–Congratulations Yahoo Finance on publishing the dopiest poll of the year.

Mitchell’s laws:
●The more 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.
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There is ignorant. There is stupid. And then there is Yahoo Finance and Chris Nichols. I didn’t see Part I, but I assume it was as silly as Part II is:

Here’s Your Chance: You Fix the Economy, Part II
By Chris Nichols | The Exchange – Fri, Oct 26, 2012

The best way for the federal government to balance the budget is through a combination of spending cuts and increased taxes, more than half of the voters in an informal Yahoo! Finance poll said Thursday.

With 10,283 total responses to the question, 52% said some combination of those two actions would be preferred to the other choices provided. However, 41% of respondents wanted to only cut spending in order to balance the budget, making for a very strong second-place showing.

With those two options making up 93% of the total vote, you can see quickly how readers feel about raising taxes alone as the preferred course of action. Our poll ran the same day that a group of corporate CEOs called on Congress to implement tax hikes and lower spending to tackle the nation’s budget deficit.

The question was one of seven we asked readers in a bid to get a sense of what they believe the government should do to improve its financial standing.

Notice that the poll directs voters to determine the best way to balance the budget, not the best way to grow the economy.

Now, if you really want to know the best way to grow the economy, the answer definitely is NOT to balance the budget, but rather to grow the deficit. But, by assuming the answer is to balance the budget, Yahoo Finance and Chris Nichols perpetuate the ignorance of the American voters.

Unfortunately (or fortunately?), when Americans vote for candidates who promise to reduce the deficit, thereby assuring another recession, these poor, ignorant souls will be hung by their own petards. They either will pay higher taxes (aka eliminating “loopholes” or “broadening the tax base”) or they will receive lower Social Security and Medicare benefits. Talk about pulling the switch on your own electric chair . . .

Anyway, if it weren’t for the fact that my own children and grandchildren will be injured, I might take a perverse delight in seeing the 99% cause their own suffering — especially when these are the folks who get angry at me when I tell them that reducing the dollar supply hurts the economy.

So, Chris Nichols, for your next survey, I suggest this question: What is the best way to effect world starvation: Destroy all the crops or poison all the water?

World starvation is as good a goal as balancing the budget.

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

–You never will know what you have lost: IV

This is the fourth in a series of posts titled, “You never will know what you have lost” (Part I, Part II and Part III) Each post describes the invisible, but real costs of federal deficit reduction, aka “austerity.”

Since austerity never has benefited any Monetarily Sovereign nation that has tried it – 100% record of abject failure, often culminating in economic disaster – it is amazing that people still believe in it. But that is exactly what our own government is trying, now.

The first of the posts contained these paragraphs:

The list goes on and on: The lame who might have walked. The blind who might have seen. The children who might have given to America. The tornadoes and hurricanes and earthquakes that might have been foreseen.

The money that investors might have saved. The inventions never invented. The recessions and depressions that might have been avoided. The wars that might have been won or prevented. The life-saving drugs that might have been developed. The people who might not have died too soon. The beauty never created. The ideas lost. The better world that might have been.

You never will know.

Day by day, we die the death of a thousand invisible cuts, at the hands of people who know not what they do. Like doctors who treat anemia by bleeding the patient with leeches, they bleed the economy of its blood, its dollars, in the name of frugality.

And yet again:

The October 20, 2012 issue of NewScientist magazine contained a short article titled, “Hurricane threat deepens.”

The world really is getting stormier. Climate change is making hurricanes more severe, according to a new study of their effects on the US.

Aslak Grinsted of the University of Copenhagen, Denmark, analysed storm surges due to hurricanes dating back to 1923, as measured by six US tide gauges. He found a clear upward trend. If it continues, the average number of hurricanes to hit the US each year will almost double by 2100 compared to 1923, and big storms like Hurricane Katrina will become more common.

Extreme weather already costs US insurers huge sums – some $32 billion in 2011.

Much damage can be mitigated and lives saved, if we have accurate prediction of hurricane paths, storm surges, rainfall and wind speeds.

New York Times
U.S. Satellite Plans Falter, Imperiling Data on Storms
By John H. Cushman, Jr.
Published: October 26, 2012

WASHINGTON — The United States is facing a year or more without crucial satellites that provide invaluable data for predicting storm tracks, a result of years of mismanagement, lack of financing and delays in launching replacements, according to several recent official reviews.

The looming gap in satellite coverage, which some experts view as almost certain within the next few years, could result in shaky forecasts about storms like Hurricane Sandy, which is expected to hit the East Coast early next week.

All this week, forecasters have been relying on such satellites for almost all the data needed to narrow down what were at first widely divergent computer models of what Hurricane Sandy would do next: hit the coast, or veer away into the open ocean?

