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 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.
=====================================================================

Fair or not, the names Hoover, Smoot and Hawley forever will live in infamy as representing wrong-headed legislation that worsened the Great Depression.

History will view Obama, Bowles and Simpson similarly, but perhaps even more harshly, for while the HSH bunch harmed America with innocent ignorance, the OBS gang harms America with deliberate, knowing and selfish malevolence.

I have been uging followers of Modern Monetary Theory (MMT) to stop hinting around, and instead come right out and say: The rich are bribing politicians, via campaign contributions and promises of lucrative jobs later, to widen the income gap between the rich and the rest.

(Like economists who suddenly discover Monetary Sovereignty, then claim they knew it all the time, most of MMT says they said it all the time, while forgetting to include the bribery part)

The rich care more about the gap than about their absolute income, because it is the gap that makes them rich. If there were no gap, no one would be rich, and the wider the gap, the richer and more powerful the top .1% is. A .1%er would be glad to see his income cut if the income of the 99.9% was cut even more. (For instance, the rich don’t mind inflation, because it hurts the poor, more.)

It is as easy, perhaps easier, to widen the gap by depressing the middle- and lower-classes as by raising the incomes of the rich, so the politicians are bribed to do both. And further to indoctrinate the public, the rich own the media.

Consider USA Today, owned by Gannett Company, Inc., a publicly traded media holding company and the largest U.S. newspaper publisher

USA Today: Simpson-Bowles’ Greatest Service

The latest plan from Simpson, a former Republican senator from Wyoming, and Bowles, who served as President Clinton’s chief of staff, usefully rattles the cages of both parties.

Somehow, the rhetoric of “don’t touch my Medicare, don’t touch my Social Security, and don’t make me pay” has to end. Simpson and Bowles’ greatest service is to give elected officials cover for telling people the truth: The primary beneficiaries of those programs will have to fund them or see them shrink.

Translation: “We have to cut Medicare, cut Social Security and institute tax increases (as with the increase in FICA). Don’t ask “Why?” But, you poor and middle class suckers will be to forced pay more and receive less. And just to show you who’s boss, we will increase unemployment and send you to starve in another recession.”

And then there is the wealthy and esteemed Washington Post, owned by wealthy The Washington Post Company, which also owns Kaplan, Inc., a leading international provider of educational services, The Slate Group, Express, El Tiempo Latino, The Gazette and Southern Maryland newspapers, The Herald (Everett, WA), Post-Newsweek Stations (Detroit, Houston, Miami, Orlando, San Antonio and Jacksonville), Cable ONE—a cable TV and Internet service providerand Avenue100 Media Solutions.

The blame game over sequestration

FORMER SENATOR Alan Simpson (R-Wyo.) and former Clinton White House chief of staff Erskine Bowles administered a dose of realism to Washington on Tuesday, announcing an update to their eponymous 2010 deficit-reduction plan. This new Simpson-Bowles outline seeks $2.4 trillion in ten-year savings, on top of the $2.7 trillion already achieved — thus potentially bringing the ratio of debt-to-gross domestic product below 70 percent by early next decade and putting it on a downward path thereafter.

Translation: “Here is the true ‘dose of realism:’ The debt/GDP ratio has absolutely no economic meaning, but it makes our arguments sound ever so scientific.

“While that scary, old sequester would cut a terrible $85 billion from our economy, our beneficial BS program would cut only $2.4 trillion over 10 years ($240 billion every year).

“We assume that because we cut funds for education, you will not be able to calculate that $85 billion is less than $240 billion, or that taking dollars out of the economy will depress the economy and increase unemployment.”

Simpson-Bowles 2.0 would take some steps Mr. Obama has already contemplated — such as adjusting federal tax brackets and benefits by a more realistic inflation measure — as well as some he would not — such as going above $400 billion in health-program savings over 10 years.

Translation: “’Adjusting’ federal tax brackets and benefits is our clever code for making you poor pay more, and receive less, but since we are liars, we don’t want to tell you that.

“And as for that ‘more realistic’ inflation figure, it’s called ‘chained CPI,’ an arbitrary, convoluted, cockamamie device whose sole purpose is to pay you lower, already-way-too-low benefits. One day, we’ll do away with all inflation measures, and justify it with the lie that Social Security is ‘unaffordable.’

“Sure, you people work in the factories and the farms and those little office cubicles, and you do the real work, while we of the .1% sit back and collect dollars. But we have convinced you that we are the “makers” and you are the “takers” — and you believe it!

The sequester would slash $85 billion between now and Sept. 30, half from discretionary programs and half from defense. Both of these have already been trimmed in previous budget deals — defense to the point where Pentagon leaders predict damage to national security if the sequester goes through on March 1. Entitlements, meanwhile, remain unreformed. deals.

