8 May 2013

bullshit3

Financiall_Times1

FT SPEWS ITS USUAL FILTH

Let’s review for those of you who came late to class.

If your government surrenders your nation’s Monetary Sovereignty, then your nation must borrow all its money. It can no longer create its own money. The result is always a death spiral in which debt and austerity sustain and increase each other. The death spiral is inevitable, and unstoppable.

Financiall_Times2

THE ONLY EXCEPTION (if your nation surrenders its Monetary Sovereignty) is when your nation has a trade surplus with respect to other nations. (In any nation, money enters its economy in three ways: bank lending, government spending, and, where applicable, a foreign trade surplus.) If you have a trade surplus with respect to other nations, and if those other nations gave up their Monetary Sovereignty, and must borrow all their money from you to buy your goods and services, then those other nations are your SLAVES.  All of their wealth and energy flows to YOU.  You continually get richer, while they fall into a death spiral to serve you.

This is the situation in the euro-zone, whose nations all have trade deficits with Germany. And since they must all borrow their money from Germany (i.e. the ECB in Frankfurt), they are the slaves of Germany. They are in a death spiral, while in Germany gets stronger by the day. In the slave states, unemployment continues to explode. In Germany, unemployment is actually falling. The slave states’ deficit is Germany’s surplus. Their austerity is Germany’s prosperity. All this because of the euro currency, plus Germany’s trade dominance (though you will never read this in the corporate media).

That is why Germany is the biggest champion of austerity and the euro currency. Germany says its slave states must have more and more austerity, forever, in order to prevent “inflation.” (!!!)

Of course, Germany doesn’t use the word “austerity” (Sparmaßnahmen) for its slaves. Chancellor Merkel says “austerity” sounds evil. Therefore Germany calls it “sparkurs” (savings course) or “sparpolitik” (savings politics).

angela_merkel

And since the ECB in Frankfurt creates euros on its computer keyboard, the ECB pays politicians in the slave states to champion the euro currency that is killing the slaves and widening the wealth gap. That is why economists, politicians, and the corporate media never mention the euro currency scam.

As long as euro-zone nations use the euro currency, they will continue to be slaves of Germany, and will continue to be in a death spiral, in which their wealth gap widens and their traitorous politicians get richer. The general public will get more and more austerity no matter what. Politicians have no choice but to impose it, since the government no longer create the nation’s money.

Now let’s move on to this FT garbage…

It was not Angela Merkel or other political leaders who pushed austerity on to Italy, Spain, Greece and the others. It was private lenders, beginning in the autumn of 2011, who declined to finance further borrowing by those countries. Then they stopped financing portions of their banking systems. In other words, markets triggered the Eurozone crisis, not politicians. The fiscal and banking restructuring that followed was the price of rebuilding market confidence.

Now THAT, ladies and germs, is some

epic_bullshit

It was indeed politicians that started the death spiral. Politicians did it when they surrendered their Monetary Sovereignty to Germany for their own personal gain.

The FT article goes on to claim that the real culprit is the “markets.

In fact, 21st-century markets are much more powerful than any government leader.

That is more…

bullshit1

In a Monetarily Sovereign nation like the USA, the financial economy (i.e. “the markets”) only becomes a parasite on the real economy if politicians choose to gratuitously impose austerity (i.e. increase taxes and cut spending).

The remainder of the FT article claims that the cause of austerity is not bankers and politicians, but the mysterious “bond markets.” And since the “bond markets” are omnipotent, the public must have more austerity.

http://www.ft.com/intl/cms/s/0/36e9369a-b7d7-11e2-9f1a-00144feabdc0.html#axzz2Sjs6BvKz

bullshit2

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dunce

Unless you truly know what you are talking about, you will only make matters worse. For example, here is a quote from a well-meaning person who wants to condemn austerity…

“Why do politicians promote austerity? Because these policies assure that the 1% will be let off the hook from paying their fair share of taxes that help subsidize the social safety net, and will have vast pools of public capital opened up for their private investment.”

WRONG! When you perpetuate the lie that the U.S. government needs and uses tax revenue, you give power to the austerity maniacs, who can always claim that there is “not enough revenue” for social programs.

