Mitchell’s laws:
●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Many of you have faced this political problem: Do you agree with the boss when you know the boss is dead wrong? Do you not merely agree, but speak earnestly in favor of the boss’s wrong ideas, knowing those ideas will lead to economic disaster?
And if you do the political thing, and agree and fight for the boss’s wrong ideas, and the disaster occurs, who is to blame? And what does that make you?
Washington Post
Romney’s tongue-tied eloquence
By Fareed Zakaria, Published: September 26, 2012Peggy Noonan eloquently voiced what many conservatives believe when she said that Romney’s campaign has been a “rolling calamity.” And yet, shouldn’t it puzzle us that Romney is so “incompetent” (also from Noonan), given his deserved reputation for, well, competence?
He founded one of this country’s most successful financial firms, turned around the flailing Salt Lake City Olympics and was a successful governor. How did he get so clumsy so fast?
In fact, the problem is not Romney but the new Republican Party. Given the direction in which it has moved and the pressures from its most extreme — yet most powerful — elements, any nominee would face the same challenge: Can you be a serious candidate for the general election while not outraging the Republican base?
Why won’t Romney, an intelligent man, fluent in economics, explain his economic policy? Because any sensible answer would cause a firestorm in his party. It is obvious that, with a deficit at 8 percent of gross domestic product, any solution to our budgetary problems has to involve both spending cuts and tax increases.
Here, Mr. Zakaria flies wildly off track. Spending cuts and tax increases are absolutely, positively guaranteed to lead to recessions and depressions. It’s a mathematical certainty, as expressed in the formula readers of this blog know so well:
GDP = Federal Spending + Non-federal Spending – Net Imports.
But there is something more fundamental at work. Apparently, Romney knows his Republican base is wrong, and he knows that decisions agreeing with that base will adversely affect America. So, what should he do? Agree with the base, hoping to be elected, knowing he will destroy our economy? Or disagree with the base, not get elected, and possibly save America?
Our soldiers make an even more extreme form of that decision: Bravely stand and fight and possibly die saving your platoon, or like a coward, run away to save yourself, assuring that the rest of your platoon will die?
Is the personal glory of the Presidency worth hurting America?
Ronald Reagan agreed to tax increases when the deficit hit 4 percent of GDP; George H.W. Bush did so when the deficit was 3 percent of GDP. But today’s Republican Party is organized around the proposition that, no matter the circumstances, there must never be a tax increase of any kind.
The Simpson-Bowles proposal calls for $1 of tax increases for every $3 of spending cuts. But every Republican presidential candidate — including Romney — pledged during the primaries that he or she would not accept $10 of spending cuts if that meant a dollar of tax increases.
Just a reminder that taxes reduce the “Non-federal Spending” part of the above equation, and thereby reduce GDP growth. So the no-tax-increases pledge is a good idea. The bad part of the idea is that cuts in Federal Spending reduce GDP growth. Simple mathematics dictates that tax increases economically are identical with spending decreases — both reduce GDP growth.
So Romney could present a serious economic plan with numbers that make sense — and then face a revolt within his own party. His solution: to be utterly vague about how he would deal with the deficit. Were he to get specific, he would be committing ideological blasphemy. So instead he talks about freedom and capitalism.
Said another way: Romney could tell the truth, save America, and possibly doom his own ambition to become President. Or he can, as he has, agreed with the Republican base, enhancing his personal ambition, but dooming America’s future.
He has chosen his route. What does that say about him?
Romney’s own inclinations are obvious. In 2002, he refused to take Grover Norquist’s “no tax” pledge. But by 2006, the ground had shifted and he raced to become the first presidential candidate to commit to it.
One of numerous Romney flip-flops, trying to “agree with the boss” to the detriment of America.
The same pattern has emerged on immigration. On ABC’s “This Week” last Sunday, Republican strategist Nicolle Wallace urged Romney to reach out to Hispanics by reminding them of Obama’s poor record on immigration reform. Except that the Republican Party is now strongly opposed to a path to citizenship for illegal immigrants.
