–The idiot patrol is on the loose, again. Hide your wallet. Pray for America.

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.
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Hide your wallet. The idiot patrol (aka The Committee for a Responsible Federal Budget) is on the loose, again.

Committee for a Responsible Federal Budget | 1899 L Street, Suite 400 | Washington | DC | 20036
House and Senate Join Together in “Go Big” Effort November 16, 2011

Today, in a rare bipartisan, bicameral showing, Republican and Democratic members of the House and Senate joined together to call for the Super Committee to think big on debt reduction. In recent weeks, 100 members of the House and 45 senators from both sides of the aisle have urged the Super Committee to propose at least $4 trillion in savings over ten years, well above the Committee’s $1.2 trillion mandate.

“If it wasn’t clear before that there’s a serious bipartisan and bicameral effort in support of a $4 trillion savings package, then it is now,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “What the Super Committee is working on by putting everything on the table in search of a compromise is so important, and those 12 lawmakers should know that they are supported by a large group in the House and Senate on both sides of the aisle.”

Today’s renewed support for a Go Big approach to debt reduction comes as the 12 members of the Super Committee enter the final days of negotiations. The Committee has until November 23 to vote on a final package of reforms.

“It’s up to the Super Committee and leaders in Congress to heed the calls that so many of their colleagues are making and to capitalize on this unique opportunity of a fast-track process and the undivided attention of the American public,” added MacGuineas. “But this group of lawmakers is not alone — there are business leaders, small business owners, everyday Americans, former government officials, economists, policy experts, and many others also supporting this effort to ‘Go Big.’ This is such an important moment, and with the world watching, failure just cannot be an option. Getting a big deal passed may actually prove to be easier from a political perspective, and it has the added benefit of being what we need to do for the fiscal and economic health of the nation.”

Hey, you call $4 trillion “big”? That’s nothing. Why not $10 trillion? Or $20 trillion? Why not really bankrupt the nation?

But, I continue to fret about one small question. I almost hate to mention it, but: How do deficit cuts reduce unemployment or grow the economy? We never see any answers to that question.

As a reminder, here are charter members of the idiot patrol: Bill Frenzel, Jim Nussle, Tim Penny, Charlie Stenholm, Maya MacGuineas, Barry Anderson, Roy Ash, Erskine Bowles , Charles Bowsher, Steve Coll, Dan Crippen, Vic Fazio, Willis Gradison, William Gray, III, William Hoagland, Douglas Holtz-Eakin, Jim Jones, Lou Kerr, Jim Kolbe, James McIntyre, Jr., David Minge, June O’Neill, Paul O’Neill, Marne Obernauer, Jr., Rudolph Penner, Peter Peterson, Robert Reischauer, Alice Rivlin, Chuck Robb, Martin Sabo, Alan Simpson, John Spratt, Gene Steuerle, David Stockman, John Tanner, Laura Tyson, George Voinovich, Paul Volcker, Carol Cox Wait, David M. Walker, Joseph Wright, Jr.

At some point in the future, they all will deny having any association with the idiot patrol, and will admit that cutting the money supply to stimulate economic growth is like applying leeches to cure anemia.

Five dunce caps, not just for failure to understand Monetary Sovereignty, but for ignorantly lending their names to an organization whose efforts could help destroy our nation:

That brings to 1083 the total dunce caps awarded. Soon, I expect members of the idiot patrol to demand I “go big” by reducing my unsustainable dunce cap awards.

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

5 thoughts on “–The idiot patrol is on the loose, again. Hide your wallet. Pray for America.

  1. Help! I just received yet another Email from the idiot patrol (aka Committee for a Responsible Federal Budget). It said:

    The benefits of a large (debt cutting) plan are numerous for both economic and political reasons. Economically, a stable and declining debt path offers a stronger economy down the road, improved business and market certainty, and the reduced risk of a fiscal crisis.

    Since by definition, federal spending is one part of GDP (GDP = government spending + private consumption + gross investment + net exports), how would a reduction in federal deficits strengthen the economy, while improving business and market certainty and reducing the risk of fiscal crisis?

    Let’s be clear: Reducing federal debt reduces the money supply. Period. So how does reducing the money supply help our economy?

    Could someone please tell these people to learn Monetary Sovereignty.

    Rodger Malcolm Mitchell

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  2. “Why not really bankrupt the nation?”

    You’ve pinpointed the cruel irony of the situation. They actually think they’re saving us from bankruptcy.

    Like

  3. Rodger,

    You should think of yourself as doing what Martin Luther (1483 – 1546) did to the Church (reformation). The global banking cartel is just as powerful. Prominent orthodox economists are priests on their payroll or at least too scared to speak up.

    This stuff is not that hard to get. Keynesian Economics + MMT + MS are all very clear and consistent. I find it very hard to accept that prominent economists and president’s advisers are that stupid.

    http://aquinums-razor.blogspot.com/2011/11/here-is-how-bankers-game-works.html

    Mansoor H. Khan

    Like

    1. As Einstein may have said: there are only two things that can be infinite, the universe & human stupidity, and I am not sure about the universe.

      Most of those people really are just that stupid. They see other monkeys raving insanely & monkey see, monkey do. Arch-terrorist Peterson – pretty sure that he knows he’s lying. Alice Rivlin – been around almost as long -& once understood real economics well – but has either gone insane or senile but probably not lying. The rest – well either they don’t give a damn about what is true or not, but just like inflicting pain on working people – Alan Simpson. But mostly, aptly enough for a committee with a Jim Jones on it, they’ve drunk the Kool-Aid. If a guru told them to, that’s what they’d do. This sort of person is not capable of thought. Outside their Beltway / Wall Street cocoon, if they ever had to work to survive, they would starve.

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  4. I THINK this is accurate, and hopefully digestible (esp by wingnuts).

    Ordinary citizens cannot own nuclear missiles, but the Govt of the USA can and does own about 10,000, for better or worse. Even though many of us don’t like the idea of our Govt being able to blow up the planet several times, few would deny nuclear weapons are a clear strength of our Govt. We *hope* our Govt exercises wisdom and does not blow our planet to smithereens and cause a nuclear winter.

    Ordinary citizens cannot ISSUE money. Ordinary citizens cannot simply MARK UP the balance of the bank accounts of the recipients with whom we spend money. We have to GET money from someone else, or from the Govt, or we have to borrow money from banks.

    Ninety-five percent of our money in circulation consists of bank credit, which is encumbered by loan agreements to pay back, in which the payback process destroys that money.

    The USA Govt (Fed + Treasury combined, upon orders from Congress) DOES have the power to ISSUE money, by spending. That money does not “come from” anywhere, other than the Sovereign power of the USA to create money. The USA does not “have” this money, it is created BY spending.

    Those who are conservative and patriotic and military-minded may think of this as “atomic banking”.

    The ancient principles of Accounting plus the rules of the Constitution (which could be amended) mandate the process. This is, the Treasury has unlimited powers to COIN money and issue Debt instruments, Bonds aka Securities. Treasury-alone does not currently have the power to issue free-and-clear paper or electronic money.

    In a similar manner, private banks DO also create money out of thin air — not out of Reserve accounts, not limited by money the bank “has” — whenever they find a worthy borrower. (Banks — like any business — run into trouble when they leverage their capital too thin and run into losses greater than their capital base.)

    Almost 100 years ago, Congress and our smart bankers came up with a solution: A Government Bank. The branches have rules to make them like private for-profit banks, but with a public purpose over the economy, while the central Board of Directors is appointed by the President and acts like a “partner” of the Treasury. This is a special kind of federally-chartered corporation. (Big Business in the late 1800s wanted *all* corporations to be federally-chartered, to eliminate meddlesome democracy-upholding states.)

    The Fed, like any other bank, has unlimited powers to create money to purchase assets, including any kind of debt obligation, and especially Treasury securities/bonds.

    So the rules say, the Treasury can borrow infinite sums and the Fed can purchase those IOUs. This is the System Design. There are NO LIMITS because this is merely accounting, “atomic accounting”.

    To complicate things more, the Fed is forbidden to DIRECTLY purchase Bonds from the Treasury, they have to use Middlemen. Treasury is mandated to sell it’s Bonds to Primary Dealers, the biggest and most powerful banks, at regular auctions. (There is always more demand for US Bonds than supply.) The Primary Dealers are regulated and back-stopped by the Fed & FDIC corp, and the PDs can sell their USA Bonds to the Fed or to other buyers.

    In an unusual switcheroo for the crash of the private Financial System, under the TARP program, the Treasury had to GIVE money to the Banks so the Banks could turn around and “lend” money to the Treasury. The Fed was also engaged in buying mortgage-backed securities (toxic, worthless) off Banks, so Banks could then use that Fed-issued money plus borrow more money from the Fed, so it could buy many TRILLIONS in Treasury Bonds (govt “debt”) to earn interest and become “profitable”.

    While this is much more “ugly” than telling the banks to simply WRITE DOWN their ridiculous debts and file for bankruptcy and orderly sell-off of remaining assets at market prices via bankruptcy auction, this did not cost TAXPAYERS money, because of the Sovereign govt’s power to create that money at will.

    This was a TRANSFER of financial wealth to the biggest Banks, and to the pockets of the Executives, and that is UNFAIR, this does not encumber the USA in terms of ability to spend more (on Soc Security, or welfare, or corporate stimulus, or the Pentagon, or anything else).

    Now in a double-switcheroo, which is political AND “class war”, Congress and the “debt hawks” are TRYING to make TAXPAYERS foot the “bill” (which does not really exist) and trying to take it out of the hide of US citizens in the form of benefit cuts, to “pay for” this emergency spending (Banks plus War).

    But since the Fed + Treasury has unlimited power to MARK UP checking accounts with interest, and the Fed unlimited power to roll over Treasury Security accounts back to cash in Reserve accounts, even-steven, this stuff about having to collect more taxes to “pay for” this spending is nonsense.

    The “national debt” is therefore nonsense. The “national debt” is a set of savings accounts at the Fed which allows “us” (rich people, corporations, foreign central banks of countries that export to us) to store their surplus balances, safely and securely, and earn interest. These accounts at the Fed are “welfare benefit” for the rich. That’s our “National Debt”.

    Taxes are VERY meaningful to us citizens, but from the perspective of a Monetarily Sovereign nation, taxation only removes money from our checking accounts and DESTROYS that money, The Govt does not “have” additional power to spend when it collects more taxes, since that power is already infinite.

    Taxes for Revenue are Obsolete!
    NY Fed Chairman B. Ruml, January 1946
    http://www.save-a-patriot.org/files/view/ruml.html

    Like

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