“Even things out”? That’s the solution? And how will increasing taxes on anyone increase aggregate demand? Answer: It can’t. Reducing the money supply reduces aggregate demand.

Here’s a bit more nonsense from our renowned economists and capitalist.

They, along with billionaire Warren Buffett, additionally agree that the government should limit the tax breaks, subsidies, and loopholes allowed to the major energy, agri-business, pharmaceutical, and financial companies.

Yes, in this world market, we should do everything possible to hamstring American corporations. Energy research and development is unnecessary, as is pharmaceutical research and development. Right??

In Roubini’s words, the government should make sure, “corporations and individuals whose income is derived from investments pay taxes commensurate with the benefits they get from the US citizenship.”

Not only is this silly from a practical sense (How would “the benefits” be measured to make taxes “commensurate”?), but it is absurd from an economical sense. Taking more dollars out of an economy, depresses the economy. Period.

Learn Monetary Sovereignty, renowned professors. The federal government (unlike state and local governments) does not spend tax dollars. Because the federal government has no need for, nor use of, tax dollars, taxes do nothing but impoverish the economy.

Raise taxes on corporations, and what will the corporations do? Answers:

1. Fire workers or cut salaries
2. Spend less

Both of those results will impoverish our economy, especially the lower and middle-income classes.

Raise tax rates on the uber-rich, and what will they do:

1. Invest less
2. Buy less
3. Fire people who work for them.

All of those results also would impoverish our economy, especially the lower and middle-income classes — except for one thing: While the upper middle-class will get stuck and see their incomes reduced, the super-rich probably won’t pay the taxes anyway. Isn’t that what Romney’s offshore accounts are for? You can be sure the upper .1% will pay the politicians for exemptions and exceptions.

Yes, people love to see those with more money get their comeuppance, but this would be a classic cut-nose-to-spite-face act.

Surely, Stiglitz, Roubini and Buffett (oh, my!) know this stuff. It’s as basic as economics can get. So what are their real motives for making such silly suggestions?

As I often have said, the super-rich do not care about absolute income. They care about comparative income. They care about widening the gap. And what is the best way to widen the gap?

Increase taxes to impoverish the entire economy, so that even the middle class faces starvation.

The economists’ more charitable motive is this: When they win Nobels and are lauded in the upper-.1%-owned media, they like to please and hang with the rich. No one ever was fired, lost tenure or ignored by rich-owned media for laughing at the boss’s jokes.

That’s the more charitable motive.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
9. Federal ownership of all banks (Click here)

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 motivation.
=====================================================================

As readers of this blog have learned, we of the upper .1% income group – we mega rich – we bribe the politicians (via campaign contributions and promises of lucrative employment later) to reduce the so-called federal “deficit,” also known as creating “austerity.” You wouldn’t believe how much politicians love to be bribed.

Because the vast majority of deficit spending benefits you in the lower and middle income classes, deficit reduction widens the gap between us rich people and you middle class folks, and it is the gap that we upper 1%ers really care about. Without the gap, none of us would be rich, and the wider the gap, the more power we have over you. Power is what life is all about. You should get some.

Under the title, Budget cut warnings may prove harsher than reality, Alan Fram of the Associated Press, discusses what austerity will do to you middle class nobodies and for us mega-rich.

—Defense: A $3 billion cut in the military’s Tricare health care system could diminish elective care for military families and retirees.

This won’t affect us in the upper .1% income group. None of us are soldiers and anyway, we have our own “cadillac” health insurance.

—Health: The National Institutes of Health would lose $1.6 billion, trimming cancer research and drying up funds for hundreds of other research projects. Health departments would give 424,000 fewer tests for the AIDS virus. More than 373,000 people may not receive mental health services.

Cancer research, AIDS, mental health – who cares? What’s important is to cut the deficit. Why? No one knows, but you believe it. We in the .1% don’t get AIDS. That’s for poor folks. And we buy our own psychiatrists.

—Food and agriculture: About 600,000 low-income pregnant women and new mothers would lose food aid and nutrition education. Meat inspectors could be furloughed up to 15 days, shutting meatpacking plants intermittently and costing up to $10 billion in production losses.

I don’t know any low-income pregnant women, do you? And if those low-paid workers in meatpacking plants lose some of their income, well I don’t know any of them, either.

—Homeland Security: Fewer border agents and facilities for detained illegal immigrants. Reduced Coast Guard air and sea operations, furloughed Secret Service agents and weakened efforts against cyberthreats to computer networks. The Federal Emergency Management Agency’s disaster relief fund would lose more than $1 billion.

