Mitchell’s laws: To survive, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Reduced money growth cannot increase economic growth. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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In the post titled: “Might Irene have a positive effect,” I wondered whether this disaster would bring Congress and the President to their senses, and begin a move away from the ridiculous, “small-government,” Tea/Republican, economic hypotheses.

Washington Post: FEMA, to pay for Irene damage, delays funds for rebuilding in tornado-ravaged areas: By Ed O’Keefe, Published: August 28

The Federal Emergency Management Agency is temporarily suspending some payments to rebuild roads, schools and other structures destroyed during spring tornadoes in Joplin, Mo., and Southern states and other recent natural disasters to pay for damage caused by Hurricane Irene.

Has our Monetarily Sovereign government – a government with the unlimited ability to pay any bills at any time – somehow run short of money? No. A Monetarily Sovereign government cannot run short of money.

But Congress, caring little for the human suffering in Joplin and the Southern states, prefers to cut off the funding these people so desperately need, rather than increase the federal deficit. Why? No reason. None at all.

Imagine a drowning person begging for a life line, and the Tea/Republicans refusing: “No, although I have an unlimited number of life lines, it is against my principles (and the 2012 election) to assist you unless I unnecessarily can steal a life line from some other drowning person.

With initial damage assessments from the storm potentially in the tens of billions of dollars, the Obama administration will need to request supplemental funding from Congress, possibly provoking another fight over federal spending as a new congressional “supercommittee” prepares to identify trillions of dollars in government spending cuts.

You remember the “supercommitte,” don’t you? That’s the group assigned to the task of applying leeches to cure the nation’s anemia. They will be judged on the amount of blood they can drain from this dying patient.

FEMA said Sunday it will still pay people eligible for individual storm assistance and some states recouping emergency response costs from previous disasters, but it will restrict payments for older, longer-term public rebuilding and mitigation projects to ensure the solvency of the federal disaster relief fund.

The decision affects projects tied to spring tornadoes and other disasters dating back several years and “prioritizes the immediate, urgent needs of survivors and states when preparing for or responding to a disaster,” said FEMA spokeswoman Rachel Racusen.

If you owned a home in Joplin, now destroyed, I’m sure you won’t mind if the government takes care of the East coast, first. After all, they have priority, and the government is “broke.” How do I know? John Boehner said so.

Federal officials Sunday would not estimate how much Irene’s damage could cost, but New Jersey Gov. Chris Christie (R), speaking Sunday on NBC’s “Meet the Press,” said damage estimates “are going to be in the billions of dollars . . . if not the tens of billions of dollars.”

Christie and other governors credited Obama for quickly issuing emergency declarations for their states in advance of the storm to provide money for their response efforts and to allow FEMA officials to assist state and local leaders in initial damage assessments.

Say, what? Republican Governor Christie is glad to receive federal money?????

But the moves will further sap the federal disaster fund, which over the weekend had about $900 million, according to FEMA, less than the $1 billion officials prefer to keep on hand.

On Saturday, House Appropriations Committee Chairman Harold Rogers (R-Ky.) called on the Senate to quickly pass the House GOP’s version of the annual Homeland Security spending measure, which includes $1 billion in additional money for the disaster fund this year and $2.65 billion for fiscal 2012.

Problem solved: The damage from Irene will be “in the billions of dollars . . . if not the tens of billions of dollars.” FEMA has $900 million and there is an additional $1 billion in the Homeland Security spending measure. Anyone see a problem, here?

The Obama administration “has let the fund reach critically low levels, putting continued recovery at risk, without a plan for the future or a clear method for dealing with new disasters,” Rogers said.

Let’s see now, the Republican House Appropriations Committee Chairman, perhaps the ultimate “cut-spending” guy is angry at Obama, for paying funds out of the disaster fund, when he should have (pick one):

1. Not paid for disaster relief and let the people suffer, or
2. Asked the Tea/Republicans for more money.

Sure.

Despite potential funding shortfalls, Obama said Sunday that the federal government would continue providing full assistance to affected states and cities.

“As I’ve told governors and mayors across the affected areas, if they need something, I want to know about it,” he said.

Huh?? Mr. President, didn’t I just read, at the beginning of this article, that FEMA will suspend “some payments to rebuild roads, schools and other structures destroyed during spring tornadoes in Joplin, Mo., and Southern states . . .” Did you forget so soon?

Ah, don’t you just love the political double talk when the reality of human need meets the obstinance of wrongheaded theory? America, wake up. These fools are stealing your lives and the lives of your children. The Tea/Republican’s “cut-deficit” effort is mean, misguided and harmful, and you are paying for their ignorance.

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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY

Mitchell’s laws: To survive, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Reduced money growth cannot increase economic growth. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Hurricane question of the day:

Will Tea/Republican Congresspersons refuse

federal disaster money?

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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY

Mitchell’s laws: To survive, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Reduced money growth cannot increase economic growth. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
==========================================================================================================================================================================

Might Irene have a positive effect?

