–What are the best recession/depression investments?

Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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It looks like Congress and the President, with the approval of the media, old-line economists and the voting public, are determined to reduce the deficit. Historically, deficit reduction has resulted in recessions and depressions. Federal deficits are the government’s method for adding money to the economy, and economic growth requires money growth.

So, we will cause ourselves a recession or a depression. I’m resigned to the fact that the vast majority doesn’t believe this, so I suppose I should enjoy the pleasant irony of seeing all the fact doubters lose their money, their jobs and their homes in the years to come.

But I don’t, partly because my own children and grandchildren will be hurt by the mess Congress is creating. I’ll be hurt, too – unless I can think of some recession-proof investments. While it seems nothing can prevent the out-of-control freight train known as “Congress” from destroying America, I’d like to protect my own family as best I can.

Many of you are investors. Some may know far more about stocks, bonds etc than I do. So I ask you this:

Given that we will have deficit reduction, which absolutely, positively will cause a recession or a depression (depending on how big the deficit reduction will be), what are the best investments to make today? Cash may be safest, but there’s no income. Treasuries are safe too, but again, there is scant income. Its a dilemma. What do you suggest?

Thank you for your help.

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


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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.

MONETARY SOVEREIGNTY

Another reminder why reducing the federal deficit is national suicide. Your health, your children’s health and your grandchildren’s health are being sacrificed.

The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.
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Another reminder about why reducing the federal deficit is national suicide: Your health, your children’s health and your grandchildren’s health is being threatened — no more than threatened, compromised. And it’s all because of the myth the federal deficit and federal debt are “unsustainable.”

While the myth is easily disproved, the politicians, media and mainstream economists refuse to learn.

By Associated Press, Updated: Tuesday, May 17, 2011
WASHINGTON — A disease standoff may be brewing: How can Alzheimer’s research receive more scarce dollars without cutting from areas like heart disease or cancer?

In one of the stark realities of the budget crisis, scientists’ chances of winning research dollars from the National Institutes of Health for any condition have dipped to a new low.

“We are clearly not able to support a lot of great science that we would like to support,” NIH Director Dr. Francis Collins told senators last week. This year, for every six grant applications that NIH receives, “five of them are going to go begging.”

That’s down from nearly 1 in 3 grants funded a decade ago, and 1 in 5 last year. And it comes before the looming fight over how much more to cut in overall government spending for next year, and where to make those cuts.

Already, a new report says one of the biggest losers is aging research, despite a rapidly graying population that promises a worsening epidemic of dementia, among other illnesses.

“Nobody wants to say Alzheimer’s is worse than diabetes or heart disease or cancer,” says Dr. Sam Gandy, a prominent neuroscientist at New York’s Mount Sinai School of Medicine.

But “part of the problem now with all the pressure to cut the budget … is that for Alzheimer’s to get more, something else has to lose,” adds Gandy. His own lab is scrambling for funds to study a potential dementia drug after losing out on an NIH aging grant.

The NIH pays for much of the nation’s leading biomedical research. Republicans and Democrats alike have long been staunch supporters. But the agency’s nearly $31 billion budget offers an example of the hard choices facing lawmakers, especially if they’re to meet House calls for a drastic scale-back of overall government spending.

So which do you fear more: Disease or the federal deficit, knowing the federal government has proved it can support any size deficit? Have you been so brainwashed by the Tea (formerly Republican) Party nuts, you are willing to lay your health, and the health of your family on the line?

Consider aging issues.

The NIH spends about $469 million on Alzheimer’s research, says a new report from the Alzheimer’s Foundation of America that criticizes overall aging research as “a minuscule and declining investment.”

About 5.4 million Americans now have Alzheimer’s disease, and studies suggest health and nursing home expenditures for it cost more than $170 billion a year, much of it paid by Medicare and Medicaid.

NIH’s Collins told a Senate appropriations subcommittee that there’s a “very frightening cost curve.” In 2050, when more than 13 million Americans are projected to have Alzheimer’s, the bill is expected to reach a staggering $1 trillion. But he said that cost could be halved merely by finding a way to delay people getting Alzheimer’s by five years.

The debt-hawks are fond of showing you graphs illustrating (falsely) how the increase in older people will cause Social Security and Medicare to run out of money. But have they ever shown you a graph illustrating how many more people will get Alzheimers, for lack of medical research?

Monday, Republican presidential contender Newt Gingrich jumped into the debate, saying that over the next four decades Alzheimer’s could cost the government a total of $20 trillion. He suggested selling U.S. bonds to raise money for research rather than have the disease compete each year for a share of the federal budget.

“We are grotesquely underfunded,” Gingrich said of health research dollars.

Yes, we are. Nice of him to notice. But creating T-securities out of thin air, then exchanging them for dollars we previously created out of thin air is foolish.

How foolish? Newt favors reducing the debt, but his bond-selling plan increases the debt. This demonstrates the idiocy of the Tea (formerly Republican) Party debt-reduction position. We wouldn’t need to struggle with complex, convoluted, nonsensical plans if we simply would end the debt-hawk control over our thinking. Stop selling bonds; fund with deficit spending.