Experiments show that without this kind of satellite data, forecasters would have underestimated by half the huge blizzard that hit Washington in 2010.

“We cannot afford to lose any enhancement that allows us to accurately forecast any weather event coming our way,” said Craig J. Craft, commissioner of emergency management for Nassau County on Long Island, where the great hurricane of 1938 killed hundreds.

On Thursday, Mr. Craft was seeking more precise forecasts for Sandy and gearing up for possible evacuations of hospitals and nursing homes, as were ordered before Tropical Storm Irene last year. “Without accurate forecasts it is hard to know when to pull that trigger,” he said.

Experts have grown increasingly alarmed in the past two years because the existing polar satellites are nearing or beyond their life expectancies, and the launch of the next replacement, known as J.P.S.S.-1, has slipped to 2017, probably too late to avoid a coverage gap of at least a year.

For now, the agency is running on a stopgap bill that allows it to redirect money from other projects to the polar satellites. In approving it, Congress demanded a plan by next week showing how NOAA intended to stay on schedule and within a strict limit — about $900 million a year.

“NOAA does not have a policy to effect consistent and reliable cost estimates,” the Commerce inspector general said. The outside review team said it could not tell “if the current $12.9 billion is high, low, or exactly correct.”

The program’s problems began a decade ago with an effort to merge military and civilian weather satellites into a single project. After its cost doubled and its schedule slipped five years, that project was sundered by the Obama administration.

The false belief the federal government is limited in its ability to spend dollars, once again will cause property damage and loss of life. That is an absolute certainty.

How much more property will be damaged? How many more lives will be lost? You never will know. Meanwhile, the Republicans and Democrats debate, not about whether we should undergo austerity, nor even how severe a misguided austerity should be, but rather what form of austerity we should face — tax increases or spending cuts.

Austerity is a foregone conclusion, never debated. What kind, is the only question. There are harsh penalties for economic ignorance. How harsh? How many lost lives? How much property unnecessarily damaged?

You never will know.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–The single biggest issue in the coming Presidential election

You may hate or love Obama or Romney. You may feel the nation is headed in the right or wrong direction. You may feel it’s time for a change, or to stay the course. These are the generalities of the coming election.

Many specific issues are involved – abortion, minimum wage, stem cell research, gay marriage, the deficit, taxes and tax rates, Medicare, Medicaid, Social Security, the military, immigration, gun control.

Though Mitt Romney has stood on two sides of most issues, he has been consistent about one issue, and it is the most important one. It encompasses all of the above, and more: The makeup of the Supreme Court.

Contrary to the hopes of the Founding Fathers, the Supreme Court is the most politically extreme of the three government branches. The other two, the Legislative and the Executive, are forced to be less politically extreme, because their members repeatedly must answer to an electorate that tends nearer to the middle. But the Supreme Court answers to no one.

Conservative Scholars Bullish That A Romney Supreme Court Could Reverse Longstanding Liberal Jurisprudence
Sahil Kapur, October 26, 2012

Liberal-leaning Justices Ruth Bader Ginsburg, 79, and Steven Breyer, 74, are likely candidates for retirement during a Romney administration, the GOP nominee has vowed to appoint staunch conservatives.

Over time, if a robust five-vote conservative bloc prevails on the court for years, the right would have the potential opportunity to reverse nearly a century of progressive jurisprudence.

Roger Pilon, director of the libertarian Cato Institute’s Center for Constitutional Studies and a member of the Federalist Society, told TPM that one more solid conservative vote would pave the way for “fundamental shifts on the Court” toward “a revival of greater protection for economic liberty and a direct assault on the modern regulatory state.”

Translation: The extreme right wing favors business protection over consumer protection, wealth protection over personal protection.

“If Romney were to appoint [conservative] justices and lower court judges, then we would see greater protection for economic liberty and greater scrutiny for regulation — whether they be environmental regulations, regulations for property rights, regulations for affirmative action, regulations of all sorts,” Pilon said.

Pilon says. “I expect that a Romney-appointed court would be more sympathetic to efforts to change the Medicare and Medicaid [and Social Security] programs because they’d come from that school of thought that says government has limited power.” It also means the Court would seek to narrow the berth for Washington to “engage in the kind of expansive programs like we saw with Obamacare and Dodd-Frank [financial regulatory reform],” he says.

Translation: Cut Medicare, cut Social Security, cut Medicaid, cut every social program that benefits the lower and middle classes, and cut out all those messy, consumer-protecting regulations designed to keep banks and big business from stealing.

Randy Barnett, a constitutional law professor at Georgetown University [is] hopeful that a more conservative Court could cut away at regulatory measures and adopt a “this far and no further” approach to federal authority, to thwart further expansion of the social safety net . . . . mentioning elements of Obamacare, Dodd-Frank and environmental regulations as targets that conservatives are already building cases against.

