Mitchell’s laws:
●The more federal 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.
●Cutting the deficit is the government’s method for taking dollars from the middle class and giving them to the rich.
●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.

●The penalty for ignorance is slavery.

Those of us who sometimes believe Paul Krugman finally, almost, maybe, possibly is starting to understand Monetary Sovereignty (based on occasional comments seeming to indicate a flicker of light behind that beard), are due to be disappointed yet again.

In his article in the December 18, 2012 New York Times, titled A Double Shot of Misunderstanding, he returns to abject cluelessness.

He begins correctly by saying:

One of the enduring fantasies of the pundit class – most dramatically demonstrated by the ludicrous Politico piece on What Insiders Know – is that all we need to fix our economic problems is to get the great and the good together and bypass those pesky elected officials. Business leaders, in particular, are presumed to have the know-how to deal with all the important issues.

But the reality is that the business leaders intervening in our economic debate are, for the most part, either predatory or hopelessly confused (or, I guess, both).

I’d put Fix the Debt in the predatory category; it’s quite clear that the organization (which is yet another Pete Peterson front, this time explicitly dominated by corporate interests) has an agenda more focused on cutting social insurance and corporate taxes than on reducing the deficit per se.

That’s the kind of truth that falsely lifts the hopes of MMT and Monetary Sovereignty adherents. And the article continues on a positive note:

OK, first of all, the fiscal cliff is NOT A DEBT PROBLEM. In fact, it’s the opposite: . . .

Pretty good, right? He’s got it. He’s got it. Oh, wait, here’s the last part of that sentence.

. . . the danger is that with expiring tax cuts, expiring unemployment benefits, and the sequester, we’ll reduce the deficit too fast.

TOO FAST??? He’s saying that he approves of reducing the deficit, but just wants to do it slower!


As a reminder to all, Gross Domestic Product = Federal Spending + Non-federal Spending – Net Imports.

Krugman, you know this fundamental formula as well as I do. So, think. What does reducing the deficit do, Paul? Fast or slow, it reduces Federal Spending and it reduces Non-federal Spending. Deficit reduction reduces the factors that make up GDP. In short, ANY deficit reduction not only is unnecessary (what’s the purpose?) but it is downright harmful.

Whether we move quickly or slowly, applying leeches will kill an anemic patient.

Every depression and nearly every recession has come on the heels of deficit reduction, and all depressions and recessions have been cured with deficit increases. See: Introduction.

Aside from a rare inflation that the Fed cannot control in its usual way (interest rate increases), there never, ever is a good time for federal deficit reduction. NEVER.

So why does Krugman dance around the truth, like a temptress shedding veils? Either he’s ignorant, which I doubt, or he dares not come right out and completely demolish what his, and every other major newspaper owner says. He simply does not have sufficient testosterone to admit that deficit reduction — even a little deficit reduction — is downright nuts.

I mean, after all, Paul Krugman is paid by the upper .1% income group, isn’t he? And no one ever got fired for laughing at the boss’s jokes.

Rodger Malcolm Mitchell
Monetary Sovereignty


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