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, and the motive is the gap.
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Let’s say you want to cook your food by building a bonfire on the rug in the middle of your dining room. But you know that this could burn the house down.
How would you solve the problem?
You could coat all your walls with fireproofing material. You could trade your wooden furniture for steel furniture. You could put bricks between the fire and the rug.
You could stash a few dozen fire extinguishers all around, within easy reach. You could tell the fire department to be on alert. You even could close all the windows and doors to deprive a spreading fire of oxygen.
You could try any number of crazy solutions.
Or, you simply could forget about the stupid bonfire, and cook your food on the kitchen stove.
Because the euro deprives euro nations of their most valuable asset — their Monetary Sovereignty, they have have lost control over their money supplies, so have run short of money to sustain, much less to grow, their economies.
With bonfires roaring in the euro nations’ dining rooms, the EU and ECB twist and turn and pretend to try in every possible way, to save a truly horrible idea.
(In a June 2005 speech, I said, “Because of the Euro, no euro nation can control its own money supply. The Euro is the worst economic idea since the recession-era, Smoot-Hawley Tariff. The economies of European nations are doomed by the euro.”)
Now we have the next bit of ECB twisting and turning and “problem solving”:
Draghi breaks new ground with negative interest rate
The European Central Bank (ECB) took the unprecedented step on Thursday of declaring a negative interest rate for deposits, in effect charging banks to park money with the ECB.
The move was part of a series of measures to combat the euro zone’s growth-sapping disinflation.
No, it isn’t disinflation that saps the euro zone’s growth. It’s the euro that saps the euro zone’s growth.
At its June monetary policy meeting, the ECB cut the rate on its deposit facility for banks to minus 0.10 percent, from 0 percent. This is the first time a major global central bank has moved rates into negative territory.
ECB President Mario Draghi (said,) “The measures will contribute to a return of inflation rates to levels closer to 2 percent.”
The ECB lends to banks at low interest rates, in order to encourage them to lend to households and non-financial corporations.
As usual, the ECB has everything bass-ackwards. Banks are failing to lend, because households and corporations can’t or won’t borrow — not because interest rates are high (they already are low), but because the economy is so bad and the future looks worse.
Businesses and individuals borrow in anticipation of future income. But when the economy is dropping like a boulder, no one can count on enough future income to warrant borrowing — not the borrower and not the lender. No one.
Until now, the EU’s favorite “solution” to the euro disaster has been to lend euros to insolvent euro nations — nations that, being monetarily non-sovereign, have no means by which to pay the euros back.
So when the debts come due, the EU:
1. Criticizes the euro nations for being profligate and wastrel
2. Demands that spending be cut ever more (thereby starving the lower 99.9% income group and further destroying the infrastructure)
3. Lending the “profligates and wastrels” even more unpayable euros, thereby creating ever greater indebtedness and dependency.
Then the process repeats.
There are two, and only two, solutions to the euro problem:
1. The euro nations return to Monetary Sovereignty by re-adopting their own sovereign currencies
or
2. The EU joins politically (like a United States of Europe), in which the EU gives, not lends, euros to euro nations as needed — just as the U.S. government gives dollars to our monetarily non-sovereign states (by deficit spending).
Don’t imagine for one minute, that every single economist in the EU and the ECB is so stupid, they cannot see the folly of the euro. If you can see it, and I can see it, they can see it.
So, why do they do it?
Quite simple: They are paid to do it by the upper .1% income group to widen the income/power GAP between the rich and the rest.
The corollaries in America are the Tea and Libertarian Parties, both of which insist on “smaller government” — code for reduced spending that would have benefited the 99.9% and reduced taxes on the upper .1%.
The euro is a powerful weapon against the middle- and lower classes, turning the euro nations into slave nations, at the pleasure of the rich.
What’s happening in Europe is a prelude to what will happen in America as the “small government, anti-deficit, pro-rich” crowd widens the GAP between the rich and the rest, with cuts in the spending that benefits the populace and reductions in the taxes on the wealthy.
The house is afire in Europe, and some embers are glowing on the American rug.
Rodger Malcolm Mitchell
Monetary Sovereignty
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Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
9. Federal ownership of all banks (Click here)
10. Tax the very rich (.1%) more, with much higher, progressive tax rates on all forms of income. (Click here)
—–
10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
Two key equations in economics:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports
THE RECESSION CLOCK
Vertical gray bars mark recessions.