. . . the staunchest legal conservatives hope a fifth vote might lead to the eradication or restructuring of programs like Medicare and Social Security. . .

Translation: The losers: The lower- and middle-classes. The winners: The wealthiest 1%.

Tim Jost, a liberal law professor at Washington & Lee University, warns that . . . conservatives could scale back the federal government’s authority to compel states to participate in federal-state partnerships like Medicaid and . . . they could also curtail the Supremacy Clause to prevent low-income Americans from suing if they are denied government [Medicaid] benefits under the law. . .

Jost continued. “The Affordable Care Act survived by one vote, and four in the dissent were willing to get rid of all of it. Four members of the court have shown that they’re perfectly happy to get rid of pretty major progressive initiatives if they disagree with them.”

Roe v. Wade . . .survives now on a fragile 5-4 margin, which would likely flip if Ginsburg, Breyer or even Kennedy were to be replaced by a down-the-line-conservative justice.

“Women’s access to abortion is likely to be significantly curtailed under a Romney court,” said Adam Winkler, a constitutional law professor at UCLA School of Law.

And the expansion of gay rights would likely hit a wall, Winkler adds, perhaps ending same sex marriage advocates’ hope that the Court will strike down the Defense of Marriage Act.

Translation: Though conservative justices are proud of their role as Constitutional originalists (when convenient), the nation may well be surprised that being an originalist means taking the nation back to 1789. As with Taliban-style religious originalists, Constitutional originalists will return us to the dark ages of imperial law.

Romney could also meaningfully impact the Court, even without replacing liberal justices, if aging conservatives like Antonin Scalia, 76, and Anthony Kennedy, also 76, were to retire. Replacing them with younger conservatives would tilt the balance of the court for decades to come, likely solidifying the right-wing consensus on issues like campaign finance, affirmative action, civil rights and gun rights.

Cato’s Pilon believes that replacing one liberal justice with a conservative could pave the way for a slow return to the Lochner Era — when the Supreme Court invalidated minimum wage and child labor laws as unconstitutional.

“The court could find Social Security unconstitutional tomorrow, and that would be a good thing . . .”

Translation: For the extreme right wing, finding Social Security unconstitutional is a “good thing,” because the program provides no real benefit to the rich, but primarily helps the lower and middle classes.

A Romney Supreme Court Would Change The Constitution Without Amending It
By Ian Millhiser on Oct 11, 2012

*Eliminating The Right To An Abortion

*Judges For Sale: Romney named Chief Justice Roberts and Justices Scalia, Thomas and Alito as his models should he be allowed to pick new judges. All four said the Supreme Court should have done nothing when a wealthy coal baron payed $3 million to place a sympathetic justice on the West Virginia Supreme Court. That justice then cast the key vote to overrule a $50 million verdict against the coal baron’s company. Romney may even want his justices to go much further in permitting the very wealthy to buy elections — he previously endorsed allowing billionaires to give unlimited sums of money directly to his campaign.

*Government In The Bedroom: Only five of the Supreme Court’s current justices joined the landmark Lawrence v. Texas decision, which struck down Texas’ “sodomy” laws

To quote from “Romney Poses Greatest Danger to the Supreme Court” by Earl Ofari Hutchinson, “Romney flatly said that the judge that he longed to have on the current court is Robert Bork. Bork’s rabid, fringe, and at times borderline zany views and interpretation of judicial and constitutional law were so repulsive that his nomination to the court by President Reagan in 1987 was virtually DOA during the confirmation hearings.”

In summary, Romney’s extreme right wing supporters wish to follow a 1789 interpretation of the Constitution, a document written when consumer protections and individual rights were less important than a strict “Talibanesque” rule of law favoring the wealthiest and most powerful.

In four or eight years, Obama and Romney will be gone. But the Supreme Court justices will rule us for decades.

And that is the single biggest issue in the coming Presidential election.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–Honest Henry Blodget: Do you believe him?

Wikipedia
Henry Blodget (born 1966) is an American former equity research analyst, currently banned from the securities industry for lying in his stock analyses, who was senior Internet analyst for CIBC Oppenheimer during the dot-com bubble and the head of the global Internet research team at Merrill Lynch. Blodget is now the editor and CEO of The Business Insider, a business news and analysis site, and a host of Yahoo Daily Ticker, a finance show on Yahoo.

Here is what honest Henry and his honest pals, say about the economy:

CEOs Launch Campaign To Get Congress To Finally Fix The Deficit
By Henry Blodget | Daily Ticker

One of the biggest challenges for the U.S. going forward is the country’s massive debt and deficit problem.

Right away you know you are about to read bullsh*t, since as you will see, the so-called “problem” never is identified. It only is criticized for being “massive,” as in: The U.S., being a “massive” nation, has created a “massive” amount of dollars. And this is a “massive” problem.

