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.
●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.
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BACKGROUND: The “debt” innuendo
The so-called federal “debt” is nothing more than the total of deposits in Treasury Security accounts at the Federal Reserve Bank. The word “debt” is just an obsolete and misleading scare term, to convince you, the public, it’s some sort of danger and is “unsustainable.”
When you transfer dollars from your personal checking account to your T-bill account at the Federal Reserve Bank (also known as buying a T-bill), how the heck is that transfer a danger to, or unsustainable by, the U.S. government? Obviously, it isn’t. It’s just a bank deposit, pure and simple.
And when you’re told how awful it is that federal “debt” is a high percentage of GDP, you might ask why total deposits in Treasury Security accounts at the Federal Reserve Bank are supposed to be a low percentage of GDP? You might ask, but you won’t get a coherent answer, because there is no answer.
And when you are told your children and grandchildren will owe your deposit in the Federal Reserve Bank, it’s complete nonsense. Actually, your children and grandchildren will own that deposit, if you leave it to them, just as they will own, not owe, all your bank deposits.
And when you see a so-called “debt clock” showing you how the total of deposits in the Federal Reserve Bank (aka “debt”) have increased, this is supposed to shock you. But why? No one knows. It’s all innuendo.
IT’S THE GAP, STUPID:
For years I’ve railed about the real problem facing America, not the phony “debt” figure, but THE GAP between the rich and the rest. If you scroll back through this blog, you’ll see such titles as:
More evidence for those who doubt the 1%’s scheme to beat down the 99%. It’s the gap, stupid
Tuesday, Feb 5 2013Yet another effort by the 1% to widen the gap and screw the 99%. Enough never is enough.
Friday, Jan 25 2013The indecisive and the deceptive join forces to increase the gap between the 1% and the 99%
Saturday, Aug 11 2012How you can help close the gap. (No, writing to politicians and newspapers won’t do it.)
Monday, Jun 25 2012Saving America by closing the gap: A suggestion for #OWS
Friday, Dec 9 2011Closing the gap between rich and poor: Eliminate all local taxes
Tuesday, Sep 13 2011How the poor get screwed. Why deficit reduction increases the gap between rich and poor.
Monday, Jun 6 2011A partial solution for the gap between rich and poor: Education
Sunday, Jul 11 2010
While I’ve deplored the growing gap between the rich and the rest – a gap caused by deficit-cutting austerity – I initially had thought the gap was the result of ignorance by our politicians. Only in the last few years have I come to the conclusion that it simply is not possible for every single one of our political leaders, to have the same ignorance.
The President and all his advisers, the Secretary of the Treasury and all his advisers, the Chairman of the Fed and all his advisers, the Counsel of Economic Advisers and its 400+ PhDs in economics and the entire 535 members of Congress – it is beyond reason to assume that not one of these thousands of educated people understands how reducing the federal deficit will punish the middle- and lower-income people and widen the gap. Yet not one of them admits it.
So clearly, they know what they are doing. The only possible motive for their destroying our lives and ruining America is they are being paid to do it – bribed by the rich (via political contributions and promises of lucrative employment later), whose sole goal is to widen the gap. It is the gap that makes them rich. Without the gap, no one would be rich, and the wider the gap, the richer they are and the more power they have over us.
And since the politicians already know what they are doing, educating them won’t change their minds. And the voters have no desire to learn economics, especially since they have been brainwashed into believing federal “debt” is a bad thing. So all the educational efforts by adherents to Modern Monetary Theory and Monetary Sovereignty have fallen on deaf ears.
I’M NOT ALONE!:
Finally, MMT is starting to understand what needs to be said. Today, I received an Email from Stephanie Kelton, Editor-in-Chief, New Economic Perspectives and Economics Professor at UMKC – and a great voice for MMT. She suggested I read the article: The Democratic turncoats behind the “Fix the Debt” attack on Medicare & Social Security.
What a great article.
Stephanie gives many interviews, and she has edged closer and closer to the outright truth that the rich have bribed the politicians to widen the gap by cutting federal spending.
