–Foolishness across the ocean. Will the UK attempt mass economic suicide?

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. Austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

I came across a website called The Robin Hood Tax. It seems to have originated in the U.K., but the goal is to spread the idea around the world. In their own words:

A tax on banks that would give billions to tackle poverty and climate change, here and abroad.

This tax on the financial sector has the power to raise hundreds of billions every year globally. It could give a vital boost to the NHS, our schools, and the fight against child poverty in the UK – as well as tackling poverty and climate change around the world.

Remember now, the UK brilliantly did not surrender its Monetary Sovereignty. It did not adopt the disastrous euro. It retained the pound. So the UK, like the U.S., has the unlimited ability to create its sovereign currency. It can pay any bill of any size at any time. It never can be forced into bankruptcy.

However, the UK, like the U.S., is burdened with politicians, media and economists who still live in the pre-1971, gold standard days. Though economics changed dramatically in 1971, the economists still spew the same, debt-hawk, gold-standard nonsense. It’s as though upon discovering the world is round, not flat, sailors still worried about falling off the edge.

Here, again in their own words, is how the Robin Hood tax would work:

In a nutshell, the big idea behind the Robin Hood Tax is to generate billions of pounds – hopefully even hundreds of billions of pounds. That money will fight poverty in the UK and overseas. It will tackle climate change.

Hundreds of billions of pounds pulled out of the economy. This is supposed to be beneficial? And “poverty and climate change”? How did those two initiatives get to be the focus of this tax – a tax that most assuredly will not reduce poverty or prevent climate change? (No tax could.)

A tiny tax on the financial sector can generate £20 billion annually in the UK alone. That’s enough to protect schools and hospitals. Enough to stop massive cuts across the public sector. Enough to build new lives around the world – and to deal with the new climate challenges our world is facing.

Now it’s £20 billion? And, now it’s “schools and hospitals,” too? And building “new lives around the world”? Have they left anything out? How about motherhood and the American – oops – the British way of life?

As a result of the financial crisis, the International Monetary Fund (IMF) has calculated UK government debt will be 40% higher. That 40% equates to £737 billion pounds, or £28,000 pounds for every taxpayer in the country. Having to pay back that debt means cuts in vital services on which millions of people around the country rely.

No, paying that debt will cut nothing. The British government, being Monetarily Sovereign, can pay any debt. No vital services need be reduced. Pure scare tactics. What is the British word for “bullsh*t”? Poppycock?

Total cost to the UK of financial crisis in terms of lost output according to the IMF was 27% of 2008 GDP.

Yes, the financial crisis caused reduced output – which has absolutely nothing to do with UK debt. I’m surprised they didn’t blame British debt for causing starvation in Armenia, and the bird flu.

So it’s time for justice. It’s time for justice for ordinary families and businesses. For the one in five British families faced with a choice between buying food or paying the heating bill. For the millions of people around the world forced into poverty by a financial crisis they did absolutely nothing to bring about.

The Robin Hood Tax is justice. The banks can afford it. The systems are in place to collect it. It won’t affect ordinary members of the public, their bank accounts or their savings. It’s fair, it’s timely, and it’s possible.

Ah, yes. The old class-warfare ploy. Justice = soak the rich. And who are the geniuses behind the Robin Hood Tax? The usual suspects. According the their web site:

We are charities, green groups, trade unions, celebrities, religious leaders and politicians.

Who could doubt the expertise of that bunch? But wait, now we get to the real winners:

President Sarkozy of France, Chancellor Merkel of Germany, Prime Minister Zapatero of Spain

Hmm, France, Germany and Spain. Aren’t those three countries that each voluntarily surrendered the single most valuable asset any nation can have – its Monetary Sovereignty – and are now in a crisis of their own making? By all means, let’s follow them over the cliff.

FSA Chairman Lord Turner, George Soros, Warren Buffet

Just shows money and economic knowledge don’t always go together. Turner has called for more central planning ala the communist countries. Buffet wants a tax increase on the wealthy, which would reduce the money supply.

And here are my favorites:

Nobel Prize winners Joseph Stiglitz and Paul Krugman, Earth Institute Director Jeffrey Sachs and 1,000 other economists from across the world.

Therein lies the problem. People, who are completely ignorant of Monetary Sovereignty, award prizes to other people, who are completely ignorant of Monetary Sovereignty, who then teach the media, the politicians and the public how to be ignorant of Monetary Sovereignty. It’s the most vicious of vicious circles.

