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.
America struggles, has struggled and will struggle, unless one fundamental changes, and that fundamental is economics. We have had an average of one recession every five years. The recovery lags. Again and again, our people lose their homes, their livelihoods, their lives. Who is at fault for our repeated economic problems?
I accuse you mainstream economists, with special mention of those who have won prestigious awards, for leading America astray. I accuse you mainstream economists for lying to America. I accuse you mainstream economists who:
1. Refuse to understand Monetary Sovereignty, which reveals that the federal government has the unlimited ability to create money, restricted not by taxes nor by borrowing, but only by inflation. You who do not understand the implications of Monetary Sovereignty do not understand economics, yet the nation relies on your ignorance for leadership.
2. Refuse to acknowledge that the so-called federal “debt” merely is the total of outstanding T-securities created at will, from thin air, a process that has become unnecessary since August 15, 1971, when President Nixon took America off the gold standard. Rather than creating T-securities from thin air, then trading them for dollars previously created from thin air, all federal debt could be eliminated if T-bill creation were eliminated. The Treasury is required by law to create T-bills in an amount equal to the federal deficit, the difference between taxes and spending. This is not a financial need; it is a legal requirement, made obsolete in 1971. You mainstream economists don’t explain this to the people.
3. Refuse to adapt your philosophies to post 1971 economics. Ask many of you mainstream economists a question about federal debt, deficits, taxes, spending, inflation, deflation or stagflation and your answers today likely will not differ in any fundamental way from your answers pre-1971, though coming off the gold standard made a vast change in economics. It’s as though physicists gave all the same answers post-Einstein as they had given pre-Einstein.
4. Refuse to acknowledge that a balanced federal budget would mean disaster for America. A large economy, by definition, has more money than does a small economy. Therefore a growing economy requires a growing supply of money. And federal deficit spending creates the money to grow the economy.
5. Equate federal debt with personal debt. You tell the populace a large federal debt is “unsustainable” and a “ticking time bomb,” when neither is true. Because the U.S. government creates money by clicking a computer key, which it can do endlessly, any amount of federal debt is sustainable. While personal debt is a danger to the debtor, requiring income to service, federal debt is no danger to the federal government, and its service does not require income. You mainstream economists fail to explain this.
6. Insist that federal initiatives be “revenue neutral,” depriving Americans of the benefits federal spending can provide. Example: You falsely tell us America cannot afford universal health care, and that paying for universal health care would require tax increases for our children and grandchildren, when neither is true. U.S. government spending is not constrained by taxes. Thus, you mainstream economists deprive millions of our children and grandchildren of their health and their lives.
7. Equate financial problems in the euro nations with America’s finances. The euro nations are not Monetarily Sovereign; they cannot create euros at will. America is Monetarily Sovereign. It can create dollars at will. The difference is as black is to white.
8. Fail to reveal that our monetarily non-sovereign governments — the states counties and cities — cannot survive long-term on taxes alone, and must have money coming in from outside their borders. Monetarily non-sovereign governments, unlike the federal government, do pay their bills from tax money received. But because their citizens also pay federal taxes, which remove money from the local government, substantial federal input is needed, else the local government continually will lose money. Yet the federal government, misled by you mainstream economists, asks state governments to pay for such things as Medicaid, housing, schooling, security, infrastructure, etc. – all responsibilities that could and should be met by the federal government.
9. Fail to reveal that Social Security and Medicare are not supported by FICA and will not go bankrupt when FICA payments don’t equal benefit payments. Medicare and Social Security are but two of the more than 1,000 federal agencies, all supported by the federal government, and not by taxes. Among the other 1,000+ agencies, not supported by taxes, are all federal courts including the Supreme Court, the Army, Navy, Marines, Air Force, the Army Corps of Engineers, Justice Department, Bureau of Prisons, Census Bureau, Congress, Consumer Products Safety Commission, Customs and Border Protection, CIA, FBI, Department of Energy, Department of Education, Treasury Department, EPA, Federal Reserve System, FDA and on and on. We don’t hear about these federal agencies going bankrupt. Yet you mainstream economists continually warn us about the impending bankruptcy of Social Security and Medicare, warning that result in reduced benefits and higher taxes.
10. Fail to acknowledge the need to eliminate business taxes. Such taxes hamper business –our economic engines — while providing nothing useful for a Monetarily Sovereign government that neither needs nor uses taxes.
11. Fail to inform the American public that recessions and depressions are not part of a normal economic “cycle,” but rather are the result of errors made by our political leaders, who take their lead from misinformation supplied by you mainstream economists.
12. Fail to explain that for a Monetarily Sovereign nation, exports are not better than imports. When China exports to America, it expends massive amounts of energy, manpower, time and scarce resources to create products, which it sends to us in exchange for dollars, which we create at no cost, by touching of a computer key. Thus, China is our slave, working and sweating essentially for nothing.
13. Fail to explain that immigrants do not take jobs from citizens nor do they commit more crimes nor take federal benefits from taxpayers. Immigrants, being consumers, create jobs by buying. They are not more likely to be criminals, for fear of being deported. And taxpayers’ money does not pay for federal benefits, the simple reason being that taxes do not pay for federal benefits. You mainstream economists do not explain this to an innocent public motivated by fear-mongering politicians.
14. Fail to speak against the federal debt ceiling, when such not only is unnecessary but harmful to economic growth.
15. Fail to inform the public that nearly every recession and depression has resulted from a series of years in which federal debt growth declined.
Yes mainstream economists, Nobel-winning, article-writing, much admired and much feted mainstream economists, I accuse you of harming America, harming our children and our grandchildren. You have done us more damage than all the Communists, all the Fascists, all the drug dealers and murderers, all the terrorists and traitors. You have undermined our nation at its very economic core.
Why do you do this to us?
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth.