–How charity destroys America, and other right-wingisms. By their own words, they die.

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, 2014

President 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

–Our debt crisis and our endless wars

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Our police state loves wars and crises, especially wars that never can be won and crises that never can be resolved.

Wars and crises provide the upper .1% power group with the excuses to take away the liberties of the lower 99.9%, thus legitimizing the widening of the power gap.

Consider the war on terror. There always will be at least one terrorist or potential terrorist out there, at least one person who either hates the United States or hates the President or hates Congess or hates the government or simply is nuts.

And even if my some miraculous means, we were able to eliminate all those haters and nuts, just the possibility that a new one might be born, is sufficient to maintain the never-ending war on terrorism. This eternal war justifies the excesses of the NSA, FBI, CIA et al, not to mention local police excesses, “stop-and-frisk,” airport security and assorted other intrusions into your privacy — none of which pester the upper .1%.

The war on drugs is another endless war that provides the .1% with excuses to harass, prosecute and incarcerate vast numbers of the 99.9%, while giving a free pass to the .1%.

Which brings us to the real subject of this post: The so-called, endless “debt crisis.”

What exactly is the “debt crisis”? No one knows, though you will see and hear that phrase every day, liberally sprinkled throughout the news and commentary.

Look through today’s paper or this week’s magazine, and whenever you see the phrase “debt crisis,” note to yourself that the author either is economically ignorant or a liar on behalf of the .1%. It is a defining phrase.

But what is the “debt crisis”? For the extreme liars, it means any debt (i.e. outstanding Treasury Security) is too much. So if the total federal “debt” were $1, the extreme liars would consider that we still are in a “debt crisis.”

I even have seen statements that the U.S. federal government should run a surplus, so there would be “enough funds for future spending,” as though the government’s finance were like yours and mine.

For the ignorant and the less-extreme liars, “debt crisis” means today’s federal debt, whatever that debt might be. This blog contains several posts regarding our so-called “unsustainable debt” (the prelude to the “debt crisis”) showing how examples of this phrase began in 1940 or earlier — almost 75 years ago!

Today, the “debt” still is “unsustainable,” still in “crisis,” and the upper .1% still is doing everything possible to increase the power gap.

The reason: Enough never is enough. Although the GINI ratio (a measure of the gap between the rich and the rest) continues to grow, no gap ever will sufficient for the rich. They want to beat the 99.9% down, down, ever down.

And they do it by convincing every level of the 99.9% that those residing in levels below them are slackers and takers.

Think of it: The vast majority of ultra-conservative voters are part of the lower 99.9%, voting against their own well-being. What a remarkable brainwashing job, the .1% have done.

Of course, there is no “debt crisis,” a manufactured “crisis” that could end tomorrow with the simple expedient of not issuing any more T-securities. Even the existing T-securities could be made to disappear, by the other simple expedient of debiting T-security accounts and crediting checking accounts. That could be done tomorrow, without creating any new money.

There are, in fact, just two debt crises, and neither has anything to do with federal debt. One is the crisis of consumer debt, forced on the ignorant, who have been made to believe it is better for a Monetarily Sovereign government to run a surplus than for the economy to run a surplus. (“The government needs my dollars more than I do.”)

The other debt crisis is the shameful, unnecessary student debt crisis, about which I will post in the future.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–What we pay for

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Here is an interesting site: What we pay for

I can’t testify as to the accuracy, but it purports to break down federal spending for any year from 1985 through 2014. (The blue box on the left.)

It also contains a red box on the right which supposedly shows “how much you pay in taxes” for each element of federal spending. Of course, this is wrong. Your tax money does not support federal spending.

All the red box does is estimate your federal taxes (not including FICA) according to your income and marital status, then divide those taxes by the amount the federal government spends.

(It would be just as meaningful to divide total federal spending by the number of albino cats in France.)

The red box does have a function, however. Click on any link in the blue box, and the red box will add detail to the spending distribution of that link.

Although the red box would mislead (or perhaps is designed to mislead) the financially ignorant, you who understand Monetary Sovereignty, and understand what the red box really shows, might enjoy playing around with both boxes.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–How not to market the truth. We knew it all the time.

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Reader DanB wrote:

Rodger! Truly fascinating blog! You’re now attracting myriad folks with incisive, insightful views. Lively give and take! But, then, so what?

Rodger, you’re the ‘Moses’ figure here! It falls to you to devise the way to effectively ‘shock’ America into ‘MS consciousness’. How, wise man?
Nicoli Tesla also suffered ‘market-phobia’. Brilliant, but, commercially,
an idiot-savant. Thus, a towering genius died relatively unknown …..
I’ve already suggested YouTube spots. But, think you need a pro Ad-Man to ‘dump your goods, spread your word’! Otherwise, it’s a pleasing blog….

