Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
With each game played, the Chicago Cubs continue to set world records for incompetence. It has been over a century since this team has won the championship of its sport, surely an unmatched record in all of athletics. And the beat goes on.
The Chicago Tribune of “Dewey Defeats Truman” headline fame, continues in the same tradition of incompetence. Consider how much wrong information is crammed into these four sentences from June 18th Tribune editorial titled, “Lo and behold,” just the latest in a long, long string of utterly wrongheaded pieces.
The national debt threatens to crush our economic future . . . The members of the House and Senate have to curb every part of government including entitlements such as Medicare and Medicaid. They have to make much more painful cuts than ethanol subsidies. And they have to stop such claptrap as the argument that ending the ethanol subsidy would be a “tax increase.”
Lets examine each sentence:
“The national debt threatens to crush our economic future.”
Forget that the Tribune never has explained how this crushing will occur. Instead focus on the fact that the so-called “debt” is not functionally related to federal spending. It merely is an artifact of the gold standard, when the government was not Monetarily Sovereign and needed to borrow its own dollars.
Contrary to popular myth, the federal government could spend $100 trillion tomorrow and not incur even one penny’s worth of “debt.” The “debt” merely is a legal requirement that the federal government create T-securities from thin air, then exchange them for dollars it previously created from thin air – in the amount of dollars it newly creates from thin air. The U.S. could end the debt today, merely by changing the law, and not creating any T-securities. No T-securities = no debt. And no “crushing.”
“The members of the House and Senate have to curb every part of government, including entitlements such as Medicare and Medicaid.”
Again, as always, no reason is given for the destruction of programs designed specifically to help the middle and lower classes. How does it benefit America for people, who cannot afford private health insurance, to be denied health care? Presumably, this editorial was written by someone in the upper 1% income category. How about, “Let them eat cake,” Chicago Tribune?
“They have to make much more painful cuts than ethanol subsidies.”
While I hold no special brief for ethanol subsidies, and there are good arguments against them, one thing they do accomplish is adding money to the economy, which is stimulative. But what are these other “painful cuts,” and why do we want to inflict pain on the American public? What is the benefit of the agony the Tribune favors? How do federal spending cuts benefit us? The Tribune never has said.
“And they have to stop such claptrap as the argument that ending the ethanol subsidy would be a ‘tax increase.’”
Ah, does their incompetence never cease? Ending the ethanol subsidy would reduce the federal deficit, which functionally is identical with a tax increase. Whether the government spends less or takes in more, the arithmetic is the same: The economy winds up with less money.
Yes, the Chicago Tribune editors and the Chicago Cubs both are incompetent, and have been for a long time. There is one important difference, however. I believe the Cubs actually try to get it right, despite the difficulty of defeating all the other teams. The Tribune editors seem not to care less, despite the ease with which they could publish the truth. It’s just less work to parrot the popular myths than to endure the pain of actually learning something. Or is this a reflection of cowardice, the fear of coming out against common opinion?
Either way, the beat goes on.
Rodger Malcolm Mitchell
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 teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it ruined my future.”