–Where have all the economists gone?

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 ultimately 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.


Are you a student of economics? According to one measure, “In 2003, there were 89,000 undergraduate and graduate students enrolled in economics courses in the United States.”

So, when President Barack Obama said:

“It comes down to this: We have to prioritize. Both parties agree that we need to reduce the deficit by the same amount — by $4 trillion.”

Did you write to the President to tell him the U.S. should not reduce the deficit? Did you write to your Senator to say the federal government is Monetarily Sovereign, and that deficit spending is necessary to grow the economy? Did you tell your Congresspersons that deficit cuts unfairly harm the middle-class and the poor, and widen the gap between the rich and the rest.

If not, why not? After all, your 89,000 informed voices could change the world.

Are you a professor of economics? According to data derived from the U.S. Bureau of Labor Statistics, in 2009, junior colleges had 2,270 positions for economics professors. Colleges and universities, including professional schools, had 10,580 positions.

So, when Laurence Kotlikoff, Economist at Boston University, said:

The US is bankrupt—not in 30 years, not in 10 years, not in 5 years, but today.”

Did you contact him? Did tell him “Lawrence, the U.S., being Monetarily Sovereign, has the unlimited ability to create dollars”?

Did you remind him that the U.S. never can be unable to pay its dollar-denominated bills unless it makes a conscious decision not to?

If not, why not? Consider the powerful effect of 12,000+ economics professors, correcting such obvious and pervasive errors in economics.

And you 89,000+ economics students — when Peter Schiff, author of the new book The Real Crash, said:

We’re already bankrupt. Better to acknowledge that fact than to pretend we’re not.”

Did you write to him and tell him it functionally is impossible for the U.S. ever to be forced into bankruptcy? Did you tell him he is confusing monetary non-sovereignty with Monetary Sovereignty, and that while such monetary non-sovereign entities as Chicago, Cook County, California, Greece, IBM, you and me, all can be forced into bankruptcy, the U.S. cannot?

If not, why not? Why did you study economics?

And you economics professors, when Rep. John Boehner said:

“Were broke. America’s broke.”

Did you tell your students that John Boehner simply is wrong, and may just be trying to help the rich widen the income/wealth gap?

If not, why not? Why do you teach economics?

And all you students and professors of economics, when:

North Carolina Republican Rep. Sue Myrick said: “The government can’t afford to take care of everybody.”


Ohio Senator Rob Portman said: “Washington has proven time and time again that it does not have the answers to get the record budget deficits and debt under control. That’s why Congress looks to reduce Washington’s out of control spending.”

Did you write to your newspapers and TV stations, and tell them why these statements are ridiculous?

If not, why not? What is the purpose of learning economics, if you close your eyes to obviously wrong statements?

Would geographers ignore, without a whimper, Congress claiming sailing ships could fall off the edge of the world? Would astronomers be satisfied with the newspapers saying the sun revolves around the earth?

Why have you economists allowed nonsense to dominate the discussions of your science? Why have you students not challenged your professors, when they spew nonsense? Do none of you have the energy to learn even the basics of Monetary Sovereignty?

Oh, there are a few. The economics department of the University of Missouri, Kansas City (UMKC) understands the facts and tries to disseminate them. And there are a handful of professors at other schools — a bare handful — who also understand Monetary Sovereignty. But their voices are drowned out in a hurricane of misinformation.

So, is it that the rest of you economists, unlike all other scientists, simply have stopped learning, and are content to parrot the errors of your teachers and predecessors?

Or is it that because your university is supported by rich benefactors, you do not want to say anything that would upset the wealthy and detour your career?

I simply can’t understand it. With so many professors of economics, and so many students of economics, how you have allowed myths, not only to go unchallenged, but to dominate.

Really, where have all the economists gone?

Rodger Malcolm Mitchell
Monetary Sovereignty

Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
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. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
9. Federal ownership of all banks (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

Monetary Sovereignty Monetary Sovereignty

As the federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise.


22 thoughts on “–Where have all the economists gone?

  1. Rodger,
    You make a good point with the examples of science refuting the obvious illusions of a flat earth or earth’s position in the solar system. It “looks” like the earth is flat, and the sun is going around us, until we get the correct data from experiment and experience.

    Economics is not physical science subject to irrefutable general principles and mechanics. It’s harder to “show” how money works at the sovereign and non-sovereign levels using words and imagery that conflict with traditional teaching. Whether by accident or design, economics and finance are confusing as hell (balance sheets!). I can look at a diagram of my knee and all the medical lingo and still make mechanical sense of the bones, ligaments and tendons because there’s a diagram and common sense to go with it.

    You should invent a diagram for this blog that shows the difference between traditional economics and MS. Show exactly how money creation is not subject to onerous debt at the federal level and is not a burden to future generations. Science and truth is modelable. Is there a dynamic model for the truth of MS that can be used here? I would think and hope so.


