Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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The Washington Post published an article by Harold Meyerson, (Opinion Writer, June 2, 2011) titled, Republicans continue to be their own worst enemy. The article began with the well-deserved criticism of Paul Rand:

If you think it is Wisconsin Rep. Paul Ryan’s gutting of Medicare that is pulling the Republicans down, you need to think bigger. The House Budget Committee chairman’s proposal to convert Medicare into a private insurance-voucher plan is indeed a political calamity for the GOP, as the results of last week’s congressional special election in Upstate New York showed. But it’s far from the only disaster that the party has visited upon itself.

Mr. Meyerson then goes on to give what he considers to be additional examples of Republican self-immolation:

In Florida, only 29 percent of voters told the Quinnipiac pollsters last week that they approved of Gov. Rick Scott’s five-month tenure in office, during which Scott has endeavored to slash business taxes — already among the nation’s lowest — while also reducing spending on schools and cutting care for the developmentally disabled.
[ . . .]
Things are looking just as bad for the GOP’s new crop of Midwestern governors. In Wisconsin, Scott Walker, whose proposal to curtail collective bargaining for public employees triggered a nationally watched eruption of protest . . .

(Re.) Ohio Gov. John Kasich: . . . approval rating was a bargain-basement 33 percent, while his disapproval rating had risen to 56 percent. Voters . . . asked if they intended to support the referendum likely to appear on this November’s ballot that would repeal the Kasich-backed law sharply limiting collective bargaining rights for public employees. Ohioans said, by a 55 to 35 percent margin, that they’d vote to repeal it.
[ . . .]
In Michigan, Gov. Rick Snyder had a 33 percent approval rating, against a 60 percent disapproval rating, in a May survey that also found that 71 percent of Michigan voters thought poorly of his budget cuts to public schools, and more than 60 percent opposed his proposed tax reductions on business. A May survey of New Jersey voters by Fairleigh Dickinson University pollsters found that Gov. Chris Christie’s favorables had slumped to 40 percent, while his unfavorables had risen to 60 percent.

Meyerson compares them with Democratic governors Jerry Brown (California) and Andrew Cuomo (New York), who have favorable ratings.

In contrast to their GOP counterparts, neither Cuomo nor Brown has proposed stripping public employees of meaningful union representation, though both have sought and obtained cutbacks to public programs. The Los Angeles Times/USC Dornsife poll also shows that Californians support Brown’s plan to retain higher tax rates rather than further decimate public schools.

Meyerson concludes:

But the Republican governors — like Ryan and his fellow Republicans in Congress — have pursued a more radical course that sharply disadvantages most Americans. . . . Republicans did not run last year on a platform of ending collective bargaining, slashing school budgets and gutting Medicare — in essence, favoring society’s most powerful at the expense of everyone else — yet that’s precisely what they’ve done since gaining power.That’s not merely bad policy; it’s bad faith — and bad news for Republicans’ electoral prospects.

It also is extraordinarily ignorant (though I don’t know whether Meyerson truly understands why), because it is unnecessary. At the federal level, a Monetarily Sovereign government does not need to cut Medicare and Social Security. The federal government has the unlimited ability to pay for these vital services. While the Tea (formerly Republican) Party rightly says that increasing taxes on the wealthy is a bad idea for the economy, cutting Medicare and Social Security are orders of magnitude worse ideas.

Not only will Medicare and Social Security cuts harm the lower and middle classes, their children and their grandchildren, but these cuts will harm the entire economy by removing money from the economy. And this whole controversy exists because the Tea/Republicans do not understand the differences between Monetary Sovereignty and monetary non-sovereignty.

By contrast with the federal government, the states, being monetarily non-sovereign, do not have the unlimited ability to support state and local programs. They are forced to cut services or increase taxes or be more efficient. In reality, there is a low limit to how far efficiency can take you, so it comes down to services vs taxes, and people want their services.

Of course, the long-term solution to the states’ (and counties’ and cities’) problems is federal support. But again, this requires an understanding of Monetary Sovereignty, a knowledge of which not one national politician has demonstrated. (Visualize 550+ people running our economy, and not one of them has even a basic understanding of economics.)

So the Tea/Republicans, who rode to power on a wave of knee-jerk discontent, now will face an electorate who have had a chance to think about realities. Carrying anti-government placards and screaming anti-government slogans will not overcome the reality that the people like their Medicare and Social Security, and if anything these programs should be expanded – and don’t you dare touch them. Here is one case, where the people are much smarter than the politicians – or is that always the case?

Of course, this all gets back to my own favorite slogan, “Those who don’t understand the differences between Monetary Sovereignty and monetary non-sovereignty, don’t understand economics” (and they should stop writing about, or voting on, economic issues).

Rodger Malcolm Mitchell
http://www.rodgermitchell.com


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No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it ruined my future.”

MONETARY SOVEREIGNTY