Austerity has nothing to do with distributing tax revenue. Politicians impose austerity to widen the gap between the 1% and 99%. Period.

The article goes on to say that

There has been a growing grassroots opposition to austerity starting locally.

Demonstrations at the local level are useless. The correct target is the federal level. For US Congressmen, austerity is gratuitous. For state, county, and municipal governments, austerity is unavoidable. If the U.S. government imposes austerity, then all other levels of government must impose austerity. They have no choice.

Austerity at the federal level will continue as long as this author continues to believe and promote nonsense like the first quote above.

http://www.globalresearch.ca/americans-across-the-land-say-no-to-austerity-local-struggles-against-budget-cuts/5334382

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nz_herald

AUSTERITY FEVER HITS NEW ZEALAND

New Zealand has Monetary Sovereignty. It creates its own currency (the New Zealand dollar). Thus, its “national debt” is trivial and unimportant, regardless of its size.

Nonetheless, Bill English, New Zealand’s Minister of Finance, is imposing gratuitous austerity on the public because, he says, the “national debt” is too high. It’s the same lie used by all politicians and bureaucrats in Monetarily Sovereign nations.

An op-ed in the New Zealand Herald purports to condemn this on the grounds that “Austerity is for booms, not slumps.” 

Huh? Why have any austerity AT ALL? Austerity ALWAYS produces recessions. To claim that, “Austerity is for booms, not slumps,” is to say that the time to create a recession is when there is not a recession.

According to Finance Minister Bill English, the New Zealand public must have austerity to protect them against the bond vigilantes. The op-ed says this cannot be true, since the interest rates on New Zealand Treasuries is very low. The op-ed does not go the next step and reveal that the “national debt” is trivial in the first place.

Then the op-ed really fouls up…

It could be argued, however, that those low rates are the intended result of massive bond purchases by central banks – quantitative easing – and that when that distortion is unwound, the New Zealand Government’s cost of borrowing will rise along with everyone else’s.

bullshit_blast

New Zealand’s “cost of borrowing” is decided by New Zealand’s central bank, not by any “markets.” New Zealand doesn’t need to “borrow” in the first place. So it is with all Monetarily Sovereign nations.

The op-ed then discusses New Zealand’s debt-to-GDP ratio, which is critical for nations that surrender their Monetary Sovereignty. But for New Zealand it is meaningless. So why mention it?

Whenever idiots berate austerity, they only strengthen it.

http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10882415

global_austerity

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colleges

Russell C. Fericks is an attorney in Salt Lake City, Utah. He has a degree in economics from Claremont McKenna College (California) and a law degree from the University of Utah.

He claims to like Paul Krugman, but he says the debt hawks are right: we must worry about the “national debt.”

“Our current national debt of $16.8 trillion, at an optimistic and easy-to-compute interest rate of 3 percent, requires annual service of more than $500 billion. And this payment on debt service does not go into roads and schools and other public activities and projects. It disappears into the pockets of folks who own the underlying U.S. treasury bills.”

bullshit00

First of all, the interest rate on most Treasuries is well below 3%, but it wouldn’t matter if it were 20% or 50%. The government pays the interest by changing the numbers in computers.

Second, interest paid on Treasuries does not “disappear into pockets.” It circulates in the economy. It is saved, or spent, or gambled with, or invested in buying more Treasuries. It is a form of federal spending, which is good for the economy.

There’s a lot more bullshit from this attorney, which I will not dignify by mentioning. He calls himself a “liberal progressive,” yet he says we need austerity (and the poverty that goes with it).

http://www.sltrib.com/sltrib/opinion/56253486-82/debt-krugman-annual-current.html.csp

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Bloomberg1

TRUE LIES

In economics, flat-out lies don’t last very long (e.g. austerity is prosperity).

Instead, what’s needed to keep the public confused and submissive are partial truths. Paul Krugman is notorious for this.

Here’s an example from Bloomberg. The author, one Josh Barro, begins with truth…

House Speaker John Boehner warns that the U.S. government must balance its budget. Boehner said, “We have spent more than what we have brought into this government for 55 of the last 60 years. There’s no business in America that could survive like this. No household in America that could do this. And this government can’t do this.

