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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According to the right-wing, giving to the needy, turns them into “takers” and sloths. Thus, unemployment compensation encourages the unemployed not to work, food stamps encourage the poor to remain poor and Medicaid encourages excessive use of medical services.
Many religious organizations support charities for the indigent, which charities presumably encourage further indigence. And where did these religious organizations obtain their money? From your charitable contributions.
If fact, a case can be made for the negative effects of your giving to virtually all charities. Any assistance you give to “those” people has a negative, overall effect, so that is a good excuse not to help them.
I was reminded of this Orwellian “black is white, up is down, good is evil” right-wing belief, when I saw this article in the right-wing Washington Times:
Obama’s stimulus beginning to drag economy down
By Stephen Dinan-The Washington Times Friday, February 21, 2014President Obama’s stimulus may have boosted the economy when it passed in 2009, but it’s now beginning to take a toll and will soon begin to leave the economy worse off than if it had never passed, according to a new report Friday by the Congressional Budget Office.
Mr. Obama signed the stimulus into law five years ago this week, vowing it would help rescue the economy from its post-Wall Street collapse tailspin, and saying it would save millions of jobs.
The CBO said it (helped) sustain between 700,000 and 3.6 million jobs at its peak in 2010. “In contrast to its positive near-term macroeconomic effects, the American Recovery and Reinvestment Act will reduce output slightly in the long run.”
They said the cause is all of the borrowing for the $830 billion program, which dramatically boosted the federal debt.
“To the extent that people hold their wealth in government securities rather than in a form that can be used to finance private investment, the increased debt tends to reduce the stock of productive private capital. Each dollar of additional debt crowds out about a third of a dollar’s worth of private domestic capital,” the CBO estimated.
Where does one begin with an article like this?
First, we have a right-wing newspaper admitting that deficit spending “boosted the economy.” Did you hear that, austerity lovers and deficit Henny Pennys. Deficit spending boosts the economy.
Although, (IMO) the deficit spending was insufficient, it did “sustain between 700,000 and 3.6 million jobs.” So, is that a bad thing, Messrs. Bowles and Simpson, leaders of the disgraceful National Commission on Fiscal Responsibility and Reform (aka the National Commission for sucking the life-blood out of the economy)?
Then the article says, “the cause (of predicted slightly reduced output) is all of the borrowing for the $830 billion . . . “ So, it isn’t the deficit spending that’s the problem. No, it’s the totally unnecessary borrowing that is the problem.
The deficit spending did its job. If debt is the problem, why is a Monetarily Sovereign nation, with the unlimited ability to create its sovereign currency, borrowing that sovereign currency?
And then, “. . .the increased debt tends to reduce the stock of productive private capital.” Again, everyone agrees that deficit spending, by adding dollars to the economy, is stimulative. The question: Does the purchase of T-securities remove dollars from the economy and thereby “reduce the stock of productive capital.”
Apparently, savings (i.e dollars in T-security accounts at the Federal Reserve Bank) are not felt to be productive. But savings are dollars people hold in order to feel free to spend other dollars. If you had zero dollars in savings, would you feel as free to buy goods and services. It’s like saying insurance is not productive.
And finally, “Each dollar of additional debt crowds out about a third of a dollar’s worth of private domestic capital.” I don’t know where this phony statistic came from, or even what it really means, but if one dollar of debt “crowds out” 33 cents worth of capital, doesn’t it follow that one dollar of debt adds 67 cents of capital?
And if that is the case, why would anyone not favor deficit spending?
Anyway, the one, short, right-wing article contains so much illogic, there is no wondering why the public is confused.
Charity is good; charity is bad; spending is good; spending is bad. And the gap benefits us all.
Trust me.
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. 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. 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. Federal deficit growth is absolutely, positively necessary for economic growth. Period.
#MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
http://recoveringaustrians.wordpress.com
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What is wrong with these people? The pool of productive capital is by definition infinite in a fiat monetary system. The number of dollar tokens (bank deposits and CB deposits) is a representation of our public initiative.
The more economic activity there is, the more people will take out loans which in turn increases the money supply which leads to more spending and then to more loans etc, natural systems (of which an economy is one) are heavily dependent on feedback loops like this. Recessions are the reverse process and a negative feedback loop.
