–Another example of how ignorance of Monetary Sovereignty will diminish your life and the lives of your children and grandchildren

Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

Here is yet another example of how ignorance of Monetary Sovereignty will diminish your life and the lives of your children and grandchildren:

Obama pulls plug on troubled long-term care program in new health law, citing design flaws

By Associated Press, Updated: Friday, October 14, 3:56 PM

WASHINGTON — The Obama administration says it is unable to go forward with a major program in the president’s signature health care overhaul law — a new long-term care insurance plan.

Officials said Friday the long-term care program has critical design flaws that can’t be fixed to make it financially self-sustaining.

“Financially self-sustaining” describes the myth that our Monetarily Sovereign federal government can run out of sovereign dollars.

Health and Human Services Secretary Kathleen Sebelius told Congress in a letter that she does not see a viable path forward at this time. By law, implementation of the program was contingent on Sebelius certifying it financially sound.

Is the Supreme Court “financially sound”? Is Congress “financially sound”? Is the military “financially sound”? What about the Department of Homeland Security? The CIA? The FBI? Are any of the 1,300 federal agencies “financially sound”?

The program was supposed to be a voluntary insurance plan for working adults regardless of age or health. Workers would pay an affordable monthly premium during their careers, and could collect a modest daily cash benefit if they became disabled later in life. The problem all along has been how to ensure enough healthy people would sign up.

This talks about adverse selection, and is based on the belief that healthy people must pay for sick people. It is a real problem for private insurance plans, because insurance companies are not Monetarily Sovereign. It is not a problem if the federal government paid.

CLASS was intended as a voluntary plan, supported by premiums, not taxpayer dollars.

Taxpayers do not pay for federal spending, although they do pay for state and local government spending. That is the difference between Monetary Sovereignty and monetary non-sovereignty.

(The) idea was to give families some financial breathing room. The burden of long-term care is growing. Most families cannot afford to hire a home health aide for a frail elder, let alone pay nursing home bills. Long-term care is usually provided by family members, often a spouse who may also have health problems.

How true. So this unnecessary burden will fall on our spouses or our children. They will be the ones to suffer.

Again and again and again, we find that the ignorance of Monetary Sovereignty diminishes the lives and well being of our children and grandchildren and of us. That is the penalty of ignorance.

I award the President four dunce caps for not understanding the vital need for this easily affordable benefit to American families:

(I now am running a deficit of 39 dunce caps. Dept-hawks would say I “owe” 39 dunce caps, and shouldn’t award any additional, until I levy a dunce cap tax to reduce my deficit. But somehow, I just don’t feel my awarding dunce caps is “unsustainable” or a “ticking time bomb” as the media like to proclaim.)

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


5 thoughts on “–Another example of how ignorance of Monetary Sovereignty will diminish your life and the lives of your children and grandchildren

  1. Rodger,
    I am afraid you are going to have to issue Dunce Cap bonds to pay for any further printing of Dunce Caps. Don’t worry though. Your grandchildren will pay off the bonds when come due.


  2. Robert Reich has a new column out called “The Seven Biggest Economic Lies” in which he really shows his support for a progressive tax code. Here’s what he identifies as lies one and two:

    1. “Tax cuts for the rich trickle down to everyone else.” Baloney. Ronald Reagan and George W. Bush both sliced taxes on the rich and what happened? Most Americans’ wages (measured by the real median wage) began flattening under Reagan and have dropped since George W. Bush. Trickle-down economics is a cruel joke.

    2. “Higher taxes on the rich would hurt the economy and slow job growth.” False. From the end of World War II until 1981, the richest Americans faced a top marginal tax rate of 70 percent or above. Under Dwight Eisenhower it was 91 percent. Even after all deductions and credits, the top taxes on the very rich were far higher than they’ve been since. Yet the economy grew faster during those years than it has since. (Don’t believe small businesses would be hurt by a higher marginal tax; fewer than 2 percent of small business owners are in the highest tax bracket.)


    1. I guess Robert doesn’t recall all the recessions that occurred from the end of World War II until 1981.

      He also seems to believe that tax cuts for the rich cause the real median wage to decrease.

      If he wants a more progressive tax code, he should advocate the elimination of the FICA tax, but he won’t.


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