–The “Extend and Pretend” austerity magic show. How to end debt by borrowing.

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

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 ultimately 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 motive.
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The U.S. is Monetarily Sovereign. It has the unlimited ability to create its sovereign currency, the dollar.

Given this unlimited ability, it can pay any debt denominated in dollars. If you sent a legitimate $100 trillion invoice to the U.S. government, it could pay that invoice instantly, with no difficulty.

Contrary to the debt hysteria you may read in the newspapers or hear on TV, debt absolutely is not a burden to a Monetarily Sovereign nation.

By contrast, Spain is monetarily non-sovereign. It does not have the unlimited ability to create its sovereign currency, for one simple reason. It has no sovereign currency. It uses the euro, the supply over which it has no control.

And that is Spain’s big problem. No matter how it twists and turns, its supply of euros is limited and deficient. It’s short of euros. And, it owes more euros than it can pay.

So how can Spain find enough euros to pay its bills? Their amazing solution: It simply borrows more euros. That way, it can satisfy today’s creditors, while assuring the problem will continue to grow.

If you are deeply in debt, and have no adequate source of income, the solution is not further borrowing. You know that. I know that. Spain does not.

Here are excerpts from the Los Angeles Times:

Spain exits bailout program
By Lauren Frayer, January 23, 2014

Spain exited its international bailout program Thursday, amid a tentative economic recovery marred by persistently high unemployment.

The Spanish government heralded the bailout exit as a milestone, but acknowledged more progress was needed in a country with a jobless rate of 26%.

“I look not only at the future but also the present with hope,” Prime Minister Mariano Rajoy told parliament. “Although the unemployment figures in Europe, and in particular some member countries such as Spain, are still unacceptably high, I believe we can say that the worst is over and that we are now on the path to recovery.”

Yes, the worst is over. I am out of a job and owe a million dollars. But I just borrowed two million from gangsters, and I won’t have to pay it back until later. Problem solved.

Europe offered a credit line of up to $137 billion; Spanish banks ended up tapping $56.6 billion of that over the past 18 months.

Thursday’s exit means that Spanish banks will no longer have access to bailout loans. And they must still pay back what they’ve borrowed, with interest, over the next 15 years.

Because Spain’s banks have not solved their underlying economic problems, they will need more help in the future. But they are precluded from getting any more loans. So who is going to back them up? The Spanish government? Puleeeze!

Spain still faces serious problems. Economists say it could be years before jobs return. And there are fears that Spanish banks, buoyed by the bailout loans and improving confidence, are not writing down their bad real-estate debt as swiftly as prescribed.

Does this surprise anyone — except maybe the Spanish people?

“The big game that politicians and bank CEOs are playing is ‘extend and pretend.’ If we pretend that our banks are really healthy, then eventually all the assets underlying things on our balance sheets will regain value, and we won’t actually have to take such big losses,” said Megan Greene, chief economist at Maverick Intelligence in London. “That’s the game everyone in Europe has been trying to play.”

I like that phrase: “Extend and pretend.” It describes the entire eurozone “strategy.” Keep borrowing far into the future, and keep pretending the euro is a viable currency.

Greene said she believed that Spain would eventually need additional aid, if the reality of its banks’ balance sheets came to light.

Of course. Borrowing to cure debt really doesn’t have a proven record of success.

Spain was the cheapest (euro nation) to rescue. Its bailout was unique in that loans were earmarked for financial institutions, not government coffers. However, the rescue money is officially on the Spanish government’s tab, which has helped push up the level of public debt.

And how will that debt be paid? How, indeed.

From El Pais
CLAUDI PÉREZ

Foreign investor confidence in the country has been restored, albeit with the jobless rate still unacceptably high at 26 percent.

Foreign investors are happy. They are being paid with borrowed money. Meanwhile, the average people suffer.

The quality of the banks’ assets continues to deteriorate with the non-performing loan ratio moving above 13 percent in November for the first time on record, while the slump in the property market after a decade-long boom that ended around the start of 2008 has yet to fully run its course.

So, again the banks will fail, more austerity will be needed, pressing down on the backs of the poor.

“The government has no plans to increase the VAT rate,” Finance Minister Cristóbal Montoro said. “We already did so in this legislature and what we are hoping for is increased collections as consumption picks up.”

Austerity always demands that ever more money be pulled from the private sector — especially from the poor and what remains of the middle — to feed the insatiable money-hunger of the government and the rich.

The people don’t mean anything; it’s the government and the rich that matter.

The gap between the rich and the rest will continue to widen, as per the plan. It’s all part of the EU and Spain “Extend and Pretend” austerity Magic Show.

Rodger Malcolm Mitchell
Monetary Sovereignty

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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. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (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)

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10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

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:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports

THE RECESSION CLOCK

As the federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise. Federal deficit growth is absolutely, positively necessary for economic growth. Period.

#MONETARY SOVEREIGNTY

–Protecting your children by destroying their futures

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

The oft-mentioned “Big Lie” includes the false claim that your children and grandchildren will be saddled with the federal debt. So, cutting the federal debt will protect your precious descendants. There even are “debt clocks” that purport to show how much each of us “owes.”

