Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
Mitchell’s laws:
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
●Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
●The single most important problem in economics is the gap between rich and poor.
●Austerity is the government’s method for widening the gap between rich and poor.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Everything in economics devolves to motive, and the motive is the Gap.
=========================================================================================================================================================================================================================
The “Occupy” movement will fail, because it is directionless, generally opposed to everything and in favor of nothing.
They should favor one goal: Narrowing the Gap between the rich and the rest, and in that effort, we offer them the Ten Steps to Prosperity:
===================================================================================
The Ten Steps to Prosperity:1. Eliminate FICA (Click here)
2. Federally funded free Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Federally funded, free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually. (Refer to this.)
8. Tax the very rich (the “.1%”) more, with higher, progressive tax rates on all their forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)
10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)Initiating The Ten Steps sequentially will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
============================================================================================================================================================================================================
O.K., now that I have given the debt hawks heart attacks, let me assure you I am aware of the limit to deficit spending: It is inflation. So exactly where is that limit? No one knows, especially since for the past 40 years, inflation has not been related to deficit spending, but to oil prices. (Click here)
So my recommendation is to begin #1-#10, slowly and sequentially, today, and if/when inflation starts to occur, institute the first inflation-fighting program the Fed always uses: Raise interest rates. In the unlikely event that doesn’t do enough, begin to cut deficit spending.
We have total control over inflation, so there is no reason to cut today’s deficits for fear that some time in the unknown future, we may have inflation. We must feed the starving patient, now. Later, if ever he becomes fat, we always can cut back on his food.
By balancing interest rates and deficit spending, we can hold inflation at any level we choose, while accruing the benefits of increased money creation.
Rodger Malcolm Mitchell
http://www.rodgermitchell.com
==========================================================================================================================================
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 
Rodger,
I can agree to the premise and believe all that you suggest would certainly be stimulative and beneficial. However, the arrant greed of the1% will never be assuaged. Their adherence to a Randian, Social Darwinist belief system precludes cogitation of the common good and of those they behold as having not made the proper decisions with regard to their lives or career. Those lazy, non-productive souls who want things for nothing. They believe their favored position is due entirely to willful choice, never by circumstance. A belief that is easily refuted. They believe they possess the right to appropriate everything they desire no matter the effect upon society or the environment. They pour champagne and toast themselves and proceed to mock the rabble protesting a system that they completely control and manipulate for their own benefit; the less fortunate be damned. Unfortunately, though the Government could provide comfort, security, health, education and relative equality, it is subjugated by those who possess sufficient wealth and power to serve those interests above those that would serve public purpose. Can you not see why they seek to punish those who for decades have done everything possible to destroy any semblance of a truly representative Government and an upwardly mobile society? You know the system is rotten. Can those occupying wall street depend on it to change for the better. I don’t see it.
LikeLike
Charles, by “lazy, non-productive souls,” I assume you mean rich people. Not sure that generalization applies.
What I sense in your comment is the emotional desire for vengeance. No problem. We all take a secret, or not-so-secret, pleasure in seeing the privileged get their comeuppance.
But in fact, efforts to bring the rich down, usually push the poor down, too. It’s far better to focus on bringing the poor up, even at a sacrifice of sweet retribution. Doing #1-#9 above, will benefit you far more than putting all the rich in jail, much as some may deserve it.
Rodger Malcolm Mitchell
LikeLike
No, I did not mean that. “The lazy, non-productive souls” is how I believe the “wall street fat cats” categorize the protestors and anyone else who might depend on a social safety net or services that promote the general welfare. Those who are not the entrepreneurs in the classic Randian sense. Sorry if I was not clear enough. I stated that I agree with your contentions. What I question is whether what you espouse can truly come to fore within the current system; being that it is completely dominated by those who possess extreme wealth, which equals the power to have legislators serve their interests no matter the impact on society or the environment. You can agree that currently Government serves the interests of the so-called 1% to a far greater extent than the interests of the so-called 99’ers, can you not? The blatant arrogance and disregard for the common good of those in the 1% is what I find intolerable. They behave as monarchists. Besides, sir, considering my personal circumstance, I surely would not be looked upon as one of the poor or underprivileged. So this is not a case of sour grapes.
LikeLike
So your suggestion is . . . ?
LikeLike
And for the inevitable protest that federal deficit spending causes inflation, I include one of my favorite graphs, showing no relationship between deficits and inflation, for at least 55 years. Of course, deficit spending could cause inflation, but the amount would have to be far greater than anything we have experienced.
