Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Yahoo News, 12/30/11
Spain must stick to deficit-cutting schedule: Rehn

BRUSSELS (Reuters) – It is essential that Spain keep on track in correcting its excessive deficit, Olli Rehn, the EU’s economic and monetary affairs commissioner, said on Friday. “I regret the sizable fiscal slippage relative to the 2011 budgetary target,” Rehn said in a statement.

“It is all the more important now that Spain remains fully committed to the fiscal consolidation path and stays determined to correct its excessive deficit by 2013 as scheduled.”

Spain’s new government said on Friday that this year’s budget deficit would be much larger than expected, and it announced surprise tax hikes and wage freezes. Rehn said he welcomed Spain’s package of policy measures as “a very important step to shore up public finances and reassure financial markets”.

The European Commission would carry out a detailed assessment of the larger-than-expected slippage and the budgetary impact of the new package once it received all the details, he said.
(Reporting by Barbara Lewis; Editing by Leslie Adler)

Tax hikes and wage freezes. Tax hikes remove money from the economy; wage freezes limit consumer spending. Could there be a more misdirected path toward economic recovery? The best analogy is applying leeches to cure anemia.

But what else can Spain do? Its government is helpless. They voluntarily surrendered the single, most valuable asset any nation can have: Their Monetary Sovereignty. They no longer can create sovereign currency to pay their bills, as they have no sovereign currency. They are monetarily non-sovereign. They are drifting in the sea, and the EU refuses to toss them a life preserver.

Why the world (including the U.S. Congress, the President, the media and the old-line economists cannot learn from Spain’s (and Greece’s and Italy’s) experience is mystifying. Our leaders would like to make America monetarily non-sovereign, i.e. unable to create our sovereign currency via deficit spending. Why? Because they believe a Monetarily Sovereign nation is just like you and me. They cannot understand the fundamental differences between federal finances and personal, kitchen-table finances. Our leaders think deficits are bad, and don’t understand deficits are necessary.

They see, right before their eyes, what happens to monetarily non-sovereign governments, including the U.S. states, counties and cities. They are unable to pay their bills. Illinois, with large debt, is months in arrears. The U.S., with large debt, has no trouble at all, paying its debt.

And yet, this evidence makes no impression. It’s as though they say, “Despite all the evidence provided by astronomy, biology, geology, plate tectonics and physics, I believe the world is 5,000 years old, and you can’t change my mind.”

They see, right before their eyes, that Japan is not bankrupt, despite a debt/GDP ratio well above 200%, yet continue to predict disaster if the U.S. debt/GDP ratio reaches 100%.

They see, right before their eyes, how recessions occur when federal deficit growth slows, and how recessions are cured when deficit growth increases, yet continue to speak against deficit growth.

They see right before their eyes how inflation has not been related to deficit growth, but continue to claim federal spending will cause inflation.

They see the equation, Federal Deficits – Net Imports = Net Private Savings, and though understanding that increases in private savings are necessary for economic growth, they rail against deficits.

They see the equation, Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports, and though wanting GDP growth, they cannot assimilate the fact that this requires Federal Spending Growth.

They discuss the fact that raising taxes slows an economy, yet don’t seem to understand why this is so. (Taxes reduce the deficit, taking dollars from the economy.)

They saw that on August 15, 1971, how President Nixon took us off the gold standard, because the U.S. was in danger of not being able to pay its bills. They saw that taking us off the gold standard made it possible for us to pay our bills. Yet they continue to espouse exactly the same economic beliefs, as though this momentous date, August 15, 1971, never happened.

What manner of people are these, who lacking any historical evidence, continue to claim that reduced money creation, or even money supply reduction, will grow the economy and cure unemployment?

Spain will suffer. Greece will suffer. Italy will suffer. Soon the rest of the euro nations will suffer. And the U.S. will suffer, if the debt hawks have their way. But if by some miracle, America’s leaders begin to understand the differences between Monetary Sovereignty and monetary non-sovereignty, we can grow as never before. We once again can create, then live, the American dream.

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. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports

#MONETARY SOVEREIGNTY

Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Think how you would feel if a speeding driver cuts you off and gives you the finger, and then a few miles down the road you see that same driver pulled over by the police, with his hands cuffed. That feeling is called “schadenfreude” and it’s how I felt when I read this outstanding editorial in the Chicago Tribune. There are times when these guys really get it right.