Total rubbish.

Federal debt is nothing more or less than deposits in T-security accounts at the Federal Reserve Bank — essentially the same as your savings account at your local bank (Your savings account is a debt of your bank).

How does your bank “pay off” its savings debt to you? Simply by transferring dollars from your savings account to your checking account.

That is exactly how the federal government pays its “debt.” It just transfers dollars from T-security accounts to checking accounts. Your children and grandchildren are not involved.

In previous posts, we have discussed how, “You never will know what you have lost” as a result of unnecessary and harmful federal debt ceilings and deficit cutting.

Well, the beat goes on. Here are a few excerpts from the January/February 2014 issue of Discover Magazine:

The spending cuts known as “sequestration” sliced $9.3 billion from federal research and development projects. The 24 federal agencies that conduct research slowed the pace of lab work, instituted hiring freezes and cut grant programs.

Yet, sequestration is only a small part of overall austerity. Deficit and debt cutting and limitation have been with us for many, many years — essentially since the end of WWII. (And before then, austerity was the primary cause of the Great Depression. See: Items 3 and 4.)

At the National Institues of Health (NIH). the sequester led to $1.6 billion in cuts and the loss of 20,000 jobs. With less grant money and fewer scientists, research stalled on cancer, the influenza virus, Alzheimer’s disease and more.

Do you think reduced research on such diseases will have any effect on your children and grandchildren’s futures?

The National Science Foundation (NSF) cut up to 600 grants, and NIH offered about 700 fewer than it did in 2012.

Steven Warren, vice chancellor for research at the University of Kansas predicts the most severe effects could come years in the future, as a generation of young faculty struggles for funding or pursues more conventional, less innovative projects, in an effort to win limited dollars.

How will less innovative research affect your children and grandchildren?

The 16-day, partial shutdown of the federal government stopped projects midstream and postponed the beginning of the five-month research season in Antarctica, where scientists are looking into everything from climate change to earthquakes.

The effects of sequestration and the shutdown have further eroded federal investment in science, which already had seen a 16% drop in the previous 3 years.

Mention this to any of your friends who tell you how they hate big government, and that government never created anything, and that the federal deficit and debt are too big, and that they worry about our children’s and grandchildren’s futures.

Remind your friends that they are parroting the very rich, who would like nothing better than to reduce federal spending on all things that could benefit the middle and the poor, so as to widen the gap between the rich and the rest.

The debt hawks say they want to protect your children and grandchildren, but instead, are destroying their futures, and doing the dirty work of the very rich.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–Why I love the National Security Agency

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

House Speaker John Boehner (R-Ohio) said of NSA whistleblower Edward Snowden, “He’s a traitor. The disclosure of this information puts Americans at risk. It shows our adversaries what our capabilities are.”

Sen. Bill Nelson (D-Fla.) told reporters, “I think it directly is (an act of treason).” Sen. Dianne Feinstein (D-Calif.), chairwoman of the Senate Intelligence Committee, also said that Snowden had committed an “act of treason.”

So we know Edward Snowden is a traitor, because he revealed secret information about our favorite government and its protection agency, the NSA — information the revelation of which compromised U.S. defenses. For instance, according to the President of the United States of America:

“We know that the intelligence services of other countries — including some who feign surprise over the Snowden disclosures — are constantly probing our government and private-sector networks and accelerating programs to listen to our conversations and intercept our emails and compromise our systems. We know that.”

Hey, wait a minute. “Other countries . . . who feign surprise?” What’s that word “feign” doing there? Are you saying, Mr. President, that “other countries” were aware of what Snowden disclosed to the American people? Are you saying that of the people on earth, the American people knew less about the NSA’s activities than did the people in other countries?

Are you saying, Mr. President, that quite likely the bad guys already know what we’re doing, and that Mr. Snowden didn’t reveal anything to them they didn’t already know?

Hmmm . . .

Well anyway, the NSA’s gathering of metadata has provided a powerful defensive shield against terrorist activities. It prevented the Oklahoma City and Boston Marathon bombings and . . . uh . . . you say it didn’t?

Well, what about the twin towers. Metadata could have prevented that. According to President Obama:

“The program grew out of a desire to address a gap identified after 9/11. One of the 9/11 hijackers—Khalid al-Mihdhar—made a phone call from San Diego to a known al Qaeda safe-house in Yemen. NSA saw that call, but could not see that it was coming from an individual already in the United States.

“The telephone metadata program under Section 215 was designed to map the communications of terrorists, so we can see who they may be in contact with as quickly as possible.”

So there it is. If NSA had been collecting data on everyone’s phone calls, it would have been able to connect the dots, seen that terrorists were planning terror, and stopped 9/11. Case closed, right?

Well, not exactly. According to Reason.com’s January 17th article titled, Obama Suddenly Realizes Mass Surveillance Threatens Privacy, by Jacob Sullum:

As ProPublica’s Justin Elliott pointed out last June, “U.S. intelligence agencies knew the identity of the hijacker in question, Saudi national Khalid al Mihdhar, long before 9/11 and had the ability find him, but they failed to do so.”