Even during the massive spending of WWII, there was no relationship between federal deficit spending and inflation:
LikeLike
From what I have read from economists we would only have price inflation if we run out of capacity for growth and continued to spend like mad, or we have some sort of crisis that leaves us with very little goods to purchase in the economy. Which would create huge price inflation like what happened in germany., is this correct? Enjoyed the article very much Rodger, I was hoping you would address the occupy wall street protesters cause I have been trying to get them to understand how the economy works a little better and smarten up their approach. Too many of them are gold standard Ron Paul followers.
LikeLike
http://attempter.wordpress.com/2011/10/07/one-simple-demand-abolish-debt-abolish-wall-street/#comments
If we are to move from endless growth to a sustainable system, we will need a money system suitable for that.
LikeLike
Since the beginning of commerce, every form of money has been a form of debt, with the exception of straight barter. Even barter is a form of debt when written or printed records substitute for the physical product.
Thus, gold itself is not debt, if one wishes to carry around sacks of gold for trading. However, when gold is the basis for printed documents or accounting records, those documents and records are evidence of debt.
In short, even without borrowing, it is impossible to have a world trading system that is not based on debt.
Rodger Malcolm Mitchell
LikeLike
Mark,
” . . . run out of capacity for growth. . . “ Not sure what that means. With a world economy, there is little likelihood we would be left with ” . . . very little goods to purchase . . . “
Germany’s situation was unique — related to the onerous terms dictated by the allies. Has nothing to do with excessive deficit spending.
Generally, the public thinks of economics as though we still were is on a gold standard, and does not understand Monetary Sovereignty.
Rodger Malcolm Mitchell
LikeLike
I guess I should of said “full employment” instead. Mainly that once everyone has a job and all of our land is used up at that point if we continued to spend we would see inflation, which I would agree is a long ways off if even a possibility. Just trying to understand the causes of price inflation so I can help explain it to people. I know its not caused by deficits and that all data points to it being more connected to oil prices. Just trying to understand at what point money creation might actually create price inflation.
LikeLike
The absurdity of infinite growth has been the most carefully ignored anomaly in the paradigm of modern economics. As Soddy put it,
“If Christ, whose views on the folly of laying up treasures on earth are well known, had put by a pound at this rate, it should now be worth an Octillion, and Tariff Reform would be of little help to provide that, even if you colonized the entire stellar universe … It is this absurdity which inverts society, turns good into evil and makes orthodox economics the laughing stock of science. If the consequences were not the familiar atmosphere of our daily lives they would be deemed beyond the legitimate bounds of the most extravagant comic opera” [Inversion of Science, page 17].
“The idea that people can live off the interest of their mutual indebtedness … is just another perpetual motion scheme — a vulgar delusion on a grand scale. Wealth grows for a while at compound interest, but, having a physical dimension, its growth sooner or later encounters limits.”
LikeLike
“infinite,” “perpetual motion,” “for a while,” “sooner or later”
I won’t have an infinite lifespan. So, I’ll let my great, great, great, infinitely great grandchildren worry about the anomaly of infinite growth. Meanwhile, what is your suggestion as to how to cure excessive unemployment now?
Rodger Malcolm Mitchell
LikeLike
Maybe you haven’t noticed, but peak growth is hitting the ceiling right now. We’ve run out of stuff to convert into money.
Historian Arnold Toynbee concluded that only two common causes explain the collapse of 21 past civilizations: “extreme concentration of wealth and inflexibility in the face of changing conditions.” The cause: the design of their money.
Here are some design features of modern money worldwide.
– It is all fiat money: created from nothing
– All money is lent into existence
– All money is created with interest
– Money is the tool of nation states
.-..It’s unstable; could self-destruct
These design features lead to:
– scarcity of money; leading inevitably to poverty and bankruptcies
– systematic competition
– the need for continuous economic growth
– concentration of wealth into the hands of a few individuals
Bernard Lietaer has some interesting ideas for solutions.
http://www.lietaer.com/2011/09/commercial-credit-circuit-c3/#more-2317
“Negative Interest Ecomonics” sounds like a great idea too.
LikeLike
Words from #OWS:
Lovely words, but not much substance.
Rodger Malcolm Mitchell
LikeLike
Pete says,
“Maybe you haven’t noticed, but peak growth is hitting the ceiling right now. We’ve run out of stuff to convert into money.”