Competition for today’s dollars is fierce, with applications up 60 percent at the aging division alone since 2003. Aging chief Dr. Richard Hodes says last year, his institute couldn’t pay for about half of what were ranked as the most outstanding applications for research projects. Still, he hopes to fund more scientists this year by limiting the number who get especially large grants.

What’s the squeeze? Congress doubled the NIH’s budget in the early 2000s, an investment that helped speed the genetic revolution and thus a host of new projects that scientists are clamoring to try. But in more recent years, economists say NIH’s budget hasn’t kept pace with medical inflation, and this year Congress cut overall NIH funding by 1 percent

The Obama administration has sought nearly $32 billion for next year, and prospects for avoiding a cut instead are far from clear. Sen. Tom Harkin, D-Iowa, who chairs the subcommittee that oversees the issue, warns that under some early-circulating House plans to curb health spending, “severe reductions to NIH research would be unavoidable.”

Still the Tea (formerly Republican) Party doesn’t get it. They don’t understand the simple premise that medical progress requires medical research.

Sen. Jerry Moran, R-Kan., pushed Collins to make the case that investments in medical research really can pay off.

Collins’ response: Four decades of NIH-led research revealed how arteries get clogged and spurred development of cholesterol-fighting statin drugs, helping lead to a 60 percent drop in heart-disease deaths. Averaged out, that research cost about $3.70 per person per year, “the cost of a latte, and not even a grande latte,” Collins told lawmakers.

Get it now, debt hawks? Probably not. But are you willing to fight for your family’s health? Contact your Washington representatives and tell them our lives are being threatened by their misguided budget-reduction nonsense.

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


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No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a dopey teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it screwed up my future.”

MONETARY SOVEREIGNTY

Here is the latest to join the “Clueless” club

The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.
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People laughed about T.V. commercials that began, “I’m not a doctor, but I play one on television.” The viewer was expected to believe the actor’s medical expertise because he plays a doctor. Well we have a corollary in the media. It’s “I’m not an economist though I pontificate about economics in the newspapers,” and the latest to join that revered group is Steve Chapman who is “a member of the Tribune’s editorial board and blogs at http://www.chicagotribune.com/news/opinion/chapman/

For those of you who are new to my site, Monetary Sovereignty is the foundation of modern economics, just as arithmetic is the foundation of mathematics. So when someone doesn’t understand Monetary Sovereignty, you can be sure he does not know what he’s talking about, when it comes to economics.

Here are a few quotes from Steve Chapman’s 4/7/11 column titled, “Reforming Medicare for the Real world.”

Critics (of Budget Committee Chairman Paul Ryan’s plan to overhaul Medicare) say its not as sweet as the status quo. But the status quo is too good to last. Mark Pauly, a health care economist at the University of Pennsylvania’s Wharton School, says of Ryan’s plan, “It’s not better than what we have now, but what we have now is not something we can have 20 years from now.”

Let me translate that for you. The plan is worse than what we have now. Americans will have less health care insurance, leading to poorer health care.

Why not? Because it will cost too much for the nation to afford. . . Absent substantial changes, Pauly has calculated payroll taxes would have to triple to pay for all the promised benefits

Here’s where Mr. Chapman’s (and Professor Pauly’s) cluelessness rears its ugly head. Monetary Sovereignty shows that federal spending is not constrained by federal taxes. In fact, FICA could be completely eliminated, while benefits were tripled, and this would not affect by even one penny the federal government’s ability to support Medicare. In short, federal taxes do not pay for federal spending.

Yes, state taxes pay for state spending, and county taxes pay for county spending, and city taxes pay for city spending — but states, counties and cities are not Monetarily Sovereign. The federal government is. This is a fact that Mr. Chapman, along with Congress, the President and most (thankfully, not all) economics professors don’t understand.

I have news for people old enough to be thinking about retirement: Your children may love you, but not enough to be taxed into poverty. Ryan’s detractors pretend we can go on enjoying the status quo indefinitely. But it’s only a matter of time before we hit a fiscal wall, hard.

Translation: Things may not be so great now, but they are going to get a whole lot worse for you. Why? Because your leaders and we columnists are too ignorant and/or lazy to take a few minutes to understand at least the basics of Monetary Sovereignty.

And what is that “fiscal wall” Mr. Chapman mentions? No one knows, least of all him. At one time, the debt-hawks claimed if we ever passed a debt/GDP ratio of 60%, we would be insolvent. We passed that, so the figure hastily was changed to 100%. We’re about to pass that, but we’re nothing compared to Japan, which already has passed 200% and is nowhere near any mythical “fiscal wall.”

As the Congressional Budget Office notes, “Most elderly people would pay more for their health care.” That’s not a terribly enticing prospect. But we might as well stop pretending there’s any alternative. . . The reason people will dislike what Ryan offers is not that he’s needlessly cruel. It’s that his plan confronts reality, and reality bites.

So there you have it folks. The debt-hawks promise you a bleak future, and there’s nothing you can do about it, except to watch America spiral down to 3rd world status. The sky is falling, and your life soon will be crap, and your children’s lives will be worse crap, so live with it.

