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●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
●Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
●The single most important problem in economics is the gap between rich and poor.
●Austerity is the government’s method for widening the gap between rich and poor.
●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.
●Everything in economics devolves to motive, and the motive is the Gap.
I just thought you should know. Lunch really can be free.
This means, the U.S. government, including all federal agencies, never unintentionally can run short of dollars.
“In the beginning,” there was no dollar. Think of the U.S. government as the God of the dollar. The government originally produced from thin air, the laws that, in turn, created the very first dollar. Like God, the government continues to rule the laws that create dollars from thin air.
Because the dollar is the result of laws, and the U.S. government has 100% control over those laws, the federal government cannot unintentionally run short of dollars. Even if all federal taxes fell to $0, the government would not run short of dollars.
That is why, in a narrow sense, the U.S government always has been Monetarily Sovereign. But during the past 200+ years of our life, the government arbitrarily has passed laws that temporarily limited its functional sovereignty over the dollar.
Functional Monetary Sovereignty is not an absolute; it is a comparative. We can function as more or less sovereign.
The most notorious of such limiting laws tied the dollar to gold and silver. During the gold and silver periods, the U.S. functionally was not as Monetarily Sovereign as it is today, though being God of the dollar, it always retained the right to make itself more or less functionally sovereign over the dollar.
On August 15, 1971, the government (President Nixon), arbitrarily decided to eliminate the last vestiges of laws tying the dollar to gold, and since that day, the U.S. has been far more functionally sovereign over the dollar.
Yet, some restrictive laws remain, particularly the debt limit laws and certain borrowing and accounting laws, which reduce functional sovereignty. Still, the U.S. government, being the God of the dollar, can do anything it wishes with the dollar, merely by changing its own laws.
Compare this with the euro nations. Greece is not Monetarily Sovereign. It is not sovereign over the euro. It did not create the euro and cannot pass laws changing the euro. Greece is monetarily non-sovereign, because it has no sovereign currency. Greece is not God of its currency.
Similarly, Illinois, Boston, Microsoft, banks, you and I are not Monetarily Sovereign. None of us has a sovereign currency. Though we have been given the right to create and destroy dollars (by borrowing and lending), we do so at the mercy of the federal government, which arbitrarily can change the laws at any time it chooses. We are not Gods of the dollar.
Visualize the game of Monopoly in which I both am a player and the rules maker. I would be the God of the Monopoly dollar.
To pay for a Monopoly property, I arbitrarily might decide to take scraps of paper and write on them $1 or $10 or whatever I choose, and give these scraps to the property owner. I can do anything. I am Monetary Sovereign over the Monopoly dollar.
For any reasons I choose, I might decide to create a rule limiting myself to creating no more than $10 on any turn. I’m still Monetarily Sovereign, but functionally less so.
However, if I find myself running short of Monopoly dollars, I simply could change my own rules, and give myself the right to create more dollars. I can do anything. I am Monetarily Sovereign. I am the God of the Monopoly dollar.
Had the U.S. government decided not to create dollar bills, but rather decreed dollars would be represented by turnips, today we all would use turnips. The government would remain Monetarily Sovereign – the God of the dollar – but dollar creation would be limited by the turnip supply.
Always through its history, the federal government has pretended it is not the God of the dollar. Why? Economists wrongly have told the government that exercising its rights as God of the dollar, would lead to instability and inflation.
But, being the God of the dollar, the government not only has the power to create and destroy dollars, it has the power to set the value of dollars, i.e. to end or create inflation at will.
Many Monetarily Sovereign governments have exercised their God-like power over the value of their sovereign currency, simply and arbitrarily by changing its exchange value. Years ago, the UK did it; Mexico did it; many Monetarily Sovereign countries have done it.
Greece, France, Italy, Spain and other euro nations can’t do it. They are not Monetarily Sovereign. They are not Gods of the euro.
Believing the economists, that without restrictions, the dollar would be unstable and subject to inflation, the U.S. government always has restricted its God-like powers. These restrictions have made people – even people in the government – wrongly believe the government was less God-like – less Monetarily Sovereign – than it really is.
We see evidences of this, everywhere. The federal government unnecessarily levies taxes to obtain the dollars it can create at will, even though it neither needs, nor uses, those taxes.
The government even has created a complex, convoluted accounting system to track those taxes – a system which gives the false impression that somehow those taxes actually support government spending.
The twin facts that the Monetarily Sovereign government – the God of the dollar — can create dollars at will, and also being the law-maker, can change the accounting system at will – these twin facts seem lost to the public consciousness.
Today, most of the government pretends, and most of the public believes, that the federal government is monetarily non-sovereign, that it needs to tax and needs to borrow dollars, that it needs to “live within its means,” and that it is “broke” and that, for all the wrong reasons, needs to starve our economy for dollars.
Slowly and agonizingly, we try to recover from a recession caused by, exacerbated by and continued by a shortage of money. America has the people; we have the technology; we have the brains and physical resources – we have everything we need to create a vibrant, wealthy economy – we have everything but sufficient dollars.
Our Monetarily Sovereign government, the God of our dollar, levies unnecessary taxes, restricts spending, impoverishes the middle and lower classes, and brainwashes the public into believing these restrictions are prudent.
With the passage of a few laws and the press of a computer key, our government instantly could make American citizens the wealthiest people the world ever has known, now and forever.
It might seem too easy; it might seem to be too good to be true; it might seem like the proverbial free lunch.
But in this case, easy really is easy, and too good to be true really is true, and lunch really can be free.
I just thought you should know.
Rodger Malcolm Mitchell
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here)
10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
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
THE RECESSION CLOCK
Vertical gray bars mark recessions.
As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.