As the federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise. Federal deficit growth is absolutely, positively necessary for economic growth. Period.
#MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
[1] The purpose of austerity is to widen the gap. The purpose of the euro is to make austerity mandatory. If we do not understand this, then we will bicker about the color of the emperor’s new clothes. Such is the nature of 99.99% of economics discourse.
[2] In the US and UK, the Big Lie is that their governments must have a balanced budget. In the euro-zone, the Big Lie is that the euro must be defended at all costs. Both Big Lies are used to justify an ever-widening gap between the rich and the rest.
[3] With the ECB having a negative interest rate, depositors in the euro-zone must pay banks if they want to give their money to banks. (Whatever the ECB does to subordinate banks is passed down to all depositors.) This will supposedly force people to spend money, rather than put money in banks. Of course, average people have no money to spend, because of the euro and austerity. And banks will not lend, since (as Rodger noted above) households and corporations can’t or won’t borrow. The real purpose of negative interest is to keep public attention diverted away from the euro-scam.
Notice the contradiction. Draghi says that the negative interest will affect banks, not “the people.” If that’s true, then the negative interest will not force people to spend after all.
Bankers can say whatever they like, and get away with it. Indeed, the more absurd, contradictory, and obviously false is their gibberish, the more it is regarded as holy gospel. Banking affects everyone, and yet society gives boundless and unquestioned power to central bankers. Banking is far too important to be left to bankers. They are the ultimate gangsters and hucksters.
[4] That CNBC article says this: “The euro declined against the U.S. dollar to 1.351 from 1.3600 after Draghi began speaking, before rising again.”
So what? What does the Forex market have to do with the rest of the article? Nothing. What do currency exchange rates have to do with negative interest rates? Nothing. By inserting such trivia, the corporate media keeps people confused and submissive.
“The dollar is falling! The dollar is falling!”
[5] Mario Draghi wants to start QE for the euro-zone. He calls this a “stimulus,” and indeed it is, but only for the financial economy, which is the playground of the very wealthy. For the real economy, QE is an anti-stimulus measure. Falsely equating the financial economy with the real economy is yet another trick to keep the peasants confused and enslaved.
[6] Rodger says, “The economies of European nations are doomed by the euro.”
If I write that at the NEP web site, they delete my comment. They prefer to whine about the euro-zone’s “perplexing” austerity policies. I say that theft and swindles are not “perplexing.” They are theft and swindles. Period. Calling them “perplexing” is a way to deny reality. Denial worsens and perpetuates the problems.
But they don’t want to hear this.
They don’t want to hear that pundits, professors, and politicians are paid to sustain the Big Lie. They don’t want to hear that the US government does not “spend” money; it creates money. They don’t want to hear any questioning of their mantra, “Taxes drive money.” They don’t want to hear any questioning of their fantasy “jobs guarantee.” They don’t want to hear any questioning of their god, Paul Krugman. They don’t want to hear clarifications about Monetary Sovereignty. (For example, Bill Black says that euro-zone politicians cling to the, “Long falsified claim of the austerians that if a government has debt it lacks the capacity to spend.” In reality, this claim is NOT false for euro-zone nations, since they surrendered their MS.)
In short, the NEP clowns are in denial.
I have often said that the most cement-headed people of all are not those who reject MS, but those who partially understand MS.
That is, people who have learned one or two things, but are too “brilliant” to learn anything more. These people help to sustain inequality.
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==Slightly off topic ==
LIES, DAMNED LIES, AND GDP
A common way to justify austerity and inequality is to lie about GDP, falsely claiming that it is booming instead of contracting. This lie has the added benefit of making slaves feel worthless. If the GDP is booming, then it is YOUR fault that you are struggling financially. The “proof” is the “booming GDP.”
There is now a global rush to re-define GDP so that poverty becomes prosperity. For example, Nigeria recently doubled its claimed GDP overnight to $510 billion annually, supposedly making Nigeria the largest economy in Africa. Bigger than Belgium and Taiwan. Of course, 170 million Nigerians remain dirt poor, with most of them struggling on less than $1.25 a day, but their GDP is up! 🙂 Despite growing poorer by the day, they are in a “recovery,” just like average Americans. Thus, the corruption of Nigeria’s government is not as bad as we thought. Right?
