Mitchell’s laws: The more budgets are cut and taxes increased, the weaker an economy becomes. Until the 99% understand the need for deficits, the 1% will rule. 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.


In the previous post, Why does the 1% upper income FIGHT the war against the 99%? we discussed the reasons why the rich want to extend the gap between them and the less rich. The reasons have to do with the psychology of money.

Once the basic needs of food, clothing, shelter, health and security are satisfied, the desire for more money to buy more goods and services, begins to morph into having more money for self image. While dollars in of themselves do not inflate the ego, comparative dollars do; the greater the income gap, the greater the ego inflation.

An income gap also translates into a power gap; the rich have power over the less rich, which has practical benefits as well as further massaging the ego.

From the standpoint of the rich, the true goal is not to acquire more dollars; the true goal is to extend the gap, which can be accomplished by raising the rich and/or by lowering the less-rich.

This is why the budget initiatives, of virtually all Republicans, and many Democrats, involve such gap extenders as reduced Social Security, Medicare and Medicaid benefits, reduced federal employment, extension of FICA, broadening the tax base, taxing Social Security benefits and reducing food stamps and other aids to the poor.

All of these are stated as the false goals: Reduce the federal deficit and debt.

The 1% correctly care nothing about deficit and debt reduction. They know the federal government, not only could service unlimited debt, but could eliminate the entire debt (i.e. T-securities) tomorrow. They also know the federal deficit is the government’s method for adding dollars to the economy – necessary for a growing economy. Federal debt and deficit are no problem whatsoever, for a Monetarily Sovereign government.

However, the 1%’s wrap gap-increasing initiatives in the semantic misdirections: “reduce the debt,” “reduce the deficit,” “balance the budget,” “be frugal,” “be sustainable” and “live within our means – all meaningful for personal finances, but destructive of a Monetarily Sovereign nation’s finances. Thus, they hide their evil in a false veil of noble intent. They label the poison bottle, “Honey.”


They are only 1%, with 1% of the vote, while 99% of the people presumably would like to see the gap reduced. So why do the 1% manage to win the voting war?

Every nation, whether totalitarian or democratic, is ruled by a small elite, and they all use the same methods. In that sense, America resembles Hitlerian Germany, Stalinist Russia and Kim Jong-il’s North Korea. How, in all these nations, does a tiny minority rule the great masses?


It begins with the simplest of concepts: Divide and Conquer. And this too is based on the gap.

Each of us, no matter how poor, has a self image, which, in part, relies on being superior to some group that is poorer or less respected. Dictators control their armies by fostering a gap between soldiers and the average citizens. Within the army, officers maintain a gap between themselves and their soldiers, and even the lowest soldiers maintain a power gap between themselves and the civilians – a gap they will defend fiercely with guns and machetes. As it happens, this defense actually is a defense of the 1%.

It is why the soldiers of Syria willingly bomb and maim and murder their neighbors. In a dictatorship, the 1% Divides to Conquer. It enlists the 99%, to do the dirty work.

A democracy works much the same way, though here the power is in the vote rather than the gun. The 1% convinces the higher levels of the 99% – the upper-middle class – to vote against the best interests of the middle class, which in turn votes against the best interests of the lower classes.

And this division occurs, even when classes share best interests.

In the coming elections, millions of people from the middle classes will vote Republican, despite Republican philosophy having extended the gap between the middle classes and the 1%. They will vote Republican to extend the gap between themselves and the lower classes.


The 1% successfully divides the 99% to conquer them, and the method is control of the media, which promulgates the Big Lie, which includes:

1. The poor are criminals, dangers to society, who will destroy what we have built.
2. The poor are lazy, do not wish to work, and any benefits they receive addicts them to further benefits (unemployment compensation, food stamps, health insurance, housing).
3. Our taxes pay for federal spending. The government spends taxpayer money.
4. We and our children owe the federal debt.
5. Like us, the federal government should run a balanced budget.
6. Immigrants are poor, lazy, uneducated and criminal (though supposedly smart enough to take our jobs).
7. Small government is better than big government.

By continuously pounding away at these lies, the media and the politicians convince the 99% to vote against their own best interests, and to extend the gap. The 99% agrees to raise the qualification age of Social Security and to tax its benefits, which will hurt the 99% and their children. The are told by the media to eliminate “Obamacare,” despite its benefits for the vast majority.

In the name of “deficit reduction,” the 99% agrees to limits on spending, education, homelessness, hunger, health care, infrastructure, sustainable energy, government employment and services, and all types of R&D – all of which would help close the gap. The 99% votes against their own best interests, just to open the gap.

The income gap is not just about money and ego; it is about power. Being on the upper side of the gap, gives you power over those on the lower side. With a word or finger twitch, you can make people grovel and scurry – an addictive feeling for many.

In short, the 1% never does its own dirty work. To survive, it must divide the 1% into warring groups, each trying to align itself with the 1% in opening the gap between them and those below. Thus does “Divide and Conquer” have the entire nation working and voting on behalf of the 1%. It is true in America; it is true in every society on earth.


The overall solution? There is none. The gap is in our nature. But we do have the power to moderate it, which requires knowledge and a leader. The leader must support the knowledge, and the knowledge must support the leader.

The knowledge is understanding why the Big Lies are indeed lies, and the leader must be willing and able to articulate the knowledge believably. He must be a uniter, not a divider. He must embrace the usually incompatible attributes of leadership and modest ego needs.

We thought it might be Mr.Obama, but he long ago succumbed to the 1%. The siren songs of banker and Hollywood money have seduced him.

The leader certainly isn’t Mr. Romney, who not only is part of the 1%, but is a man with neither core beliefs nor morality, who will say anything and “believe” anything to gain power. His mutually incompatible beliefs on every key issue, would be humorous if they were not so disgusting.

Something tells me Hillary Clinton might have been that leader, but we missed our chance to find out. Could she have been a great leader? I don’t know. No one does. But losing a potentially great leader is no trivial matter. Imagine America without Washington or Lincoln.

So the 1%, Divides and Conquers, using the BIG LIE, which compels 99% to vote to extend the gap and to act against their own best interests. And that is why the war is lost. Our only hope: To gain the knowledge and to find the leader, and meanwhile to vote for, not against, our best interests.

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