Translation: “’Unreformed’ means we plan to charge you more and pay you less, but there still are some crumbs, which we also plan to take, if you let us get away with it.

“Fortunately for us, you don’t understand that the federal government’s finances are different from your personal finances. While you struggle to find the dollars to pay your bills, the federal government never can run short of dollars (unless we impose a stupid Debt Ceiling or even stupider austerity). So we tell you the debt is ‘unsustainable,’ and the deficit must be reduced, and you never even have the curiosity to ask, ‘Why?’

“Amazingly, there still are innocents among you who actually believe the government wants to help you and to grow the economy and to reduce unemployment. You even doubt that the politicians are being bribed to vote against you.

“Well, will the following convince you, or are you hopeless?”

Billionaires for Austerity: With Cuts Looming, Wall Street Roots of “Fix the Debt” Campaign Exposed

A new investigation reveals how billionaire investors, such as Peter Peterson, have helped reshape the national debate on the economy, the debt and social spending.

Between 2007 and 2011, Peterson personally contributed nearly $500 million to his Peter G. Peterson Foundation to push Congress to cut Social Security, Medicare and Medicaid — while providing tax breaks for corporations and the wealthy.

Peterson’s main platform has been the Campaign to Fix the Debt. While the campaign is portrayed as a citizen-led effort, critics say the campaign is a front for business groups. The campaign has direct ties to GE, JPMorgan Chase, Morgan Stanley and Goldman Sachs. Peterson is the former chair and CEO of Lehman Brothers and co-founder of the private equity firm, The Blackstone Group.

Translation: “Pete Peterson is a great and generous patriot, who unselfishly spends an astounding $500 million of his own money, just to better the lives of us American citizens. Right? So, please don’t assume he really is spending all that money to better his own life by increasing the gap between the rich and the rest, thus growing his power over us. No, he’s just a benevolent soul, wanting to help you. (Help you starve, that is.)”

Anyone who thinks Pete Peterson’s millions are not bribing politicians (Hello, MMT), can be the proud owner of a bridge I plan to sell.

Hoover, Smoot and Hawley. Obama, Bowles and Simpson. You who helped destroy the lower- and middle-income classes and who helped raise unemployment to starvation levels: Your names long will be remembered.

Your legacy is assured.

Rodger Malcolm Mitchell
Monetary Sovereignty

====================================================================================================================================================

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

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 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.
=====================================================================

Quantitative easing (QE) is economics jargon for a process few non-economists understand. That, after all, is the purpose of jargon. Sadly, few economists understand it either.

To paraphrase from Wikipedia:

Quantitative Easing (QE) is used by central banks to stimulate the national economy. A central bank implements QE by buying long term bonds from commercial banks and other private institutions, thus creating money and injecting a pre-determined quantity of money into the economy.

Quantitative easing increases the excess reserves of the banks, and raises the prices of the financial assets bought, which lowers their yield.

Risks include the policy being more effective than intended in acting against deflation – leading to higher inflation, or of not being effective enough if banks do not lend out the additional reserves.

Utter nonsense on all counts.

Fed Chairman Bernanke, being among the nation’s experts in the effects of federal finances, is well aware of the following:

1. QE does not stimulate the economy. It depresses the economy. When the Fed buys T-bonds, it takes those T-bonds out of private hands, thereby reducing the amount of federal interest paid to the private sector.

Rather than being stimulative, these money supply reductions depress the economy.

2. Banks neither need nor use additional reserves. They can obtain all the reserves they want, directly from the Fed, at near zero rates. So adding to reserves does not stimulate lending.

3. Reductions in interest rates are not stimulative. In the blog post Low interest rates do not help the economy we show that there is no historical relationship between low interest rates and economic growth. In fact, the opposite is true. Higher rates force the federal government to pump more interest into the economy, which is stimulative.

So why does Chairman Bernanke, knowing the above, institute repeated rounds of QE, and pretend he is doing this to help grow the economy, when he really is depressing the economy? Because it’s what his bosses (the President and Congress) want.

And why do the President and Congress want QE? Because recessing the economy widens the income gap between the rich and the rest.

And why do the President and Congress want the income gap to be widened? Because that is what the uber-rich bribe them to want (via political contributions and promises of lucrative employment, later). The world’s Pete Petersons and Koch brothers et al, want the gap widened, because it is the gap, not absolute income, that makes them rich and powertful.

If there were no gap, no one would be rich, and the wider the gap, the richer they are and the more power they have over you and me.

So they are quite pleased with Bernanke and the Fed, not only for depressing the economy, but also for brainwashing the voting public into believing this actually stimulates the economy.

It’s the perfect con. Get the victim to demand his own losses. Bernie Madoff knew this well, when he tricked people into demanding they be allowed to invest with him.

So you demand “deficit” reduction, “debt” reduction and QE, all in the name of economic stimulus, when in fact, all three are economically depressive.

