Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
Here are excerpts from a brief article at Yahoo Finance, showing how our government and businesses leaders accept responsibility.
U.S. Treasury says China yuan move helpful
WASHINGTON (Reuters) – The U.S. Treasury Department said on Sunday that a wider yuan trading band could help reduce global trade imbalances if it allows more play for market forces.
“China’s decision to widen the daily trading band for its exchange rate, if implemented in a way that allows the value of the exchange rate to reflect market forces, could contribute rebalancing, which would be positive for China, the United States, and the global economy,” a Treasury Department official told Reuters.
But the Treasury said the process of correcting a “misalignment” of China’s exchange rate is still incomplete and said more progress was needed.
U.S. manufacturers complain that China’s yuan is so undervalued that it gives Beijing an unfair trading advantage and they blame it for having cost millions of lost American factory jobs.
Yes, having a “weak” (exchange rate) currency allows for more exports. But so does imposing a tax on corporate profits, one of the looniest ideas among a world of loony economic ideas foisted on us by our Monetarily Sovereign government (You know; it’s the government that neither needs nor uses tax income, because it has the unlimited ability to create its sovereign currency).
So rather than whining about China, wouldn’t we be better simply to eliminate corporate taxes? Nope, we can’t do that, because American’s believe corporations pay too little in taxes, not understanding that corporations merely pass 100% of their tax burden on to their customers and employees.
If you set out to make our corporations less competitive internationally, what is the very first thing you would do? Right. You would tax them.
Our government and the private sector leaders find it easier to find a whipping boy, China. If they took the trouble to learn MS, they would understand that this simple fact:
When China exports to America, it expends massive amounts of energy, manpower, time and scarce resources to create products, which it sends to us in exchange for dollars, which we create at no cost, by touching a computer key. Thus, China is our slave, working and sweating essentially for nothing.
Remember also that China too, is Monetarily Sovereign. The can create unlimited numbers of their sovereign currency. So why do they want to obtain our dollars in exchange for their valuable resources? First, they don’t need dollars, and second they can get all the dollars they might want simply by buying them on the open market, in exchange for yuan.
I have the same feeling you get when watching teenagers engaged in self-destructive acts. No matter how often you tell them why they should not do that, they just keep doing it.
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
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports
2 thoughts on “How our leaders and our teenagers take responsibility: “Don’t blame us. It’s all China’s fault.””
You asked the question, but didn’t offer an answer…
“So why do they want to obtain our dollars in exchange for their valuable resources?”
Is this rhetorical? Are they as hopelessly ignorant and out of paradigm as the US is?
Yes. They are living an obsolete paradigm.
I’ll discuss this in the next post.