Anyways, I can’t imagine anything as ridiculous as thinking there is a finite pool of dollar measurements. Oops, we can’t measure that bridge, we are out of inches! These people said the same thing when the number of T-bonds outstanding was $1 trillion in 1980. We didn’t run out of money increasing the number of T-bonds 1600% to $16 trillion in 34 years and guess what, when T-bonds increase another 1600% to $225 trillion in another 4 decades do you still think they’ll be running there mouths about running out of dollar numbers then?
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What’s wrong with these people, you ask? They are creatures of society.
All societies form and enforce pecking orders and caste systems. This is the source of all social ills. Most people at all levels seek to widen the gap between themselves and those they deem “inferior.”
For example, Thailand’s former Prime Minister Thaksin Shinawatra raised the country’s minimum wage to US $300 dollars a month. In this way the salaries of cleaning ladies matched those of receptionists and others who considered themselves middle class.
This caused an outrage. Did middle class people lose jobs, or lose money? No, but they lost their “superiority.” Suddenly they were no “better” than their “inferiors.”
This is unacceptable in feudal states like Thailand or Indonesia, where people at all levels place supreme importance on maintaining their symbolic places in the social pecking order.
Let the economy crash. Let the nation burn. Let poverty explode. The only thing that matters is maintaining my symbolic place in the caste system.
When Indonesia won its independence, the new government tried to break this pattern of feudal caste systems. The result was a national backlash in 1965 (coordinated by the USA) in which the military exterminated hundreds of thousands of communists and other leftists who sought equality for all, and who wanted to make Indonesia a modern nation.
Likewise in Thailand, when Prime Minister Thaksin Shinawatra raised the minimum wage, he was deposed in a military coup. Today in Thailand there is a violent struggle between rural dwellers who want more equality, and middle class city dwellers (and rich people) who want more “superiority.” It’s the same in Venezuela.
The USA has its own caste systems. For example, poor people are “inferior.” They deserve austerity.
People play this game at all levels. That’s why the madness continues.
As for recessions and depression in developed nations, these are fine. They hollow out the middle class, thereby widening the gap between the rich and the rest.
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What is the benefit of measuring something with 20 dollars or a zillion dollars if what you are measuring is the same?
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Thats the whole point. There is no difference. All the constraints are on the REAL side of the economy. Nominal dollar tokens are infinite.
The question you need to ask yourself if:
Do we have too much income?
Do we have too much infrastructure?
Do we have too much heath care?
Do we have too much scientific investment?
Do we have too much employment?
If the answer to any of these questions is no, then the obvious follow question is why not? And the obvious answer to that question is generally “we don’t have enough money?” Which is the entire reason for the existence of MS and MMT. People like you think we should have less of the above because you think we can run out of money. So we impoverish ourselves, prevent the best possible future for our offspring all based off the false belief that we just cant afford to do the things that would make our society and standards of living better off. Shame on you.
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You really believe that – don’t you?
Our money supply went up by 1100% since 1971 – yet we do not have an economy 1100% bigger. The economy would work the same way it does with any amount of money, the amount of currency does not have to increase for there to be prosperity.
Additionally, the level of poverty went up during that 1100% increase in the money supply. People have gone from owning their homes, cars, clothing and paying cash for education and medicine to owing their homes, their cars, their clothing, their education and medicine.
It doesn’t matter anyway – our government is not about to send everyone a million bucks – and quite honestly – it doesn’t have to to continue to hollow out the middle class. The banks will continue to use fractional reserve and continue to expand credit and the government will continue to borrow. Both of which will continue to destroy people like us.
Our country has become a cesspool of liberals – even “republicans” are big spenders now day – just talk to them about the military and you will see.
One thing is for sure – both liberals and “right wingers” are nothing but a bunch of self centered lunatics that only think about themselves. We’ve turned into a bunch of socialist losers – just like the rest of the world.
One thing I can say with certainty is we will pay for drinking the cool-aid, that’s guaranteed.
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[1] If you need money, then you are evil and worthless. If you DON’T need money, then you are enviable and admirable. Indeed, if you are rich, the more money you get, the more you are worshipped.
[2] The US economy is still in a depression. What is the cause? Four solid years of austerity? No: a one-time stimulus bill. 😉
[3] The Washington Times article claims that the $830 billion “Dramatically boosted the federal debt.”
