●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.
Recently, I saw an excellent movie, “A Royal Affair.” The producer describes it this way:
The true story of an ordinary man who wins the queen’s heart and starts a revolution. Centering on the intriguing love triangle between the ever more insane Danish King Christian VII, the royal physician who is a man of enlightenment and idealism Struensee and the young but strong Queen Caroline Mathilda.
A Royal Affair is the gripping tale of brave idealists who risk everything in their pursuit of freedom for their people.”
The movie also is about a menagerie of butt kissing, boot licking sycophants, whose sole mission in life is to agree with whomever has most power currently, so as to gain power for themselves, despite horrible damage to their nation and its people — in short, exactly like the U.S. Congress.
Recently, I’ve been in touch with Warren Mosler and Stephanie Kelton, two of the more influential people in Modern Monetary Theory. They are interviewed repeatedly, though sadly, I don’t see as much positive result as one might hope.
Here is the text of my 2/15/13 note to Stephanie:
You may be our best hope. I just wrote to Warren, and gave him my usual doubts that Obama, Bernanke, the Counsel of Economic Advisors et al don’t understand economics. Warren’s response was, “they are afraid the deficit will bring down ‘the whole house of cards’ like greece“
I then said, All of them are afraid? The thousands of political leaders in America and around the world, and their economists, all are ignorant of the economic facts? I have trouble believing that you and I and a few dozen professors (mostly from UMKC) and a handful of others are the only knowledgeable people on earth.
His response was, “yes, bunch of sheep. some might not be, but they are ‘team players’ who follow their leader and don’t think at all.”
So there it is. All those politicians and PhD economists are “ignorant, sheep or team players.”
My belief: It’s more than ignorance and “sheepness.” Has to be. The 1% are paying politicians to create austerity and widen the gap, and the sooner we all accept that, the sooner we’ll be able to do what’s necessary to turn things around.
In short, I believe it’s not ignorance but rather bribery. Warren agrees it’s not ignorance, but he thinks it’s “sheep following their leader,” something like King Christian VII’s kiss-ups.
Stephanie, then wrote me today:
I can tell you that I had lunch with a WH aide last month. He told me that everyone in Congress is a total wimp. no one — not a single one — wants to make a decision or think for themselves. He was quite adamant. Everyone wants to be told what to do. Both sides of the aisle.
The D’s divide into two camps: those who view their mission as supporting the President 100% — cheerleaders for Obama — and those who are concerned only with attacking the R’s. On the other side of the aisle are those who care only about attacking and undermining Obama and those who care only about brand loyalty and the Rep. base.
It is only about “winning” as defined by these narrow missions. No one cares about policy — only politics. He is very well connected and totally disgusted.
So when you ask whether it is possible that no one understands the economic facts, I wonder if that is even the right question. They seem to have ZERO interest in economic facts or economic policy itself. They are minions on a mission.
I believe Stephanie, her White House contact and Warren all are correct. The sheep know the truth, but they follow the leader. Their motive is the same as the King’s followers, i.e. no one ever got fired (or beheaded)for laughing at the King’s jokes.
All of which begs the question, “What is are motives of the leaders?” I can think of two:
1. The leaders suck up to the voters who are absolutely, positively certain the federal deficit is too high, and demand that something be done about it.
2. The leaders are being bribed by the upper .1% income group to widen the income gap by legislating against the best interests of the 99.9%.
Why do the voters believe the Big Lie that the deficit is to large? Partly its a feedback mechanism. People tend to listen to and believe ideas they already believe. That’s why anti-black, anti-brown, anti-poor, anti-immigrant and anti-gay bigots and gun nuts are more likely to watch Fox “News” and less likely to watch MSNBC — more likely to believe what Republicans say and less likely to believe Democrats.
Of equal importance is the fact that most media are owned by the upper .1%, who want austerity, because austerity injures the middle class and widens the gap between the very rich and the rest.
So, if the media continually (for more than 40 years) pound away at the Big Lie, that the deficit must be reduced, the voters believe it, and the politicians reinforce what the voters already believe, especially when the .1% pay them to do so.
Where does that leave us if we wish to save America, especially the middle and lower income groups? Trying to educate the politicians and their lackeys is useless. They already know the truth, but are motivated not to admit it.
Trying to educate the voters also is useless, because they will not listen. They want to hear what they already believe.
Which brings us back to my suggestion made several weeks ago. We first must shock the public with a scandal — the scandal that the politicians are being bribed by the rich to screw the poor.
We must make the voters angry enough for them to open their minds to a different idea.
Once we get them angry enough so they are shouting out their windows, “I’m mad as hell and I’m not going to take it any more,” then we come to them and say, “If you’re that angry, here’s the solution.” And we explain the simplicity of Monetary Sovereignty.
Scandal first; educate after.
By the way, I believe Stephanie agrees with this, and if I’m right and she does, and if she will have the courage to say so, again and again, and if UMKC and the rest of MMT support her, she may become the most important economist in America.
Let us pray.
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