●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Until the 99% understand the need for federal deficits, the 1% will rule.
●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.
When someone can’t understand a simple concept, it’s because they don’t wish to understand.
Though Monetary Sovereignty can be complex, its fundamental concept is simple: A Monetarily Sovereign government has the unlimited ability to create its sovereign currency. That is why a Monetarily Sovereign government never needs to ask anyone else for that currency. It never can run short of money.
Think of owning a dollar-creation machine. Your machine allows you to create endless dollars. Would you ever need to ask anyone to give or lend you dollars? The U.S. is Monetarily Sovereign. It can create endless dollars. It never needs to ask anyone for dollars.
Could anything be simpler?
Yet, there are educated people who claim not to understand that simple concept. Congress and the President fret over the federal debt. Surely, anyone with even modest intelligence, can understand that a nation with the unlimited ability to create dollars, doesn’t need to borrow dollars. I am certain Congress and the President know this.
Yet the Speaker of the House, John Boehner, famously lied, “America is broke.” A nation owning a dollar-creation machine is “broke”???
Both political parties feign concern about the “unsustainability” of the debt, though no one seems to know what “unsustainable” means. The hundreds of editors of all major newspapers pretend we are in a debt crisis, though no one seems to know what that crisis is. The Federal Reserve publishes articles indicating none of their executives understands that the U.S. owns the money-creation machine.
Meanwhile, adherents to Modern Monetary Theory (MMT) and Monetary Sovereignty (MS), write books, articles and blog posts, trying to simplify the concept enough for all these college-educated people. It’s a fools mission.
We cannot force someone to “understand” something they do not want to understand. So the real question becomes, “Why do these people pretend ignorance, when even the least intelligent among them, understands perfectly?” The answer is money and power.
The politicians and the media are paid not to understand. Their jobs depend on their not understanding.
Money is comparative. Owning $1 million might make you the richest man in the room. Everyone in the room would admire your “wealth.” You not only would have their admiration to stroke your ego, but you would have the power to encourage or even force people in that room to do things, say things or even believe things.
Or, owning $1 million might make you the poorest man in the room. No one in the room would admire your wealth. Your power would be negligible.
Your power and admiration would be based on something called the “gap.” Whether a wealth gap or an income gap, the size of the gap, rather than the absolute value of your dollar holdings, is the key to your power.
The gap can be widened either by increasing the dollar holdings of the rich, and/or by decreasing the dollar holdings of the not-rich. Either approach will accomplish the same end.
Reducing the federal debt demands that federal spending be decreased and/or taxes be increased. The vast majority of federal spending benefits the not-rich more than the rich: Social Security, Medicare, Medicaid, aid to education, food stamps, disability care – all have far more meaning for the middle and lower classes. So cuts in federal spending, which reduce the federal deficit, widen the gap.
Many taxes also hurt the less affluent: FICA, income taxes on Social Security benefits, tolls, sales taxes, all reduce the deficit and widen the gap.
Clearly, telling the populace that federal deficits and debt should be reduced, is in the best interest of the wealthiest among us, and it is to the detriment of those less wealthy. Is it any wonder then, that the politicians who owe their jobs to rich donors, and the media, which are controlled by rich owners, repeatedly decry the federal debt?
What can be done? Trying to educate the politicians and the media is hopeless. They already know. But, in essence, they have put their hands over their ears, and are yelling, “I CAN’T HEAR YOU..”
I believe we must educate the public, directly.
We have been blessed with a medium the rich can’t control: The Internet. You users of Facebook and Twitter should direct your friends and followers to appropriate postings about Monetary Sovereignty. You need to build an ever-branching tree of fact. When enough people understand the basic truth, the politicians and the media will jump on the train.
It’s our only hope.
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