Uh, well there is one thing: You can learn Monetary Sovereignty, in which case you would discover that the future doesn’t need to bite. It can be a great one, and all it takes is a bit of brains.

You might drop Steve Chapman a note at schapman@tribune.com, and ask him why he refuses to learn the basics of economics (i.e., Monetary Sovereignty) but still feels qualified to write about economics.

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


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No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetarily Sovereign, and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a dopey teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it screwed up the economy.”

MONETARY SOVEREIGNTY

The end of Medicare

The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.
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It’s one thing to call for “smaller federal governement” or for “less federal spending” or for “cost savings” as vague, general, feel-good concepts. It’s quite another to see the actual effects of reduced federal spending.

Consider Medicare. Relative to the real cost of medicine, Medicare payments to doctors and hospitals have gone down. Many people cheer these payment reductions as evidence doctors have been making too much and charging too much, and that the government is trying to be frugal in its payments. And isn’t frugality a good thing?

Here are some excerpts from an April 2nd, 2011 article by Ricardo Alonso-Zaldivar, of the Associated Press.

Every year, thousands of people make a deal with their doctor: I’ll pay you a fixed annual fee, whether or not I need your services, and in return you’ll see me the day I call, remember who I am and what ails me, and give me your undivided attention.

But this arrangement potentially poses a big threat to Medicare and to the new world of medical care envisioned under President Barack Obama’s health overhaul.

The spread of “concierge medicine,” where doctors limit their practice to patients who pay a fee of about $1,500 a year, could drive a wedge among the insured. Eventually, people unable to afford the retainer might find themselves stuck on a lower tier, facing less time with doctors and longer waits.

Doctors are people. Nurses are people. They have personal lives. They have families. While there may be a certain amount of altruism associated with being a medical care giver, ultimately people, particularly the best people, drift toward money. So restricting Medicare payments tends, over time, to reduce the number and quality of people willing to be educated and trained in medicine, or willing to practice, particularly in primary care.

Hospitals are businesses. Potentially more lucrative businesses attract more investors than do less lucrative businesses. So restricting Medicare payments reduces the number of hospitals, and reduces the sophistication of equipment and systems in the remaining hospitals.

Medicare recipients, who account for a big share of patients in doctors’ offices, are the most vulnerable. The program’s financial troubles are causing doctors to reassess their participation. But the impact could be broader because primary care doctors are in short supply and the health law will bring in more than 30 million newly insured patients.
If concierge medicine goes beyond just a thriving niche, it could lead to a kind of insurance caste system.

“What we are looking at is the prospect of a more explicitly tiered system where people with money have a different kind of insurance relationship than most of the middle class, and where Medicare is no longer as universal as we would like it to be,” said John Rother, policy director for AARP.”

As Tea (formerly Republican) Party Patriot member dance about, hoisting their signs, Medicare slowly shows signs of distress. Doctors have begun to opt out of a system they feel is uneconomical and even unfair.

The trend caught the eye of MedPAC, a commission created by Congress that advises lawmakers on Medicare and watches for problems with access. It hired consultants to investigate. Their report, delivered last fall, found listings for 756 concierge doctors nationally, a five-fold increase from the number identified in a 2005 survey by the Government Accountability Office.

The transcript of a meeting last September at which the report was discussed reveals concerns among commission members that Medicare beneficiaries could face sharply reduced access if the trend accelerates. “My worst fear — and I don’t know how realistic it is — is that this is a harbinger of our approaching a tipping point,” said MedPAC chairman Glenn Hackbarth, noting that “there’s too much money” for doctors to pass up. Hackbarth continued: “The nightmare I have — and, again, I don’t know how realistic it is — is that a couple of these things come together, and you could have a quite dramatic erosion in access in a very short time.”

Another commissioner at the meeting, Robert Berenson, called concierge medicine a “canary in the coal mine.” . . . MedPAC’s Hackbarth declined to be interviewed. But Berenson, a physician and policy expert, said “the fact that excellent doctors are doing this suggests we’ve got a problem. The lesson is, if we don’t attend to what is now a relatively small phenomenon, it’s going to blow up.”
When a primary care doctor switches to concierge practice, it means several hundred Medicare beneficiaries must find another provider.

And why is an excellent concept like Medicare being dismantled? Because of the false beliefs our Monetary Sovereign federal government “can’t afford” to support universal health care, or the government is “too big,” or people should learn to “take care of themselves.”

The next time you hear a Tea (formerly Republican) Party Patriot (ironic, isn’t it?) scream their latest chant, “Cut it or shut it,” understand you are witness to the tolling of the Medicare bell – as well as the bell for so many other valuable federal projects. These people might as well be screaming, “Cut the American life style. Make us third world.”

My prediction: Rather than fund Medicare properly, as a Monetarily Sovereign nation easily could do, Congress will attempt to outlaw concierge doctors or add a tax to medical services provided by these doctors. This will exacerbate the problem, as fewer people will enter and remain in the medical profession, but addressing a bad law with a worse law often is Congress’s knee-jerk approach.

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

No nation can tax itself into prosperity, nor grow without money growth.

MONETARY SOVEREIGNTY