  2. Hard to top this for economic nonsense:

    Boehner: “If we’re going to raise the amount of money we can borrow . . .

    A Monetarily Sovereign nation doesn’t need to borrow

    ” . . . we ought to do something about our spending problem . . . “

    We have a lack of spending problem.

    ” . . . and the lack of economic growth in our country,”

    The lack of growth is caused by the lack of federal spending. GDP = Federal Spending + Non-federal Spending + Net Exports.

    Where are the economists to tell the nation Boehner is lying?


  3. Two points:

    1. By increasing aggregate demand, there will be increased employment. Some people think of “free lunch” (referred to in the Monetary Sovereighnty link) as people not working and receiving a check. So perhaps “free lunch” is not the best choice of words.

    2. It would be refreshing for economists to agree with the above, and then add the caveat that it is too risky to use dollars to solve our nation’s problems because of inflationary risks. They would be wrong, but it would be their opinion. What is really frustrating about the statements by politicians and economists above is that they are factually incorrect.


  4. It is horribly frustratingly sad, but humans in the aggregate are not as interested in truth and rational discourse as the few in the know would hope. This is a sociological problem, without a practical logical answer. People govern their lives by perception, which to them is “their” reality.

    The truth can be irrelevant, more important is what is expected ,and ,or ,hoped for. Especially when the vast majority see things similarly. Unfortunately it takes an extremely long time to disseminate correct knowledge counter to popular opinion.

    That coupled with a messy democracy appeasing the powerful and rich while deviously patronizing uneducated voters, impedes progress and depressingly provides a deep rabbit hole for those who’ve escaped the “matrix”.

    I find this same frustration discussing animal cognition and conscience with supposed experts like veterinarians and biologists. Culture has built up such a wall that breaking it down would cause too much guilt ,coupled with financial loss that the truth becomes irrelevant. People prefer to live in their bubble, or convenient perception.

    The vast difference of knowledge and experience between those in positions to benefit economically or through convenience ,and the few who know the truth but cant financially express themselves and foster change , assures animal exploitation for a long time.

    Interestingly, at least to me, religions have done a great job in supporting both incorrect perceptions. The idea of a paternal omniscient and omnipotent “being” whom supports hard work , sacrifice of pleasure, with the common thread something can’t come from nothing obviously alluding equally as well to the notion of only a finite amount of “sound” money available, so eloquently supports the conservative mantra. Inflation , no matter how irrelevant or remote, is seen as a punishment for digressing from popular opinion, amusingly supported by incorrect macroeconomic assumptions ingrained during a commodity backed monetary system.

    Even though today, so many classic macroeconomic examples are irrelevant, good luck explaining it to politicians who only care about getting money for votes. One could easily change the system so this wouldn’t be so paramount, once again good luck!

    Lets not forget one of the biggest impediments to enlightening the population today, time. No one has any time, everybody is too busy hustling to make a living, or if they have a family, making it work with so many distractions. People don’t want to spend the time it takes to learn about economics and money dynamics.

    They obviously want the money, but time is such a constraint, the subject is so full of minutia, and many figure the game is so rigged anyway, that there is no purpose wasting precious time on such a boring hopeless undertaking.

    Sadly this insures the wealth disparity problem escalating until some future critical juncture,where the whole society breaks down. I certainly hope not, and thank you guys for the effort in educating as many as possible, including me, but I fear it’s too little against a roaring tide of ignorance on one side and bellicose wealth on the other.


  5. In answer to a reader who posed the same question multiple times in recent posts:

    “If the government doesn’t need to borrow, why the concern about the debt ceiling?”

    A Monetarily Sovereign government (unlike a monetarily non-sovereign government) originally created its sovereign currency, and has the unlimited ability to create even more of its sovereign currency.

    However, Monetarily Sovereign governments also create laws that often reduce their own currency-creating ability.

    The U.S., for instance, is the only MS nation in the world that has a “debt limit” law. This law requires the government to issue T-securities in the same amount as federal deficits.

    Though these securities are mis-termed “debt,” they do not provide the government with spending money. The dollars actually remain in T-security accounts at the Federal Reserve Bank.

    This is discussed in more detail at: I just thought you should know. Lunch really can be free.


    1. Than why are you screaming like a hyena about why the Tea Party not wanting to raise it if these funds will remain in the Fed account?

      Pants on fire….


      1. Dear Pants on fire:

        Ignoring the mixed metaphor of hyenas screaming . . .

        The law, as currently written, merely requires T-securities to be sold in the same amount as the deficit.

        (It’s as though a law were written requiring the public to put $1 into a personal bank savings account for every $1 of federal deficit.)

        This has nothing to do with the government needing dollars, which it does not, and nothing to do with the government obtaining dollars from the public, which it also does not.

        The dollars mistakenly thought to be lent to the government, actually go into personal T-security accounts at the Federal Reserve Bank, where they remain, until the T-securities expire.