Who is this “debt” owed to? China? Investors? Where did they get their dollars to “lend” in the first place? From banks? (Some people wrongly say that all money comes from banks.)
[4] Much of the “national debt” is intra-governmental, i.e. money the US government owes itself. So why not just cancel this “debt”? Why is it a “crisis”?
[5] If not enough people buy T-securities to match the deficit, then the Fed buys them. Therefore a lot of the “national debt” is the Fed owing itself. This is a trivial formality. It is mere sleight-of-hand.
[6] The Washington Times article claims that, “The stimulus was initially projected to cost $787 billion over a 10-year period, but the CBO now puts the price tag at $830 billion.”
Nonsense. If you could create as much money as you wanted by crediting your own bank account, then would you have any “costs”? Would “price tags” have any meaning for you?
[7] The Washington Times article claims that, “More than $40 billion of the stimulus remained unspent as of the end of 2013, the CBO said.”
Oh? Where did the money go? Where is the pile of $40 billion in unspent currency bills? Huh? Money isn’t physical? So what’s the problem?
The Washington Times is worried that politicians might start spending money again, in ways that reduce the gap between the rich and the rest. The Times claims that stimulus spending will make the depression even worse.
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Off topic…
[1] END OF THE GOLDEN AGE? (Part II)
Some right-wing media outlets are lamenting that we are dangerously close to the end of deficit reduction. Oh no!!!
It’s a false alarm, of course. Deficit reduction is one of several means to widen the gap between the rich and the rest. All these methods will continue as long as the Big Lie continues.
Besides, the White House OMB projects the federal deficit to be $744 billion in FY 2014, falling to just $475 billion by FY 2018 (a 36% drop).
Thus, by 2018 an additional $269 billion per year will be sucked out of the US economy and destroyed. Just what we need during a depression, aye?
Eventually the US government may reach a budget surplus. No matter how big such a surplus becomes, will need a still bigger surplus (i.e. more austerity) in order to address the “national debt crisis, and avoid “hyper-inflation,” and be “fiscally irresponsible.”
It’s all about widening the gap between the rich and the rest, and the assault will continue as long as the masses believe the Big Lie.
Some right-wing media outlets say we have had no austerity at all, since (according to the OMB) the federal government will spend $ 3.8 trillion in FY 2014.
Thus, even though the deficit keeps shrinking, and average people have less and less money, there is still no austerity. (!!!)
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[2] WARNING: MORE REFORMS AHEAD
Yesterday and Saturday the finance ministers of the G20 nations met in Sydney Australia and to target “reforms” aimed at adding more than $2 trillion to the global economy over five years.
What are these “reforms”? The finance ministers didn’t say, but “reforms” always mean “widen the gap between the rich and the rest.”
The Financial Times says this “marks a shift in emphasis from championing austerity to promoting growth.”
But if two trillion dollars were added to the economy, it would be added to the financial economy, not the real economy. Therefore it would boost the G20’s collective GDP, but it would not boost general prosperity, nor decrease inequality. Quite the opposite, in fact. (Austerity includes the routine denial of differences between industrial capitalism and finance capitalism.)
Here’s the Financial Times: “US Treasury secretary Jack Lew said there was a world of difference in the orientation of the G20 talks held this weekend, which were focused on growth, compared with the past few years when ministers debated austerity.”
Oh? Will Monetarily Sovereign governments start spending on infrastructure repair and other means to create jobs? No, of course not. The US budget deficit is projected to keep decreasing. The only growth will be in poverty and inequality.
This weekend’s meeting was between G20 finance ministers. The next summit for G20 presidents and prime ministers will be in Brisbane Australia (15 & 16 Nov 2014). There, Prime Ministers Tony Abbot (Australia) David Cameron (UK) and Stephen Harper (Canada) will say this is no time to reverse austerity. All three prime ministers are extremely right-wing. Here’s how the Financial Times phrases it: “G20 ministers warned there was no room for complacency as the world economy still faced weakness in some areas of demand.”
