●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.
●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.
●Everything in economics devolves to motivation.
Stephanie Kelton, Ph.D. is Associate Professor and Department Chair, for the economics department at the University of Missouri, Kansas City, probably the best economics department in the country if not the world.
Why do I say “the best”? Because the UMKC people are among the few who understand, speak and write why federal deficits are important for economic growth. They understand Monetary Sovereignty / Modern Monetary Theory, and they absolutely understand that austerity is a death sentence – an unnecessary death sentence — for any economy.
Lately, Professor Kelton has been interviewed many times on the radio and TV. She currently may have the “loudest” voice in modern economics. During her interviews, she explains how federal deficits are private sector surpluses, and she even provides a graph to demonstrate this point.
Professor Kelton has not yet used her loud voice to ask WHY Congress favors this death sentence for our economy. She has not asked, “What is the motivation?”
In other posts, I have suggested she ask such questions as:
“Do you think it is possible that the President of the United States, the Secretary of the Treasury, the Chairman of the Fed, the Counsel of Economic Advisers and their 400+ PhD economists and all 535 members of Congress — NOT ONE of these experts — understands that federal deficits are private sector surpluses?”
“If it isn’t possible that none of them understands, why does not one of them say it? What is their motive for denying the facts?”
“Is it possible the motive is that the politicians are paid by the upper 1% (via political contributions and promises of lucrative employment later) to widen the income gap between them and the 99%?”
“The gap is what makes people rich. If there were no gap, no one would be rich, and the wider the gap, the more power the rich have. Does it sound reasonable that wealthy people like the Koch brothers and Pete Petersons of the world — wealthy people who also own most of the major media — spend millions, if not billions from their personal wealth, to widen the gap?”
“What other motivation sounds logical?”
Perhaps it would be helpful if we all wrote to Professor Kelton and suggested she ask those questions, or similar questions, during her future interviews. A discussion of the parties involved, and their possible motives, might establish a basis for communicating the economic facts. The voters might accept what’s happening if they understood why its happening.
Professor Kelton’s email address can be found at: UMKC economics people.
Drop her a note of encouragement.
Rodger Malcolm Mitchell
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
6 thoughts on “–Write to Professor Kelton and ask her these questions”
Economists at the Fed and at all levels know very well that federal deficits are private sector surpluses.
As he [Fed Chairman
Greenspan] underscored on January 25, 2001,
“continuing to run surpluses beyond the point at which we reach zero or near-zero federal debt brings to center stage the critical longer-term fiscal policy issue of whether the federal government should accumulate large quantities of private assets.”
Yes, of course they do, which is why I find it sad that our MMT allies don’t come right out and ask, “If they know, why aren’t they saying it?”
And that brings us right back to the question of motive.
I’ve spoken to a number of academics and the successful ones all have something in common. They don’t speculate upon what they can’t prove. First of all, they don’t want to be open to slander or liable suits – this happens too, for the reasons you already gave, about intimidation. And second, it’s in their nature, as social scientists, not to espouse untestable theories.
You won’t find much support there, except for specific theses. Journalists and pundits are better at this, but are less trusted because of that.
An yet, MMT espouses their JG (Jobs Guarantee) program, which they can’t prove.
I think we may be being a bit too
hard on MMTers. Professor Michael Hudson of UMKC has been very outspoken about the motives of the 1%. Of course, he has not received the press Kelton has received lately.
Also, Professor Bill Black of UMKC criticizes the banks control of the political system to avoid prosecution every chance he gets.
Bill Black does a great job exposing bank malfeasance. And all of MMT does talk about the rich wanting to get richer. But there is a central point that is being missed: The gap.
The rich do not just want to be richer. The real goal for the rich is to widen the gap between them and the rest, and the fastest, easiest way to do this is to impoverish the middle- and lower-income classes.
This is what MMT doesn’t talk about.
It is the gap, not absolute income, that makes the rich rich and the poor, poor. If you earn $100 thousand a year, and everyone else also makes $100 thousand, no one is rich and no one has power.
But if you make $100 thousand and everyone else makes $1 thousand, you are rich and you have the power. The gap means everything.
This is why the rich want to cut Social Security, cut Medicare, cut Medicaid, increase FICA and “broaden” the income tax — all methods of impoverishing the 99% and widening the gap.
Let me know when you hear an MMTer talking about the goal of rich being to widen the gap by impoverishing the poor. Then, I’ll know we’re making progress.