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.
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In June, we published Government/media disinformation. You won’t learn this from your morning paper.
The article quotes Reuters “news” service. You know Reuters, that climate-change-denying, terrorism denying, owned-by-the-rich “news” source.
I you read the Reuters article, you’ll see that it claims the government’s purchase of General Motors stock stimulated the economy (by adding dollars to the economy), while the government’s subsequent sale of GM stock benefited taxpayers (by taking dollars from the economy).
Apparently, there is no difference between federal purchases and sales of private sector stocks, an amazing duality of benefit in which no matter what the federal government does, it’s good.
Now today, Time published:
U.S. Treasury Sells Final Shares in General Motors
The U.S. helped bail GM out with $49.5 billion in investments in exchange for an ownership stake
By Anita HamiltonThe United States Treasury has sold off the last bit of the 912 million shares in General Motors it received when it bailed out the automaker in 2009 under the Troubled Asset Relief Program (TARP).
General Motors said in a press release that the bailout saved 1.2 million jobs. However, taxpayers wound up paying approximately $10 billion to save GM, according to the Detroit News.
Translation: The federal government pumped $10 billion into the economy, which saved 1.2 million jobs. Taxpayers payed an additional $10 billion although no new taxes were levied. No one can explain this.
President Barack Obama also released a statement on the sale.
“Today, we’re closing the book by selling the remaining shares of the federal government’s investment in General Motors. GM has now repaid every taxpayer dollar my Administration committed to its rescue.”
The government’s total recovery from all TARP investments is about $432.7 billion.
Translation: The government has benefited taxpayers by taking $432.7 from the private sector. The fewer dollars taxpayers have, the better off they are.
The government will continue to benefit taxpayers by reducing the federal deficit. This will require adding fewer dollars to the private sector, while taking more tax dollars from the private sector.
Since taxpayers constitute the private sector, adding fewer dollars together with taking more dollars, impoverishes the private sector, which somehow benefits taxpayers.
And this is good for the economy.
Please do not ask for an explanation from Time or Reuters, or from the wealthy people who own these “news” services or from the bought-and-paid-for politicians and main stream economists.
And by the way, just because austerity impoverishes the poor far more than the rich, this all has nothing much to do with widening the gap between the rich and the rest. Nothing at all.
If you need an explanation, ask George Orwell.
Rodger Malcolm Mitchell
Monetary Sovereignty
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Nine 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. 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
THE RECESSION CLOCK
As the federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise.
#MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
Rodger, this is off-topic, and I know you don’t like lengthy comments, but I seek permission to please share this absurdity with you and your readers.
Larry Summers and Paul Krugman (links below) say the Fed’s near-zero interest rates have failed to revive the U.S. economy. Therefore they recommend that banks switch to negative interest rates, in which ordinary depositors are charged for giving their money to banks, and that society become cashless, so that depositors have no choice but to use banks, and cannot store their money in their bed mattresses. This capture and extortion will supposedly create more financial bubbles, which will supposedly create jobs. (!!!)
Yup, the solution to Wall Street theft is more theft, just as the solution to austerity is more austerity.
I shall cite details below, but my overriding point will be that NO ONE MENTIONS THE ROLE OF GRATUITOUS FISCAL AUSTERITY IN MANTAINING THE DEPRESSION.
Not even Summers’ detractors mention it. For everyone on all sides, permanent austerity is the “new normal.” Austerity is natural and forever. Amen.
On November 8, Larry Summers gave a speech at the IMF headquarters in Washington DC, in which he claimed that during recessions over the past 50 years, the Federal Reserve has cut short-term interest rates (overnight rates) to spur economic growth. However, he said, the Fed has a “new problem,” in that short-term rates have effectively been cut to zero, and yet still have had a slow recovery.
Right away Summers spouts the standard lie that only the Fed can create jobs, and that QE and zero-interest overnight rates are a “stimulus” for the real economy. The truth is that these Fed gimmicks are designed to stimulate the financial economy (the “markets”) at the expense of the real economy. They are designed to KILL jobs, because lower labor costs means higher profits. They are designed to widen the gap between the rich and the rest.
