–Democrat says budget should be cut more than $2 trillion. As always, no proof offered.

Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

Note to Lori Montgomery, financial reporter for the Washington Post:

Hi Lori,

You reported,

“Sen. Kent Conrad (D-N.D.) said the goal of slicing more than $2 trillion from the federal budget by 2021 falls far short of the savings needed to stabilize borrowing, re-energize the economy and avert the threat of a debt crisis.”

Hmmm . . . Let’s see. Federal purchases of goods and services increase business sales, therefore are stimulative. But a $2 trillion reduction in federal spending – money that otherwise would have paid to businesses – will “re-energize the economy.” I’d love to see the math on that.

It also would be interesting to hear Sen. Conrad explain how a $2 trillion reduction in federal spending will “stabilize borrowing” (whatever the heck that means).

By the way, did you ever avail yourself of the opportunity to understand Monetary Sovereignty? Do you have any questions?

Previously she had written to me, saying she would review my summary of Monetary Sovereignty. I’ll let you know what she says in response to this letter, if anything.

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.”


11 thoughts on “–Democrat says budget should be cut more than $2 trillion. As always, no proof offered.

  1. Good stuff. I have understood Monetary Sovereignty for a long time, but I can’t seem to illustrate it to my friends in an understandable manner–they are all Repubs. The Dems may not have it right yet, but the Repubs seem to either confused or intellectually dishonest. I vote for both. Anyway, I will follow this blog to see how the discussion goes.


    1. Dems want to raise taxes to balance the budget. They are equally “confused or intellectually dishonest” Two sides of the same coin.


      1. Right.

        A balanced budget guarantees the reduction in the real (inflation adjusted) money supply, if there is even the slightest inflation. A reduction in the money supply guarantees recession and depression.

        Rodger Malcolm Mitchell


  2. John,

    I empathize.

    I ask people whether they know the differences between Monetarily Sovereign governments and monetarily non-sovereign governments. They seldom do, but that doesn’t stop them from making ignorant comments like “You can’t print money forever” or “Remember the Wiemar Republic,” as though they had come up with a clever never-thought-of rejoinder.

    Read the previous “suicide bombers” post and you’ll see how difficult the problem is.

    Rodger Malcolm Mitchell


  3. Here’s yet another in the thousands of examples of sheer government stupidity. Many point to the growth of the food stamp program as proof positive that we have 40 million starving families in the midst of us. When you read this brief article you’ll be amazed we don’t have 200 million food stamp recipients. This is the kind of thing that enrages people about government. http://online.wsj.com/article/SB10001424052702304657804576401412033504294.html?mod=WSJ_hp_mostpop_read


  4. Intuitively the phrase ‘can’t print money forever’ makes sense, as most of us have an anthropomorphic view of government finances, ( I know I did) taxes pay for spending, and if you borrow too much eventually you go broke. So it’s very easy for politicians and economists to appeal to this view in order to push whatever agenda they have. It is also hard for an individual to go against this ‘official line’, as you are opening yourself up to ridicule and hostility from those whose egos are put out of joint by you suggesting things may indeed be different.

    This makes the challenge that of educating enough of the population into understanding that the (federal) government is indeed different to you and me, and the constraints they have are not financial, there is no ‘deficit bogeyman’ waiting to get us, and that we can improve things if only we allow ouselves to.


      1. I think there’s a typo in the linked article:

        “3. Federal debt is a burden on future taxpayers
        Unlike you and me, the government does neither needs nor uses income in order to spend. ”

        Isn’t the “does” superfluous?


  5. Here is a nice succinct quote from Paul Krugman:

    From today’s (Obama) radio address:

    “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”

    Yep, the false government-family equivalence, the myth of expansionary austerity, and the confidence fairy, all in just two sentences.

    Krugman was right on target, and in just one sentence. There is zero equivalence between federal financing and personal financing. There is no mechanism for austerity to stimulate the economy. And business confidence is the result of, not the cause of, economic growth.

    The Tea/Republicans foist this BS on the public, and Obama goes along with it. The only thing that would make me vote for this guy is Michelle Bachmann.

    Rodger Malcolm Mitchell


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