Right. No room for complacency, i.e. no room for less austerity.
http://www.ft.com/intl/cms/s/0/722f2056-9c61-11e3-b535-00144feab7de.html#axzz2u9Ty8gUR
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@Rodger: I think the quoted advice (e.g., reduced government spending) from the below cited article is incorrect, and the exact opposite regarding spending should be advised for Ukraine (I also think that they should reject privatization for basic infrastructure and certain safety net services like healthcare, unemployment programs). Can a developing nation like Ukraine benefit from MMT and MS, that is, being able to provide funding in it’s own currency for programs to it’s people even though it is a poor country? If this country has its own currency and is monetarily sovereign, shouldn’t this be the most powerful tool it can use to lift it out of poverty and increase it’s development? Could Ukraine, without using any foreign debt denominated in a foreign currency, provide increased funding for its own people?
My concern is that their economy may not be developed enough or have enough productive capacity to absorb the injection of its own currency without causing other problems like high inflation. Does MMT/MS work only for countries with well-developed, highly productive economies? Even though their own domestic economy may not have the productivity (products and services to spend the additional currency on), they have access to foreign markets/economies that do.
See:
http://www.nationalreview.com/article/371778/ukraine-changed-forever-live-tv-john-fund
“Ukraine’s immediate problem is that it is on the edge of economic collapse. To become a normal nation anchored in the global trading system, Ukraine will have to endure decisive and deep economic reforms, including state spending cuts, privatization, and the implementation of a tax system that is simpler and less loophole-ridden.”
(If my thinking is correct regarding MMT/MS, this could be revolutionary? Think about it: Trapping poor, third world countries (that are monetarily sovereign) in servicing debt may not be necessary and there are alternative ways to help these poor countries? Am I missing something here?).
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NEWBIE:
You ask a good question.
If Ukraine has its own currency, and its government has Monetary Sovereignty, then why can’t the Ukrainian government use MS to lift Ukraine out of poverty and increase Ukrainian development?
The answer is that Monetary Sovereignty is only partly about money. More important is the stability of government and society. For example, during the US Civil War, the Confederacy had Monetary Sovereignty, but this became more and more irrelevant as the Confederacy suffered more and more losses on the battlefield. There was not enough industry to keep Confederate society together, and not enough government stability to back up society’s “faith and credit” in the Confederate dollar. Hence, for the Confederacy, Monetary Sovereignty unraveled and finally evaporated.
If society and government break down, then so does confidence in the scoring system. “Faith and credit” are lost. MS becomes irrelevant.
Ukraine’s government has Monetary Sovereignty, but Ukraine’s government is also divided by warring oligarchs. Some of these oligarchs are allied with Russia, because that’s where their fortune lies. Other oligarchs want to join the Western club, because that’s how they can get richer faster. Many Ukrainian politicians are themselves oligarchs. Nationalism is irrelevant. It’s all about personal wealth and power. The allegiance of any given oligarch or politician depends on which side (Russia or the West) can bring him the most money personally.
Ukraine’s money system is intact, since Ukraine’s society has not broken down. But since Ukraine’s government is divided, Ukraine has “foreign debt,” despite having Monetary Sovereignty. How can this be?
President Viktor Yanukovych and his cronies maintain their wealth and power via their allegiance to Russia. If Ukraine’s government were stable and united, and not torn by warring oligarchs, then Ukraine’s government could use its Monetary Sovereignty, and would not need outside loans. Instead, the pro-Russian oligarchs have accepted all kinds of credits and favors from Russia, in order to increase their personal power.
Their opponents (the pro-Western oligarchs and politicians) want credits and favors from the Troika, especially the IMF.
Again, it’s all about personal wealth and power. As an oligarch, if I can get a loan from the IMF, then I can use that money to increase my power, while I dump the debt on my slaves (i.e. the public).
Think of Ukraine’s “foreign debt” not in terms of money, but in terms of power and expectations. Russia has extended special deals to its allies in the Ukrainian government. In return, Russia expects a lot back (e.g. “Ukraine will buy all its oil and natural gas from Russia alone”). When such expectations are expressed in monetary terms, we call it a “foreign debt.”
However, since these expectations can change, the exact amount of this “foreign debt” is vague and problematic. Thus, every media outlet gives a different figure for Ukraine’s “foreign debt.”
Ukraine’s factories and steel mills are antiquated, and not energy-efficient. They consume tremendous amounts of energy, most of which they get from Russia. Thus, pro-Russian oligarchs and politicians tend to have their fortunes tied up in industries that need Russian energy.
Anti-Russian oligarchs and politicians tend to have their fortunes tied up in industries that do not need Russian energy. They are allied with Western governments and elitists.