This magical mumbo-jumbo is called “rebasing.”
A number of other developing markets play similar games with their GDP figures. China’s methods for estimating its GDP have always been dubious.
Since austerity reduces many people to prostitutes and drug dealers, both the UK and Italy are now adding income from prostitution and drug dealing to their GDP claims. Britain estimates that prostitution services will add $17 billion to Britain’s GDP. The Financial Times claims that prostitution and drug dealing will magically boost the UK’s GDP by 5%. How these figures are derived is a mystery, but it is solid “proof” that austerity brings prosperity. :-)
There are many ways to lie about GDP. For example, quality improvements in smart-phones are going up so fast that “prices” are supposedly going down. You didn’t actually pay $800 for that i-Phone Five. Despite the $800 charge on your credit card, it was really much less. Somewhere, somehow, you still have $750 in disposable income.
The possibilities for magical GDP “growth” are limitless. Pakistan’s government transforms recessions into “growth” by claiming that the previous year’s GDP was actually smaller than the government thought.
In March 2013 the U.S. government re-defined the “gross investment” part of the standard GDP formula, so that the USA’s shrinking GDP magically increased by 3 percent. Art and music, for example, are now considered part of “gross investment.” (Everybody grab your crayons and bongo drums! Do your part to boost GDP!) Of course, real production continues to shrink, because of austerity.
In September the European Commission will change its GDP methods so that the euro-zone’s shrinking GDP will magically increase by 2.4 percent. Finland, which is now in a severe recession because of the euro, will see its GDP rise by 5% overnight. Positive proof that austerity works, and the euro is necessary!
Pundits and politicians aren’t the only ones who play this game. Average people play it too. The World Bank thinks that China’s GDP is now equal to the USA’s. This offends the pride of American peasants, who say, “No way!” One wonders how average Americans claim to have the slightest clue about actual GDP figures.
GDP figures are politically sensitive, like the figures for inflation and unemployment. Thus, all three classes of figures are filled with lies.
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Europeans are slaves?
I bet Americans work much more than Europeans. My top wish is that what you want actually occurs so we can see how misguided this idea of a nation giving money is.
This is what will happen the minute they become sovereign nations.
1) They will print money to fund government programs, as they are accustomed to.
2) They will print so much money that inflation will run high
3) Not long after, the bond market will realize that they are being fooled and will shut the doors on lending to the nation
4) The nation will drown on it’s own currency. No food, no nothing, but tons of currency for sure.
5) I will be laughing at you Rodger
Paper may come from trees, purchasing comes from the sweat in your forehead.
What should the ECB have done? Nothing…. Yes, you read that right – what’s wrong with lower prices? The theory that deflation is a bad thing is what the .0001% want to sell to you and the majority of us are morons and do. Find one single person in the world that doesn’t enjoy lower prices?
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Ah, so you’d prefer being like Greece, Italy, France and Portugal, eh?
Meanwhile, the U.S. has been Monetarily Sovereign for more than 40 years. So where is that “high running” inflation?
And why haven’t the “doors shut” on U.S. T-securities?
And why aren’t we “drowning,” with no food?
And then, what about Canada, which also is Monetarily Sovereign? And Australia?
How long have you been a student of economics? No, really. How long? And where do you come up with this nonsense?
From now on, anything truly silly and outrageous will be called “Shishonomics.”
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1) Money is not printed, and never has been. Money is not physical, and never has been.
2) Inflation is not a product of the money supply, but of the complex interaction between the supply of and demand for money, goods, and services
3) The bond market is irrelevant. Nations with true Monetary Sovereignty sell T-securities by choice, not by necessity.
4) Since nations will “drown in their own currency,” the best course of action is presumably to continue austerity, with its ever-worsening depression and inequality.
Incidentally, notice how people only mention the inflation bogeyman in response to calls for getting more money into the hands of average people. The inflation bogeyman vanishes when the government gives trillions to weapons makers and to rich people on Wall Street, or creates trillions of dollars for wars.
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1) You know full well what I meant. Giving anyone access to funds is called synonymous with printing.
2) I got it. So you can’t define what causes inflation because it’s “too complex”. If it’s too complex, than how you do know that it’s not more currency that causes inflation. You know Quat, the relationship between demand and supply will fluctuate “naturally” – is that not a given? Push currency into the system and you distort it.