        When T-securities are redeemed (mistakenly called “paying off the debt”) the appropriate T-security account is debited and the so-called “lender’s” checking account is credited.


      2. Again, if the process of issuing debt means nothing, which is what I read from your response, than why complain. Roger, the debt ceiling means nothing as per your own words. Don’t waste any precious time writing about it and let’s just move on.

        Per your own words, the government doesn’t need any stinking debt – it can just create dollars at will. Again, something does not add up on your argument.


        1. The “debt” limit does nothing more than put a lid on the amount of T-securities that can be sold.

          However, the law requires the sale of T-securities to equal deficit spending. No T-securities (wrongly called “debt”), no deficit spending allowed.

          Therefore, although the government does not need to borrow, by law, further deficit spending requires additional T-security sales, which is why the “debt” limit must be lifted.


    2. Question(s): WHY is the U.S. the only sovereign to have a debt limit? What is it about US that is unique and in the meantime Canada, Mexico, etc., skirt this road block? How did this all get started, what is the advantage?



      1. The “debt limit” is merely an anachronism to the way public finance was managed before 1971 (actually way before then, 1913 (?), I believe), when complete Monetary Sovereignty was attained. When Nixon made the change, the government bureaucrats never bothered to make the relevant changes to finance management procedures that were necessary due to the change, these other procedures just remained in place without anyone else bothering to make the changes to administrative rules and procedures. The concept of the U.S. having Monetary Sovereignty has actually been recognized and known since the 1930’s I believe – search this blog site, as well as Mike Normans’ web site (Also Stephanie Kelton and Randall Wray at UMKC). Even the act of creating Treasuries can be considered an anachronism as well, since the federal government can fund itself, and government bonds aren’t necessary. Maybe RMM can comment on this (I believe the gist of what I have written is correct?)?


        1. since the federal government can fund itself, and government bonds aren’t necessary… is this done with or w/o attachment to debt? How does this appear on the balance sheet?


  6. I looked up Kotlikoff. He has a long laundry list of “accomplishments, honors, associations, papers, etc.”. His “specialty” is “public finance”.
    Incredible that he has it wrong. More to the point, given his “investment”
    in his views, I doubt “the facts” would change his mind. I write and explain
    these things to people. It’s quite amazing. Younger people usually have
    little difficulty grasping. More experienced and older people usually reject it
    out of hand. I’m an “older” person myself (over 65). In this case, experience
    is not the best teacher.


  7. OK, done Rodger. I am new at this so feel free to critique my letter to help me present a succinct message in the future.

    Dear Senator,
    I would like to point out that the debates about whether the US can pay back the federal debt are ridiculous and completely miss the point. The US federal government is Monetarily Sovereign, meaning that it and it alone creates dollars and can never go bankrupt, default (unless foolishly by conscious choice), or otherwise not be able to pay its bills.

    This is different from a state or household, which are not monetarily sovereign and must bring in money to pay bills. People who are not educated in economics, and even those who are, conflate the two. The US “deficit” is actually the source of the money in circulation. Without it we would have a depression or recession. Deficit spending is necessary to grow the economy.

    Well-funded groups like to promote the idea of “fiscal responsibility (ie, deficit cutting) because their agenda is to transfer more wealth to the 1%. Deficit cuts unfairly harm the middle-class and the poor, and widen the gap between the rich and the rest, although even that last point is unnecessary for my argument.

    It isn’t that we shouldn’t cut the deficit because it harms the middle class and poor, we shouldn’t cut it because the reasons given for doing so are faulty. It is the source of money in the economy.

    Thank you,

    Allen Sayigh


    1. Good thoughts..

      Notice that the federal government is not the only entity that creates dollars. Lenders also create dollars. In fact, the majority of dollars in existence were created by banks.

      The difference is that net “bank dollars” are temporary in that loans must be paid back, at which time those previously created dollars are destroyed..

      Net dollars (total spending minus total taxing) created by deficit spending need never be paid back. They only disappear when the federal government runs a surplus.


      1. Thank you for the clarification. One more point that trips me up: when lenders create dollars they do have to be paid back but they are paid back with interest. Is that not dollar creation?


  8. By the way, Boehner’s offer to raise the debt ceiling demonstrates the federal debt is meaningless.

    Boehner is saying it’s O.K. to increase the debt, so long as the government passes his legislation.

    He’s not worried about the size of the debt. He’s ready to increase it. He only worries about his legislation.


  9. Somehow I find it very difficult to imagine the day when all of a sudden the Sunday talk hosts and even a few politicians declare, ” Wait, wait! There is no debt or deficit. The Ph.d s are wrong. All this time we’ve been making a terrible mistake. Everyone go to the UMKC website and start reading MMT!!”

    This whole thing should have been nipped in the bud in 1971 when we became sovereign monetarily. Now it’s become an absolutely HUGE whopper, so difficult to walk back. The only way out of this lie-mess is to take the world to the economic brink and let it all play out for better or worse. Oh what a web we have weaved……


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