●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●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.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
Believers in Modern Monetary Theory (MMT) and Monetary Sovereignty often wonder why the clear and obvious bases for their hypothesis so actively are resisted by the public. We encounter not just reasonable doubt, but sarcasm and anger.
We wonder, “Why do people so passionately object to paying less tax and receiving more benefits?”
Recently a blogger, whose name is hidden to protect the ignorant – we’ll call him “F” — labeled Modern Monetary Theory (MMT), and by association, Monetary Sovereignty, “fringe theories.” An example of his commentary is:
I am continually baffled by people who give views far outside the mainstream, and insult people with conventional views — as if these non-consensus views were obvious and widely accepted by most experts.
That does not mean they are wrong. Sometimes — although rarely — very fringe theories become accepted (ie, some of today’s views were once on the fringe, but few fringe views become widely accepted).
After scores of fruitless debates with such people, I concluded that this attitude tends to characterize ideologues, people with an idée fixe. That does not mean that they’re bad, or wrong. It, in my experience, means that debate with such people is a waste of time (ie, a rule based on a generalization).
F is referring to MMT and MS, and his use of the words “fringe theory” is a gratuitous slap disguised by phony reasonableness. His comment has nothing to do with the merits of MMT and MS. It merely is his excuse for saying they are wrong, without having to justify why.
For the F’s of the world, science stands still. He does not acknowledge that every new scientific idea begins in the “fringe.”
This thread touches on one of my major shocks from the comments on [my] website: the degree to which my bland, mainstream views (with which most people will agree) are fiercely attacked as if they were extraordinary violations of common sense.
Ah, the innocence of those “bland, mainstream views,” and the implication that “most people” agreeing is proof of correctness. We attack F’s views, not just because they violate mathematics and common sense (which they do), but when demanding reductions in the federal deficit and debt, F joins those who put America at risk. “Bland,” indeed.
The mainstream takes umbrage at Monetary Sovereignty calling their ideas not only wrong, but obviously and dangerously wrong. But those ideas are motivated not by sincere applications of science, but by the greed of the upper 1% income group. .
In short, F, you and the populace have been had by the 1%.
Gross Domestic Product (GDP) is the most popular (mainstream) measure of economic growth. It is calculated by adding federal spending, non-federal spending and net exports. More specifically:
GDP = Government Consumption & Investment (federal spending) + Personal Consumption Expenditures + Private Domestic Investment (non-federal spending) – Net Imports
Because U.S. Net Imports removes about $500 billion a year from GDP, the total of federal spending plus non-federal spending must exceed that $500 billion sent overseas, just for GDP to exist, let alone grow. Basic algebra.
But the mainstream economists wish to reduce, or even eliminate, the federal deficit, and the only ways to do that are to cut federal spending and/or to increase federal taxes – both of which reduce federal and non-federal spending. In short, F’s “bland, mainstream view” is to reduce the only elements responsible for economic growth.
And we shouldn’t attack that??
I have called the mainstream view, “Applying leeches to cure anemia.” (I’ll accept any better analogies.) Meanwhile, there is not one iota of evidence that federal deficits and debt are “unsustainable” or excessively inflationary or any of the other “sky-is-falling” deficit scenarios depicted by the mainstream, and further, not one iota of evidence that cutting the federal deficit and debt will stimulate the economy. All the evidence is on the other side.
So, shame on us “fringe” theorists for daring to attack these bland, mainstream unsupported, harmful views. Better that we should stand back and say nothing and join the safety of the majority, while the country descends into recession, depression and ultimately, into anarchy (when the income gap, between rich and poor, grows large enough)?
In the previous post, I described how President Obama’s “grand bargain” will widen that gap, and I speculated on his motivation, i.e. he is bought and paid for by the upper 1% income group. (Ask him about his real estate deal with convicted felon Tony Rezko.)
But while the 1% is motivated by the desire to increase the gap, and the Republicans and Democrats are motivated by the 1%’s bribes, none could accomplish their misdeeds without the acquiescence of the public. And standing at the public’s source of this river of misinformation, you’ll find mainstream economists.
What motivates mainstream economists to ignore science, mathematics and common sense, to hold fast to ideas that cannot be supported by data? Let me count the ways:
1. Some economists have won what misleadingly are called “Nobel Prizes,” for proving the world is flat, and by heaven, they are not about to admit the errors of their ways.
2. Those awarding the prize have staked their reputations on the mainstream idea of reducing the factors making up GDP in order to increase GDP. Economists know the prize will go to the mainstream, so they follow the mainstream.
3. Some economists receive money from the upper 1% income group, and one does not bite the hand that feeds you.
4. Professors need to publish, and mainstream publications are far more likely to publish articles parroting mainstream propaganda.
5. And what shall one do about those annually revised, profitable textbooks forced on the students every semester – textbooks espousing the mainstream view?
6. Finally, no one is granted economics department tenure for advocating a hypothesis embarrassing to the head of the economics department, and that guy already has published mainstream pap.
So you have the great Harvard University and the even greater (for economics awards) University of Chicago, pumping out mainstream nonsense, which the media, the politicians and bloggers like “F” accept without resistance, while professors at the University of Missouri, Kansas City (may their name be blessed) courageously tell the truth about our economy.
Would that their voices were louder.
As the bought-and-paid-for Obamas, Romneys and Bernankes, Senators and Representatives, newspaper and T.V. “journalists, Fox News and mainstream economists all do their utmost to indoctrinate the populace with lies, a handful of heroic economists – Randall Wray, Warren Mosler, Bill Black, Billy Mitchell, Stephanie Kelton, Mathew Forstater and others fight to save America.
And endure the F’s of the world sneering at “fringe” theories.
Of course, one day, as either the evidence continues to pile on their heads, or the angry mobs impale them with pitchforks, these mainstreamers will tell everyone, “You misunderstood me. I knew Monetary Sovereignty all the time. When I said the deficit should be reduced, I really meant it should be unreduced. That always has been my bland, mainstream view.”
Bottom line, there are many reasons why the public resists the facts of Monetary Sovereignty – and perhaps the most powerful reason is: The mainstream disputes it. We humans are predisposed to join the collective, especially when the F’s of the world say so.
As the Borg in Star Trek said, “Resistance is futile.”
Or maybe not.
Rodger Malcolm Mitchell
Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%
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 Imports