The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.
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Paul Ryan, the Tea (formerly Republican) Party hero, was interviewed in the May, 2011 Money Magazine. Here are a few excerpts (Money Magazine comments in red) :
Ryan is as free market as it gets – he’s cited Ayn Rand as an influence
For those of you not familiar with Ayn Rand, she believed in Objectivism. It could be known as the Gordon Gekko, “Greed is good” school of thought, in which the powerful receive all and the weak receive nothing. One of her followers was Alan Greenspan. Need I say more?
Should we be focused on the deficit when we’re still recovering from recession? Yes. There’s a neo-Keynesian school of thought that says to run deficts when you have a bad economy. But chronic, deficit spending, plus the huge debt, adds to more uncertainty to the economy and means higher taxes around the corner.
“Around the corner” is one of many debt-hawk phrases, along with “ticking time bomb” and “unsustainable,” in which no specifics are given, thus avoiding the Harold Camping, “world-is-ending” embarrassment. Ryan fails to mention there is no historical relationship between federal taxes and federal deficits.
Think about it: Without actually committing to anything specific, he seems to support deficits to grow the economy, when the economy is bad. So why wouldn’t one wish to grow the economy, when it’s good?
Businesses are holding back from hiring and investing because of uncertainty created by government.
No, businesses are holding back because profits don’t warrant expansion. Why? Insufficient federal spending has prevented recovery from the recession.
You’ve said the deficits could “crash” the economy. How so? The Congressional Budget Office (CBO) has a long-term forecasting model, and their computers can’t conceive of the economy continuing with the ongoing deficit. Their projection is, we are on an unsustainable path. We see this crisis coming. We can’t duck the responsibility of tackling it now.
It was a great question, which he never answered. No surprise there. No debt-hawk ever has answered that question. Federal money creation won’t crash the economy; lack of money creation will. And oh yes, there’s that weasel word “unsustainable,” again.
Are tax hikes one part of the answer? No. Raising revenue just takes pressure off the real cause of our problem, which is spending.
Double talk. Financially, cutting spending = raising taxes. Either way, less money enters the economy. To say that raising taxes is economically bad but cutting spending is economically good, makes no sense. Classic gobbledegook.
Does that mean future retirees would be spending more of their savings on health care? Yes, you have to do that. Medicare spending will grow at a slower rate under my plan. That’s how you keep Medicare solvent.
That also is how you make older Americans insolvent. His plan cuts spendable income each year. The way to keep Medicare solvent is the same way we keep Congress, the Supreme Court, the White House, the military, and the thousand other federal departments solvent. Our Monetarily Sovereign nation funds them.
Do you think Republicans have an stomach for cutting Medicare? We’re not cutting Medicare . . . we’re going to reform Medicare for future generations.
Translation: “Yes, we are cutting Medicare for people under 55, but we’re going to call it ‘reform,’ and in that way you won’t notice. Everyone loves reform, don’t they?”
For all you folks who hate big government (but really don’t know why), and are concerned about your children and grandchildren (but not concerned enough to make sure their health care is a good as yours), the Tea (formerly Republican) Party / Ryan proposal is perfect. Of course, not understanding Monetary Sovereignty is the first step.
Rodger Malcolm Mitchell
http://www.rodgermitchell.com
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No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.
Remember that the next time you’re tempted to ask a dopey teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it screwed up my future.”
MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
No sooner had I posted the above, when I saw this article in the POLITICAL HOTSHEET, by Lucy Madison:
“Massachusetts Republican Sen. Scott Brown said on Monday he would vote against Rep. Paul Ryan’s plan to reform Medicare, citing fears that the plan would require seniors to bear a disproportionate burden of its costs and put them at risk of not being able to afford coverage.
In an op-ed for Politico, Brown praised Ryan for “getting the conversation started,” but argued that Medicare could be reformed without completely overhauling the system.
[ . . . ]
“Brown’s criticism of Ryan’s proposal, which aims to transform Medicare into a voucher-like system, somewhat mirrors the complaints Democrats have leveled at the proposal. He argues that the government subsidy to purchase health insurance might not keep pace with rising costs, leaving the elderly unable to pay their full health care costs.”
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“He argues that the government subsidy to purchase health insurance might not keep pace with rising costs, leaving the elderly unable to pay their full health care costs.”
“might not”? Are you kidding me? It MUST NOT! “That’s how you keep Medicare solvent”, Mr. Brown.