I should mention that schadenfreude neither is noble nor praiseworthy, Quite the reverse, but it can be a guilty pleasure, and I’ll try not to gloat.

Chicago Tribune Editorial
How not to fix the immigration system
Harsh laws create trouble for Alabama, Arizona
December 29, 2011

Crops don’t get picked. Chickens don’t get plucked. Kids don’t go to school. And the line at the Department of Motor Vehicles is really, really slow. Those are among the unintended consequences of Alabama’s overreaching immigration law.

The law, which took effect in September, is even more punitive than Arizona’s SB 1070, most of which was blocked by a federal court after the Obama administration sued. Alabama and a handful of other copycat states will have a rooting interest next summer, as the U.S. Supreme Court hears that case against the backdrop of an intensifying presidential race.

Challenges also are pending against similar laws in Georgia, Utah and South Carolina.

Arizonans are rethinking their harsh stance. Immigrant-friendly governments, companies and individuals boycotted the state, costing it hundreds of millions in tourism, conventions and sales. More than 100,000 Hispanics left the state — exactly as the law intended — but businesses weren’t happy to see them go. Besides being a source of cheap, reliable labor, immigrants are consumers too.

With another round of restrictive measures teed up in the legislature earlier this year, Arizona’s business leaders called for a timeout. The bills, which would have denied birth certificates to children of undocumented parents and banned illegal immigrants from driving, among other things, were defeated.

In November, Senate President Russell Pearce, the mouthpiece of the anti-immigrant movement, became the first state legislator in Arizona history to be removed from office via a recall election. He was replaced by a candidate who favors a more balanced approach to immigration reform.

Some Alabama leaders are having second thoughts too. Dubbed the “Juan Crow law,” their measure is meant to intimidate immigrants into fleeing the state by, for example, requiring schools to check the residency status of students and their parents — even though the Supreme Court has long held that children are entitled to a public education regardless of their immigration status. Fearful parents have responded by keeping their kids out of school.

A worker exodus has left farmers and poultry plants without enough help.

The law’s onerous demand that documentation be produced for “any transaction between a person and the state” has turned out to be a maddening inconvenience for everyone who needs a driver’s license, auto tags or a business license.

Some local governments are unsure whether the law prohibits them from providing utilities or trash pickup to undocumented families. A judge already has blocked the state from requiring proof of legal residency on annual registrations for mobile homes.

Meanwhile, measures meant to scare away illegal immigrants could end up scaring away business investors too. In November, a German executive visiting Tuscaloosa’s Mercedes plant was pulled over because his rental car was missing a tag; he was arrested when he couldn’t provide proof of residency. Oops.

This prompted the St. Louis Post-Dispatch to invite Mercedes to move its plant to Missouri. “We are the Show-Me State, not the ‘Show me your papers’ state,’ its editorial page quipped. The paper admitted Missouri’s legislature has been hostile to immigrants, “but not as hostile as Alabama’s or Arizona’s.”

Many Alabama lawmakers recognize they need to change the law. That won’t be easy after all the chest-thumping that went into passing it.

The lesson here is that the one-dimensional, enforcement-only approach doesn’t address the root of illegal immigration: Businesses need workers. When the system fails to provide enough visas to fill the available jobs, employers and workers find ways around it. Those needs should drive our immigration policy. Instead, it has been driven by politics.

Aware that the hard-line approach doesn’t sit well with businesses or Latino voters, some of the presidential candidates have dared to temper the debate. Texas Gov. Rick Perry defended his state’s program to extend in-state tuition to undocumented students. Newt Gingrich called for “humane” immigration policies, including a path to legalization for longtime undocumented workers who have otherwise been law-abiding. Both tacked right again after being booed by immigration hawks.

Two recent polls of likely Iowa caucus-goers, though, gave Gingrich and Perry the highest marks in the Republican field on immigration.

Maybe we’re getting our hopes up, but Americans seem to be inching toward a civil discussion on immigration. That would be a big step toward a workable solution.

Funny how humane treatment of the men, women and children living in their state, meant nothing to the politicians and voters in Alabama, Arizona and the other states where bigoted politicians win elections by being more cruelly racist than the other guy. Beating down, not only on helpless immigrants, but on their innocent children, was just fine. No human empathy offered. Just lots of lies and phony rationalizations about immigrants taking jobs, committing crimes and voting illegally.