The U.S. government is currently spending about $1 trillion more every year that it takes in, and we’ve now piled up $16 trillion of debt. So far, this debt burden has been sustainable, but only because interest rates are at generational lows. If and when our creditors wake up and start demanding higher rates of interest, our ballooning debt-service costs will quickly swamp everything else in the budget.

Henry made a “massive” amount of money by lying, and he just can’t get out of the habit. The “debt burden” is sustainable because it isn’t a burden. Federal debt simply is the total of deposits in T-security accounts at the Federal Reserve Bank. I never have heard of a bank complaining that its deposits weren’t sustainable. In fact, though banks no longer give away toasters for deposits, they still solicit for deposits.

Blodget is waiting for poor, sleepy China et al to “wake up” to the notion that interest rates are low, something he suggests is a secret from the Chinese, though obvious to every other human on this planet. And when China et al “wake up,” Henry expects them to demand higher rates, or else . . . or else, what?

Will they stop buying T-securities? No, but if they did, who cares? China’s dollars go into China’s T-security account at the FRB, and there they reside, until the T-securities mature, at which time, China takes their dollars back. Never does the U.S. Treasury receive or even need those dollars.

A mere glance at the federal budget reveals to any reasonable human being that we can’t go on like this.

A “mere glance,” and a crook, might say that, but an honest, informed analysis says the opposite. There is zero possibility the FRB will be unable to pay China et al back, or create sufficient dollars to pay interest. No taxes needed.

And yet, so far, our elected leaders have refused to do anything about it. Instead, our elected leaders have formed themselves into two ideologically-driven camps that, like groups of children, refuse to compromise. The Republicans want to fix the debt by cutting spending. The Democrats want to fix the debt by raising taxes, especially on rich people.

Well, yes, if you’re going to reduce the deficit, you have to cut spending and/or increase taxes. Duh. And, by the way Henry, either approach would bring on a recession.

And Henry, it’s not “especially” on rich people, it’s only on rich people. That’s the real problem, isn’t it?

And, for some reason, our leaders seem to think it is okay to simply hunker down and stick fast. Never mind that, with every day that goes by, our debt burden grows larger.

And never mind that a growing federal “debt” is required for a growing GDP. Henry, don’t you remember that GDP = Federal Spending + Non-federal Spending – Net Imports? Sure you do, but you don’t want to admit it.

The consensus of non-partisan economists (and reasonable people everywhere) is that the only way to solve our debt and deficit problem is to do it in a balanced way: To trim spending AND increase revenue.

Currently, government spending is running at about 24% of GDP, and tax revenues are only coming in at about 17% of GDP. The only way to reasonably expect those lines to cross is to reduce spending and increase revenue, perhaps converging at about 20% of GDP. And if we don’t agree on this soon and make the tough decisions necessary to gradually get there, our situation will only get worse.

Yes, to trim spending and increase taxes, aka “austerity” is a great solution – if you consider prosperity to be a problem and poverty to be a solution. And where did you get that phony 20% figure? You have no idea. It just popped into your head like your fake research numbers.

The good news is, reasonable people everywhere will now have the help of some of the country’s business leaders, who have formed a campaign to pressure Congress into coming up with a long-term deficit reduction plan.

According to the Wall Street Journal, about 80 CEOs have joined this group, which is dedicated to ending the deficit dysfunction in Washington. Politically, the CEOs hail from both sides of the aisle, but they’re united in this common purpose.

“There is no possible way; you can do the arithmetic a million different ways” to avoid raising taxes, said Mark Bertolini, CEO of Aetna. “You can’t tax your way to fix this problem, and you can’t cut entitlements enough to fix this problem.”

Translation: “About 80 rich people want to reduce federal spending (the vast majority of which benefits the poor and middle classes) and to broaden the tax base (to tax more poor and middle class people).” What a surprise that you and those 80 rich people would want to increase the income gap.

Jeffrey Immelt of General Electric (GE), J.P. Morgan’s (JPM) James Dimon and Honeywell’s (HON) CEO Dave Cote support this call for a balanced approached the deficit.

And these three gentlemen are widely revered for their humble, aesthetic lives and their concern for the welfare of the 99%. And, what is that “balanced approach” BS? Why not call it a “balanced budget“?

Oh, yeah. Economists now have come to realize that a balanced budget causes recessions, so the new euphemism is “balanced approach,” whatever that means.

But big oil executives, who fear higher taxes on their record profits, have not fallen into line on this push. For the sake of the country, let’s hope that support for this purpose only grows.

Perhaps we can spare big oil by cutting Social Security, Medicare, food stamps and federal workers’ pay.

You know you’re on the wrong side of the argument if ever you find yourself agreeing with honest Henry Blodget and his 80 honest CEOs.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

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