The uber-rich reward the Fed and the politicians for using jargon to trick the public into believing that the treatment for anemia is to apply leeches. Owning the compliant media completes the con.

And the rich have succeeded. You believe what you’ve been told, don’t you?

Are you ready for another round of leeches to cure your anemia?

Rodger Malcolm Mitchell
Monetary Sovereignty

====================================================================================================================================================

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

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 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 motivation.
=====================================================================

BACKGROUND: The “debt” innuendo

The so-called federal “debt” is nothing more than the total of deposits in Treasury Security accounts at the Federal Reserve Bank. The word “debt” is just an obsolete and misleading scare term, to convince you, the public, it’s some sort of danger and is “unsustainable.”

When you transfer dollars from your personal checking account to your T-bill account at the Federal Reserve Bank (also known as buying a T-bill), how the heck is that transfer a danger to, or unsustainable by, the U.S. government? Obviously, it isn’t. It’s just a bank deposit, pure and simple.

And when you’re told how awful it is that federal “debt” is a high percentage of GDP, you might ask why total deposits in Treasury Security accounts at the Federal Reserve Bank are supposed to be a low percentage of GDP? You might ask, but you won’t get a coherent answer, because there is no answer.

And when you are told your children and grandchildren will owe your deposit in the Federal Reserve Bank, it’s complete nonsense. Actually, your children and grandchildren will own that deposit, if you leave it to them, just as they will own, not owe, all your bank deposits.

And when you see a so-called “debt clock” showing you how the total of deposits in the Federal Reserve Bank (aka “debt”) have increased, this is supposed to shock you. But why? No one knows. It’s all innuendo.

IT’S THE GAP, STUPID:

For years I’ve railed about the real problem facing America, not the phony “debt” figure, but THE GAP between the rich and the rest. If you scroll back through this blog, you’ll see such titles as:

More evidence for those who doubt the 1%’s scheme to beat down the 99%. It’s the gap, stupid
Tuesday, Feb 5 2013

Yet another effort by the 1% to widen the gap and screw the 99%. Enough never is enough.
Friday, Jan 25 2013

The indecisive and the deceptive join forces to increase the gap between the 1% and the 99%
Saturday, Aug 11 2012

How you can help close the gap. (No, writing to politicians and newspapers won’t do it.)
Monday, Jun 25 2012

Saving America by closing the gap: A suggestion for #OWS
Friday, Dec 9 2011

Closing the gap between rich and poor: Eliminate all local taxes
Tuesday, Sep 13 2011

How the poor get screwed. Why deficit reduction increases the gap between rich and poor.
Monday, Jun 6 2011

A partial solution for the gap between rich and poor: Education
Sunday, Jul 11 2010

While I’ve deplored the growing gap between the rich and the rest – a gap caused by deficit-cutting austerity – I initially had thought the gap was the result of ignorance by our politicians. Only in the last few years have I come to the conclusion that it simply is not possible for every single one of our political leaders, to have the same ignorance.

The President and all his advisers, the Secretary of the Treasury and all his advisers, the Chairman of the Fed and all his advisers, the Counsel of Economic Advisers and its 400+ PhDs in economics and the entire 535 members of Congress – it is beyond reason to assume that not one of these thousands of educated people understands how reducing the federal deficit will punish the middle- and lower-income people and widen the gap. Yet not one of them admits it.

So clearly, they know what they are doing. The only possible motive for their destroying our lives and ruining America is they are being paid to do it – bribed by the rich (via political contributions and promises of lucrative employment later), whose sole goal is to widen the gap. It is the gap that makes them rich. Without the gap, no one would be rich, and the wider the gap, the richer they are and the more power they have over us.

And since the politicians already know what they are doing, educating them won’t change their minds. And the voters have no desire to learn economics, especially since they have been brainwashed into believing federal “debt” is a bad thing. So all the educational efforts by adherents to Modern Monetary Theory and Monetary Sovereignty have fallen on deaf ears.

I’M NOT ALONE!:

Finally, MMT is starting to understand what needs to be said. Today, I received an Email from Stephanie Kelton, Editor-in-Chief, New Economic Perspectives and Economics Professor at UMKC – and a great voice for MMT. She suggested I read the article: The Democratic turncoats behind the “Fix the Debt” attack on Medicare & Social Security.

What a great article.

Stephanie gives many interviews, and she has edged closer and closer to the outright truth that the rich have bribed the politicians to widen the gap by cutting federal spending.

Social Security cuts? The rich want them. Medicaid cuts? The rich want them. Federal employment cuts? The rich want them. Medicare privatization? The rich want it. Federal spending, almost of all of which benefits the middle- and lower-income people? The rich want it cut.