This post is my response:

You’re right about the need for marketing. A few months ago, I suggested to Professor Stephanie Kelton, Economics Department Chair at UMKC, a program with which they could educate lobbyists.

She, in turn sent me to their Marketing Department, and I prepared the following summary plan for them:

Nice talking with you. As promised, here is an outline of what I propose:

Summary

UMKC is the nation’s leader in teaching Modern Monetary Theory and Monetary Sovereignty (MMT/MS), an accurate description of modern economics. Yet, because MMT/MS not only is counter-intuitive, but actively denied by opinion leaders (politicians, media and economists), UMKC does not receive the acclaim it deserves.

The solution is not merely for UMKC professors to reveal the truth (which they have been doing for years), but to enlist opinion leaders to tell the truth.

The opinion leaders are influenced by money, and the primary sources of money are the richest 1% and major corporations. Therefore, the sources of money must be shown why MMT/MS is beneficial to them.

While facts can be presented in a classroom setting, the richest 1% and corporate executives are unlikely to attend classes. One group, however, might be persuaded to attend such classes: Lobbying agency executives.

Lobbying agencies essentially are law firms and advertising/PR agencies, whose primary motivations are to please and impress current clients, and to secure new clients. They do this by demonstrating superiority over competing agencies.

Superiority can include having special knowledge or abilities to further client’s causes. Using facts from MMT/MS can support clients by providing a reasonable and factual rational for client requests, and by countering arguments opposed to client requests.

The following proposes soliciting lobbying agencies to attend 3-day classes at UMKC.

1. The Goals:

a. Promote UMKC as having the nation’s #1 Economics Department
b. Improve America’s economy with an understanding of MMT/MS.

2. Background:

a. UMKC’s Economics Department is nation’s (the world’s?) leader in teaching Modern Monetary Theory (MMT/MS), which says such things as:

i. The U.S. government created the laws that created the dollar

ii. The U.S. is Monetarily Sovereign. Its laws give it the unlimited ability to create its sovereign currency, the dollar, which it does, simply by paying bills. It never can run short of dollars.

(1) By contrast, monetarily non-sovereign entities cannot create unlimited amounts of sovereign currency, as they do not have a sovereign currency.
(2) Examples of monetarily non-sovereign entities are: Cities, counties, states, the euro nations, businesses and individuals

iii. Neither taxes nor borrowing are necessary to pay for federal spending. Even were both eliminated, the U.S. could continue to pay all its bills. Taxpayers do not pay for federal spending.

iv. Federal “debt” is not like personal debt. It is nothing more than T-security accounts at the Federal Reserve Bank. The so-called “debt” could be paid off instantly, merely by transferring the dollars in these accounts to checking accounts – zero burden on the government or on taxpayers.

v. Not only is deficit reduction (austerity) unnecessary, but it is harmful to the economy.

b. Austerity requires a combination of tax increases and spending decreases.

i. The greatest burden of austerity falls on the middle- and lower-income groups (aka the “99%.”) Austerity leads to:

ii. Tax increases disproportionately punish the 99%.
(1) FICA
(2) “Broadening” the tax base
(3) Sales taxes
(4) Value Added Taxes (VAT)

iii. Spending decreases also disproportionately punish the 99%.
(1) Medicare cuts
(2) Social Security cuts
(3) Federal employment cuts
(4) Cuts in any federal spending, which otherwise would increase employment.

c. Since the greatest burden of austerity falls on the 99%, it widens the income/wealth gap between the 99% and the upper 1%

i. Wealth is a comparative, not an absolute

(1) If one has $1 million, but everyone else has $1 million, that person is neither wealthy nor powerful.
(2) If one has $1 thousand, but everyone else has but $10, that person is wealthy and powerful.
(3) So the upper 1% is more interested in widening the gap than in absolute dollars. This is why so many wealthy people support austerity.

d. The 1% support of austerity takes several forms;
i. Support of politicians via campaign contributions
ii. Promises to politicians of lucrative employment (the famous “revolving door.”)
iii. Ownership of the media, which endorse austerity
iv. Large contributions to universities to teach the mythical “need” for austerity.

e. The public, being brainwashed that the government:
i. Needs to cut the deficit
ii. Can run short of dollars
iii. Will be unable to pay its bills.
iv. The public also has been taught, our children owe the federal debt and government finances are like household finances.

f. If the public were taught the beneficial facts of MMT/MS, and if UMKC were responsible for the revealing these facts, credit would accrue to the Economics Department, with the potential for Nobels.

3. The fundamental idea.

a. The primary sources of propaganda – the politicians, media and universities – are controlled by money. Countering the false information requires money.

i. To influence politicians to vote against austerity
ii. To influence the media to speak out against austerity
iii. To influence university economics departments to teach MMT/MS

b. The primary sources of propaganda money are:
i. Rich individuals
ii. Corporations
iii. Large organizations (AARP, AFL-CIO, chambers of commerce)
iv. Corporate lobbying agencies

c. The reasons corporations would benefit from supporting MMT/MS are:
i. Reduced personal income taxes for corporate executives
ii. Reduced federal corporate income taxes
iii. Reduced state taxes
iv. Reduced FICA costs
v. Reduced health insurance costs
vi. Better health for everyone, including employees
vii. Reduced unemployment compensation costs
viii. Superior employees via free education
ix. Improved infrastructure and ecology
x. Reduced crime
xi. More customers with money to spend
xii. Better controls for inflation, deflation, recession

d. To educate and motivate contributors to politicians, media and universities

i. A 3-day “Executive Summary of Economics” course taught by Stephanie Kelton and other UMKC professors
ii. Considering the four primary targets – rich individuals, corporate executives, organizations and lobbying agencies – the lobbying agencies may be the most receptive to attending a class

(1) Provides information lobbying agencies don’t currently have, that would benefit clients
(2) Provides a selling point for lobbying agencies to solicit new clients and maintain existing clients
(3) The course also could provide a gateway for UMKC to gain the other three targets as students
(4) Could provide a direct Public Relations gateway to politicians and the media

4. A Plan

a. Create a 3-day course that teaches:

i. The differences between Monetary Sovereignty and monetary non-sovereignty
ii. Why the U.S. government cannot run short of dollars and needs neither taxing nor borrowing to support spending
iii. Why federal deficits are necessary
iv. Why austerity is bad for business and for the nation
v. Why deficits do not cause inflation, and how inflation is controlled

b. Obtain lists of major lobbying firms, their top executives and contact information
i. See Top 50 lobbyists: http://www.washingtonian.com/articles/people/hired-guns-the-citys-50-top-lobbyists/
ii. See Lobbyingfirms.com: http://www.lobbyingfirms.com/Directory/browse_locations.php
iii. See: Lobbying Firms: http://www.sourcewatch.org/index.php?title=Lobbying_firms
iv. Top firms that can be Googled for contact information:

(1) WPP Group
(2) PMA Group
(3) Interpublic Group
(4) Williams & Jensen
(5) Van Scoyoc Assoc
(6) Livingston Group
(7) Akin, Gump et al
(8) BGR Group
(9) Blank Rome LLP
(10) Patton Boggs LLP
(11) Tiber Creek Group
(12) Duberstein Group
(13) Mehlman Vogel Castagnetti Inc
(14) Dutko Worldwide
(15) Cornerstone Government Affairs
(16) Alpine Group
(17) Ben Barnes Group
(18) Podesta Group
(19) Ryan, Phillips et al
(20) DLA Piper

c. Additionally, check with UMKC personnel for corporate and donor introductions.

d. Market the course via direct postal mail and telephone, in six steps

i. Send personalized letter to top executives at major lobbying agencies, from Professor Kelton, on UMKC stationery.
ii. Letter also to include a course flyer.

(1) Sample letter:

Dear [Mr.] [Name];

It isn’t only who you know. Often it’s what you know.

That is why the University of Missouri, Kansas City offers the 3-day course designed especially for lobbyists: Economics For Politics.

It will provide you with little-known, but powerful economic rationales for the requests you make of politicians.

The information you receive from Economics For Politics will give your clients a lobbying edge and will give you an edge when soliciting clients.

Please contact me for further information about this valuable addition to your lobbying arsenal.

Sincerely,

Stephanie Kelton, Ph.D.
Chair, Department of Economics
University of Missouri, Kansas City

iii. Two weeks later send a second letter
iv. Two weeks later make a phone call
v. Two weeks later send a third letter
vi. Two weeks later send a fourth letter
vii. Two weeks later make a second phone call

Nothing happened. A marketing person might have seen this as an opportunity to promote the UMKC name, but the UMKC marketing department didn’t respond.

The fundamental problem is: Marketing requires money and desire, but the people with money don’t desire to reveal the truth.

Previously, I had made several offers to the “Occupy” movement, to teach them how to focus their demands. No response. Also, I contacted leaders of AFL-CIO and AARP. Nothing.

Bottom line: I’m too old any more to fight battles. I enjoy writing the facts, but if the people most affected can’t bring themselves to get off their mental sofas, I’m not Moses to carry them to the promised land.

(At least he had God working for him.)

About the best I can suggest is for those who understand the truth, to band together into an organization that will pepper politicians and the media with repeated notes, Emails, phone calls and whatever. Or gather money and hire a lobbyist.

If you are younger than me (Isn’t everyone?), use your youthful energy to keep battering against the door. When you finally break through, and the populace sees that MS will benefit them, they will join you and say, “We knew it all the time.”

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

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