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. 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.
My Senator, Mark Kirk, parrots the latest fad that we should “Go Big” on federal deficit reduction. Here is what he says on his web site:
Resolved, That it is the sense of the Senate that Congress should pass a deficit reduction measure that-
(1) includes enough deficit reduction to stabilize the Federal debt as a share of the economy, put the debt on a downward path, and provide fiscal certainty;
(2) reduces the deficit by at least $4,000,000,000,000 over 10 years in order to reassure financial markets;
(3) encompasses the principles of reform, shared sacrifice, and compromise;
(4) uses established, bipartisan debt and deficit reduction frameworks as a starting point for discussions;
(5) focuses on the major parts of the budget and includes long-term entitlement reforms and pro-growth tax reform;
(6) is structured to grow the economy in the short, medium, and long terms to create jobs in the United States and increase United States competitiveness;
(7) builds a foundation of investor confidence that preserves the United States dollar and Federal debt securities as the global standard of safety and stability;
(8) works to include the American public and the business community in a broader discussion about the breadth of the issues, challenges, and opportunities facing us; and
(9) includes tax reform that guarantees deficit reduction and economic growth to rebuild America.
In short, it’s the usual, meaningless blah, blah, blah, long on platitudes, but with no specifics, save one: a $4 trillion cut in deficits over 10 years.
Where did he get $4 trillion? He has no idea. Rather than wasting brain energy to think things through, he, like most Congresspersons, has found it far more efficient to parrot the crowd. I Googled “go big” and here is what I found:
*Lawmakers urge supercommittee to ‘go big’ on deficit reduction
*Bipartisan push to ‘go big’ on deficit reduction. November 18, 2011 By Brian Moon.
*Lawmakers look to ‘go big’ on deficit – Seung Min Kim – POLITICO.com
*Go big on deficit reduction | WE Blog | Wichita Eagle Blogs
*Senators offer $4 trillion ‘Go Big’ deficit reduction plan to super …
*Super Committee Urged to ‘Go Big’ on Deficit Cuts | PBS NewsHour …
*McConnell’s about-face: Go big on deficit – TheHill.com
*US Sen Alexander: Big Deficit Plan At Top of Next Week’s Agenda …Bipartisan Pols Tell Super Committee to “Go Big” on Deficit …
Every one of these articles describes “go big” as a $4 trillion deficit reduction over 10 years, so everyone seems to agree: “Go Big” = $4 trillion reduction. And if “everyone” agrees, Mark Kirk agrees, too. That must be what we elected him to do: Not think; just agree.
One little problem. The Federal government projects the total of all deficits in the next ten years to reach $7 – $8 trillion, so that “go big” $4 trillion is quite a cut, indeed.
In fact, a ten-year, $4 trillion cut in federal deficits would guarantee the gosh-darndest depression in the history of America.
But hey, who’s counting? Surely not Senator Kirk. Surely not the media and politicians who have no idea what they are talking about and no idea how they would cut $4 trillion from the deficits, and no idea what would happen to unemployment, Social Security, Medicare, Medicaid, the armed forces and the entire economy, but they just enjoy mouthing what everyone else is mouthing: “Go big, Go big, Go big.”
As a test of this hypothesis, you might write to your Congressperson and your local media, and ask for specifics on how they would cut $4 trillion from the deficit. Either they won’t answer at all, or they will shock you with the identity and scope of the suggested cuts.
I suspect mindlessly mouthing “Go big” makes these people feel big and brave and powerful. I too, love shouting “Go big!” I also love the idea of sending each Congressperson and each media hack a pair of “go big” floppy shoes, and a “go big” red nose that goes “honk!” when squeezed.
Send in the clowns.
Don’t bother; they’re here.
I award one clown to all those who mindlessly chant “Go big,” whenever discussing deficit reduction.
(As a lesson in Monetary Sovereignty, I have decided to substitute clowns for my previous currency, dunce caps. 1 clown = 1 dunce cap.
I can do this because I am Monetarily Sovereign in my new currency, clowns. This is similar to what I have suggested for Greece and the rest of the euro nations: Adopt your own sovereign currency and announce it will be substituted for the non-sovereign euro. I now am running the equivalent of a 1350 clown deficit, with no danger of bankruptcy.)
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