Summers also claimed that what he calls the “natural interest rate” (where investment and savings supposedly bring about full employment) is now negative. But, he said, if banks charge depositors to hold their money, then depositors will put their money in mattresses. Summers called this problem the “zero lower bound,” which he said has reduced the power of Fed policy to create jobs. He claimed that the purpose of QE is to offset this factor (as though QE is intended to create jobs!).
For Summers, the solution is to have a totally cashless society in which depositors cannot store their money anywhere except in banks. This, he said, will force depositors to spend more — and voila — we will have a recovery!
Never mind the extreme unemployment and underemployment and personal debt (such as student loans). Summers’ scam will bring mass prosperity by forcing ordinary people to spend money they don’t have. Whoopie!
Paul Krugman loves it. He too pretends that only the Fed can create jobs, and that the Fed has lost this power, since short-term interest rates are effectively zero. Therefore Krugman favors the Summers scam, saying it would create more financial bubbles, which will supposedly create jobs. Krugman also wants negative interest rates, plus a cashless society.
But wait…can’t the government create jobs via stimulus spending? SSHHHH! Austerity is no longer mentioned.
Some people (e.g. Ellen Brown and her disciples) say the solution is not the Summers-Krugman scam, but publicly owned banks, plus a melding of the US Treasury with the Fed.
But again, can’t the government create jobs via stimulus spending? No, this can’t work since, according to Ellen Brown and her disciples, the US government borrows all its spending money from banks and investors. (In reality the US government has infinite money. For the purpose of spending, it borrows from no one.)
What about lowering federal taxes across the board — e. g. eliminating the FICA tax? No, Ellen Brown says that can’t work either, since (according to her) the federal government needs tax revenue. (In reality the US government creates it spending money out of thin air, simply by crediting bank accounts. Therefore the US government does not need or use tax revenue, and actually destroys tax revenue upon receipt by removing it from the money supply.)
Summers, Krugman and Brown do not attack or defend austerity. They simply ignore it. In this way austerity will keep going forever.
In the past, leeches (austerity) were applied to cure anemia (the current depression). Now leeches are still applied, but the prescription no longer mentions the leeches.
Granted, we cannot recover by simply ending austerity. We must also reform the processes by which stimulus money is spent. But neither can we recover by ignoring the role of fiscal austerity, as everyone now wants to do.
Business Insider praises Summers’ speech, and has a video of it…
http://www.businessinsider.com/larry-summers-imf-speech-on-the-zero-lower-bound-2013-11
Slate also praises it…
http://www.slate.com/blogs/business_insider/2013/11/18/larry_summers_speech_the_fed_s_biggest_problem_is_the_zero_lower_bound.html
Paul Krugman also praises it…
http://krugman.blogs.nytimes.com/2013/11/16/secular-stagnation-coalmines-bubbles-and-larry-summers/
Some right-wing blogs have attacked the Summers / Krugman scam for ignoring the role of taxes.
You and I know that federal taxation is austerity, but right-wing blogs cannot mention austerity, lest they expose their own lies. Instead, right-wing blogs say they want lower taxes on the rich (i.e. less austerity), and higher taxes on the not-rich, plus the privatization of all social programs (i.e. more austerity).
For right-wing blogs, the endless trillions in government hand-outs to the rich are the “free market,” while the meager government support for the elderly and disabled are “unsustainable entitlements.”
Cheer up. It can only get worse.
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The effect and purpose of austerity is to widen the gap between the rich and the rest. Since each wealth level wishes to widen the gap between themselves and those below them, the austerity lie is backed at all levels.
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Bingo.
Rodger discussed this five weeks ago today in his post titled, “The Gap, the whole Gap and nothing but the Gap . . . so help me . . .”
Each wealth level wishes narrow the gap between themselves and those above them, while widening the gap between themselves and those below them.
Of these twin drives (Rodger noted), the latter is the stronger. For example, rather than steal and scheme to become rich (i.e. narrow the gap above) most people find it easier to widen the gap below. If they see a panhandler on the street, they avoid eye contact. If their survival does not depend on Food Stamps or Social Security, then they demand austerity. Their central angst is a fear of falling into the lower classes. And when they do fall, they fear falling to the still lower classes.
Therefore, when we discuss the public’s refusal to see the truth, we are discussing the effect of mass selfishness. And when we discuss the truth of Monetary Sovereignty, we are trying to offset mass selfishness.
