2 May 2013



The images above show why Europeans will get more austerity. As long as they cling to the euro, their governments have no choice but to impose more austerity forever.

Reason: euro-zone governments surrendered their computer keyboards. They can no longer create their own money out of nothing. Instead, they must borrow all of their money by selling bonds, and by taking loans from Troika bankers, who have keyboards, and who do create their money out of nothing. The result is a spiral of compounding debt and austerity. It has already reduced the euro-zone to a wasteland, and it is accelerating.

The one exception is Germany, which rules the euro-zone because Germany has a trade surplus with the other nations. If you surrender your Monetary Sovereignty, you cause money to leave your economy. But if you have a whopping trade surplus, you cause money to come back into your economy. If your victim nations have a common currency, and you have a trade surplus with them, then money flows from them to you. You can suck every last bit of wealth out of them. And that’s exactly what Germany is doing. Not just monetary wealth, but physical resources and other assets.

This is why Germany is the strongest nation in the euro-zone, and has always been the biggest champion of the euro.  Moreover the ECB is located in Frankfurt, and can dust off its keyboard if Germany needs more (debt-free) euros in a hurry.


And then there’s the UK, whose government has Monetary Sovereignty, but which nonetheless imposes austerity, using this lame excuse…


This is the British version of America’s “national debt clock.” Britain’s national debt is a ticking bomb! No one knows when it will explode! (Actually it’s a dud.) You can visit the link below to see the timer on the bomb counting down to “detonation.”  It would be even funnier if the web site makers had included a tick-tick-tick sound, accompanied by creepy music and random wails of doom. The absurdity would brighten our day.



Because of this “debt bomb” nonsense, we see comments like this:

“We’re in debt, our children are in debt, and our grandchildren will still be paying this off when we are pushing up daisies.”

Really? Paying it off to who? China? The UK government creates its own money, remember? And 65% of UK Treasuries (or “gilts”) are held by domestic British parties.

Also, if the UK government is so deeply “in debt,” then how can Britons claim that the UK is the world’s “sixth richest nation”? This is a contradiction. You can be rich, or you can be in debt, but you can’t be both. (No, don’t try to weasel around that. High net wealth means you are rich. Period.)

The average person never bothers to think these things through. He’d rather self-righteously wallow in the filth. He’s as stupid as a rock, yet fancies himself brilliant. And since he thinks that you are causing the “debt crisis” (not him) he wants austerity for you (not him). Everyone thinks the same thing. Thus, everyone gets austerity.


 “The UK has a £1.3-trillion debt! That means every person has a £20,500 debt at birth. There is no way we can ever pay it off. It will keep getting bigger. There’s nothing we can do. It’s hopeless.”

…and so the masses submit to austerity, all based on lies. And since each person thinks that he uniquely understands the “debt crisis,” he imagines himself uniquely brilliant and righteous. And so he considers austerity to be just punishment for everyone around him.

“The national debt will be a millstone around our grandchildren’s necks! Weak politicians bribed voters with endless amounts of borrowed cash. Voters lived beyond their means. You lived beyond your means! Therefore you deserve austerity!” (But I don’t.)

“Since you lived beyond your means, I must pay £43bn per year to service the debt. Therefore it’s time that you have more austerity, so you can help me pay the debt.”

All bullshit.


Meanwhile his anxiety about the false “debt crisis” becomes an addiction, and transmutes into a smug rejection of the truth. His rejection is a security blanket. If you tell him, “The debt crisis is a lie, and the U.K. government creates that £43bn per year out of nothing,” he becomes angry.


(End of comment.)



You don’t believe it? That’s because you are brainwashed into thinking that money is physical. Money is not physical, anywhere in the world. All of it consists of digital notations in bank computers. A dollar bill is not money. It is a Federal Reserve note. It is a unit of account; a claim to ownership of one dollar’s worth of digital value in the computer networks of banks.

But the illusion persists, and it keeps you poor. It makes you submit to poverty and inequality since, after all “money doesn’t grow on trees,” right? “There’s only so much to go around.” Right?

People so cherish the lies that keep them poor that they desperately find ways to make the lies seem “true.”  For example, they claim that since money is electrons in computers, money is indeed physical. (Actually electrons aren’t physical, but that’s beside the point.) Or they cling to their brainwashing like MMT people do, by falsely claiming that federal taxes are necessary to control inflation and to maintain the legitimacy of fiat money. Or, like other MMT people, they cling to their brainwashing by arguing over whether tax dollars “go” straight to the Fed, or to the Treasury, or to Treasury-Tax-and-Lean accounts in banks, or wherever — as though money “moved” physically. Yes, even MMT people cling to their brainwashing. Or they bicker and argue about what happens when you pay in cash at an IRS office, as though money were physical. Stephanie Kelton claims that IRS agents physically shred the cash. (!! Actually it goes to a bank, where the bean counters change the numbers in the Treasury’s account.) It’s all a way to cling to brainwashing.