America’s greatest enemies are the rich, and their stooges are the politicians. The rich are traitors to America. This is what the public needs to be told. The rich (and I mean the very rich – the billionaire class) are screwing you, and they have brainwashed you into believing you should be screwed. Their goal is to widen the gap and increase their power over you.

The “debt” is phony. Cutting the debt is “phony.” Bribing the politicians to cut the “debt” to widen the gap by impoverishing the middle- and lower-income people – that is real.

Read the article.

I’m not alone.

Rodger Malcolm Mitchell
Monetary Sovereignty

====================================================================================================================================================

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

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 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 motivation.
=====================================================================

The Dems are right. The GOP is right. And the 1% laugh all the way to the bank

The Dems are right to deplore federal program cuts, virtually all of which would dramatically burden the middle and lower classes. Spending cuts not only limit dollar growth in the economy. Further, because most spending benefits the 99%, spending cuts directly punish all but the top 1%.

The GOP is right to insist there be no tax increases (other than, tellingly, Obama’s outrageous increase in FICA, which already has begun to burden the middle and lower classes). Tax increases on anyone, rich or poor, remove dollars from the economy, thereby depressing the economy.

So, in a way, everything the Dems and GOP propose is right, and everything they plan to do will dramatically burden the middle and lower classes.

So who came up with this truly harmful sequester idea? The Dems conspired with the GOP. For those who may doubt there is a conspiracy to widen the gap between the 1% and the 99%, the sequester is prima facie evidence. Both parties voted for it and now for political purposes, both parties deny they voted for it.

The purpose of today’s political jockeying merely is to disguise the fact that both parties want austerity. Why? It’s what the 1% pay them to do. That’s what the Citizens United decision was designed to facilitate.

And while the 99% voters buy into the nonsense that the deficit and debt are too big, the 1% laugh all the way to the bank.

Examples:

Washington Post
Pentagon warns workers may need to take unpaid leave if sequester kicks in
By Zachary A. Goldfarb and Ernesto Londoño, Published: February 20

The Pentagon warned 800,000 civilian employees worldwide Wednesday that they will be forced to take unpaid leave if deep budget cuts take effect next week, fueling growing anxiety about the impact of the automatic spending reductions on the nation’s economy and security.

In the most detailed account of the ramifications of across-the-board cuts, called the sequester, Defense Department officials said civilian personnel could be put on leave one day a week for 22 weeks — effectively cutting their pay by 20 percent for nearly six months.

And the 1% laugh all the way to the bank.

Budget cuts could result in up to 20 percent pay cut for federal workers
Joe Davidson

Agriculture: Plans to furlough about one-third of its workforce, which would lead to “a nationwide shutdown of meat and poultry plants during a furlough of inspection personnel.”

Commerce: “Up to 2,600 NOAA (National Oceanic and Atmospheric Administration) employees would have to be furloughed, approximately 2,700 positions would not be filled, and the number of contractors would have to be reduced by about 1,400.” Census vacancies would remain vacant.

Justice: “The Department estimates that it would lose the equivalent of more than 1,000 federal agents . . . as well as 1,300 correctional officers.”

Education: The sequester “would likely require the Department to furlough many of its own employees for multiple days.”

Energy: “Sequestration would affect thousands of jobs among Federal, contractor and grant awardee personnel.”

Homeland Security: “Sequestration would necessitate furloughs of up to 14 days for a significant portion of our frontline law enforcement personnel, and could potentially result in reductions in force at the Department.”

Housing and Urban Development: “Furloughs or other personnel actions may well be required to comply with cuts mandated by sequestration.”

Interior: Sequesters would limit the department’s “ability to sustain a full complement of seasonal employees needed for firefighting, law enforcement and visitor services.”

NASA: Some inspector general vacancies would go unfilled.

National Science Foundation: The agency would have to cut nearly 1,000 research grants.

Social Security Administration: Sequestration would lead to more than 5,000 positions lost through attrition and termination of more than 1,500 temporary and other employees and a general elimination of overtime.

Transportation: The vast majority of the Federal Aviation Administration’s nearly 47,000 employees would be furloughed for about one day per pay period through September.

Treasury: Most Treasury employees would face furloughs, which would have a cascading effect on employees’ families as well as on the economy at large.

And it’s not “just” the massive job losses. These agencies perform valuable functions, the lack of which will negatively affect you as a member of the 99%. Want less inspection of meat and poultry? Done.

Want fewer law enforcement personnel? Done.

Want less scientific research? Done.

Want less help from Social Security personnel? Done.

Want fewer air controllers? Done.

And the list goes on and on. All the services the federal government provides, reduced. That is what austerity means.

Middle- and lower class voters. You demanded austerity. Now, you have austerity. The deficit will be reduced; the government will be reduced; your lives will be reduced. Enjoy.

And the 1% laugh all the way to the bank.

Rodger Malcolm Mitchell
Monetary Sovereignty

====================================================================================================================================================

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