My family has a slogan: “Good comes from bad.” It is related to the old saying, “It’s an ill wind that blows no good,”

The Irene hurricane and subsequent tropical storm may cause more damage than any natural disaster in recent memory, perhaps in American history. People will die. Homes will be lost. Families will be torn apart. Businesses will disappear. The cost in human suffering will be enormous.

So, “positive effect”? Really?

Yes, I can think of one, and if it happens, it may be a long lasting positive effect that even outweighs the horrors of Irene. Because Irene is damaging the east coast, where live and work America’s most influential people — i.e. the politicians and the bankers — President Obama and the Republicans may agree on one thing: Massive federal spending will be needed.

Yes, that President Obama. You know, the DINO (Democrat in name only). The one who talks like a liberal but walks like a conservative as he leads the United States of Bank. Even he will agree “this is no time for deficit cutting . We have to rebuild the East.”

Never mind that rebuilding the southern states after Katrina, never was important to the conservatives. Never mind that rebuilding the entire country has not been a top line on the conservative/Obama agendum, so long as the banks were protected and politicians retained their gold-plated medical care. If the influential people now suffer losses, swift action will be taken. And so perhaps, just perhaps, this east coast storm may foster the realization that deficit spending is necessary for economic growth.

Yes, the first steps will be to assure the soundness of the banks. And thereafter, money will be needed to rebuild the infrastructure upon which the banks stand and the bankers live. The entire financial community will need saving, and who better to save them than the federal government?

This means jobs and business, to supply the goods and services the influential people cannot live without. And that requires deficit spending. Lots of it.

And, despite the plaintive wails of the ultra-conservatives, whose mantra is “Weimar Republic, Zimbabwe, Weimar Republic, Zimbabwe . . . “ this deficit spending will not cause inflation, at least not an inflation the Fed cannot easily cure. So perhaps a lesson will be learned, and the nation can grow again. Perhaps, good can come from bad.

We shall see.

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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY

Mitchell’s laws: To survive, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Reduced money growth cannot increase economic growth. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
==========================================================================================================================================================================

Perhaps, economics isn’t so bad after all. I often have criticized old-line economists for not recognizing the absolute facts that:

1. Federal spending is constrained only by inflation. Taxes and borrowing do not support the spending by a Monetarily Sovereign nation. Even were taxes and borrowing to be completely eliminated, this would not affect the federal government’s ability to spend.

2. The federal government is not, and never can be, “broke.” Neither today’s taxpayers, nor future generations, ever will pay for today’s federal debt.

3. No amount of federal debt is “unsustainable.” The government can service any amount of debt at any time.

4. A growing economy requires a growing supply of money. Federal deficit spending is the government’s method for adding growth money to the economy. Reductions in federal deficit growth lead to recessions and depressions.

I have criticized mainstream economics as being akin to a religion, relying on faith and authority, rather than on fact. Well, perhaps economics is not alone.

Background: Biological evolution relies on natural selection (popularly known as “survival of the fittest”), in which better suited individual entities survive. These better suited entities pass their genes on, while unsuited entities do not.

The sticking point is that natural selection does not explain altruism. Just two examples among humans: Care for the elderly and heroic soldiers. In fact, human morality is based on altruism. But how does this benefit the individual?

One would think that over time, any leaning toward altruism would be bred out, since the altruistic individuals, by giving their lives or even by sharing their food, time or attention, sacrifice some of their chances to pass on their genes. Yet, nature offers numerous examples of altruism — even among unrelated individuals — in species from the lowest bacterium to the highest life forms.

A solution to the problem is called “group selection,” in which entire groups, receiving the benefits provided by altruistic individuals, are more able to pass on their genes. This solution was rejected for many years, by mainstream biologists. Here is an excerpt from the August 6, 2011,New Scientist magazine:

Today, there is near-universal agreement among those familiar with the subject that the wholesale rejection of “group selection” was mistaken and that the so-called alternatives are nothing of the sort. Some, such as William Hamilton, reached this conclusion as early as the 1970’s, but decades were required for others to follow suit.

However, many people who do not directly study the subject, including many biologists, have got the impression that group selection was conclusively disproved and that nothing has changed since. As a result, there is widespread confusion.
[…]
The new consensus states definitively that the individual organism is not a privileged level of the biological hierarchy.

Sound familiar? A long-held belief, by mainstream scientists, many of them Nobel prize winners, now has been disproved. Yet despite massive evidence, the public, and even many of the old-line scientists, cling to the old view.

Change a few words, and this article could be talking about the public and old-line economists not recognizing the truths of Monetary Sovereignty.

Yes, maybe economics isn’t so bad after all. By coincidence, William Hamilton proposed “group selection” in the 1970’s and the U.S. became Monetarily Sovereign in 1971. Now that biologists are coming around to the facts, perhaps economists soon will follow.

Could four decades be the magic number for turning that lumbering ship known as “science”?

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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY