Mitchell’s laws: To survive, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Reduced money growth cannot increase economic growth. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
This is the next speech President Obama will give — if he has courage:
My fellow Americans,
You have been told monstrous lies – by the media, by the Tea Party, by the Republicans, by the Democrats, and yes, I’m sorry to say, by me. And all these lies chipped away at our great nation. They led to the recession, to the non-recovery, to the unemployment – all unnecessary, all preventable and all curable. We, in Washington, have preached austerity, when we should have preached prosperity.
Well, the lies stop right here, right now. During the next 25 minutes, I’m going to tell you exactly how we’re going to get out of this mess and return to prosperity – and it all will happen within 12 months. No more austerity; from now on, think prosperity.
I am so confident in this plan, that if we adopt it, and do not return to prosperity within 12 months, I will tender my resignation. But more on that later.
First, we’ll rid ourselves of that ridiculous, deficit-reduction, super-committee. Forming this committee made as much sense as punting from your opponent’s ten-yard line. There simply is no way – I repeat, no way – to grow an economy by increasing taxes or with reduced federal spending. Cutting the federal deficit is the sure way to sink the economy. That is true today, tomorrow, and for all time in the future.
Our federal government is what’s called Monetarily Sovereign, meaning it has the unlimited ability to pay any debt of any size. There is not one reason – not one – to reduce the deficit or the debt, and plenty of reasons not to. Consider that deficit-reduction committee gone.
Second, we’ll get rid of FICA. No more lies. Here’s the truth: FICA does not pay for Social Security. FICA does not pay for Medicare. FICA does not pay for anything. It is nothing more than a useless – no, harmful – tax on the working class. Before 1971, when we still were on a gold standard, FICA was needed. But that need ended. Our government now has the unlimited ability to create dollars. FICA is an obsolete carbuncle on the neck of our economy.
Medicare and Social security are federal agencies. Like all of the thousand federal agencies – like the Department of Defense, like the Supreme Court, like the White House, like Congress itself – all federal agencies are supported in exactly the same way – by federal spending.
There is no FICA for the military, there is no FICA for Congress or for the courts or for the White House. There is no FICA for the CIA or the FBI. And starting now, there will be no FICA for Social Security or for Medicare. Like every other federal agency, they simply will be supported by the federal government.
What will this accomplish? Not having to pay FICA will put money in your pockets, so you’ll be able to save more and spend more. Not having to pay FICA will put money in the pockets of businesses, large and small, so they’ll be able to invest more and hire more. And when you spend more, that will stimulate business to hire even more. And all those new hires, will spend even more – and the economy will grow toward prosperity. Consider FICA gone – one less burden on your shoulders.
Not only will FICA end, but Medicare and Social Security will expand. Every year, the qualifying age for Medicare will be reduced by one year, until in the future, every man, woman and child in America will covered by Medicare – and not just today’s Medicare, but an expanded Medicare, with fewer holes and better payments do doctors, nurses and hospitals. That not only will save you money, but increase the number and quality of doctors, nurses and hospitals. Millions of American lives will be saved, extended and improved. You’ll live longer and healthier lives, as will your children and your grandchildren. Isn’t this what we all want?
And Social Security – it once again will begin at 65, and we’ll raise those pathetic benefits so that our older citizens actually could live on them.
Third, we’ll begin to increase the standard deduction on income tax, by $10,000 each year. This means, fewer and fewer people, in the lower income groups, will have money taken from their pockets. Today the standard deduction is about $5,000. Next year it will be $15,000. The following year, $25,000. Within ten years, no one earning less than $100,000 will pay any federal income tax at all. You’ll keep all the money you earn. The federal government doesn’t need your tax money, so it won’t take your money. Remember, since 1971, the federal government has had the unlimited ability to create dollars. So, why would it need your tax dollars? It doesn’t.
I know what you’re thinking: Inflation. Don’t worry about inflation. I’ll address that in the next couple of minutes. Think only about the money you’ll save and how that will grow our economy – and what prosperity will mean to you and to your loved ones.
Fourth, the federal government will send every man, woman and child – every American citizen – a check for $5,000, to do with as you choose. Pay your rent or your mortgage. Buy food. Make a down payment on a car. Pay a college tuition. Buy some clothes. Take a vacation. It’s your money. This will give the economy the powerful kick in the butt it needs.
And don’t worry; the government can afford it. So, consider your $5,000 check a down payment on your prosperity – your reward for putting up with all the lies, the compromises, the politics the recessions, the unemployment your government has foisted on you.
There will be other parts to the plan, the details of which I don’t have time to discuss, now. The federal government will help the states – which by the way, do not have the unlimited ability to pay bills –get out of their financial problems. And the government will increase support for road and bridge repair and building, transportation, research & development, education, policing, food and drug inspection, and many other important functions on our march to prosperity.
What will all of this cost? I estimate about $4 trillion the first year, and even more in succeeding years. Can the government afford it? Yes, the government could afford ten times that amount. There is no limit to what the federal government can afford.
And that brings us back to the subject of inflation. Visualize this: Say a fire has started in your house. You worry that if you call the fire department, and they pour water on the fire, the water could get into the carpets, and at some time in the future, mold could grow, and if it does, you might be allergic to that particular strain of mold. So what do you do? Do you call the fire department to put out the fire, or do you wait for fear of a possible mold you possibly could be allergic to, some day in the future?
Well America, our house is on fire, and that fire – that recession and unemployment — needs to be dealt with now. Not tomorrow, not next week, but now. We’ll take care of this immediate problem first, and if – big IF – if we have mold, that is if we have inflation, we’ll deal with that too, and here is how:
Tomorrow, I’m going to call Mr. Ben Bernanke, Chairman of the Fed, into my office and say to him, “Ben, you have one assignment. It’s not to regulate the economy; it’s not to stimulate bank lending; it’s not to cure the recession. Those are my jobs. Your one assignment is very simple: Do exactly what you’re best at: Control inflation. That will be your sole focus.
“If you see inflation going above your target, do what you do – raise interest rates, buy T-bills — do what you always have done to prevent and cure inflation. And if – another big IF – if despite all your best efforts, you still can’t control inflation, we simply will cut back on spending. But we’ll keep that in card our back pocket, to be used only if – big IF –if all the other methods you successfully have employed over the years, somehow stop working this time.”
So that’s a brief outline of my plan for prosperity. Within two weeks, I will present to Congress, the details of the plan, along with a simple choice: Accept it or reject it. Vote for prosperity or vote for austerity.
There will be no more compromises. No more chipping away at this corner or that. No more delays, no more lies, no more politics. Take it as is, or leave it. If Congress takes it, I guarantee we will have prosperity within 12 months. If I am wrong I will tender my resignation, so sure am I of its success.
If Congress rejects the plan as is, I also will tender my resignation, because I refuse to be a lame President, trying to work with one hand tied and with plans I know will not work. The focus has changed. I don’t care about re-election. I care about you; I care about America. And I expect every member of Congress to feel the same way.
I’d much rather leave the Presidency, and write books, and travel the world with my beautiful family, and give hundred-thousand dollar speeches, and live the life all former Presidents live, than to sit quietly in the Oval Office, suffering in frustration over a failing economy I know I could cure, if only I were allowed to.
So there are the broad strokes, and soon you will see the details. Congress can accept the plan, and we will have prosperity, or Congress can reject the plan and we will have austerity. No more lies. No more compromises. No more politics. The choice is theirs, and the choice is yours, America, because ultimately you tell Congress what to do.
Contact your Congressperson and tell him or her what you want. Prosperity or austerity. Prosperity or austerity. That is your choice for yourself, your children and your grandchildren. Prosperity or austerity.
God bless you and watch over you as you and Congress decide.
That is the speech a courageous, dedicated, honest, sincere President Obama will give.
Rodger Malcolm Mitchell
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