3) LMFAO – wrong. The sad part? You know you are wrong. Fractional reserve currencies, i.e., the Euro and the dollar work by continuously expanding credit. Credit (the thing you owe the bank) is not the same as money (that thing you have in your bank account). There is always, always more of the thing you owe the bank than the thing in your bank account. The government issues those bonds to fund itself, what you call “choice”. Will the US have an issue funding itself? Probably not in our lifetimes. Remember that saying that nothing is free? The government gets basically unlimited funding via the issuance of bonds, banks get to issues as much debt as they can. The details are in the reports that the government puts out. They say themselves that they are “borrowing” anything in excess of tax receipts. It’s not me making it up.
4) I presume you think that not creating more money (debt) is the same as austerity? I’m thinking the word “austerity” confuses people. If by austerity – you mean lower prices – everyone wants more of it. And that my friend is exactly what austerity is. It means the government and banks spend less of “your’ money and you get to spend it.
I am willing to bet that austerity actually leads to lower prices and improved quality of lives of the population. What was wrong in Europe? Prices were dropping. Go ask the average European what they thought about lower prices – please do. But guess what – a few communist central bankers know better than all of us. You and Rodger also know better than them.
Has anyone actually proved that lower prices (aka deflation) is a bad thing? Find me one single person that has proven that. Is anyone complaining about cheaper TVs, radios, computers, laptops, digital cameras, and on and on.
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1. I guess that makes me a printer.
2. Read his answer again.
3. Wrong. When you borrow, the bank puts that money in your bank account.
4. Austerity is not lower prices. You can have austerity with inflation.
Are you Luis Magno under a different name?
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1) Really, you can create money out of nothing? You somehow think that you lending me $20 (and foregoing the purchasing power), is the same as a bank lending me $400k to purchase a home, the money gets transferred from my lender to my seller’s bank account – and 90% of it gets re-lent again, and again, and again. No Rodger, you are not a printer – you are an average person, not a bank.
2) No need, issuing un-backed currency is the cause of inflation.
3) As I stated in #1, when I borrow from you I take your purchasing power from you and spend it myself. There is no way me and you both can have ownership to the same money. Never…. However, banks (many of them) do have access to the same money. As I outlined, If I buy a home using a mortgage, I borrow $400k, the $400k goes from the bank to the home sellers bank account – the sellers bank account will keep 10% and re-lend the rest, all without the saver knowing. If you don’t believe me, try looking up the definition of fractional reserve banking. Hint: this is the cause of inflation
4) Of course you can have higher prices with austerity. That’s not my argument. I am not going to say much about government spending as the majority of money gets created by the private sector anyway, but the more money gets created by the private and public sectors, the more inflation you will have. There is always a potential that humans will develop a “want” for something and drive up demand and with the demand make prices go higher. However, if you print money and give it to people, you will have more money chasing the same goods and you will drive up prices.
An increase in prices is not inflation. An increase in the money supply is inflation. One is nature, the other is point blank fraud.
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Any one who says “They will print so much money that inflation will run high” and has been on this forum for several months obviously doesn’t want to learn, just be a thorn in the side.
“..purchasing comes from the sweat in your forehead..”
Computers don’t sweat and a lot of people who would like to sweat won’t because computers are no sweat.
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Tetrahedron:
(q)uatloosx mentioned this person as being psychologically damaged last week. How true. Months ago (“shish”) mentioned to Rodger that they’d never go away. This person’s sole motive is to be a pain in the ass. I am beginning to wonder if this person calling themselves any number of pseudonymity, “shish”, “none”, “dannyboy”, “flash”, “suceso financiero”, et al, is not just a plant to keep avid readers on this thread on their toes. No one could continually be so utterly in denial, so self-absorbed, so lacking in facts/data, so grammatically incoherent and so down right politically/economically ignorant.
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Some comments are worse than Orwellian. They are Shish-ian. For example, someone (perhaps “Shish”) made this comment at another web site…
“The only reason why Venezuela’s government has so many social programs is that politicians just want to buy votes. This proves that the government is corrupt.”
Got it? Any politician that actually serves the people who put him in office (and not just rich people) is “corrupt.” If he does what voters pay him to do, he is “corrupt.” If he promises to help the masses, and he keeps his promises, he is “corrupt.”
That comment is what I call a “Shish-ism.”