When ordinary people reject the truth of Monetary Sovereignty, their failing is not intellectual; it is moral. It is a character flaw. Brainwashing plays a role, but more central is mass demoralization. The masses seethe with envy and resentment. They reject MS in favor of their bitterness. Rather than accept the truth of Monetary Sovereignty (so that everyone can become prosperous) they want to punish the rich. The masses are hostile, but helpless. And since their hostility is largely turned inward, it sours into emotional depression.
I too have hostility, but my target is not the rich, and not ordinary people who reject MS. My target is professional liars. Pundits, professors, and politicians are bad enough, but even more diabolical is the religious right – e.g. Bishop Shirley Holloway of Washington DC.
Ms. Holloway is a black woman, a former postal worker who is now a religious celebrity in the depressed suburbs outside the beltway. She says austerity is “God’s will. She is close friends with Paul Ryan. She tells her congregation, “Paul Ryan wants people to dream again, and you can’t dream when you’ve got food stamps.”
Oh the wickedness of such people! The hate! The dishonesty! The selfishness! Ms. Holloway (and all of her kind) cloaks condescension as compassion; hatred as hope. She preys on the credulity of the financially ruined. She justifies genocide (i.e. austerity) for her own gain. She aids the predatory classes in their obsession with “reforming” social programs (i.e. destroying or privatizing them).
A curse on such people! They are vampires in the original sense: deathly demons that prey on the desperate and destitute. And today they are everywhere.
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In line with Rodger’s post above, I wince when I see articles claim that the US government has “saved” money, or has “made a profit,” or that a federal program is “taxpayer financed.”
Such nonsense is designed to brainwash ordinary readers into thinking that the US government is as worried about money as the readers are.
However the media alone does not carry all the blame. The lies continue because everyone at all levels uses the same lies for his own ends. Rich elitists claim that the US government is “broke.” Leftists agree, and they blame it on the rich paying no taxes.
Rich elitists claim that federal assistance programs are a “wealth transfer” to the poor. Leftists claim that “taxpayers paid $10 billion to save GM.”
And so on. Everyone uses the same lies for his own ends. Black, white, male, female, rich, poor, liberal, conservative – all of them deny the facts of Monetary Sovereignty. Why? Why do ordinary people defend their collective suicide? In my opinion it is a manifestation of learned helplessness. This is a social constant, and is seen throughout the world, and throughout history.
When the masses are enslaved, they cope with their pain by defending it, calling it “noble, and begging for more. They champion their chains, calling them “God’s will.” They call their misery “patriotic,” and “better than any alternative.” They rationalize their despair. They retreat into fantasy and self-righteousness. They squabble over trivial minutiae. They lose their ability to reason, and to distinguish truth from lies. They convince themselves that ignorance is wisdom, and that absurdity is “common sense.”
These are coping strategies. They are self-destructive, yet they become deeply engrained habits, and even addictions. Mindless propaganda becomes impervious to facts and logic. Stupidity becomes “truth.” Collective suicide becomes a narcotic.
Such is the psychology of mass demoralization.
Contrast this to what happens when the masses are empowered. They cease to squabble with each other. They become genuinely interested in politics and economics. They recover their ability to reason, to think logically, to identify contradictions, and to distinguish fact from fantasy. They become like children again, authentically asking, “Why?” Their morale skyrockets. They dream of a better world for themselves, and they cooperate to make it real.
They taste dignity and freedom, and they want more. They think like the rich.
Such is the psychology of mass empowerment.
In sum, the lower you are on the social ladder, the more you develop coping mechanism that get you through each day, but which are individually and collectively self-destructive. That’s why regular people deny the truth about Monetary Sovereignty.
(I’m talking about regular people, not priests, pundits, professors, politicians, and other toadies for the rich.)
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The return of the abundance thinker! I’ve missed your insights.
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Correct me if I’m in error, Rodger. So what you’re saying is GM shouldn’t have paid anything back since a sovereignty has no need for it. They (GM) should have been given the money free of charge as a gift, not a loan. The money (and the 1.2 million jobs) thus stay in the economy and we are better off. Did I get that right?
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Yes.
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I can only hope that the governmental largess granted to GM will at some point be granted to me personally. I’m not being greedy here, all I’m asking is I be granted $10 million or so, in order that I might stimulate the economy and possibly provide a job or two. Put that money to really good use I will. I promise, I will.