So we fire a few border agents and a few in the Coast Guard. None of us in the .1% work those kinds of menial jobs. And as for FEMA, really who cares? My rich friends and I don’t receive disaster relief.

—Education: Seventy thousand Head Start pupils would be removed from the pre-kindergarten program. Layoffs of 10,000 teachers and thousands of other staffers because of cuts in federal dollars that state and local governments use for schools. Cuts for programs for disabled and other special-needs students.

Some teachers lose their jobs – big deal. I can hire private tutors. Anyway, my kids go to expensive private schools. Don’t yours?

—Transportation: Most of the Federal Aviation Administration’s 47,000 employees would face furloughs, including air traffic controllers, for an average of 11 days.

So 47,000 people each lose 11 days of pay – is that something I’m supposed to care about? Let ‘em eat cake.

—State Department: Slow security improvements at overseas facilities.

So a couple more ambassadors get killed. Not my worry. Just blame Hillary.

—Internal Revenue Service: Furloughed workers would reduce the IRS’ ability to review returns, detect fraud and answer taxpayers’ questions.

This is great. Mitt and I hate those guys nosing into our offshore bank accounts.

—FBI: Furloughs and a hiring freeze would have the equivalent impact of cutting 2,285 employees, including 775 agents. Every FBI employee would be furloughed 14 workdays.

More unemployment for the middle class. Perfect. Just widens the income gap between us and you. By the way, what does the FBI do?

—Interior Department: Hours and service would be trimmed at all 398 national parks, and up to 128 wildlife refuges could be shuttered.

If I want to see wildlife, I’ll fly my private jet to Africa. You should, too.

—Labor: More than 3.8 million people jobless for six months or longer could see their unemployment benefits reduced by as much as 9.4 percent. Fewer Occupational Safety and Health Administration inspectors could mean 1,200 fewer visits to work sites. One million fewer people would get help finding or preparing for new jobs.

This is the best news yet. Increase unemployment while decreasing jobless benefits – the perfect combination for widening the gap between me and you.

—NASA: Nearly $900 million in cuts, including funds to help private companies build capsules to send astronauts to the International Space Station.

Science, who needs it? Really, what good is it?

—Housing: The Department of Housing and Urban Development said about 125,000 poor households could lose benefits from the agency’s Housing Choice Voucher program and risk becoming homeless.

All those lazy, homeless people wandering around. Thank goodness I built a big wall around my estate, so I don’t have to look at them.

In total, austerity is the greatest idea for us .1%ers. The more we cut federal spending, the wider that income gap. For a while, we thought only the Republicans were on our side, but now even the Democrats are starting to join in. They probably couldn’t resist the bribes.

Finally, I’d like to thank all you poor and middle-class slobs for demanding – yes, demanding – that the federal budget be cut, because you believe it’s “unsustainable” or will cause inflation or the government is “broke” or whatever other nonsense we’ve told you.

I know austerity causes you and your children great hardship, but remember, your sacrifices are for a good cause: To benefit us rich people.

Rodger Malcolm Mitchell
Monetary Sovereignty

[Confession: I’m not really part of the upper .1% income group, but it’s nice to dream, especially with the politicians being so cooperative.]

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

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 motivation.
=====================================================================

Well, we have an new protest organization. It’s called “Flip the Debt.” Unfortunately, like the Occupy” movement, they don’t understand economics. So they think our problem is corporations and rich people not paying enough tax.

Here is their press release:

Flip The Debt and Us Uncut Honeywell Action Press Release
Posted by Emine Dilek on Sunday, February 10, 2013

Honeywell CEO David Cote and ‘Fix the Debt’ will host a public event on Monday.

Unfortunately for them, a coalition of groups including FLIP THE DEBT, the Alliance for Retired Americans, and US Uncut will hijack their party to elevate our message about the hypocrisy of corporate tax dodgers demanding cuts to social programs.

‘Fix the Debt’ claims to seek bi-partisan solutions to reduce the federal debt and deficit, but Fix the Debt is a CEO-led group whose real objective is huge corporate tax breaks and drastic cuts in Social Security, Medicare, and Medicaid.

The hypocrisy is stunning…

David Cote and his CEO friends receive a lot from government:
In 2011, the firm got $725 million in government deals, making it the 35th-largest federal contractor.

However, these companies contribute very little in taxes: Honeywell’s actual tax rate from 2008-2011 was 2 percent. They are not alone. Corporate taxes as a share of GDP are near record lows.