Meanwhile in Kiev, the protesters are tired of ALL the oligarchs on ALL sides. They are tired of being robbed of life and hope. They want a real government; not the tyranny of oligarchs. When they say, “We want freedom,” they mean freedom from all oligarchs.
The Western corporate media distorts all this. It portrays the demonstrators as opposed only to the pro-Russian oligarchs. The West calls them “pro-democracy,” which indeed they are – but for the corporate media, “democracy” means victory for the pro-Western oligarchs, and defeat for Russia and the pro-Russian oligarchs.
“Democracy” means freedom from Russian tyranny, so that the masses can instead live under Western tyranny.
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Hopefully once the dust settles in Ukraine and they decide on their relationship with the EU, Ukrainians will choose not to adopt the Euro and retain their monetary sovereignty. The baltic countries that decided to go with the EU option along with adopting the Euro do not appear to have done well. I’m hoping there are Ukrainians that read this blog.
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Even if the government doesn’t adopt the euro, it can say, “We’re broke.”
In fact, it HAS to say this, in order to justify the austerity and “economic liberalization” that European elitists will demand. In exchange for European “aid,” (i.e. debt bombs) Ukraine will be forced to lower wages, cut the public sector, cut social services, raise taxes on the working class, lower taxes on the rich, slash pensions, and deregulate all. There will be mass privatization, causing prices to soar. Ukraine will be compelled to open its financial sector to predatory speculation, and will be forced allow Europe to dump goods into the Ukrainian market. Birth rates will fall. Suicides will rise. So will alcoholism. Violent crime will explode, because of prolonged unemployment and police budget cuts. The most highly educated Ukrainians will flee en masse. Politicians will line their pockets as never before, and ingratiate themselves to the European and American financiers that will flock to Ukraine like vultures to carrion. There will be massive profits for speculators, but no jobs for working people. The best land will be sold to foreign corporations and rich land-grabbers. Ukraine’s resources, including the highly regarded agricultural sector, will be stripped and sold on the world market, leaving farmers and city dwellers alike in grinding poverty. Russia will either cut Ukraine off, or demand higher prices than ever for oil and gas, thereby causing average Ukrainians to suffer.
Meanwhile, the worse this nightmare becomes, the more the corporate media will celebrate the “success” of Ukraine.
Welcome to integration with Europe.
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Even if Ukraines’ economic and political state is not optimal, but still developing, being monetarily sovereign, shouldn’t MMT/MS give them more options to improve their situation (and without having to acquire foreign currency-denomated debt)?
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The WT article may have a point, though only one. Treasuries are generally owned by wealthy individuals, or, mostly, by even wealthier institutions, sovereign wealth funds, countries, or more recently likely, the Fed itself. This is the wealthy on the dole. That it, they are making money from renting America the money it could, and should, produce for nothing. Yes, interest rates are low for now, but there is no reason to expect them to stay that way, and probably not even for very much longer either. Besides, traders can make money from selling Treasuries on the open market – an unnecessary middleman enriching brokers – and from speculation on the future prices of Treasuries on the market. None of these activities produces actual wealth – the total of goods and services of the country.
It would be better to have the spending without the borrowing, just as the WT says (though they under-estimate the importance of the spending part, as their neo-conservatism dictates how they see the world). We could, and have, do this with issuance of debt-free/interest-free money directly from Treasury (i.e. U.S. notes). Of course, we do this with coins all the time and have since 1792’s original coinage act. We also gain seigniorage with various commemorative coin acts, which accrue money directly into the national account (more attention should be paid to how easy it really is to produce new money this way. I wrote about this here, in support of Rep. Andy Barr’s commemorative coin act which would produce $3B in seigniorage savings, and says so, here: http://www.opednews.com/articles/Why-does-Congress-Nickel-a-by-Scott-Baker-130804-838.html).
We must get the wealthy off the dole. We simply can’t afford to pay them for their idle laziness any more. Fortunately, if we took away their handouts, they would be forced to go back to work and produce something for a living. Of course, they will fight this tooth and nail. Dependence does that to people.
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I wonder if the best way to sell MS is not to mention it directly or exactly how it works because it’s too scary to traditional thinking. Instead, keep punching away at what MS supports without mentioning MS. For example, emphasize that spending is stimulating and not spending is killing the economy (the leaches metaphor). If the response is ” We’ll put or kids in debt” then come back with “What do we do in the mean time for the kids today who’s parents are out of work, fighting, arguing and on the verge of divorce—the obvious reality at Present or the Maybe reality in the future?”, i.e., put the focus on the scary NOW and destroy the argument of the bogeyman future that conservatives love to use.
