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.

Do you think Barry Ritholtz finally gets it? Remember, this is the same Barry Ritholtz who wrote a scare article titled, “Who Will Buy Treasuries When the Fed Doesn’t” in which he described U.S. Treasuries as a Ponzi Scheme.

And when I wrote that the U.S. is Monetarily Sovereign and doesn’t need to sell Treasuries, nor is it in any danger of defaulting, this is the same Barry Ritholtz who said, “Jeebus, you fucking sovereign guys are such dreadful bores.” (Exact quote) And then he erased all my comments from his blog.

Now, the newly enlightened (?) Barry writes at

The US still controls its own currency and issues debt in that currency. The US government can always fund its spending, regardless of access to external debt markets or tax revenues, so long as it keeps inflation under control and doesn’t push aggregate spending beyond the economy’s capacity.

The euro zone isn’t like that. The governments of France, Italy, Spain, and Germany issue debt in the euro, a currency they do not control.

Exactly correct, Barry. No Ponzi scheme. No concerns about who will buy our debt. Unlike the monetarily non-sovereign euro nations, the Monetarily Sovereign U.S. has only one constraint on its deficit spending: Inflation, not the ability to service its debt.

Since inflation is under control, and will be for the foreseeable future, and our real and immediate problem is lack of money and growth, why have the politicians, the media and Barry been so crazed about reducing the federal debt?

Ignorance and/or servility to the wealthy 1%. Which do you think describes Barry?

I ended the post titled, “The conversation Barry Ritholtz wouldn’t publish” with this line: “I expect that sometime down the road, Monetary Sovereignty will be understood and accepted by the mainstream, and Barry then will tell you he knew it all the time.

Getting there, Barry. Late to the party, but always welcome.

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. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
b>Gross Domestic Product = Federal Spending + Private Investment + Private Consumption + Net exports