Ah, but when money and consumers predictably began to flow out of the state, then suddenly, seeing all those tan-skinned kids and their parents having their lives destroyed, wasn’t quite as much fun.

A nation is known by the way it treats its least powerful. That goes for state governments, too.

I award 3 un-American symbols to all you politicians and sheriffs who sold your souls and appealed to the baser instincts of the slack-jawed members of your constituencies, in order to win an election. And you voters who cheered them on can share in the award.

Shame on you. Racist lesson learned?

Rodger Malcolm Mitchell

http://www.rodgermitchell.com

==========================================================================================================================================
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 exports

#MONETARY SOVEREIGNTY

Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
==========================================================================================================================================

Remember when we were proud to be Americans? Can we still be as proud, while our government leaders punish the poorest, weakest and most vulnerable among us — and we go along with it?

How do you feel about this article in the 12/28/11 Chicago Tribune:

DeMint anti-deficit plan leans heavily on poor
By James Rosen

A plan by Republican U.S. Sen. Jim DeMint of South Carolna to slash the federal budget defict would hit the poorest Americans especially hard, directing 70% of its $4.2 trillion in spending cuts at safety-net programs intended to help tens of millions of low-income people.

Sadly, these are the same people who have been brainwashed by the media and the politicians into believing the deficit should be cut. They are the classic turkeys who vote for Thanksgiving.

The plan proposes $20 billion in cuts that would affect the affluent. It suggests almost $3 trillion in cuts that would affect low-income Americans. But DeMint, a leading figure in the national tea party movement, says the cuts — including eliminating the earned income tax credit and child tax credit for Americans who don’t earn enough money to owe federal income taxes — are needed.

“During the Clinton years, during the Bush years, even when the economy was booming, we were still adding to the welfare rolls” DeMInt said. “We have not helped the people we’re supposedly helping. Poverty has gone up in America.”

See the logic? If the money we’ve given hasn’t cured poverty, then giving even less is the solution.

“We have trained several generations of Americans to be dependent on government rather than trying to get them off welfare.”

This is the typical “blame-the-victim” approach. Poor people are at fault for being poor. They don’t want to work. They enjoy living in crime-ridden, rat-infested, public housing, and surviving on the dole, rather than working like us real Americans.

“We can’t help the poor — we can’t help anyone — if the country goes down the tubes or we start massive inflation.” Sen. Jim De Mint.

Let’s see if I understand. We would love to help the poor, but if we do, the country will go down the tubes and we’ll have massive inflation. So to save America, we not only won’t help the poor, but we’ll take benefits from them. Does that about cover it?

DeMint said in an interview that poor people would be far worse off if the U.S. economy sank under a mountain of federal debt and the country went the way of Greece and other European nations that were facing forced austerity measures.

Another Congressman who doesn’t want to understand the differences between monetary non-sovereignty (Greece) and Monetary Sovereignty (U.S.A.). Remember, this is a guy who has served on the:
Committee on Banking, Housing, and Urban Affairs
Subcommittee on Financial Institutions
Committee on Commerce, Science, and Transportation
Subcommittee on Consumer Protection, Product Safety, and Insurance
Subcommittee on International Operations and Organizations, Democracy and Human Rights
Subcommittee on European Affairs (Ranking Member)
Subcommittee on International Development and Foreign Assistance, Economic Affairs and
Joint Economic Committee

Is it any wonder Congress is so clueless, heartless and ineffective?

“A lot of middle-class people are now using food stamps,” Demint said. “Many Americans are sick of seeing the guy in front of them in the grocery line using food stamps to buy steaks.”

How many is “a lot of”? How many Americans have even seen those middle-class steak-buyers, much less get sick about it? This is the kind of bullsh*t that passes for knowledge in Congress. It’s a direct appeal to bigotry by the Senator from South Carolina.

Robert Rector, a Heritage Foundation economist who advised DeMint in crafting his Welfare Reform Act, said the plan was reasonable. “It’s not like he’s trying to do away with the welfare state,” Rector said. “He’s just saying that the welfare state, like any other set of programs, has to face overall budgetary restraints.”

Ah, yes, that old boogey-man the “welfare state.” It’s populated with free-loaders who don’t want to work, but prefer to live in poverty, while we solid Americans support them. Like those millions of middle-class steak eaters using food stamps. There are millions, right?

