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 = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
My understanding of the Tea Party (does anyone really understand the Tea Party?) is that they are xenophobic and hate the government telling them what to do and what not to do. We all have a bit of the xenophobe in us to the degree that we love our country more than any other, and prefer jobs not to be “exported” to other nations. And we don’t like to be told not to do something we want to do, and vice versa.
I believe the Tea Party to be filled with a bunch of phony-religious, hyper-patriotic, gun-toting nuts. Their web site says, “Gun ownership is sacred.” Guns — this is what they consider sacred?? They love guns and embryos. People? Not so much.
But, I empathize with some of their feelings, particularly about not wanting a “Big-Brotherish” government running my life. I enjoy America’s freedoms (what little is left of them, considering the Patriot Act), and I greatly fear the dictatorial Soviet-style, Cuban-style, North Korean-style, Libyan-style, George Bush trend of our government, all in the name of security.
That said, I also like such government programs as Social Security, Medicare, infrastructure defense, education and food & drug & finance & military protection. I really don’t want to do my own research & development, and I’m not much into home schooling and guarding the coast.
I mention this because a false equation often is made between federal deficit spending and government interference in our lives. The two are not the same.
When I posted “Why Modern Monetary Theory’s Employer of Last Resort is a bad idea,” I indicated I didn’t like the creation of a giant, inept bureaucracy to accomplish what the private sector could accomplish much better. My exact words were:
Rather than attacking unemployment directly, by offering government, make-work jobs, I suggest the government stimulate the overall economy (via increased federal deficits), enabling the private sector to offer more jobs. A stimulated private sector will provide more meaningful and economically beneficial jobs than will a government bureaucracy offering jobs to anyone who wants one.
One reader said, ” I’m hearing a hint of Tea Party sympathy in your questions.” Although gun ownership is a stupid, intentional misreading of the Constitution, and making English mandatory is a thinly-veiled disguise for bigotry, I do support the Tea Party notion that all other things being equal, it is better for people to have the freedom to succeed than to have the government succeed for them.
“Liberalism” and “socialism” are spat upon because, in the minds of many (including liberals and socialists), both these words imply government control. When MMT suggests, to reduce unemployment, the federal government be the Employer of Last Resort (ELR), I rebel for many reasons, one of which it is a further government intrusion/control, when none is necessary.
Government deficit spending is not the same as government control. Eliminating FICA does not place an increased weight of government on our backs. Reducing income tax rates does not create a Big Brother environment.
While government payments can lead to control, the payments in themselves are not controlling; it is only the laws that control. So yes, let us have the government build roads, but also support local road building by giving money to the states and local governments to create the roads of their choice. And yes, let’s have rules to protect our health, our ecology, our finances and our security. I don’t want the government to own or control public radio and TV, but I’d like to see the government give money to these stations so they could afford more programming, and not have to run begging sessions every month or so.
There are things the government does best. There are things the government supports best. We must recognize the difference. We must be selective about government ownership of business while maintaining government regulation of business for the welfare of Americans.
Socialism (federal ownership) no. Liberalism (federal supervision) yes. It can be a fine line, and many people try to confuse it for political purposes, but recognizing and maintaining that line will make us strong.
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. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports