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 motive.
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What are your most important concerns? I’ll bet health and finances come near the very top of the list. You are concerned for your own health and for the health of those you love. The same is true of finances. You spend eight hours a day, for an average of 45 years — more than half your life — thinking about money, working to make money, saving and spending money — so you can support yourself and your loved ones.
Clearly, you violently will reject anything that will make you sicker or poorer.
In that vein, how would you feel if your children were sick, and a politician told you they are not allowed to see a doctor? Or if a hospital refused your wife admittance? Or if you were not allowed to purchase the medicine they desperately need? Are you angry? Frustrated? Incredulous? Are you ready to march on Washington?
Probably not. If you’re like the majority of Americans, you don’t give a damn.
Quoting from an article in the February 28th SunSentinel:
Cuts to bruise health care
By Noam N. LeveyAs the Obama administration begins to implement $85 billion in cuts to federal spending this year, no part of the federal budget other than defense will take a bigger hit than health care.
And the sequester appears likely to have a disproportionate effect on areas of the health system already hobbled by years of retrenchment and under-funding, including public health and medical research.
Laboratories at major universities and medical centers are laying off scientists and local public health officials, hit by years of cutbacks, are scaling back immunization efforts to track and control infectious diseases.
“They are doing cuts on top of cuts on top of cuts,” said Dr. Eric Hoffman, director of the Center for Genetic Medicine Research at Children’s National Medical Center in Washington. Hoffman’s labs have had to delay several projects, including new research into muscular dystrophy in children.
Nationwide, as many as 46,000 public health jobs have been eliminated in the past five years. Now, the federal Centers for Disease control and Prevention plans more cuts.
So, I ask again: How would you feel if your children were sick, and a politician said you are not allowed to take them to a doctor? Or if a hospital refuses you admittance? Or if you can not purchase the medicine they desperately need? Are you angry? Frustrated? Incredulous?
Here is the answer, as told by this NBC News/Wall Street Journal poll of 1,000 U.S. adults conducted Feb 21-24. (Margin of error is +/- 3.1 percentage points:) The subject was the sequester.
Opinion on the Best Way for Congress to Handle the Deficit
–A plan that has more cuts: 39%
–The current automatic cuts: 14%
–A plan that has fewer cuts: 37%
–None/not sure: 10%
How shall we explain 53% of Americans wanting a plan that has more cuts than even the sequester demands?
You of the 53%, your elected politicians have voted to cut back immunization, so your children will have a greater likelihood of suffering from or even dying from a disease. Your politician also has voted to cut back medical research, so you and your family will suffer needlessly from heart disease, cancer and the myriad other ailments that kill us too young
Congress and the President demand that you have available to you, fewer doctors, fewer nurses, fewer hospitals, less research and more sickness. Yet, you 53% of Americans not only welcome it, but you want even greater cuts. America is on the edge of becoming a 3rd world country, and Americans not only are satisfied, but become angry at anyone who protests — thus is the power of brainwashing.
Barack Obama, Peter Peterson, the Koch Brothers — these are the people who are sickening and killing your loved ones, and half of America doesn’t give a damn. The rich bribe the politicians, via campaign contributions and promises of lucrative employment, to cut medical services.
The rich don’t care. They always can pay for doctors, nurses and hospitals. They can fly to foreign lands, where the care and the research are better.
All the rich care about is depressing you, pushing you and your children down into the gutter, making you suffer and beg for help — all to widen the income gap and increase their power over you.
And there you 53%ers sit, with you fingers in your noses, worrying not about your loved ones, but rather worrying about the federal government’s unlimited ability to pay its bills, or about the scant likelihood of a hyperinflation this nation never has had in its history. While you fret about gay marriage and left vs. right, the 1% are stealing your health and financial life.
But, you are perfectly content to sacrifice your health, your family’s health and all your money, just so the federal government, which creates dollars, is unnecessarily given even more of your dollars, for which the government has no need.
