●The more federal 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.
●Cutting the deficit is the government’s method for taking dollars from the middle class and giving them to the rich.
●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.
●The penalty for ignorance is slavery.
Never believe your opponent is ignorant. It’s what he wants you to believe.
The man stands accused of murdering his wife.
He claims he loved his wife and had no reason to murder her. He was not in an affair, nor was his wife; he was not known for fits of temper; they never had fought in public; there was no financial benefit to her death. By every available measure, he had no reason to kill her.
Despite the evidence – finger prints, DNA, his purchase of the murder weapon, his proximity at the time of the murder – the jury refuses to believe he could do it. Why? He had no motive.
Now change one fact: He was in an affair. Now it all adds up. The jury believes the accusation, and convicts.
The difference between belief and non-belief was the motive.
Background: For months, I have advised that economic facts alone will not change the federal government’s suicidal mission to reduce the deficit. I discussed this most recently in Why MMT frustrates the hell out of me and in Some blowback from MMT.
The public has been misled by the words “debt” and “deficit.” When applied to personal finances, these words flash danger signals. Who wouldn’t want their personal debt reduced and not to run a deficit?
The politicians and the media take advantage of this confusion, by brainwashing the public into wrongly believing the same danger signal applies to the federal government, the sole Monetarily Sovereign entity in America – the sole entity having the unlimited ability to create the dollars that grow the economy — the sole entity that cannot unwillingly run short of dollars.
Then, in those rare cases, where a member of the public begins to understand that federal deficits are absolutely necessary for economic growth, we are met with the other myth: Money printing causes inflation.
This too makes superficial sense, in that increasing the supply of something generally reduces its value. The fact that this can be true only if demand does not rise proportionately and in fact, has not happened since the U.S. went off the gold standard, seldom is mentioned by politicians or the media.
So the question becomes, “Why have the politicians and the media lied to the American public? Is it a matter of ignorance or malevolence?
My complaint with MMT is that they act as though it were ignorance, so continually try to explain the economy in simpler terms – terms even a politician could understand, while being loath, for lack of evidence, to accuse the politicians of intentional, bought-and-paid for deceit.
MMT shows flashes of anger, but it is anger at the misunderstanding of what is obvious. This anger never seems to transition into direct accusations of intentional malfeasance. Implicit in this is the notion that politicians – the President, Congress et al – really do want what is best for America, but are ignorant about economics and are neither intelligent enough nor motivated enough to learn. “So let’s make it simpler for them.”
Or at worst, the politicians merely are “playing politics,” that is, the Democrats are trying to make the Republicans look bad and the Republicans are trying to make the Democrats look bad.
But, evidence indicates neither ignorance nor “playing politics” is the problem, and barring ignorance and politics, the sole conclusion is that our politicians do understand the facts, but intentionally are voting to injure America. In short, the President et al are committing treason.
Here is the evidence: As I have stated in other posts, neither the President, the Vice President, the Secretary of Treasury, the Chairman of the Fed, nor the 435 members of Congress ever has admitted that federal deficits are necessary to grow the economy. Not one of them. Not ever. That is a too-great-to-believe number of people all sharing the same “ignorance” and the same “politics.”
Additionally, we have the Council of Economic Advisers, to greater or lesser degree, all experts in economics:
Chair: Alan Krueger; Members: Katharine Abraham; Chief Economist: Jim Stock; Director of Macroeconomic Forecasting: Steven N. Braun; Senior Economists: Bevin Ashenmiller: Energy and the environment; Benjamin Harris: Tax, budget, and retirement saving policy; Sue Helper: Manufacturing policy; Chinhui Juhn: Labor policy; Paul Lengermann: Macroeconomics; Emily Lin: Tax policy; Rodney Ludema: International economics; James Williamson: Public finance issues in agricultural and resource economics; Wes Yin: Health economics and policy; Staff Economists: Jeff Borowitz, Colleen Carey, David Cho, Judd Cramer, Reid Stevens, Research Economists: Pedro Spivakovsky-Gonzalez; Research Assistants; Matt Aks, Sandra Levy, Carter Mundell, Seth Werfel; Statistical Office: Adrienne T. Pilot; Director
Statistical Office Analysts: Brian Amorosi & Lindsay Kuberka
To my knowledge, none of the above has stepped forward and correctly said, “Cutting the deficit hurts America by reducing three of the four elements that constitute Gross Domestic Product: Personal Consumption Expenditures, Gross Private Domestic Investment and Government Consumption Expenditures & Gross Investment.”
Then we have the Board of Governors of the Federal Reserve System, which according to its own web site:
“Economic research at the Federal Reserve Board is conducted primarily within the Division of Research and Statistics, the Division of Monetary Affairs, and the Division of International Finance. Together, the three divisions have approximately 450 staff members, about half of whom are Ph.D. economists.
The Division of Reserve Bank Operations and Payment Systems, the Division of Consumer and Community Affairs, and the Division of Banking Supervision and Regulation also conduct economic research and employ Ph.D. economists.
Board economists produce numerous working papers and are among the leading contributors at professional meetings and in major journals. Board economists also produce a wide variety of economic analyses and forecasts for the Board of Governors and the Federal Open Market Committee.
Have you seen or heard of any of these Ph.D. economists writing or saying that austerity, i.e. deficit cutting, injures the American economy, just as it has injured the European economy, and in fact, every economy in which it is tried?
I could go on and on, adding the thousands of Ph.D.s floating about in all the colleges and universities, but the point is clear. Is it truly possible that these thousands of people, all of whom have devoted their lives to studying economics, do not understand basic economics?
No, not possible.
So, either Monetary Sovereignty is wrong, and by some miracle of arithmetic, taking dollars out of the public’s pockets actually spurs economic growth or – or something more insidious is happening. I vote for the later.
Belief flows downhill. If your boss says “Pigs fly,” and he pays you quite well to say, “Pigs fly,” and will fire you if you don’t agree, you probably will agree – not just agree, but actively promulgate the notion that pigs fly. And if everyone around you also is saying that pigs fly, you may come to believe that despite all evidence to the contrary, pigs actually do fly.
So if anyone shows you evidence that pigs are too heavy to fly and they don’t have wings, and no one ever has seen pigs fly, you will ignore the evidence and perhaps even ridicule it, with comments like, “There’s always a first time,” or “Why do you know this and no one else does,” or “Heavy animals have flown, and flying squirrels don’t have wings, so pigs can fly.”
And that, I suggest, is what is happening. Not ignorance. Not party vs. party politics. But slavish devotion to the hand that feeds you.
And that, I suggest, is why every criticism of the austerity policy should – no, must – include the motive, which is this: The rich have bought the obedience of the politicians via campaign contributions, the obedience of the media via ownership, and the obedience of the universities via charitable contributions.
And because the rich want the gap between them and the rest to widen, and austerity widens this gap, the politicians, the media and the economists toe the line, and spread the myth that a Monetarily Sovereign nation must “live within its means.”
The leaders and the economists will not respond to education. They are paid not to. The public will not respond to education. They are predisposed not to.
But the public will respond to a scandal, and that is what we must provide them. Every article should follow the format: “Deficit cutting is paid for by the rich. Here is how. The motive is to widen the gap between them and you. Here is how.”
The politicians, the media and the mainstream economists commit treason by accepting money intentionally to injure America.
But, it’s hard for the public to accept the crime, without knowing the motive.
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