The debt hawks are to economics as the creationists are to biology. Those, who do not understand monetary sovereignty, do not understand economics. Cutting the federal deficit is the most ignorant and damaging step the federal government could take. It ranks ahead of the Hawley-Smoot Tariff.
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Yesterday (11/9/10), I sent the following letter to the people at National Public Radio. I’ll let you know in the unlikely event they respond. Even this self-styled, independent, “open-minded” medium, funded primarily by private donation, simply cannot bring itself to consider the possibility that the federal debt is not too high, and in fact, is necessary for economic growth. If NPR can’t handle the facts, what hope is there the for-profit media, which solely are interested in ad dollars fueled by popular wisdom, will understand?
You pride yourself on balance, but there is one area in which you are completely out of balance. Day after day I hear your interviewers talking to people who claim the U.S. is “broke,” and the federal debt is “unsustainable” and needs to be reduced. Entire radio programs are devoted to debating about which spending initiative should be cut. Interviewees tell us whether payments to doctors should be reduced. Or Social Security cut. Or can we afford health care?
Day after day your programs tell listeners the government can’t afford this and can’t afford that. Today, on one of your programs, I heard someone say the federal budget for Public Radio should be eliminated — a delicious irony, since you helped bring this on yourself by never presenting the other side of the story.
In 1971, the end of the gold standard, the federal government became monetarily sovereign. This changed everything in economics. Suddenly, the federal government had the unlimited ability to create money and to service any size debt. It is 100% impossible for any monetarily sovereign nation to be “broke.” There is nothing the government cannot afford.
Additionally, in a monetarily sovereign nation, federal spending is not constrained by taxes or borrowing. If taxes and borrowing both fell to $0, this would not change by even one penny, the federal government’s ability to spend any amount on any initiative.
The only thing that constrains federal spending is inflation, and as you can see, we are nowhere near inflation; in fact, deflation is the current worry. Meanwhile, millions of Americans suffer for lack of federal spending on health care, Medicare, Social Security, roads, bridges, poverty, affordable housing, education, etc. — all because of the incorrect belief the government is “broke.”
I would be glad to present the other side of the story. It’s time your audience heard a balanced presentation of this critical issue. If it’s a debate, my first question will be, “If America is broke, as you say, exactly when did it become broke? After that, my questions will become harder.
It’s time for a little balance
Rodger Malcolm Mitchell
http://www.rodgermitchell.com
No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind me of the guy whose house is on fire. A neighbor runs with a garden hose and starts spraying, but the fire continues. The neighbor wants to call the fire department, which would bring the big hoses, but the guy says, “Don’t call. As you can see, water doesn’t put out fires.”
#Monetary Sovereignty - Mitchell 
Yay. Call Diane Rehm today.
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Thank you so much for this letter and the work you do with the blog. I’ve recently become acquainted with MMT and greatly appreciate the insights provided. Your concern for the needless suffering due the deficit hysteria resonates completely with me.
In one of your posts you exhort people to “write, write, write”. I want to follow that encouragement and have a question about a letter to the editor I was considering fashioning. I’m going to have to email later about that when I have more time.
I just had to take a minute though to thank you. Also I appreciate your ability to express these ideas with such clarity and accessibility to lay people. Please, please keep up the good work.
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Need I say more about the damage debt hysteria causes and will continue to cause? When will the madness end?
Rodger Malcolm Mitchell
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Send something to the Planet Money people, or Steve Inskeep directly.
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Thanks Andrew,
I’ll try that. You too can help America by writing these people, as well as your Congresspeople.
Rodger Malcolm Mitchell
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I stopped listening to National Propaganda Radio a long time ago. Spare yourself the misery; listen to an audio book or Democracy Now! with Amy Goodman. What passes for independent investigative journalism in the mainstream is really just a parade of corporate shills and rebranded Washington consensus.
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Roger,How about you and Warren Mosler,And maybe a couple of Economists from UM/KC going on Oprah.What better forum to reach the American people,and she seems to have the ear of Obama,so If you convince her,you could reach way more people than by writing NPR or the newspapers..
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ken,
I’d love to join Warren and Randy Wray on Oprah. Yes, if we could convince her, we might change the world. Now all someone has to do is arrange it.
Rodger Malcolm Mitchell
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I know Warren is a multi-millionaire,and I think you are also,surely you have mutual friends who might arrange it ?
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Also.I’m curious if you are familiar with the American Monetary Act..
Click to access 32pageexplanation.pdf
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Not much. I’ve heard they would do away with federal debt, a step I support. The creation and sale of T-securities (aka “borrowing) is unnecessary for a monetarily sovereign nation.
I also heard they would do away with fractional reserve banking. We don’t really have fractional reserve banking; we have fractional capital banking. I’m not sure whether this means banks no longer could lend money??? I don’t see how that would work.
Finally, I understand they want Congress to spend money on “green” initiatives, which seems innocuous, depending on how it’s done.
Perhaps you know more about this than I do.
Rodger Malcolm Mitchell
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