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Rodger is saying yes from an economic point of view, that it would have been better for the economy if GM received a gift instead of a loan. Rodger is not saying that it is fair for GM to have gotten $10 billion and for your company to have gotten nothing. I know this because in Rodger’s “Nine steps to Prosperity”, he treats everybody equally.
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Some people have a problem with stimulus spending (e.g. the bailout of GM). They correctly note that money always floats to the top, and that the reality is not “trickle down,” but “trickle up.” Therefore if the government spends more, then the rich will simply become richer, yes?
Granted. They have a point. We must repeal austerity, and we must also reform where government money is spent. Neither measure alone is sufficient. For example, we must ensure that federal stimulus money does not go to the financial economy, and instead goes to the real economy.
That said, it is better to repeal austerity than to constantly increase it.
I hate the ever-widening wealth gap, but I find it easier to live with if I know that money enters the real economy, and passes through the hands of the poor on its way upward.
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If you throw a match on a campfire’s logs they’ll absorb the heat without transferring it on to the lower branches and twigs at the BASE. If you start the fire at the BASE you’ll be working with nature upward and outward, and the logs at the top benefit from working with nature instead of against it.
Monetary sovereignty has a public relations problem, because MS states we (the USA) don’t need to borrow or tax or payback. This rubs the public the wrong way, thinking only in terms of the limited household budget and local/state politics.
There is a matter of scale: when you get to the federal level everything changes. You can float a needle on water but not a nail. You can safely toss a bug out of an airplane but not yourself. The sovereign is not the household or the private sector.
The best way to get money into the real economy is to “spend-vest” on us twigs –the BASE. Otherwise, trusting the top is futile. The top is wealth suction.
I’m waiting for the MSNBC lovers of truth, Rachel Maddow, Lawrence O’Donnell, et al, to step up to the plate and show some real guts.
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tetrahedron720 writes: “Monetary sovereignty says that the US government doesn’t need to borrow or tax or pay back. This rubs the public the wrong way, thinking only in terms of the limited household budget and local/state politics.”
Yes. The public is “rubbed the wrong way” because the public is brainwashed into thinking that an entity with infinite money is the same as an entity with finite money — i.e. that a currency ISSUER (i.e. the federal government) is the same as a currency USER (i.e. the public).
If you were like the federal government, then your personal money would be infinite, since you could create limitless money by changing the numbers in your bank account.
And if you convinced everyone around you that you were “just like them” (i.e. constantly worried about money) then you would have boundless power over them. You could hand out money or withhold it as you please.
Since your power would totally depend on your lie, you would use your infinite money to defend your lie, just like the rich and their puppets in Washington DC.
It’s all about POWER.
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Quatloosx, I understand your every word and I go along with the principles of MS. The hard part is getting those who believe and thoroughly understand MS in the same room at the same table with those PHD/Nobel Laureates who think Econ 101 is the correct version of today’s economics. Put them on television and just like a presidential debate let them answer questions from a moderator. I say this would be hard because the PhDs and Nobel Laureates would never show up for fear of losing. They know MS experts would destroy them. They only appear where it’s safe and can’t get hammered.
This is why I say I want to hear the truth lovers on MSNBC (Maddow, Matthews, Ball, Sharpton, etc. ) step up and tell the truth about Monetary Sovereignty. But guess what!! Not even the truth lovers will show up for that day of reckoning because they too will be destroyed by station management conservatives and ratings analysts who will say, “Are you nuts! You can’t say the USA, China, Canada, and a hundred others are not in financial trouble!! If the public believes that then there will be no more need for MSNBC an FOX!! We keep our jobs and our advertisers by perpetuating the myth of scarcity, limitation and survival of the fittest! We thrive on conflict, finger pointing, polarization, exposing hypocrisy, self righteousness, and emotional frustration!!! The public must not be told the complete truth, only just enough to keep our high paying jobs!!”
SO this is the P-R problem. No matter which way you go–the political debate confrontation model, or the gutsy, truth lover, liberal TV model– the fear of losing ones’ reputation or employment is overwhelming. This leaves only these blogs and writing books about utopian financing to get the word out about modern monetary mechanics.
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