So tell me, why should we have any federal taxes at all? The government does not need or use tax revenue. The government creates and destroys money like I just did above.




From Time Magazine…

“A recent report in The Washington Post suggests that some Republicans want to move away from demanding entitlement cuts and towards fighting for revenue-neutral tax reform in the upcoming round of budget negotiations.”

“Revenue-neutral tax reform” means “screw the lower classes.” The scam is to have the federal government receive the same amount of tax “revenue” (which is destroyed upon receipt) while shifting the source of the “revenue” to the poorer classes.  As with all thefts by the rich, this is called “reform.”

“The right has failed to convince a majority of Americans of the urgent need for cuts to Social Security and Medicare. However, the problem with macroeconomics is that it’s very difficult to prove any fact beyond the shadow of a doubt.”

Oh? How about this fact…

GDP = private consumption + gross investment + government spending + (exports − imports).

If one of these goes down, then one or more of the others must go up, if we are to avoid a recession (i.e. avoid a drop in GDP).

That’s a FACT. And since the equation assumes that a nation has Monetary Sovereignty, it does not mention national debt.


“Instead of admitting defeat, advocates of austerity have regrouped and retooled their LIES arguments, which fall roughly into three camps:

1. The “national debt” is still bad. Therefore the middle and lower classes must have more austerity.

2. The real problem is uncertainty. Since it is not certain that austerity is good, and since it is not certain when the national debt will become a problem, the USA has a high “uncertainty index.” Therefore the middle and lower classes must have more austerity.

3. The real problem is “unfunded liabilities.” Since Medicare and Social Security are “broke,” the middle and lower classes must have more austerity.

The Time article is full of garbage, but it does ask whether it is a good idea to have austerity now, in the middle of a depression.

“This is the question that austerity proponents have been consistently unable to answer.”

Yup. So let’s have more austerity!


breathe life




When someone tries to use the so-called “national debt crisis” to justify austerity, and he is proven to be an idiot, he always shifts to Plan B: we must have austerity to ward off inflation.

For example, Time magazine author Christopher Matthews admits that the USA cannot become like Greece…

“The most important difference is that the U.S. prints its own currency, meaning it can create money out of thin air. By contrast, when Greece borrows money, it borrows Euros, a currency over which it has no control. So, for the USA there is no risk of default in the sense that markets refuse to fund government operations and the government must resort to swift and deep cuts to government services. If our creditors demand we repay them, we can just print dollars.”

Great! But then Mr. Matthews implies that we need austerity anyway, as a hedge against possible inflation.

“That’s not to say the U.S. doesn’t need to worry about its debt. For developed economies that print their own currencies — like the U.S., the U.K., and Japan — the risk is not outright default, but runaway inflation. If we must resort to the printing press to pay our debts, this may cause the supply of dollars to outstrip demand for them, and the value of our currency to plummet.”

There is not one single historical example to prove this. Not one. Moreover, the author uses a flawed definition of inflation.  Ordinary laws of supply and demand apply to money in some ways, but not in all ways. Furthermore the US government already “prints dollars to pay its debts” (i.e. it credits accounts).

One thing is certain: austerity causes depressions.

Therefore, to protect ourselves from inflation that has never happened (and probably never will) let’s have more austerity.






From ABC News…

“For the first time since 2007 – before the recession – the US Treasury is planning to make a down payment on the federal debt.”

Down payment? This is intended to make you think the “national debt” is something that must be paid off, and which you are “responsible” for. And since you are “responsible,” you should submit to poverty in order to do your part (for the rich).

“The budget deficit has been shrinking more than expected. Thanks to spending cuts and tax increases, the Treasury says it expects to pay off $35 billion of debt in the second quarter. That compares to an earlier forecast that it would have to borrow $103 billion.”

Watch as I “pay off” $16.7 trillion. Ready? Here goes: ‘0’. Voila! It did it with my computer keyboard, just like the Fed and the Treasury do when they credit or debit accounts.

“Usually this time of year is the best for government cash flow, because annual tax returns flood into the Treasury in April. But the return to at least one quarter of debt paydown is a clear sign government spending cuts and tax increases have helped lower the deficit.”

Hooray! The lower the deficit, the wider the gap between the 1% and 99%.




New Italian prime minister Enrico Letta (seen above) is cruising around the euro-zone, getting warm welcomes from all the other corrupt politicians who are on the Troika / German payroll.

At a press conference in Paris with French President Francois Hollande, Mr. Letta called for an economic stimulus at a European level.

Translation: he wants more austerity. Unless the ECB gives (not lends) euros to euro-zone nations, all “stimulus” will be in the form of added debt, which will worsen Italy’s depression and austerity.

Mr. Letta says he does not like austerity (which he calls “fiscal consolidation”), but he pledged that the Italian public would meet austerity targets dictated by the Troika and Germany.




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