Or this: “How come we CAN find billion$ for preparing to legally kill people we don’t even know or won’t ever see, but we can’t find it for the unemployed we do see/know in our own back yard?” If the response is “that only encourages laziness” then come back with “it’s not their fault they were thrown out of work” or “what about the dole outs the big shots get, and when it’s illegal they don’t go to jail?”
All these retorts are done without mentioning MS and “money from nowhere.” It’s simply using the liberal side to counter the fiscal “(in)sanity” side. Since there’s always two sides that can be argued, use the negative consequences of bad economic decisions and bad logic to bolster MS without mentioning it directly. You don’t appear to be out in left field because you’re talking in real life terms about the consequences of bad decisions which many economists would be supportive of even though subconsciously they may not support MS.
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Try it on your friends and family, and share with us how it works.
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They agree. Or else they get quiet. They have no reply.
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Good start. The true test is whether they tell others the same thing, or if their minds really have not been changed.
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your comment reminds of a famous quote from an old British labor MP…
“If we can afford full employment killing Germans, why can’t we afford to have full employment during peace time.” Or something to that effect.
I often ask people if they believe during a time of war we would run out of money and thus lose the war. Of course nobody believes that, they just don’t understand that there is no difference between war and peace when it comes to the Nation spending its fiat dollar tokens.
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Thanks Auburn and Rodger,
We can’t run out money. As Bernanke said in an interview with Scott Pelley of CBS,” If we can find enough electrons we can find the money.”
Problem is people hear that and right away think, yea ok then how do you pay for all this spending. Something that is hardly mentioned on here is MS means government (FED) doesn’t acquire money from an existing account. People think “it’s gotta come from an existing account and has to be paid back to whomever it was taken from.” If Bernanke would have said”…we can find the money and it’s not attached to debt (RMM book- Free Money) then that would have begged more questioning about money w/o debt and how can thAT
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possibly be true, etc.
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I doubt my thinking carries enough weight to get others to pass on the good news of MS. But if someone like a Yellen or Bernanke said what I said it would go viral and she would get fired. So I answered my own question.
My approach won’t work unless the time is ripe for a teachable moment. And that moment won’t come until imminent disaster catches everyone’s attention, then suddenly everyone is willing to be taught. Then people will wake up and finally ‘get it.’ our leaders are idiots, we need answers.
If its not too late and we haven’t passed the point of no return then maybe MS will find a way to appeal to the desperate, like a terminally ill cancer patient who will grasp at any straw, especially if it works.
Have faith in the internet growth of the MS seed. If it’s true it’ll grow. But we may only be at the shoot stage.
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tetrahedron720 says: “If someone like a Yellen or Bernanke said what I said, it would go viral and she would get fired.”
I fear the masses would ignore it, since they prefer slavery. The masses do this all the time.
For example, in 2005 while giving Fed Chairman Alan Greenspan was giving testimony to Congress (the House Budget Committee), Greenspan told Paul Ryan that Social Security cannot become insolvent or “go broke.”
PAUL RYAN: “Do you believe that personal retirement accounts can help us achieve solvency for the system and make those future retiree benefits more secure?”
(Translation: “Do you agree that Social Security should be privatized, so that billions in FICA tax revenue will go straight to Wall Street?”)
ALAN GREENSPAN: “I wouldn’t say that the pay-as-you-go benefits are insecure, in the sense that there’s nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.”
Greenspan was correct. Therefore FICA taxes do not pay for Social Security. FICA taxes are simply a means to sustain the Big Lie, which itself is a means to constantly widen the gap between the rich and the rest.
Here’s the video. Greenspan’s comment is at 02:42.
http://www.c-span.org/video/?c3886511/2005-greenspan-ryan-024200
On 15 March 2009, Fed Chairman Bernanke lied on the “60 Minutes” TV show, saying he was angry that “taxpayer dollars” were used to prop up AIG. But a minute later on the same show, Bernanke admitted that taxpayer dollars are NOT used to prop up banks and financial firms.
“The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. To lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. So it’s much more akin to printing money than it is to borrowing.”
