Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
This is an open letter to the “leaders” of #OWS (are there any?) or, in my geographical case, #Occupy Chicago:
O.K., we get it and we empathize with it. You’re angry. You’re angry at the banks. You’re angry at the politicians and the rich and the corporations. You’re angry at the lying, the cheating. You’re angry at the unemployment, and gap between rich and poor. We get it. We really do. And we’re with you. We’re angry alongside you.
Now, to get from here to there, you have to figure out exactly where “there” is, and that requires focus. Exactly, what do you want to see happen, and who will make it happen?
Wait! Before you answer, it’s important to know what you’re talking about. Which you don’t. Ask any ten of your people in the street, “What’s the problem and how should it be solved?” and I suspect you’ll receive ten different answers, all ridiculous. The reason: They, and virtually all your #OWS followers, do not understand economics. Specifically, you do not understand Monetary Sovereignty.
The President and both parties have appointed a “super committee” whose assignment is to find ways to reduce the deficit, via some combination of tax increases and spending decreases. What do you think of that? Can you answer today’s single most important question in all of economics: How does a tax increase or spending decrease reduce unemployment or grow the economy?
If you understood Monetary Sovereignty, you would know the work of the “super committee” will exacerbate the problem, as will the result of their non-agreement (automatic deficit reductions). You need to be able to articulate to the world why deficit reduction is like applying leeches to cure anemia.
Can you do that?
It’s not enough to be angry. Everyone is angry. Even the rich are angry — at you. You need to promote specific goals and specific means to those goals, like the few I offered at What Is Your Plan?
The goal is not to punish the rich or to destroy businesses, or to eliminate capitalism. The goal is to lift the lower income classes, and the means are:
1. Eliminate FICA (Click here)
2. Provide free Medicare — parts A, B & D — for everyone, from cradle to grave.
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Provide long-term nursing care insurance for everyone
5. Provide free education (including post-grad) for everyone
6. Provide a salary for everyone attending school (Click here)
7. Eliminate corporate income taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America
Begin to institute #1-#9 today, in the order shown, and if/when excessive inflation starts to occur, institute the first inflation-fighting program the Fed always uses: Raise interest rates. If that doesn’t do enough, begin to cut deficit spending.
Perhaps, you have different ideas. Fine. But, more importantly, you need to understand WHY your goals are both important and attainable, and you need to put forth those reasons in a clear manner, so the public will understand. You need to be able to defend against the inevitable retort, “What about inflation?” You need to overcome intuition, your own, your followers’ and the public’s.
How will you do that?
Today, you are seen as leading an amorphous mob, a group threatening to bring down civilization. That’s why the politicians have been slow to back you. They don’t know what you want. You need to focus, focus, focus, so the world can visualize where you want to go, understand why you want to go there and how you will achieve it, and in that way, join you.
You need to understand, then teach, Monetary Sovereignty, first to your followers, then to the rest of the world. Those are your next steps. And there are plenty of us who can teach you. You have but to ask.
Rodger Malcolm Mitchell
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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings