●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