So you have it. Yet another group of debt-hawks believing taxes are beneficial. If anyone can explain how removing money from the economy can reduce poverty, reduce unemployment or grow the economy, I sure would like to hear it.

I award 1 dunce cap to The Robin Hood Tax. It would be more, but they are just one more debt-hawk group of which there are dozens. And as any debt-hawk will tell you, if I give out too many dunce caps, I could have an unsustainable dunce cap deficit, which would lead to a huge dunce cap debt, and I’d need to start taxing people dunce caps – or I might need to borrow dunce caps from a bank.

Makes sense?

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


8 thoughts on “–Foolishness across the ocean. Will the UK attempt mass economic suicide?

  1. “If anyone can explain how removing money from the economy can reduce poverty, reduce unemployment or grow the economy, I sure would like to hear it.”
    PLEASE,challenge,change,or endorse:
    HOW to remove money from the economy to use those funds to reduce poverty,reduce unemployment,and grow the economy.
    Create “THE FEDERAL BANK OF AMERICA” can create a stream of income to fund those projects.
    Please,read justaluckyfool.wordpress.com
    “The Federal Bank of America”



  2. I think most people support taxes to prevent climate change, such as a carbon tax, because they don’t know that a regulation would be much more effective.


    1. Yes, while taxing carbon emissions can reduce carbon emissions, the taxes remove money from the economy and specifically from industry, which is anti-growth. Rather than punishing industry (and the economy) for emitting carbon, perhaps reward industry and the economy for reducing carbon.

      Pay companies for reducing their carbon emissions in a way similar to the tax rewards individuals are given for buying energy-efficient appliances.

      Rewards work as well as, or better than, punishment, while stimulating the economy.

      Rodger Malcolm Mitchell


  3. Carmen, I’ll challenge it.

    The U.S. federal government, being Monetarily Sovereign, does not need “a stream of income to fund” anything. It creates dollars by paying bills. It could reduce unemployment, reduce poverty and grow the economy via deficit spending.

    Monetarily non-sovereign nations, such as the PIIGS, do need a stream of income.

    Those,who do not understand Monetary Sovereignty, do not understand economics.


    1. The streams of income are needed to control the quality and quantity of the money.It is also needed to be placed back into the economy in order to redistribute the money already in existance.This leads me to wonder if as per your approach,the continuous printing would lead to inflation,even hyperinflation especially if the money exceeds productivity.
      The return of money to the US Treasury via
      “interest” is really just a control mechanism used as funding which is really a redistribution mechanism

      Please tell me that upon either acceptance of this point ,you would endorse this “All in One Solution ‘The Federal Bank of America’, or is ther other issues?
      justaluckyfool-Anyone who attemps to predict the future is a fool.It by chance correct,then justaluckyfool.


  4. I fail to see how a tax constitutes the removal of money from the economy. The government does not take tax money and stuff it down a hole, never to be seen again; it spends it on goods and services for the population. That means that products are purchased, personnel are hired, and money is distributed. In fact, there are studies showing that the best way to ensure the efficient circulation of money is to give it to the poorest segment of the economy. If you give a rich family $1000 during a recession, there is a good chance they will simply stash it away in an offshore account somewhere, or purchase metals to safeguard it from the effects of inflation. If you give a poor family $1000 during a recession, they will probably use it to buy groceries, clothing, and pay their bills, thereby helping pay the salaries of grocers, clothiers, landlords and utilities.


    1. The federal government is different from you and me. It is different from the states and from the PIIGS. It is Monetarily Sovereign. While you and I spend by transferring dollars from our checking account to our vendor’s checking account, the federal government spends by creating dollars in its vendors’ checking accounts.

      That is where dollars come from: Federal deficit spending. Because the federal government has the unlimited ability to spend, i.e. to create dollars, it has no use for taxes. If federal taxes fell to $0 or rose to $100 trillion, neither event would affect the federal government’s ability to spend.

      (The same cannot be said of states and cities, which do rely on taxes.)

      You are confused because you do not understand Monetary Sovereignty, which is the first important step you should take.

      By the way, I didn’t understand how everything beginning with “In fact,” relates to your question about tax dollars.

      Rodger Malcolm Mitchell


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