Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. 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.
One thing I love about economics: Every time you think you’ve heard every argument, a new one emerges. Though many (most?) of these new arguments are specious, I enjoy reading and even printing them, because they help to visualize the facts of Monetary Sovereignty.
There’s an old saying, “The best way to learn a subject is to teach it.” For the past 15 years I’ve been teaching economics, and the effort has taught me more than if I had spend that same time continuing in formal classes. Why? Much more variety. Classrooms teach the professor’s beliefs.
Recently, I heard from someone named “Pete,” who seems to be an ardent environmentalist. To argue with Pete is like arguing with a religious fundamentalist. Truth blends with fiction, outrageous claims and exaggerations pop up and need to be addressed.
The whole thing turns into a whac-a-mole argument, leading to even more outrageous exaggerations and outright denials of fact, drifting further and further from point. (At one point he doubted people live longer today than in the distant past, and demanded I supply data.)
Nevertheless, I participate in such arguments (and admittedly, instigate them) because I learn from the nuggets of truth hidden in the hyperbole. Unlike debt-hawks, Pete seems to agree that Monetary Sovereignty — the government’s unlimited ability to pay for anything — does in fact lead to economic growth. This takes him orders of magnitude beyond popular ignorance.
But, Pete’s argument is that growth itself is bad, so even though Monetary Sovereignty, more specifically, federal deficit spending, begets technology, which begets economic growth, he feels this is a bad thing, not a good thing.
He provides a long list of bad results, mostly involving chemicals in our environment, to prove that humans have put way too many chemicals into the air, water and food, and killed too many animals. I agree.
But what is the trade-off? A dreamy return to a mythical, idyllic lifestyle, living naked in the forest, eating berries? Yes, some chemicals are bad; but some are good. Some medicines fail; some succeed. Some inventions bless us; some curse us.
How do we differentiate unless we progress? Can we learn in advance every side effect, and if so, how? Will we cope with the future? When the next big meteor or pandemic or ice age hits, will humans survive it — or even prevent it?
I grow impatient with people who feel progress must be linear — no bad experiments, no bad results, no bad surprises. I grow impatient with people who would junk democracy because there are crooked politicians, or blame business because some businessmen care more about profits than consumer safety.
One often hears the question, “How is man unique?” I suggest the answer is, “Man progresses.” Lions, tigers and bears do not progress. They are what they were and always will be. Nature may have changed them, and may change them in the future, but they will not change themselves. They are victims of what is. They settle for darkness; humans invent light bulbs.
To progress is to be human, as is to err. To learn from history, and to act on your learning, is to be human. To overcome intuition is to be human. To discover by (as Newton said) “standing on the shoulders of giants” is to be human.
Humans reach for the hills, for the mountains, for the stars. That reaching, reaching, failing, then reaching more is progress. Without it, we are no more than the lions, tigers and bears.
Animals eat eggs. Humans eat omelettes, and to the dismay of many environmental extremists, omelettes require egg breaking. Two steps forward; one step back. That is the reality of our growth.
The hope for humankind is not a reversion to nature or mean austerity or an end to economic growth. We must seek solutions to the problems that face us, some of which we have caused ourselves.
The Pete’s of the world disagree. They come from a culture where pessimism is oh, so much cooler than optimism. But, I believe in us. I believe we will find solutions to disease and pain and global warming, and poverty and hunger and the extinction of our species. I believe in human progress.
But progress demands money. I know of no other path. Those who deny Monetary Sovereignty — those who deny the absolute need for growth in federal deficits, i.e. money creation — they deny us the money we need for progress.
For the sake of a pessimistic present, they deny us an optimistic future. In essence, they deny us what makes us human.
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