You can’t point to a single instance of austerity bringing a nation anything but misery, yet you want austerity for your nation and your family.
Congress, the President and the upper .1% income group are sickening and murdering your children, yet all that concerns you is whether the Democrats’ method or the Republicans’ method is better.
Are you angry? No. You subscribe to the immortal words of Alfred E. Neuman, “What, me worry?“
How very clever you of the 53% are.
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 
“Nationwide, as many as 46,000 public health jobs have been eliminated in the past five years. Now, the federal Centers for Disease control and Prevention plans more cuts.”
Yes, many people think it is a good career move to go into health care, since the public will always need health care. However, austerity mania has made mass layoffs in health care as common as in any other field. And yet the average person continues to favor austerity (for other people). It is precisely this selfishness that makes everyone impoverished.
I’m curious what the average person feels when he sees a small business fail and close its doors. Probably nothing. “It doesn’t affect me, so who cares?”
Because of this attitude, EVERYONE is affected.
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More evidence that Obama is in the pockets of the rich:
Obama has hoodwinked 53% of America. He is the phoniest liberal since Castro. Congress knows it, but since virtually all its members also are on the dole from the upper .1%, no one says it.
Only when the people understand that his motive is bribery from the upper .1%, will anything positive happen.
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Roger I am from the UK, can you explain to me how:
The government budget deficit adds to our savings (to the penny). This is an accounting fact, not theory or philosophy. There is no dispute. It is basic national income accounting.
For example, if the government deficit last year was £1 trillion, it
means that the net increase in savings of financial assets for
everyone else combined was exactly, to the penny, £1 trillion.
How do I work this out with actual figures to show to my friends that this statement is true. They don’t believe me.
Do I use monthly figures or 12 month rolling figures ? Also how on earth do I work out the net increase in savings of financial assets for everyone combined for the UK for the month of January ?
My friends say
The problem with your theory arises when you start to discuss credit creation and contraction. For example, if this government money is transferred to a private individual or business, who then uses it to pay off a debt, assets and liabilities held at financial institutions disappear. That’s right, they vanish! This is also an accounting fact. When a bank lends money, they create an asset and a liability on paper. When the same debt is paid off, both the liability and the asset disappear – the only thing left is an increase in the bank’s capital, which has earned interest. This is not reflected in the bank of England’s accounts.
In the real world, however, government capital spending diverts real economic resources away from the private sector. The private sector creates wealth and drives growth, not the government.
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You were doing so well until you got to the very last paragraph. Federal spending goes to the private sector. The government creates wealth and drives growth, by spending.
As one of many examples, the U.S. federal government built our interstate highway system. Or more correctly, the U.S. government paid the private sector to build our interstate highway system.
Perhaps your friends could visualize it more clearly if they think of how the government creates money. When the government pays its bills, it instructs its creditors’ banks to mark up the creditors’ checking accounts.
These instructions take the form of a check or a wire. As soon as the bank obeys those instructions, money is created. Thus all Monetarily Sovereign government spending creates pounds, dollars, etc.
Similarly, when you pay taxes, you instruct your bank to mark down your checking account, which destroys pounds, dollars, etc.
The fundamental source of all pounds is your national government’s spending. Though your banks create pounds by lending, they need “seed money” to begin the process. If the UK government had not created pounds in the first place, banks would be unable to lend, and there would be no money in the UK.
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Derek: Here are some replies to your questions to supplement Rodgers’.
Your friends say: The problem with your theory arises when you start to discuss credit creation and contraction. For example, if this government money is transferred to a private individual or business, who then uses it to pay off a debt, assets and liabilities held at financial institutions disappear. That’s right, they vanish! This is also an accounting fact. When a bank lends money, they create an asset and a liability on paper. When the same debt is paid off, both the liability and the asset disappear – the only thing left is an increase in the bank’s capital, which has earned interest. This is not reflected in the bank of England’s accounts.
This is actually sort of right, but the beginning, involving the government is perhaps sort of wrong (or confused or incomplete). When Mr. A gets/has government money, then Mr. A can use it to pay off a liability to Mr. B (for Bankster). But then Mr.B’s asset – the loan to Mr. A – disappears, and is replaced by the government money / reserves, another bank asset. Mr. A’s liability was that same loan, so that disappears by the same token. So a financial institution asset & a private individual liability (to it) disappeared. A private individual’s asset became the financial institution’s asset. This is not precisely what was said above.
The rest after “When a bank lends money” is broadly correct – except that when banks lend, two different assets, two different liabilities are created – really two different asset/liability “pairs” are created. Financial assets always come in “pairs”: the asset and the liability are really two names for the same thing viewed in two different ways, which is why I put “pair” in quotes. It is really just one credit/debt = asset/liability relationship. In government spending only one financial asset, one credit-debt relationship is created. But in bank lending, two are: the loan note and the money in the borrower’s bank account.
But the main answer to this supposed “problem with your theory” is “So what, where’s the problem?” And more – this is actually incorporated into, is a foundation of genuine economics = (post)Keynesian, MMT, MS, FF, creditary, institutional economics. The credit creation (lending) and contraction (loan repayment) are theoretically considered under the same auspices as government spending and taxation. The most general term is “efflux” or money creation for government spending or bank lending, and “reflux” or money destruction for government taxation and loan repayment.
In the real world, however, government capital spending diverts real economic resources away from the private sector. The private sector creates wealth and drives growth, not the government. Yes, it COULD happen this way, the government could outbid the private sector and grab more resources for public purposes, leaving less for the private sector. But your friends, like many bad, but famous “economists” take an unlikely and unusual occurrence as an unshakeable axiom. Of course the first sentence can be interpreted as a tautology – spending by definition is spending on something which of course goes from the private to the public sector. But that is not what I am sure they are saying. Whatever size the government, it will spend something, and the recurrent problem is government underspending / overtaxation, not over-diversion/overspending. Of course, the government shouldn’t do things which are better done by the private sector. But vice versa is of course true, and there are many things the government does better – health care, education, scientific research etc. – and the government is the only agent that can spend enough to ensure economic efficiency, the usage of all resources, above all full employment.
In the real world – government capital spending doesn’t really divert resources, hardly anywhere, hardly at any time. Governments worldwide have been grossly underspending and overtaxing for decades, especially since the 1970s. When there is massive unemployment, as now, what the government is doing is forcing people out of jobs, preventing them from doing real, valuable, often crucial and necessary work, by making government money so scarce.
Governments are PERMANENTLY DESTROYING colossal economic resources by following your friends’ advice, which is based on an utterly preposterous assumption that “the market” will always efficiently ensure the full employment of all resources. In reality, “the market” is and always was a government intervention. There are no markets without money, and no money without the state. Money is a creature of the state.
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Should these be the same to back up the statement of
If the government deficit last year was £1 trillion, it
means that the net increase in savings of financial assets for
everyone else combined was exactly, to the penny, £1 trillion.
a) the budget deficit in % of GDP for January.
b) the Gross savings report for January in % of GDP.
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Also consider Net Exports in the equation.
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Thanks Rodger.
I’m trying to work it out so that I can say to my friends….
Look if you add that, that and that, together it equals the deficit.
To show them that the deficit is actually a reflection of how well the country is doing and how much wealth it has. ( Monopolis Monopoly)
My problem is
a) I don’t know what that, that and that is
b) Where to find the figures.
Is there any chance you could do an American version for me and I’ll learn it from that?
By the way this topic is being dragged into the British main stream media, there are a group of people who are highlighting this in the Guardian ( centre left) and Telegraph ( centre right) newspapers in the comment sections online of these newspapers.
Thanks..
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Try studying this graph. It shows the four elements of Gross Domestic Product and shows how those elements do indeed equal GDP:
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