Romney has curried favor within the party by opposing the Dream Act, supporting Arizona’s harsh law under which police check people’s immigration status at will and proposing “self-deportation” as a way to get rid of undocumented immigrants. As with the deficit, he has a plan — but it’s secret.
Romney has tried to run a campaign while not running afoul of his party’s strictures. As a result, he has twisted himself into a pretzel, speaking vacuously, avoiding specifics and refusing to provide any serious plans for the most important issues of the day.
Here is a man who even disavowed his own signature political achievement — “Romneycare” — just to curry favor with the Republican political base.
Ironically, Romney already “ran afoul of his party’s strictures” — at least somewhat. The Republican base really wanted a nutcase like Michele Bachmann or Newt Gingrich. The base was cool on Romney. But, even after winning the nomination, he caved to the pressure, and went along with what this “intelligent man, fluent in economics” (according to Zakaria) knew was wrong. His personal ambition exceeded his patriotism. Romney first; America second.
To be awarded with the Presidency of the United States, and all that position’s powers and honors, you should at least display the courage of our fighting men and women — people who die for what they believe, and are not rewarded with the powers and honors of the Presidency. You will be expected to make difficult and correct decisions, each of which will have massive effect, not just on your platoon, but on the entire United States — indeed, the entire world.
What kind of leader will you be if you lack the competence and courage to stand up for what you believe is right, and against what you believe is wrong? Why would you accept the rewards of a leadership that requires you to send your people over a cliff?
For the sake of personal ambition, Romney has sold his soul to the devil. After the election, what will he see when he looks in the mirror?
Wanted for President of the United States: Competence and Courage. No Cowards Need Apply.
Rodger Malcolm Mitchell
Monetary Sovereignty
P.S. Please: Spare me the “Obama is just as bad” comments. He isn’t.
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Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%
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 Imports
#MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
They should have given the nod to Batshyt Bachmann; at least the base could have been sincere and felt more “secure” in their trek into the bizarre.
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“Where did the mammoth US budget deficits come from?”
Let’s go back about a decade, when budget surpluses were predicted for the foreseeable future. Somehow, the math went terribly wrong, by trillions of dollars. Here’s an accounting of what happened….
By Peter Grier | Christian Science Monitor (9/28/2012)
Ouch! The sky is falling! Deficits too big! Doomsday lurks!
My favorite BIG LIE excerpt:
“BORROWING our way through this is not a viable option because the rising cost of Social Security, Medicare and Medicaid is not a temporary blip. It gets bigger with time. Incurring permanently rising debt would result in staggering interest costs and ultimately a total debt burden that would crush the economy,” concludes the Concord Coalition analysis. (Wow, words of wisdom from your favorite NON-RESPONDERS!)
Eyeing through the first couple of pages of comments from readers of the article shows an incredible depth of ignorance about sovereign debt and government deficits that is only matched by the fear mongering and outright lies of the Concord Coalition. Deficits bad! Spending cuts good!! America is doomed.
Social Security transfer payments as percentage of GDP are less than 5% today. By the year 2087, with the projected huge population increases Social Security transfer payments as percentage of GDP will still remain under 8%. Very comparable figures exist for Medicare sustainability over the same time frame . Rodger! As you emphatically state, Social Security and Medicare at any percentage of GDP are fully sustainable now and LONG into the future. No one believes us. Then folks don’t believe in math either,
How bleeping simple can it get? GDP=FEDERAL SPENDING+Private Spending-Net Imports.
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“In fact, the problem is not Romney but the new Republican Party…”
the commentator in this video made precisely the same point a week ago:
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Yes, the Republican Party has changed dramatically. Long time Republicans (including me) no longer recognize this ultra-right-wing, extremist, selfish, cold-hearted group of Tea/religious zealots, as Republicans. They are more like theocrats from the 15th century than Eisenhower/Reagan Republicans.
That said, nothing requires Romney to abandon his principles (if he ever had them) just to win an election. At some point, a man should stand up for what he really believes.
How does it profit a man to gain the world and lose his own soul.
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“Or disagree with the base, not get elected, and possibly save America?”
What do you have in mind for how he saves America if he loses the election?
Anyway, the conventional wisdom is that a Republican has to run to the right in order to win the primaries, and then to the left in order to win the general election. Are you saying that this has changed, and that a more conservative Romney will get more votes from Democrats and Independents than a less conservative Romney? The Tea/Republican base is energized by Obama, they don’t need any more encouragment from Romney.
Paul Krugman said that Romney’s deficit will be higher than Obama’s. Isn’t that good for the economy?
My prediction is that if Romney wins, his tax cut proposals will pass Congress and his spending cuts will not, so in fact the result will be more stimulation than Romney’s plan calls for.
Democrats are politically constrained to not have tax cuts, indeed are proposing tax increases, and are unwilling to propose spending increases. At least the Republicans will cut taxes, and whether or not they will be able to cut spending is to be seen (I think not, but even if they do, we are no worse off than if we do nothing).
Neither candidate shows any understanding of MMT, but I think Romney will stumble into better policy than what we’ve had so far. Maybe with Warren in Congress, whoever wins can be educated.
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“What do you have in mind for how he saves America if he loses the election?” That’s how he saves America.
“. . . a Republican has to run to the right in order to win the primaries, and then to the left in order to win the general election. “ I don’t know whose conventional wisdom this is, but I doubt it refers to extreme right. And if a guy says one thing to get a nomination and something totally different after he’s nominated, how do you determine what he really will do?
A man who will say anything will do anything. So exactly whom would you vote for: The pre-nomination Romney or the post-nomination Romney? And why?
“Romney’s deficit will be higher than Obama’s. Isn’t that good for the economy?” Yes, if true. However there’s more to it than that. Giving every billionaire an additional $10 billion also would raise the deficit, but would not be good for the economy.
“Democrats are politically constrained to not have tax cuts, indeed are proposing tax increases . . .” You mean the tax increases on the rich? I disagree with them.
“Republicans will cut taxes, and whether or not they will be able to cut spending is to be seen (I think not, but even if they do, we are no worse off than if we do nothing).” Whoa, boy. You seem to agree with Krugman that Romney’s deficit will be higher than Obama’s (and if you don’t believe it, why did you mention it?)
And if they cut spending, why are we “no worse off than if we do nothing”? And exactly what is “nothing”?
Not sure why you believe ” Romney will stumble into better policy than what we’ve had so far.” The man has taken both sides of every important issue, and neither you nor I have any idea what his “policy” is, and he specifically has refused to tell the nation what his policy will be (other that to get rid of Romneycare (oops, excuse me. Obamacare).
Further, the Tea/Republicans have focused on being obstructionist, not on proposing policy — and the “fiscal cliff” is a result of Tea/Republican demands.
Exactly, what are Romney’s policies? It sounds like you believe any old policy is as good as any other policy, so what the heck, vote against Obama, just because.
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Maybe some generalities will help you. I agree Romney’s political philosophy, like both Bush presidents and Clinton, is uncertain. All of them failed to articulate any clear guiding principles. Reagan and Obama’s philosophies were quite evident by their histories prior to running for President, and they did stick to them in office. Mostly. Obama made some promises that he didn’t keep, but mainly because of his naivete, not because he didn’t really want to do them.
I like Reaganism. If Romney is 100 miles away from Reagan, then Obama is 150 miles away. So, regardless of Romney’s flaws, the choice for me is clear. If you liked the principles and policies of some past Democrat president (except Kennedy, maybe), then clearly Obama is your choice.
In my short study of MMT, I’ve come to believe that neither party’s candidates are capable of deliberately pursuing a correct economic policy.
They both think we’re “out of money”, and need to balance the budget or at least greatly reduce the deficit, and that Social Security and Medicare are unsustainable in their current form. If there were an MMT candidate, I wouldn’t bother with Republicans or Democrats.
So, in particular
Romney lost in 2008. That didn’t save the country then, and I see no evidence that it will do it now.
You determine what a president will do by examining what he has done in previous offices. You can tell easily by Obama’s Senate career, and before,
what he’s likely to do in the Presidency, and his first 4 years have borne that out. I think a President Romney will govern kinda like Governor
Romney did, and like Olympic czar Romney did. Don’t pay too much attention to campaign rhetoric. Specific proposals made in a campaign,
like Romney saying he’d like to cut income tax rates by 20% across the board, and limit itemized deductions to $17,000 across the board, are more
credible and important than the more vague and goal-oriented statements like “create 8 million jobs”.
Cutting taxes for billionaires only would be far less effective than other kinds of tax cuts. But, like building a bridge to nowhere, anything that adds net financial assets to the private sector is helpful, not hurtful. According to MMT. Romney’s tax cuts are not for billionaires. His intent,
as evidenced just recently by the trickle of specificity on itmeized deductions, is to keep billionaire taxes about the same as today, and cut taxes for everyone else. That would be helpful to the economy, in a better way than a standalone top-bracket-only rate cut that you describe, and which
nobody has proposed. Obama would like to keep taxes the same for most people, and raise them on the top bracket. That would be hurtful, not helpful.
I’m not a fan of Krugman’s politics and opinions, but he can crunch numbers and has better access to more data than I. If he does the math on two proposals, I’d tend to believe his numbers. There is a bit of a problem in that he thinks a higher deficit is necessary, and yet he opposes Romney anyway. If I were more of a cynic, I might believe he made the numbers up in order to bring the deficit hawks over to Obama’s side. I’m sure that’s why he published the statement, but I still tend to believe that it’s true, or at least that he believes it’s true.
Obama said last night that Romney proposes a $5T tax cut, with no offsetting revenues or spending cuts. That would be a good thing, no?
Maybe I wasn’t clear enough. Equal size tax cuts and spending cuts would have close to no effect on the economy, except second-order
effects if income is shifted to groups with different propensities to spend. Instead of “doing nothing”, which would be the fiscal cliff, I should have said to continue current tax rates and spending policies, which would have an economic effect quite similar to equal tax cuts and spending cuts. Neither one is a bold policy of the magnitude that is needed.
I think Romney has been clear on his tax policy. He thinks taxes are too high, and he’s never said he thinks they are too low. The health care issue
has been obfuscated by his opponents in both parties. The difference between doing something at a State level and at a Federal level is crucial in our political system, and is of the essence. Massachusetts loves Romneycare, but that doesn’t mean it should be forced on Utah. A
President Romney would support the right of any State to enact a health care law like Romneycare, and also their right to enact very different kinds of health care laws or keep the ones they have today. That is a crucial difference between the two candidates, and if you don’t “get” that, then you don’t understand the American political system. (Kinda like if you don’t understand Monetary Sovereignty, …)
I don’t try to keep up with all the “gotcha” quotes on either side, but I know Romney has had to “clarify” some of his comments, as has Obama. In both cases, though, I think I know where they’re coming from, both before the flip and after the flop.
There are no ideal candidates running, maybe no good ones, but based solely on economics, and from an MMT perspective, I think the guy who wants to cut taxes would have a better economy in 4 years than the guy who wants to raise them.
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A man who will say anything will do anything. Since Romney has taken both sides of every issue, you have absolutely no idea what he will do.
“I think a President Romney will govern kinda like Governor Romney did, and like Olympic czar Romney did.”
Governor Romney and Olympic czar Romney didn’t have to suck up to an absolutely insane, right-wing, extremist party. Again, based on what he says he will and will not do, you have no idea what he really will and will not do, so you have no basis for giving him your vote.
“President Romney would support the right of any State to enact a health care law . . . “
So, his message to the states is, “Do whatever you want. Don’t blame me for anything.” Hello Pontius Pilate.
This is leadership? So, if a state wished to eliminate Medicare altogether, no problem? Not having the moral or political courage to put forth a Medicare plan, he has dumped the problem onto the states. Why?
I suppose next, the governors should dump the problem onto the counties, which then should dump the problem onto the cities??
I understand the American political system. I also understand that if various Presidents had decided to let states do whatever they want, we wouldn’t have Social Security, Medicare and Medicaid, and we’d still have slavery and “separate but equal” in the South.
“I think the guy who wants to cut taxes would have a better economy in 4 years than the guy who wants to raise them.”
If he wants to cut taxes and wants to cut the deficit, then he must want to make enormous cuts in spending. Simple arithmetic. So where will he cut spending? His party already has said, “No cuts to the military.” That leaves Medicare and Social Security to endure those enormous cuts. Oh yes, and Public Broadcasting.
Is that what you want?
Romney is a moral and political coward with no core beliefs other than getting elected. If the American voters are foolish enough to elect him, he will follow his usual pattern: Say and do anything to be re-elected, while sucking up to the most extreme elements of an already extreme party.
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“A man who will say anything will do anything”
?Huh?
As for Medicare, I don’t think the states have anything to do with it. They don’t fund it or administer it. It is meaningless to talk about them eliminating it, or dumping it on anyone. Likewise Social Security, student loans, and hundreds of other purely federal progams.
The tenth amendment, not Mitt Romney, is what gives the message to the states and the people to manage their own affairs, regarding matters not covered elsewhere in the Constitution. What article is it that says the Federal government will determine health insurance policies? How did Massachusetts ever get away with deviating so far from the way the Federal govenment has been forcing people to do it all these years?
“If he wants to cut taxes and wants to cut the deficit, then he must want to make enormous cuts in spending.”
Reagan cut tax rates and cut the deficit with enormous increases in spending, not cuts. When the economy grows, tax receipts grow even faster, and the deficit shrinks. This is a big part of Romney’s calculations (not his personally, his economic advisors). The spending cuts are to come from reorganizing and streamlining the government, not cutting benefits to anyone during his term in office (the reforms of Medicare and SS don’t take hold for 10 years).
I think PBS can flourish without tax money. Most of their revenues come from other sources already, and they do produce some things that people are willing to pay for, like Big Bird. When there were only 3 commercial channels, it might have made some sense, but not today.
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“As for Medicare, I don’t think the states have anything to do with it.”
Romney specifically said he would get rid of Obamacare and turn it over to the states. But who knows, tomorrow he may say the opposite, and by next week he may say something completely different. Last week he dissed the 47% and this week he loves all 100%. Next week, maybe he’ll hate the other 47%.
“Reagan cut tax rates and cut the deficit with enormous increases in spending, not cuts.”
Actually, the federal debt tripled under Reagan’s “supply side” economics, aka “Reaganomics,” aka “voodoo” economics. That said, deficit increases increase GDP so are good for the economy, which is why the economy grew under Reagan. If I could rely on Romney to increase the deficit, I’d vote for him, but no one can rely on his word, which changes each hour.
The big question is: How can you have any idea what Romney will do? He has taken both sides of every issue, so his statements mean absolutely nothing. He has no plan, offers no plan and will stand behind no plan.
He is a black hole, and no one can tell me what he will do, which is what is meant by “A man who will say anything, will do anything.”
Face it: This election has nothing whatsoever to do with Romney. It’s all about Obama. Seemingly you hate Obama, so will vote for Romney. Fine. But don’t pretend you plan to vote for Romney because he is better in some way than Obama. You have no idea what Romney stands for or will do.
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