December 19th, 2014
in Op Ed
by Rodger Malcolm Mitchell, www.nofica.com
We've keep hoping you Brits, being older than us, also would be wiser. So, we published:
How the debt hawks will destroy the U.K. Monday, Jun 7 2010 and Foolishness across the ocean. Will the UK attempt mass economic suicide? Monday, Oct 31 2011 and How the UK teaches America about economics Wednesday, Dec 5 2012 and many other posts detailing the absolute need for central government deficit spending, and the goal of the deficit hawks: Widening the Gap between the rich and the rest.
All of our entreaties have fallen on deaf ears and blind eyes.
December 15, 2014 12:04 am David Cameron to defend goal of budget surplus in next parliament George Parker, Political Editor
David Cameron will defend Conservative plans to run a budget surplus in the next parliament, in the face of renewed claims by the Liberal Democrats that continuing Tory spending cuts would "devastate" public services.
Mr Cameron will argue on Monday that his plans for a small surplus by 2018/19 are "sensible and reasonable", adding: "If we are not going to start putting money aside after seven years of continuous economic growth, when will we be?"
First, let's look at the "seven years of continuous economic growth" and compare it with the tepid, wishy-washy growth of the United States (another nation dominated by deficit cutters):
Hmm . . . Not so continuous, and not very impressive for you of the U.K. At the current rate, it should take you "only" about 20 years to reach where you were before the Great Recession.
What a wonderful record Mr. Cameron has amassed.
And not only does he want to cut the deficit (which reduces the number of growth pounds added to the British economy), but he wants to run a surplus (which actually removes pounds from the economy). One wonders what mad economist believes that starving an economy of money is a method for growing that economy.
We like to call it: "Applying leeches to cure anemia."
You British were brilliant in not adopting the euro, an act that would permanently have starved your economy of money. But now, Mr. Cameron wishes to starve your economy by cutting deficits and running a surplus.
Sadly, he relies on the economic ignorance of the British people - ignorance of Monetary Sovereignty - to pull off that stunt.
Iain Duncan Smith, work and pensions secretary, gave a glimpse of the kind of savings Mr Cameron has in mind when he said on Sunday that a Tory government could restrict child benefit to the first two children.
Mr Duncan Smith told the BBC's Sunday Politics that the idea was "well worth looking at", adding that "it does save significant money and also helps behavioural change".
Hmmm, again. "Behavioural change"? Is this a backdoor way to reduce the prolific Muslim population? Or is it yet another way to widen the Gap between the rich and the rest? The rich won't be affected, but the poor will be.
And why would a nation that has the unlimited ability to create its sovereign currency need to "save significant money"? It doesn't. It's not like you and me. National finance is different from personal finance.
Mr Cameron's defence of Tory austerity plans is timed to coincide with the delayed publication of a new coalition fiscal mandate, committing the Tories and Liberal Democrats to balancing the current deficit by 2017/18.
Balancing the deficit (balancing the budget?) would mean the government would create no net pounds to grow the economy. Someone should ask Mr. Cameron, "Where has austerity served to benefit the people and grow the economy?" Answer: Nowhere.
However, Vince Cable, the Lib Dem business secretary, said the two parties did not agree on how to achieve that objective: the Lib Dems would raise taxes to cover part of the consolidation while the Tories would focus entirely on cutting spending.
Will the U.K. raise taxes on the poor or cut social spending for the poor? Either way, you can be sure no one will do anything to hurt the rich.
Mr Cable added that Conservative plans to continue cutting beyond 2017/18 would be "devastating and ideologically driven" and would leave the armed forces with a "largely ceremonial role"
Yes, to hell with the poor and middle-income groups, but don't do anything to hurt the armed forces. We don't want the military to become angry and institute a coup, do we? All politicians know to keep the army happy.
Ed Miliband, the Labour leader, believes Mr Osborne has made a strategic error by proposing further cuts even after the day-to-day budget is balanced.
But Mr Cameron will argue that Labour's fiscal plan would allow Mr Miliband to carry on borrowing "every year, for ever", since the party is only committed to balancing the current day-to-day budget, not the capital budget.
He will cite the Institute for Fiscal Studies as saying Labour's rules would allow it to borrow an extra £28bn a year, adding: "That is a great, black, ominous cloud on the horizon."
O.K., let's get this straight. The British government created all the laws that created the British pound. It can change these laws at any time. It can create as many pounds as it needs, any time it needs them. The British government never can run short of pounds, if it doesn't want to.
For that reason, the British government never needs to borrow the pounds over which it is sovereign. NEVER
Tory polls suggest the public likes the word "surplus"; however, Labour and the Lib Dems will seek to persuade voters that this could be achieved only at the cost of big cuts to public services.
The public thinks government finance is like personal finance. Unfortunately, the politicians never have had the courage to explain Monetary Sovereignty
The sole question is this: Is Mr. Cameron ignorant of economics or has he been paid by the rich to widen the Gap (with campaign contributions and promises of lucrative employment after he leaves office)?
We suspect the later.
Mr Cameron will lace his economics speech with a promise to bring forward by six months a previously announced scheme to help 100,000 first-time buyers move into new homes on brownfield land with a 20 per cent discount.
This will cost money. But Mr. Cameron wants to save money. What's going on?
Quite simple: He will take a great many pounds from the poor and middle income groups, and give a few of them to first-time home buyers, all the while boasting about how he is helping the economy - while starving it.
Rich home builders will be happy. Wealthy bankers will be happy. That's all that matters, isn't it?
Mr Miliband will announce plans for a new law to stop the exploitation of migrant workers, which he said had led to the undermining of wages for local workers.
Prosecutors would have to (provide evidence that some abuse of power had occurred and that migrants were employed on significantly different terms to local workers.
In short, a purely cosmetic law to appease voters, while doing nothing to irritate big, rich employers.
"We won't make false promises on immigration, like David Cameron," he will say. "And we won't offer false solutions: leaving the European Union would be a disaster for jobs, businesses and families."
False solutions for what? Deficit spending is what grows an economy. Done right, it also can narrow the Gap between the rich and the rest.
And as for "leaving the European union," there's no need for that. But do stop pretending you have adopted the euro and thereby lost control over your money.
Our fervent hope is that some day, the citizens of the U.K. and/or the citizens of the U.S. will discover that:
- National finance is not like personal finance.
- National deficits are necessary to grow an economy
- A Monetarily Sovereign government has the unlimited ability to create its own sovereign money, with absolute control over inflation, and never can run short of money to pay its bills.
- Deficit cuts hurt the rich much less than the poor, so they widen the Gap.
This time Brits, do as we say, not as we don't. We are led by fools and criminals.
You don't have to be, too.
- Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
- The more federal budgets are cut and taxes increased, the weaker an economy becomes.
- Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
- Austerity is the government's method for widening the gap between rich and poor.
- 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.
- Everything in economics devolves to motive, and the motive is the Gap.