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The Ryan Budget Tipping Point
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” Ryan is as free market as it gets – he’s cited Ayn Rand as an influence
For those of you not familiar with Ayn Rand, she believed in Objectivism. It could be known as the Gordon Gekko, “Greed is good” school of thought, in which the powerful receive all and the weak receive nothing. One of her followers was Alan Greenspan. Need I say more?
You should read and study Atlas Shrugged to understand that individual achievement to what makes the world a better place, Not government intervention. Greenspan actually moved away for capitalism and that is partly why we are in the mess today. His debt is good policy forgot to look into his buddies at Goldman Sachs as they bet against the house (US). Ryan is OK, but he a politician. Nuff said. As for Rand, she may have been a nut case, but she lived in a socialist / communist world and that is clear in her writings. She knew the difference and tried to warn people.
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Good lord, where is the “Don’t touch my Medicare” mob now?
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hiscross,
Yes, individual achievement is important. Government intervention also is important. In fact, intervention is the function of government, else who would support the army, build the roads and bridges, inspect our food and drugs, run our courts and do the million other things government does for us?
On balance, socialism is far better than anarchy — unless of course, you plan to guard against terrorists yourself.
Rodger Malcolm Mitchell
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“ntervention is the function of government” I’m sorry to disagree with you. The reality government is necessary because of the weakness of man. The human spirit who does want is morally right doesn’t need a government because that person knows what is right and wrong. Terrorism is a direct result of government. Terrorism would not exist if man was free to chose his own path in life, but that is not the case. In gave 29 years of my life serving in the military so I know the result of government policy. In the end, the world needs the individual who can achieve is own self interest because that person effort has a greater positive impact on the human soul than any government can ever understand and never achieve. No I am not bitter, but i clearly understand the difference.
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I agree. In a perfect world full of flawless people, there’s no need for government at all.
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Your forgot the most important function of modern government — creating money!
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Capitalism creates more than money, it create the freedom to produce wealth. Once you tax that wealth, you take away freedom. Just look at the unemployment rate much which caused by monetary policy that has not worked (QE2)
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“tax that wealth”? What are you talking about? Haven’t you learned by now government doesn’t need to tax anybody? It just creates money.
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OK, I’ll make this simple. By paying taxes you are jobbed of your money by a system that can’t produce a thing. Let’s say you build boats. It is your time and money that goes into making those boats. You sell them at a profit. Are you with me so far? Hope so. However, someone who can’t make a thing, can legally loot some of your profit just because they can. It is called Taxes. Yea, that term you keep saying isn’t needed, but many of us are forced to pay. If you don’t pay, then you can be put in jail. Hope that was easy to understand.
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hiscross,
Glad to hear you’re not bitter about your 29 years in the military. What is your evidence that anarchy works in the real world? If as you say, man is weak, how do you propose to undo a million years of evolution?
That is my beef with the Tea (formerly Republican) Party: Ton’s of dreamy, pie-in-the-sky about eliminating government in favor of individual freedom, but not an ounce of reality.
The science of economics is to describe the world as it exists, not the fairyland world of “I wish.” As with all sciences, there is much to be learned about reality, but surrendering to myths is ignorance.
If you don’t like government, next time your house is on fire, get a pail.
Rodger Malcolm Mitchell
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Hiscross,
Thank you for making it simple. Agreed, federal taxes are unnecessary, in fact harmful, which I’ve been saying for at least 15 years.
None of this has anything to do with federal spending, which has no relationship at all with federal taxes.
If taxes were reduced to $0 or increased to $100 trillion, neither would affect by even one penny, the federal government’s ability to deficit spend.
Was there more to your point?
Rodger Malcolm Mitchell
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So how about getting on the zero tax bandwagon . That would get people attention. Just think, no taxes and plenty of money to pay for all those programs people want. It bet even Ron Paul would agree.
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You got it. No taxes, all benefits. What’s not to like?
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Ron Paul would probably not agree, because once taxes are reduced to zero, federal spending would then more directly correlate with increased inflation. Mr. Paul would prefer, well, I honestly don’t know what the Pauls want, since they would prefer the Fed be dissolved, the US return to the gold standard, and THEN reduced taxes, with the necessary reduced spending since the US government would have forfeited its monetary sovereignty. At least to me, this sounds like anarchy, but its a message that appeals to people who think that the government can do absolutely nothing right. After several decades of living in a world where my water, food, and air are all clean, with freshly paved roads free of armed banditos, where I can read articles on the monopoly-free internet about the FEMA response to the devastating tornadoes in the south, I can say that the government can do a few things right.
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