Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
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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We look across the ocean, and we see the death of freedom. If I believed the leaders of the eurozone truly wanted to benefit their nations, I would be baffled at the ignorance of their actions.
The Guardian
Eurozone retreats from austerity – but only as far as ‘austerity lite’
Recession, social unrest and political necessity force shift in eurozone, but its economic future remains deeply uncertainThe subway workers were on strike in Lisbon on Thursday. Next month it will be the turn of the teachers. Portugal’s blue-collar trade unions are gearing up to bring almost a million workers out later in the summer as the country’s protest against austerity intensifies.
It is a similar story across large parts of the eurozone. There have been mass protests in Madrid, Dublin and Athens against policies designed to reduce budget deficits.
The European commission has told six countries – France, Spain, Portugal, Poland, the Netherlands and Slovenia – that they will have up to two extra years to put their public finances in order.
Translation: Austerity (deficit reduction) has done what austerity always has done, and always will do: It has destroyed economies. Therefore, the EU will force euro nations to implement further austerity for two more years — another two years of applying leeches to cure anemia.
Economists say the case for austerity was undermined just over a month ago, when it was revealed that basic research errors in an influential paper by two Harvard economists – Carmen Reinhart and Ken Rogoff – invalidated the claim that countries suffered a growth hit when public debt rose above 90% of national income.
Oh really? That’s when it was undermined? How about when I published THE ULTIMATE AMERICA in 1996, in which I wrote:
The “experts” say you can’t have lower taxes and more spending on social issues. They say you can’t have low inflation while you cut taxes and spend more. They say you can’t afford Social Security and Medicare.
Those “experts” tell you that in order to lead good lives, you must suffer. They are wrong.
Or was that phony research undermined when I published FREE MONEY in 1997, in which I wrote:
The federal government can, and should, end its borrowing and taxing, and very simply create the money needed to grow our economy.
Or was that rotten research, which didn’t differentiate between Monetary Sovereignty and monetary non-sovereignty, undermined when in June of 2005, I spoke to Randy Wray’s class at the UMKC, and said:
“Because of the Euro, no euro nation can control its own money supply. The Euro is the worst economic idea since the recession-era, Smoot-Hawley Tariff. The economies of European nations are doomed by the euro.”
Or was that laughable, Harvard research undermined when in 2011, this blog posted: There are two, and only two, long-term solutions for Greece and the other euro nations., which said:
For Greece and the other euro nations, long term survival requires one of two, and only two, events:
1. Adopt some form of a sovereign currency, and become Monetarily Sovereign
or
2. The EU to give (not lend) euros to its member nations as needed.There are no other solutions. None. All the running in circles by the European financial geniuses will be to no avail. Each day they come up with some new lending plan, and the next day abandon it in favor of some other lending plan.
I have been awarding one to five dunce caps for economic ignorance, but now the ignorance has grown so pervasive, with the euro nation leaders and our own Tea/Republican, Democrats, and the media and the columnists and the old-line economists –none of whom understand that what happened in August 1971 completely changed economics — I feel even five dunce caps does not do justice to the universal economic ignorance.
So today, I award 1000 dunce caps to all the self-styled experts, who blather on and on, spouting intuitive economics, but know nothing of the facts Monetary Sovereignty exposes.
———-1000———-
There is a second reason I award 1000 dunce caps: To demonstrate what sovereignty can do. I can create all I wish. I never will run short. I cannot be forced into dunce cap bankruptcy. I don’t have to “live within my means.” I don’t need a balanced budget. I don’t need to tax or borrow dunce caps. I don’t need to be dunce cap prudent. I am dunce cap sovereign.
In that sense I am identical with the United States government which is dollar sovereign. It too can create all the dollars it wishes, never will run short, cannot be forced into bankruptcy, doesn’t have to “live within its means,” doesn’t need a balanced budget, doesn’t need to tax or borrow and doesn’t need to be dollar prudent.
No, that nonsense research, in which apples, oranges, crickets and toe nails all are mathematically combined to create lying averages — that fake research was not undermined a month ago. It was undermined many years ago. Then, when it was published, it became yet another mindfuzz from professors who seemingly felt that coming from Harvard, they really didn’t need to be accurate or honest.
The disaster of deficit reduction has been obvious to anyone who understood the facts of Monetary Sovereignty for at least 20 years, perhaps more. Yet the disaster continues in Europe, and sadly, continues in the U.S., courtesy of the Republicans, the Democrats, the Tea Party, Congress, the media and the old-line economists.
If I believed anyone in any of these groups truly wanted to benefit their nations, I would be baffled at the ignorance of their actions. Fortunately for my sanity, I don’t have to wonder. I know how it is possible for every single one of those folks to be ignorant of America’s unlimited ability to pay its bills, without borrowing or taxing.