Furthermore, it is not clear why the NSA, having eavesdropped on seven calls between al-Mihdhar and the Al Qaeda safe house in Yemen, needed a database containing everyone’s phone records to identify the source of those calls.

The Justice Department “could have asked the FISA Court for a warrant to all phone companies to show all calls from the U.S. which went to the Yemen number,” former counterterrorism official Richard Clarke told ProPublica.

“Since they had one end of the calls (the Yemen number), all they had to do was ask for any call connecting to it.”

NSA, this giant, information-gathering monster, had all the information it needed and failed to act on it. So what possible purpose could be served by gathering even more information?

As ProPublica’s Kara Brandeisky notes, “Obama’s own review group concluded that the sweeping phone records collection program has not prevented any terrorist attacks.”

The NSA’s record: Billions spent. No terrorist attacks prevented. None. Zero. Nada.

O.K., so the NSA has stopped no terrorist attacks, but still Snowden is, if not a traitor, at least a criminal. Here’s why:

Geoffrey R. StoneEdward H. Levi Distinguished Service Professor of Law, University of Chicago, doesn’t think Snowden is a traiter. Instead, “He is most certainly a criminal who deserves serious punishment” (because he revealed classified information). Probably, he should have presented his concerns to senior, responsible members of Congress.”

I assume among those senior, responsible members of Congress would be John Boehner, Bill Nelson and Dianne Feinstein, who clearly are outraged, not by the spying on innocent Americans or the lying to Congress, but rather by the revelation to innocent Americans that they are being spied on and lied to.

But if Snowden is a criminal, because he violated his oath not to reveal classified information, who else acted criminally?

Federal Judge John D. Bates, a judge on the FISC, wrote “(This was) the third instance in less than three years in which the government has disclosed a substantial misrepresentation regarding the scope of a major collection program.”

Let’s sum it up. NSA had information that could have prevented 9/11, but did nothing. Three times in three years, this federal agency that spends billions to prevent terrorism, but cannot point to a single instance of having prevented terrorism, has broken the law, and gone unpunished. (James Clapper Jr, the director of national intelligence, lied to Congress when he testified that the NSA was not collecting data on millions of Americans.)

Meanwhile, Edward Snowden, who objected to the NSA’s criminality and revealed the NSA’s unlawful and useless activities to the American public — activities known to foreign nations, but not to Americans — Edward Snowden is a traitor or a criminal or both, and should be prosecuted, while no criminals in the government did anything that should be prosecuted.

Does that about cover it?

But wait. What about the title of this post, “Why I love the National Security Agency”? Why do I love an agency run by lying criminals, that spies on innocent Americans?

The answer can be found above, in this phrase: ” . . . a government agency that spends billions . . .”

While Congress has been increasing taxes on the middle class (FICA) and cutting benefits to the middle and poor (Social Security, Medicaid, government employment, the sequester, etc., etc., it has not hesitated to spend billions on NSA.

And where do those billions go? Into the American economy — into the pockets of NSA workers and NSA suppliers, who in turn spend those billions on food, clothing, school, cars and all sorts of stuff.

And it doesn’t cost you or me or any other taxpayer a dime. Those billions are free economic stimulus, which we so desperately need.

So, Mr. President. Go ahead and spend billions of stimulus dollars on an agency that has accomplished very little. Just keep the guard dogs under control and prosecute its lawbreakers.

And please don’t hassle the one guy to whom we all owe a debt of gratitude, the guy who spilled the beans on malfeasance. I know you’re embarrassed and you should be. But don’t shoot the messenger.

Give him a medal.

And keep on spending.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–How long before the Supreme Court makes it legal for you to carry these?

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

How long before our right wing, “originalist” Supreme Court approves this new rifle for gun nuts to carry in the streets, bars and schools for “self-protection” and “stand your ground”?

U.S. super-snipers: ‘Smart’ rifles tested by military could be game-changer
By Douglas Ernst -The Washington Times

The U.S. military has acquired and is now testing “smart” rifles with the potential to be a game-changer on the modern battlefield.

While at the nation’s largest gun show in Las Vegas, Nev., the SHOT Show, the U.S. Army is said to have purchased six “smart” rifles after witnessing the product’s performance in the hands of novice shooters.

A correspondent working for Military.com hit a target from roughly 1,000 yards away on his first shot. He reported that of 70 or so reporters and novice shooters who tried the rifle, only “one or two” missed from the extended range.

When Military.com asked TrackingPoint Inc. Chief Executive Officer Jason Schaubie what the sniper community thinks of the smart rifle, he replied: “This is not necessarily for them. This is for guys who don’t have that training who need to perform in greater capabilities.

Right. This is for average guys. And really, who doesn’t need to kill a robber at 1000 yards?

Remember, guns don’t kill people. Gun nuts kill people.

So Supreme Court, go ahead. Do what you’ve been bought to do.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

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