The quality of a nation is measured by how it treats its less fortunate — the poor, the sick, the elderly. Remember when we were the people who proclaimed, “Give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore. Send these, the homeless, tempest-tost to me, I lift my lamp beside the golden door.“

Today, we follow politicianss who have forgotten our heritage. We no longer are the Americans the world looks to for moral leadership. We now are the TEA (Take Everything Away) Party people, the me-first people, the deport-aliens, the harsh religionists who vote for the DeMints of the world.

I am sorry to leave such an America to my children and grandchildren. They should have better.

I award two traitor images to Senator James DeMint, for his un-American statements and proclivities.

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

==========================================================================================================================================
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 exports

#MONETARY SOVEREIGNTY

Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
==========================================================================================================================================

The Tea (Take Everything Away) Party Patriots have been the dominant influence on today’s politics. Their cut, cut, cut philosophy, which has permeated both political parties and the media, ignores a basic fact of economics: Federal Deficits – Net Imports = Net Private Savings.

Cut deficits and you cut savings. It’s that simple.

The Tea’s relentless drive to impoverish America touches every facet of our lives. One of many, many examples: How we treat our returning soldiers.

Washington Post
Veterans Affairs claims progress in ending homelessness among vets
By Steve Vogel, Published: December 26

Making aggressive use of a voucher program, the Department of Veterans Affairs (VA) has housed more than 33,000 veterans in the past 2 1/2 years.

That our returning soldiers must struggle with homelessness, is a disgrace. Ironic too, considering who the flag wavers in America are.

VA and the Department of Housing and Urban Development want enough funds to issue 60,000 vouchers at the rate of 10,000 a year through 2014. The effort comes as tens of thousands of troops who served in Iraq and Afghanistan are leaving military service and entering an often bleak job market.

Why have Congress and the President not created a program to employ these men and women who Congress and the President sent away from their homes and families, to risk their lives?

. . . more than 20,000 Iraq and Afghanistan veterans have been homeless at some point during the past five years and that their numbers are rising.

Matt Barnes, a 28-year-old former Marine corporal, is representative of this new generation. On a rainy December night, Barnes slipped quietly into St. George’s Episcopal Church in Arlington County, gratefully accepting a bowl of meat stew offered by volunteers and taking a seat at a table with other homeless veterans.

Barnes has been homeless for two years since losing his job as a waiter and being unable to afford his apartment in Fairfax County. Barnes served five years in the Marine Corps, including a tour in Fallujah, Iraq, in 2004 during the height of the insurgency, when he regularly risked roadside bombings as a convoy driver.

“It was easier over there,” Barnes mused. Barnes finds it nearly impossible to look for a job while homeless. “You can’t get good sleep on the street,” he said. He lacks a phone or even money to get a haircut.

The poverty rate for veterans ages 18 to 34 reached 12.5 percent in 2010, more than double that of 10 years earlier, according to a report last month from Congress’s Joint Economic Committee. Veterans pay 30 percent of their income to rent, and the voucher covers any rent above that amount. Each voucher costs the government on average $6,500 a year, plus $4,148 in case management services — much less than the costs of staying in jails, hospitals or emergency shelters, advocates say.

“It literally saved me,” said Mickiela Montoya, who served with the Army National Guard in Iraq and received a voucher last year for an Orange County, Calif., apartment where she lives with her 4-year-old daughter.

Gary Bush, a homeless 54-year-old Navy veteran in Arlington whose hollow cheeks and sunken eyes tell of long nights on the streets, has asked for a voucher, but he was discouraged by the response. “They tell me the waiting list is 500 deep,” Bush said .

Those selected often must wait four months to a year for housing, depending on the amount of paperwork required by the jurisdiction, said Becky Kanis, who directs a homeless project run by Community Solutions.

Wealthy Congresspersons call for cuts in federal spending, but every cut hurts real people with real needs. The most common Tea Party, debt-hawk excuse for deficit cuts is: “Deficit spending causes inflation.” Not only is this false (See: Oil causes inflation,) but it is heartless.

It says, “All you sick and homeless and jobless veterans must suffer, because I personally believe (with no evidence to support my belief) that at some unknown future time, federal deficit spending, which is necessary for economic growth, might just possibly cause inflation.

“In short, screw you soldier. I’ve got mine.”

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

==========================================================================================================================================
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 exports

#MONETARY SOVEREIGNTY