Here’s the video. Bernanke’s comment is at 07:58.
http://www.cbsnews.com/news/ben-bernankes-greatest-challenge/
On a later installment of “60 Minutes” (5 Dec 2010) Bernanke resumed his support of the Big Lie…
“We don’t want to take actions this year that will affect this year’s spending and this year’s taxes in a way that will hurt the recovery. But that doesn’t stop us from thinking now about the long term structural budget deficit. We’re looking at ten years from now, a situation where almost the entire federal budget will be spent on Medicare, Medicaid, Social Security, and interest on the debt. There won’t be any money left for the military, or for any other services the government provides. We can only address those issues if we think about them now.”
The lies and contradictions never end, because the masses never question them. Hence, poverty and inequality get worse every day.
I don’t know if things will ever change, but I hope they do.
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You’ll have to remember I said, “If someone like a Yellen or Bernanke said what I said..”
They don’t talk like I do. Notice they couch their terminology somewhat academically and cast a pall –especially visually–over the reader/listener.
Ever wonder why they don’t say it the way Rodger says it. Or me?
The scarcity model is dead. Economics is all wrong. Many Nobel Laureates of economics are all wrong. The citizens of this country have been hoodwinked by our twofold power structure— 1) the visible political power structure and 2) the invisible, rich, influential, super pack power structure supported by the Supreme Court’s Citizens United ruling. If you think I’m lying or don’t know what I’m talking about then I dare you to Google MMT and Monetary Sovereignty and go back to school for a few days and learn the truth about the world of money or are you afraid of the truth?
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“but if one dollar of debt “crowds out” 33 cents worth of capital, doesn’t it follow that one dollar of debt adds 67 cents of capital?”
You give me a dollar and I return 67 cents – it’s not adding capital, it’s removing. It sure is adding capital to the government pockets – definitely not to businesses and laborers.
Let’s clarify, if for every dollar that the government deficit spent – 1 dollar in capital gets created – deficit has a zero impact on the economy. If for every 2 dollars, there is 1 dollar of capital – the economy is losing 1 dollar of capital (-1).
That is the truth…
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If I give you $1 and that destroys 33 cents, you are ahead by 67 cents.
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Whoa Rodger! easy with the complicated math. Our friend here has a very difficult time understanding basic arithmetic, which is of course why he is a right-winger. People who are intellectually honest and can comprehend simple logic and math are never right wingers, there is just too much idiocy over there for normal people.
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Sure it does Rodger, but thats not what the article says. It says the government removes 33% of capital from the economy.
When I asked who produces what the gov buys, I was given the run around. The gov uses deficit spending to appropriate an additional layer of goods and services on top of taxes. The govetnments adds woth lesser paper and takes ever valuable goods and services. Boy, what a deal. Not!!!!
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Oh Vanessa, how funny.
The article was wrong. That was the whole point. You still don’t get it??
The private sector produces what the government buys. The private sector receives money in exchange for goods and services. If the private sector did not want to receive money in exchange for goods and services, it would not sell to the government.
See how simple things can be?
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How can you be so stupid and still operate a computer?
When the Govt deficit spends a dollar, that means that $1 worth of financial wealth is added to the non-govt. So how can deficit spending ever hurt capital?
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Smarty pants,
What happens to oil when you add more and more water?
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Vanessa,
You get salad dressing?? But this isn’t a cooking blog.
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It would be good if you understood what capital means. If you think credit is capital, than I’d like to hear your explanation as to why banks were all insolvent in 2008 during the crisis.
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Vanessa, do you think it might have to do with who owns the credit and how stable the credit is?
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T-bonds ARE capital.
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sucesofinanciero says….. “It sure is adding capital to the government pockets – definitely not to businesses and laborers…”
You are right if capital is added to local and state government pockets. They use money. The federal gov doesn’t cuz it has no need for that which it can summon with the electical wave of a magic wand.
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Vanessa (aka sucesofinanciero) says, ” . . . The economy would work the same way it does with any amount of money.”
Also a car would drive as far with any amount of gas. A tree would grow as high with any amount of rain. And a sailboat would sail as fast with any amount of wind.
Thank heaven for fools. No matter how often they are proven wrong, they continue to allow average people to feel thankful.
And as for the phony statistics, here are the facts:
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Agree, but then what are you putting in the government’s pockets? I took it literally.
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