But if our fiscal practices haven’t caught up to us after 60 years, when will they?

Actually they have caught up to us NOW, since the only fiscal practice that hurts the USA is austerity.

Or does Boehner take a David Stockman-like position that the last several decades of American advancement have in fact been a ghastly failure? Of course, budget deficits work because the government is different from a household.

Wow! Who’da thunk it?

Those are the truths. Now come the half-truths and the no-truths. The overall mixture of truth and lies is what keeps the public confused and submissive.

Bloomberg2

A government does not have a life cycle, does not ever expect to stop generating income to support itself, and, therefore, does not ever have to retire its debt. It must keep its debts at a manageable size relative to the economy, which the U.S. has done over that 60 year period. If the economy is growing over the long term, that means the government can run a deficit and grow the debt every year — sustainably.

Bloomberg Error 1: A Monetarily Sovereign government has no need for “income.”  It creates its money by changing the numbers in computers.

Bloomberg Error 2: A Monetarily Sovereign government has no need to “keep its debts at a manageable size.” The “debt” is simply the amount of T-securities sold. The Treasury sells these securities by choice, not necessity. If politicians are worried about the amount of Treasuries sold, then the Treasury can stop selling T-securities.

Then the Bloomberg article issues more half-truths. It says that the net debts of Wal-Mart Stores have soared upward 5,760 percent since 1987, whereas the US government’s “debt” (i.e. the amount of T-securities sold) has risen only 600% over the same period. The author concludes that businesses and government can keep going further into debt as long as their business grows faster than the debt.

Bloomberg Error 3: The US government, unlike Wal Mart, has a deficit, but not a “net debt,” and is not a “business.” The US government creates its own money, and the Treasury sells T-securities because it chooses to, not because it needs to.

 John Boehner’s position on short-term debt is confused. If the recent expansion of the public debt is a matter of overriding economic concern, then why is Boehner so resolutely opposed to tax increases to pay it down? America’s economy has thrived under a variety of tax policies, including much higher top marginal tax rates than are in effect today. Shouldn’t Boehner be willing to accept tax increases, or perhaps even be eager for them, in order to fight the debt menace he cites?

Bloomberg Error 4: The US government does not need or use tax revenue. It creates money by changing the numbers in computers, remember? If the government wants to retire the T-securities it has sold, then the government only needs to change the numbers in computers. And since taxes are austerity, the Bloomberg author questions austerity by upholding austerity.

Then the Bloomberg article swerves back toward truth.

Boehner doesn’t really care about the public debt, as he made clear when he repeatedly supported debt-expanding measures under a Republican president. What Boehner and House Republicans really want are excuses to cut federal spending on programs such as Medicaid and food stamps that support low-income Americans. But those cuts are unpopular, so Republicans frame fiscal debate to make such cuts appear necessary to avoid disaster. If you can’t borrow or tax more, and can’t cut old-age entitlements or the military, which command the majority of federal spending, you’re not left with many options but to soak the poor.

Soaking the poor is a policy option. It is not, as Boehner would have it, a policy necessity dictated by the inability of the federal government to borrow or tax sustainably. But if the debate instead becomes about tax and spending priorities — is it more important to provide universal health care or keep tax rates low on high earners — it shifts to turf unfavorable to Republicans. So they pretend.

Yes, and so does this Bloomberg author, in his own way.

http://www.bloomberg.com/news/2013-05-08/boehner-accidentally-explains-why-his-deficit-position-is-phony.html

In another Bloomberg article, the same author writes,

“So long as the economy keeps growing, the government can keep borrowing more money, and it’s all sustainable if the debt does not grow too large relative to the economy.”

More nonsense. The “national debt” is simply the amount of outstanding T-securities. There is no limit to how many the Treasury can sell. The size of the “national debt” has little or no effect on the economy, nor does “debt” ratio to GDP.  For the Monetarily Sovereign U.S. government, the ratio of Treasuries sold to GDP is meaningless and irrelevant.

http://www.bloomberg.com/news/2013-03-22/why-don-t-republicans-love-deficits-anymore-.html

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