●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Until the 99% understand the need for federal deficits, the upper 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.
A bit more than one year ago, this blog published “Is NPR in league with the Tea Party, or simply clueless?” The theme of that post is summarized in the following excerpt:
Today, I heard a discussion on National Public Radio (NPR). The participants claimed the media are hamstrung by the need to present both sides of each issue.
They lamented the fact that “fairness” required them to give equal weight to opposing opinions, even when one opinion was far more persuasive than the other — and shouldn’t the media have more leeway in exercising their judgement on this?
The specific subject was the federal deficit. Both participants agreed the deficit must be reduced, so the “two sides” were: Raise taxes or don’t raise taxes.
As readers of this blog know, those are not both sides of the deficit issue. Those “two sides” are mere details in the real issue: Increase the deficit or don’t increase the deficit.
The closing sentences of the post read:
Contact your local NPR station (www.mpr.org) and ask them to do as they claim to do: Broadcast both sides of the issue – the real both sides. If enough people request it, NPR finally may realize they are missing an important part of the economics debate.
I guess not enough people contacted NPR, because so far as I know, nothing has changed, because I heard Terry Gross (moderator of “Fresh Air”) interview David Wessel, “economics editor for The Wall Street Journal and writer of the Capital column, a weekly look at the economy.“
Wessel was puffing his book titled, “Red Ink: Inside the High-Stakes Politics of the Federal Budget.” According to NPR:
(Wessel’s book) breaks down the budget in stark terms: how the government spends its money, who pays what in taxes, and why politicians can’t reduce a potentially catastrophic debt load.
Frankly, I haven’t read Mr. Wessel’s book. (I also haven’t read books titled, “Why Evolution is wrong and Creationism is right” or “The earth really is the center of the universe, held aloft by Atlas.”) But, I suspect Mr. Wessel does not supply data to prove the federal debt is “catastrophic.” No such data exists in the real world. I can’t imagine why he wrote his book, since it undoubtedly contributes nothing to what already has been said by every other misguided debt hawk (Is there any other kind?)
Anyway, NPR’s web site provides this discouraging news: Mr. Wessel “appears frequently on National Public Radio’s ‘Morning Edition’ and on WETA’s ‘Washington Week.'”
Why is this discouraging? Because contrary to NPR’s protestations and mission, Wessel is firmly planted on one side of the debt discussion. Here are a couple of the discouraging comments, pulled directly from the NPR Website:
Wessel thinks there is a fundamental difference between the two parties “about how important and how big a role the government should play in our economy and that influences what you think should be done to cure the deficit.“
A synonym for “cure the deficit” might be “prevent economic growth and send us into a recession or depression,” for that’s exactly what “curing (aka reducing) the deficit” would do.
More from the NPR website:
Wessel believes one possibilty for compromise is to place “pretty tough restraints on spending, on benefit programs, like Medicare and Medicaid, which would be hard for the Democrats to swallow, coupled with some increase in taxes, that would be hard for the Republicans to swallow.”
This is what passes for compromise in Wessel-land — cutting benefits to the 99% lower income group, while raising taxes on everyone. I can’t imagine what Mr. Wessel believes that would accomplish for our economy.
It continues on this ridiculous vein:
Pretty much everybody … is looking for ways to reduce the amount of money that [goes into] these inefficient loopholes, credits and deductions in the tax code, as a way to either lower tax rates or raise money for the federal government [while] doing less harm to the economy.”
Examples of “inefficient loopholes” are the mortgage interest deduction, the medical expense deduction, and the home owners’ real estate tax deduction. Yes, we really need to make homeowners and sick people pay more taxes.
And, he wants to “raise money for the federal government,” a Monetarily Sovereign government that has the unlimited ability to create dollars, so does not need to ask anyone for dollars — not you, not me not anyone.
But thankfully, he only wants to do “less harm to the economy.” Heaven forbid he should actually want to help the economy.
Anyway, I was fortunate not to be pulled over by the police, for as I grew angrier at this tripe, my foot began to press down on the accelerator. By the time I arrived home (quickly), I had composed the following letter in my mind, which I then typed and sent to NPR.
One of NPR’s purposes is to broadcast what other mainstream stations do not broadcast. So there was Terry Gross interviewing David Wessel, and going along with the same old popular wisdom that the Federal Deficit should be reduced.
Not once did she ask, “David, what evidence do you have that the federal deficit should be reduced?” (He has none. He talks about how big it is, but has no data to show it has any negative impact on the economy.)
Not once did she say, “David, in view of the economic fact that Federal Deficits – Net Imports = Net Savings, wouldn’t reducing the Federal Deficit reduce Net Savings?” (It would)
Not once did she ask, “And wouldn’t reducing Net Savings negatively impact the economy?” (It would) “And David, wouldn’t increasing Net Savings stimulate the economy?” (It would.)
Not once did she say, “David, on August 15, 1971, the U.S. became Monetarily Sovereign. Before that date, U.S. dollar creation was limited by gold inventories. But following that date, the U.S. has had the unlimited ability to create dollars. Why does a government with the unlimited ability to create dollars need to ask you and me and China for dollars?” (It doesn’t, which is why federal borrowing and federal taxing are relics of the gold standard days and do not support federal spending.)
No, Ms. Gross just went along with today’s common knowledge, adding nothing to what people already believe. The show contained no new ideas, just a rehash of the same old ideas that went obsolete in 1971.
If Ms. Gross understood the difference between Monetary Sovereignty (the U.S., Canada, Australia, China et al) and monetary non-sovereignty (Greece, France, Illinois, Chicago, IBM, GE and her), she would have asked better questions and had a far more informative show.
If she would like to learn something different from what “everyone knows,” I’d be glad to teach her.
Now, it is possible that on rare (as a 40 carat diamond) occasions, Terry has interviewed someone who understood Monetary Sovereignty. I myself, never have heard it.
But, because Ms. Gross and her NPR bosses already know all they need to know about economics (i.e what the upper 1% wants them to tell us), and have no desire to learn anything about Monetary Sovereignty vs. monetary non-sovereignty, I doubt my note will be rewarded with even a stock response.
So, if you believe NPR should fulfill its mission of airing “both sides” of important issues — especially the provably correct side — perhaps receiving dozens or hundreds of letters might do the trick. There is an NPR contact page at http://help.npr.org/npr/includes/customer/npr/custforms/contactus.aspx
This is your opportunity to make a difference, and all it will cost you is the time to write a note.
Or you can continue to hear discussions giving “equal weight” to the two ways you can keep from sailing off the edge of the earth (row hard or attach a rope to land).
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