Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Today’s headline:
Dow Jones closes down 513 points;
worst drop since October ’08
Well obviously, we need to cut federal spending. Quickly, write your Congressperson and thank him/her for cutting the federal deficit. Tell him there still is too much damn money in the economy, so we need to cut spending even more. And thank you Mr. President for giving us austerity. That should eliminate the unemployment problem.
By the way, last month I predicted a depression for 2012. What can prevent it? Federal deficit spending. (But don’t tell the Tea Party).
Rodger Malcolm Mitchell
http://www.rodgermitchell.com
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No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings
MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
“A surge of private sector layoffs in July may suggest that the economic recovery is stalling. Former top White House economist Larry Summers warns of “at least a 1-in-3 chance” of falling back into recession.”
Gee, you think so? Hard to imagine why, considering Congress and the President are doing everything possible to bleed the economy of money and prevent a recovery.
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I actually heard an economist on the Kudlow Report last night say that the problem with this economy is too much government spending and unemployment insurance. I turned the channel.
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Mr. Mitchell
Krugman, Stiglitz, Hudson, Galbraith, Baker, and Sands have all said that gov stimulus has been too small and needs to be much greater or risk a double dip or worse. All cite the current situation as a repeat of the filed austerity of FDR in 1937. Would you agree with that? However, doesn’t increase gov spending increase the debt and the resulting interest? I do find it stunning that there was no discussion of the two (or more) wars, generous oil and agricultural subsidies, offshore tax havens, or greater taxation of the top 2% who are wealthier than ever and have more tax breaks than ever. What would your solution be?
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Roy,
Yes, I agree. I predicted in an April 9, 2008 Email to the Chicago Tribune (http://www.rodgermitchell.com/medialetters.html ), that the stimulus would be “too little, too late.” It was. Now the geniuses in Congress want to cut it further.
As a Monetarily Sovereign nation, the U.S. does not need to borrow the dollars it has the unlimited ability to create. Think about that. T-securities (misnamed “borrowing”) could be eliminated tomorrow.
Interest rates are not determined by the market; they are determined by the Fed. Further, there is no relationship between high interest rates and slow GDP growth.
My solution to the current economic problem, a solution I have stated often:
1. Eliminate FICA. This would have a tremendous stimulative effect on business and consumers.
2. Reduce payroll taxes by increasing the standard deduction about $10,000 each year.
3. Provide greater federal support to the states, the poor, the sick and the retired.
Rodger Malcolm Mitchell
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