Perhaps even more galling is Cote’s demand for cuts to earned benefit programs. Cote has $78 million in his Honeywell retirement accounts, enough to qualify for monthly retirement checks of $428,000 starting at age 65. In contrast the average retiree receives just $1,237 a month from Social Security.

If you think it’s time we stand up against corporate tax dodgers, RSVP to the page NOW! Please RSVP ‘Going’ regardless of whether you can attend. This will help you stay connected with the action. Also, we encourage people to post news, info, and photos about corporate tax dodgers on this wall.

Flip the Debt made good on its promise of protest:

When Honeywell CEO David Cote arrived at Saint Anselm College, he had expected a warmer reception. As the host of Monday’s “Fix The Debt” campaign event, Cote, whose company has come under heavy scrutiny by corporate watchdogs and tax advocates for its use of offshore tax havens, spoke only for three minutes before activists from the “Flip The Debt” campaign interrupted him with a message of protest, before being escorted out by police.

“Offshore tax havens” are not the problem. Low corporate taxes are not the problem. (In fact, they are beneficial.) The problem is a too-wide income gap and a too-low deficit.

You could do Flip the Gap a favor by going to their site and suggesting they immerse themselves in Monetary Sovereignty and/or Modern Monetary Theory. The basics don’t take long to understand, and this will make their protests productive. (You may have to do it via tweets, as I was unable to find an Email address at their site, http://www.flipthedebt.org/)

Otherwise, they’ll just be another Occupy movement that failed to accomplish much, because it refused to learn the facts.

It will be a shame to see their energy wasted.

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 motivation.
=====================================================================

FDIC is an excellent program that protects bank depositors. Its limits are too low (in my opinion), but otherwise it does what it is supposed to do: Allow people to make deposits without the fear that these deposits will not exist when needed.

I, myself, have owned multi-year CDs in banks that closed several years prematurely, and in each case, I received my money, including interest, within a week.

Insurance companies have some resemblance to banks in that they accept “deposits” (premiums) and provide promises of specific, later payments. Like banks, insurance policies are supposed to provide risk-free investment with many (not all) of their policies. That is why they are called “insurance.” They insure against risk.

A fixed annuity resembles a CD in that it guarantees a specific payment, despite inflation, recession or any other economic uncertainty. And, similar to the situation with banks, the long-term, future finances of insurance companies are difficult, if not impossible, for the public to research or predict.

So where is the FDIC for insurance companies?

Accident victims are threatened with cuts in annuities
By Donna Gehrke-White, Sun Sentinel
February 13, 2013

Timothy Culhane was only 29 when he tripped on a high-rise conduit pipe and fell seven floors while working on a New York hotel construction site near the World Trade Center in 1980.

He survived, but since then he’s lived through decades of painkillers, surgery and physical therapy. Now totally disabled and living in Plantation, Culhane thought at least he had a regular check coming after he received a million-dollar settlement.

He wasn’t counting on a New York government agency going to court to liquidate an insurance firm that for decades has sent out his monthly checks.

Ironically, the agency that was supposed to protect Culhane has convinced a New York court that he and about 1,500 other annuity recipients must give up a substantial portion of their monthly income because the Executive Life Insurance Company of New York doesn’t have enough money to pay everyone. In fact, it is more than $1.5 billion short.

Last week, an appeals court upheld the cut in annuity payments.

The New York Superintendent of Financial Services is supposed to protect annuity beneficiaries and should help the victims keep what was promised them. The Superintendent’s office first took over Executive Life Insurance in 1991 when its California-based parent company couldn’t pay debts. The stressed ELNY was then given to the New York Liquidation Bureau to turn around.

But after more than two decades of overseeing, the liquidation bureau said that low interest rates and the 2008 stock market collapse had made matters worse and ELNY could no longer “support the payment of 100 percent of the benefits.”

If changes in interest rates and the stock market can affect the security of an insurance policy, it isn’t insurance. It’s speculation.

“I didn’t think that could happen,” Culhane said. He said had turned over his $1 million settlement from the accident in the 1980s to ELNY to ensure he would always have steady income.

“I still need surgeries,” he said.

In New York’s defense, it is a monetarily non-sovereign government. It does not have the unlimited ability to pay its bills. By contrast, the U.S. federal government is Monetarily Sovereign and never can run short of dollars.

Though FDIC arbitrarily limits the size of its guarantees, the federal government really could pay any claims of any amount. So the question is this:

Why does the federal government not guarantee fixed payout insurance, just as it guarantees my bank CDs?

The federal government already has demonstrated it will save large insurance companies and their highly paid executives and wealthy creditors, as AIG can testify.

So the question remains: “Where is the FDIC for insurance premium payers?”

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