He’s right. I hadn’t noticed:
LikeLike
Mark, there is no specific point at which deficits can cause inflation, partly because the influence of oil is so overriding. Even the gigantic deficit spending of WWII didn’t cause inflation — and at that time, we had full employment.
LikeLike
Here’s all you need to know about the GDP. Every time someone gets sick and has to pay out the ass for a doctor, gets thrown in a for-profit prison, clear cuts a forest, makes a bomb, or takes out a massive student loan that will never be paid back, the GDP goes up. Hooray.
LikeLike
Apparently that’s all you know about GDP.
LikeLike
You don’t see the validity of that point or you just wish it to not be true? The best critique I’ve heard of GDP as a measure of economic growth boils down to:
1)GDP does not take into account the sustainability of future GDP
2)GDP does not take into account the value of non-monetized activity
3)GDP does not differentiate between more or less productive economic activity (i.e. implicitly assumes that economic activity is the desirable ends rather than a means to an end)
A great example of the first criticism is if I clear-cut a forest and sell the timber it adds to GDP in the current year but significantly reduces the chance the economy can have the same performance the future years. Put another way, GDP does not differentiate between depleting assets or generating incremental wealth.
An example of the second criticism is the growth of two-income house-holds. While having mothers work has had huge positive impacts on our GDP (since their income and spending now counts as monetary transactions), the GDP accounting implicitly diminishes the value of mothers’ economic activity they used to performed without monetary compensation. Another example is that many communities used to receive goods/services of value outside the monetary system (e.g. clean water from a nearby stream) from the natural environment. GDP would not take into account the loss of those goods and services if the stream was destroyed by mining but would probably register the income from the raw material extraction.
Crime is an excellent example of the third criticism. Crime is great for GDP as it necessitates monetary transactions such as hiring guards, buying security systems, purchasing insurance, paying lawyers, building prisons, etc. All these are additive to GDP. But, since most of this economic activity is counter-active, GDP may be overstating the economic growth resulting from all this activity.
LikeLike
All true, and have been true forever. So when we talk about growth, those elements existed yesterday and today, and so are factored into any measure of growth — unless you can show how those factors have grown so much more than all other GDP elements, as significantly to nullify the overall growth results.
If that is your belief, supply data, not intuition, to demonstrate that basic GDP (without the above factors) has not grown.
And by the way, none of this relates to the subject at hand: Truly ridiculous statement, “Maybe you haven’t noticed, but peak growth is hitting the ceiling right now. We’ve run out of stuff to convert into money.” I know. I know. That isn’t exactly what you meant. Twist, turn, bob, weave.
Rodger Malcolm Mitchell
LikeLike
My suggestion is that there is nothing, short of revolution, that will create a monetary/political system that promotes the COMMON GOOD. You have wonderful ideas, pretty charts, etc. It all sounds great in theory. Explain how it will become practice? It seems that those controlling the show have no intention of legitimizing what you preach. So how about telling me how you convert those that could care less about government serving public purpose? By having an intelligent conversation?
LikeLike
Agreed. It may take a revolution, if not in blood, then perhaps in thought. If America’s economists, especially the Nobel winners, began to understand economics, they could be a turning force. So far, the old guard has been clueless.
Rodger Malcolm Mitchell
LikeLike
Rodger,
I didn’t bring GDP into the discussion, you did. Relying so heavily on a simple measure of the amount of stuff bought and sold is like removing all of the gauges on a car’s dashboard except the speedometer.
GDP attained global domination precisely because it avoids value judgments about purpose, direction and consequences of economic activities (see what is happening in the U.S. as we discuss). The measure hides the costs of pollution, depletion and sickness, and counts the bad as much as the good. And it hasn’t been around “forever” unless you think humans and economic activities began in the 1930’s. It’s a blip, and a tool of the high priests of growth.
How about if I reword my original comment to “We are having to invent new ways to sustain growth (convert things to money) which debatably provide any real productivity or benefits to the welfare of the people and the planet we live on.” That way I can make my point without having to face the magical GDP metric.
I’ll give you the last word here as I know that no matter what I say, you’ve made up your mind that with a little reform there’s a kinder, gentler Capitalsim to be had using the old money paradigm. I think it an impossibility but I wish you luck.
LikeLike
I recommend replacing step three with “Increase the EITC to $10k per year for every eligible worker.”
Employers would be able to maintain current wages.
LikeLike