They are paid — bribed, really — by the .1% wealthiest among us, to widen the gap between the rich and the rest, which is exactly what deficit reduction accomplishes.
*The .1% bribes politicians via campaign contributions and promises of lucrative employment when they leave office.
*The media are owned by the .1%, and the media bosses make sure the austerity message dominates.
*The .1% bribes universities via huge contributions that create classrooms, sports arenas and courses. Heaven help the economics professor who departs from the chosen message.
Yes, the eurozone still is doomed, as I repeatedly have said it was, for years and years and years. The euro is a failed concept. The euro nations voluntarily surrendered the single most valuable asset they had: Their Monetary Sovereignty.
Think of France surrendering its language, its left bank and its cuisine, and you still would not come close to the disaster of surrendering Monetary Sovereignty.
Think of Italy surrendering all its art, all its music and all of Rome and Florence, and those loses would not begin to compare to the surrender of its sovereign currency.
Think of Greece surrendering all its history and every one of its islands and that would be nothing compared to the surrender of its financial control.
We look across the ocean and are horrified to see freedom dying. Yet, American soldiers have given their lives around the world, fighting for freedom, while we here at home, blithely hand over our freedom on an austerity platter.
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. Click here
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%
10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt
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:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports
#MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
[1] Rodger, I take issue with your awarding of one thousand dunce camps. You are fiscally irresponsible. Dunce caps are physical and limited. They do not grow on trees, nor can they be created and awarded via computer keystrokes (contrary to urban legend). Each dunce cap you borrow from China puts every American man, woman, and child into greater debt. And the debt is already unsustainable.
[2] Rodger writes, “The disaster of deficit reduction continues in Europe, and the U.S.”
Actually it’s occurring in Canada, Israel, and even Iran. The governments of most industrialized nations are indulging in gratuitous austerity, on behalf of the rich and the financial economy. That is, the purpose of austerity is to not only widen the wealth gap, but to increase the supremacy of the (parasitic) financial economy over the real economy.
I think we have regressed to the 1930s, when most Western governments adopted austerity mania, thereby causing a global depression. (The 1929 stock market crash was irrelevant.)
[3] Mike Norman recently said that when Warren Mosler taught him the facts, Mosler told Mike Norman, “From now on, you will be miserable.”
How true! I only learned the facts a few months ago from Rodger’s blog — but Rodger has grappled with social madness for 20 years. Yikes!
By the way, people who reject the facts of Monetary Sovereignty do not annoy me, since I can effortlessly shame them. They cannot out-debate me. What annoys me are people who simply don’t care, even though money is important to EVERYONE.
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And Mark, though I may jump you occasionally, I’ve been reading this blog a long time and ever since reading a book “For the Common Good” and then F. Soddy in 1993, I have been debating with the morons that the Treasury should control all money creation. Just know we’re on the same team.
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More leeches to cure more anemia:
Cut pensions, raise the retirement age and fire public employees — now that ought to stimulate the economy.
Watch Europe die the death of a thousand cuts. Watch America follow suit.
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Flash here again…
I have to laugh a bit here because I am totally confused.
Mr Mitchell states that austerity doesn’t work. Fair enough, let’s say you are right and it doesn’t work.. I think we need to define what “austerity” is and why it doesn’t work or else, nobody reading will understand.
Anyone can jump in and say austerity does work because it always benefits economies. Can anyone prove this person wrong? Point blank, I’m not a big believer in “i said so” statements. Prove it to us Mr. Mitchell.
What is austerity? from what I’ve read on the media, austerity is a reduction in government deficit spending.
Why does austerity destroy the economy? In theory, the government must spend more than it receives because otherwise the economy will “run out of money” as people and companies tend to save. I don’t buy it, but let’s say I do for now. In practice things tend to work a bit differently than theories.
What is the barometer used to decide whether an economy is growing or
not?
Here is where things get a bit dicy. Wouldn’t you think that the more the economy creates, the better off it’s citizens would be? Without going into technicalities, wouldn’t a village be better off when a crop can feed 10 times their population? Wouldn’t that crop support other villages as a result, or perhaps could be used as a safety net for any future crop shortages? Nooo…. according to Mr. Mitchell, savings are bad because they take away from the economy… Get that? having extra crop is a bad thing. I know, it doesnt make sense because it’s a lie. But, according to MMT and Keynesians the savings are for the government taking via the issuance of debt, i.e. Japan.
Wouldn’t citizens benefit more when there are savings because their quality of life would be better?
No sir, we dont measure economies like that. Our measure of “economic growth” takes into consideration how much credit/debt is issued. Whether that has any negative effect on the economy, and it does, or not is of little importance. Issuance of debt actually robs people because it acts as money (hint: it allows the gov to purchase things otherwise bought by you), but it’s considered “good” from an MMT/Keynesyan perspective. Why? I have no clue, but it strikes me as very odd indeed. How would government counterfeiting help the people? Can anyone on this board explain that to me? Hint: prices don’t increase because companies are evil. They increase as a direct consequence of more debt which bids up prices (steals from the lower classes).
In closing… The U.S. closed the gold window in 1971 and has embarked on the growing the deficit day after day, week after week, month after month, year after year. Yet year after year our economy has been in decadence. Our industries have been in decadence. Our education has been on decadence. Our medical industry in decadence. Our GDP measured by output has been deterioating, which makes perfect sense. People/companies stop producing as they notice they are being stolen from. Let’s see if this makes sense to anyone on this board.. Mr Mitchell states that austerity/deficit reduction/stopping the theft to the population does not work. Read that again please.
So is it austerity that is destroying our economy…… or was it the deficit spending that ALREADY destroyed it?
I vote for deficit spending already gutted it… It’s a LONGGGGGGG way down Mr. Mitchell..
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What would you accept as proof?
There are more than 1000 articles in the blog, many of which have the proofs you claim to want. Start with the very first post, and work your way forward.
Learning takes two. The teacher must supply the information and the learner must open his mind to receive it.
Here’s a start. This graph shows the federal deficit. The downward slope shows decreases in the deficit. Note how the downward slope introduces recessions, while recessions are cured when the deficit increases.
Sadly, we now have begun another downward slope, which if not changed, will lead to another, unnecessary recession.
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Recessions calculated by our measure of GDP, which includes debt. More debt = greater GDP, less debt = lower GDP. In my opinion, we are following the wrong measure to base our “success”.
From 1985 to now, our ouput has dropped and continues to drop. Since 1985 the purchasing power of the poor as well as middle clas has eroded. From 1985 to now our education system has eroded. Our medical industry is in bed with politicians in pushing senseless regulations like Obamacare, which do no more than hand over money to the rich.
I am ok with being called a student, I will be for the rest of my days. But bashing the rich while pushing for regulations and policies that funnel money to them seems a bit hypocritical to me.
So here we are, we’ve been increasing our debt for years on in and yet the cause of 40 years of decadence in purchasing power, education, medicine is not deficit spending, it’s the lack of it.
Perhaps it’s time to raise the flag Mr. Mitchell and come to the realization that deficit spending and all other government manipulations are the issue, not the solution.
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“Is it austerity that is destroying our economy, or was it the deficit spending that already destroyed it?”
I admire your logic. Did the jetliner explode because it crashed, or was it already exploding in all the years it flew? Did the draining of blood cause anemia, or did the fullness of blood already cause anemia? Does austerity kill economies, or is austerity the only thing that keeps economies alive? Does your face hurt because I slapped you, or was your face already hurting because we had not yet met?
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Than why has the purchasing power continued to decline in the last 40 years while deficit spending climbed? why did our education system erode while deficit spending climbed? why did our medical costs climbed while deficit spending went up? The logic that deficit spending makes us richer is a complete lie.
You have years and years of proof in your face, yet here we are. Has your purchasing power gone up as deficit spending went up? No it didnt. You cant afford to buy a car, a house, an education, medicine like your parents did because your purchasing power has eroded due to deficit spending.
Mark,
You know full well that the government takes and distributes and that nobody likes to have what they earned and distributed by force. Individuals might not forge a war against the government, but they sure can stop producing until the government and the country is starved. That is the way we are headed. Whether you want to accept or not is another matter.
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To put how deficit spending robs people into perspective.
The village that produced the crop that could feed their population 10x over would be forced to keep 1 crop and the government would deficit spend their savings.. the other 9 crops. Of course the government would go out and hand that other 9 crops to their buddy buddy in other villages for votes.
Somehow, this is suppose to motivate the village to produce more crops. Why would this village produce more than the 1 crop for themselves? Why would the other villages produce more when the government just handed them a free crop?
Truth is, theft is theft. The government overproducing should be left alone with the 10 crops and allowed to either trade/give/or save their surplus crops as they wish. For instance, village A can trade their crop which would improve the quality of life of village B and vise versa.
The benefits reaped from the surplus would entise them to produce more and more and benefit themselves as well as other villages more and more.
The moral of the story is that governments always TAKE and DISTRIBUTE. Not that we dont need roads, etc, but the more the government takes and distributes, the WORST we are. As a country we should pass a law that limits government spending to tax revenues whether tax revenues are up or down. Maybe that would entise them to save as well. This is not rocket science.
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Let’s get away from all the theorizing and get to the point. A truly wealthy nation creates and produces real goods and services to meet the needs of its people. As the value of these goods and services increase through increases in labor productivity the wealth of the nation increases. If productivity increases to the point where there is surplus beyond what is necessary to meet the needs of the public, then we export or give to those less fortunate. That should be what true patriots strive for. We have those who favor fiat money, those who idiotically favor basing a nations money on a finite commodity, however it is the common good of a nation for which we all should be striving. Anyone who believes otherwise is a traitor and a selfish ass-hole, period. The amount of money in circulation should equal the true value of a nation’s production. Then monetary sovereignty is based upon the actual, true faith and credit of a nation. Yes, it may be a utopian ideal, but the choice is yours. We can implement revolutionary ideals or we will surely face violent revolution.
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Simply, Rodger, I love you!
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For flash:
By “decline in purchasing power,” I assume you mean inflation, which is determined by the Fed, and is not related to deficit spending:
You demand fact, but your other questions are devoid of fact. “Education system erode” is not a statistical measure, nor is it related to federal deficit spending.
Also, “medical costs climbed” have many causes, and a tenuous relationship to inflation, which itself has no relationship to deficit spending.
As for, “the government takes,” what the government takes are taxes. I agree the federal government should take less taxes. Far less.
If you’d read more and written less, you’d know all these years, we’ve preached that federal deficit spending has been too little. Now you ask why federal deficit spending has not cured all the ills of the nation.
Could it be, that as we have preached, deficit spending has been insufficient, and the ongoing attempts at austerity are the real culprit?
Anyway, the above graph gives you the facts you demand: Deficits do not cause inflation (or as you call it, “decline in purchasing power.”)
Now, provide the facts to show that reducing the money supply (i.e austerity) will stimulate the economy, reduce unemployment, improve education and cut medical costs.
You might wish to begin with this equation:
GDP = Federal Spending + Non-Federal Spending – Net Imports.
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Government deficit introduces money into the economy and is a defacto tax. An increase in money supply is inflation. Prices, are a convenient scapegoat for the government and for theories like MMT.
I personally don’t have an issue with higher taxes because the people would have to allow them for the most part. You know, that thing called democracy.
Printing for purposes deemed important by a small group is exactly the opposite of what the title of this post proposes to defend, freedom. Free markets are freedom.
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Btw,
I have never advocates for a reduction of the money supply.
I don’t profess to know the appropriate level of money supply, neither does anyone else. I don’t know the right interest rate, neither does anyone else.
Theories professing for the manipulation of the above are anti markets, anti poor, anti democratic.
Free markets can teach men how to fish Mr. Mitchell manipulations have the opposite effect. My proof is anywhere you look.
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By purchasing power, I simply mean what can be bought with an average salary. A person flipping pizzas could put themselves through college in the 70s. Try that now. Homes were also cheap relative to salaries, etc, etc..
The government issues debt which acts as money and results in higher prices. The government needs ever lower rates. This is worst than taxes as the government will pay people to spit to the moon if they could with the majority of cases not benefiting society. MMTers actually demand this, what an interesting bunch. Pay (give what others created) to people who don’t create anything. Wow…
Inflation is not determined by the fed, it’s a government figure conveniently including things that make inflation look good. Fools are easily fooled by focusing them on prices rather than the money supply.
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“I don’t profess to know the appropriate level of money supply, and neither does anyone else.”
>>Deficit spending should increase until unemployment is at or near zero.
“I don’t know the right interest rate, neither does anyone else.”
>>Interest rate for what?
“Free markets are freedom.”
>>There has never been a truly “free market.” For Rodger and me, a “free market” is a fair market. For right-wing retards, a free market is one that is controlled by the rich and powerful. It lacks regulation, and therefore gives rich people the freedom to create monopolies and expand their tyranny. Freedom for them. Slavery for us.
”As a country we should pass a law that limits government spending to tax revenues whether tax revenues are up or down. Maybe that would entice them to save as well. This is not rocket science.”
>>I agree. We need a balanced budget so we can have a dystopian wasteland. The U.S. economy already loses $420 billion a year from the trade deficit alone. A balanced budget would finish us off nicely.
By the way, federal “tax revenues” do not exist. When the federal government orders your bank to debit your account by the amount of your tax check, that money vanishes. POOF. The money does not “go anywhere,” since money is not physical. It is destroyed, just as four points are destroyed when a football scoreboard changes its number from “7” to “3”. The US government needs no revenue, and collects no revenue. Nor does the US government “save money,” or need to “save money,” since it creates money out of nothing, simply by crediting bank accounts (i.e. changing the numbers in accounts).
It’s sad that you never bother to read any of the posts you comment on.
If you did read them, you might actually learn something.
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If we didn’t have to argue with fools, we could have free Medicare for every man, woman and child in America. Just, for instance.
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flash, apparently you agree with me. You say everything is terrible and I say the deficit is too low. Must be a correlation.
You now have had your say. Goodbye.
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