Social Security cuts? The rich want them. Medicaid cuts? The rich want them. Federal employment cuts? The rich want them. Medicare privatization? The rich want it. Federal spending, almost of all of which benefits the middle- and lower-income people? The rich want it cut.
America’s greatest enemies are the rich, and their stooges are the politicians. The rich are traitors to America. This is what the public needs to be told. The rich (and I mean the very rich – the billionaire class) are screwing you, and they have brainwashed you into believing you should be screwed. Their goal is to widen the gap and increase their power over you.
The “debt” is phony. Cutting the debt is “phony.” Bribing the politicians to cut the “debt” to widen the gap by impoverishing the middle- and lower-income people – that is real.
Read the article.
I’m not alone.
Rodger Malcolm Mitchell
Monetary Sovereignty
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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 
Mr. Mitchell,
I’ll admit, when I first saw a post or comment from you – maybe it was at Naked Capitalism – I figured you to be some sort of kook. Then I studied some MMT, continued following NC, read Randy Wray’s money textbook, etc., and came to appreciate that you’re no kook. And at the same time, while I came to appreciate the truth of the theses at the root of MMT, I also had a growing sense of frustration that there was something missing, namely an appreciation of the fact that the “misunderstanding” regarding monetary sovereignty could NOT be accidental. There is not much difficult to understand with MMT – the only puzzling part is that MMT’s rather obvious conclusions are not universally recognized as true. Puzzling, that is, until one accepts the only reasonable conclusion, namely that our billionaire overlord class is purposely destroying our wealth and freedom.
You, sir, have connected the dots. Today’s post is particularly cogent, and I’m encouraging any and all to read it. Thanks for your work.
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Another voice in agreement: http://www.washingtonsblog.com/2013/02/economic-leaders-pay-lip-service-to-decreasing-inequality-while-pushing-policies-which-increase-it.html
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Rodger, relative inequality exists throughout the wealth and income distribution. Should we expect the instrumentality and valence of increased inequality to be restricted to the top 0.1%? What if half the population covertly thought this relative way and a quarter overtly?
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Many people look down on those having less money, and feel comfortable with increase inequality below them. It is the very rich who have the power to take advantage of those feelings, by calling the poor sloths.
Thus, for instance, “food-stamp-mother” resonates as a derogatory term among many in the middle class.
In the ideal world of the very rich, there would be two classes: The very rich and the very poor — and they don’t care whether some are very poor, while others are very, very poor.
The rich, who are miles ahead, look down on our struggles to get inches ahead, and smirk. They like us to struggle against each other.
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Here’s another voice in agreement:
http://www.eriereader.com/topics/politics/cliff-notes
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B,
Thanks for the excellent article.
You understand it. I understand it, and the author of the article understands it. But much of the MMT crowd believes Congress, the Treasury, the President and the Counsel of Economic Advisers don’t understand it!
So they keep trying to educate Congress et al.
I guess you, I and the author must be amazing intellects to understand what thousands of experts don’t.
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Here’s another, I think – Mike Norman: http://www.youtube.com/watch?feature=player_embedded&v=T_vR99rHzW0
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I don’t want our politics to go down that road of divide-and-conquer. I’m looking for the message and framing I can use in conversation.
If many of us hold to a private interest in standing on the other person’s neck — our peers and those below us — in spite of actual knowledge that we risk personal economic harm, it may be difficult to overturn this private interest with logic. But how to avoid sounding like a moral saint or a class warrior? Those get dismissed.
I see the rhetorical value of the (non) “ideal world” argument you make. I hope it is emotionally vivid enough to break through our cognitive dissonance and irrational private support for austerity politics, before that kind of world actually comes to be. The logic can come later if the opponent actually engages with the real issues.
Thank you for explaining these issues for years on end.
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Ask yourself this: In what are these billionaire investors investing? Why do these money-wise .1%ers give away their dollars? What will they receive in return.
Why are their desires more important than yours?
Ask the right-wing Supreme Court.
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