Here’s another example…
Yesterday on CNN, National Security Advisor Susan Rice Ms. Rice said she was “heartbroken” about the US-sponsored civil war in Syria, and that this was why the US has “ramped up” its involvement in escalating the war.
It was a variant on the standard, “We must destroy them to save them” rhetoric.
When Shish-isms are string together into absurd nonsense, the result is what Rodger calls “Shishonomics.” 🙂
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Quat,
“Good” can mean different things to different people. And that is where I believe your mistake lies.
Your definition of a “good” government is one that provides for the people, especially the poor. Fair enough – I respect your opinion but I also think you are wrong.
To me – however – a “good” government is one that applies the law equally and allows the people to help each other. By “help”, I don’t mean necessarily giving to others (of course, giving is a good thing as well), I mean working and producing things we all consume. By producing, you are making those products cheaper in the markets – and helping your fellow human being. At the end of the day, what all of us consume has not been created by the government. The government cannot give what it has not created.
I bet that by your definition of good the government will distort markets and make matters worst in the end. If a person that could be working and producing stays home, watching TV and twiddling his thumbs because, after all, he will get a check at the end of the month – the government has indeed done a very BAD thing. For whatever is not being produced is now making someone poorer. The US has social programs, but countries like Venezuela is much more involved in it – and it’s the reason they are much worst off. It is also the reason the US has been progressively getting worst and worst – there is no other reason. But “giving” has a nice ring to it – and voters eat it up like hot cakes.
The majority of people fail to see the consequences of actions – I believe that’s the case with you. It is the reason why all social programs fail – always. Every single social program ever has always failed – because they focus on “giving”, but don’t account for where the stuff will come from.
Nobody needs an economics degree to figure this out – all they need is common sense.
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In “Shishonomics,” programs for the poor, for the elderly, for education, for health care — Social Security, Medicare, Medicaid et al — school lunch programs, housing aids, disability aids — virtually all forms of federal aid, plus private charities — cause recipients of this aid to become worthless sloths.
So such aids must be eliminated — for the good of the people, of course.
Either Shish is among the upper .1% (in which case he wishes to widen the GAP), or he is suicidal (in which case he also wishes to widen the gap — but only below him, not realizing that widens the gap above him, too).
So far, we’ve allowed Shishonomics to be published as a demonstration of what everyman can believe, in extreme circumstances.
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Classic shish-ism: “All social programs fail – always.”
Yup. Police, fire departments, public highways, public libraries, Social Security, Medicare, public schools, Food Stamps, flood control, airports, etc etc etc – they have all failed. Anything in which society’s members cooperate with each other has failed. (That is essentially what social programs are.)
I know that I shouldn’t feed the trolls, but it’s like throwing peanuts at a monkey in a zoo. The monkey chatters annoyingly, but its acrobatics are fun to watch as it leaps to catch the peanuts. Sometimes the monkey throws the peanut shells back at us in a gesture that seems almost human. It’s great fun for the whole family. Best of all, admission is free. 🙂
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Shish – The problem is that we disagree on some very simple, abstract, intellectual things. Why not argue on that level, where people tend not to get upset? Things like “fractional reserve” and “government borrowing” are just a distraction here. The common mistakes and confusions there come from even more basic ones. What you say is common sense – but the problem is that this common sense is a creation of propaganda and implantation of partial truths.
MS/MMT/FF/Keynes/Institutional/Creditary economics is based on Commoner Sense – things that are so well accepted and so ludicrously simple that people hardly ever say them, except to infants; nobody can think without them. But if you go back and think in those simple terms you can see that the usual Common Sense about money, the stories about fractional reserves & government borrowing is in fact propaganda and insane raving.
Money & credit are not different things the way you say they are. Money is a form of credit = debt = moral obligation. Not the other way around. Credit is not “credit for” money, but the primary concept. Money is defined in terms of credit, and has nothing to do with gold or silver or any other commodity. Gold & silver were just not very valuable or desired metals that states decided to use as measures for their money, which had existed before.
To me – however – a “good” government is one that applies the law equally and allows the people to help each other. We agree. But how does it do this? Money is the main way.
You say ” Every single social program ever has always failed”. But “money” and “markets” are social programs created by governments. The historical sequence was governments/tribes/societies & credit/debt relations, then money, then markets. Governments don’t “intervene in” or even “regulate” markets. Governments create markets, the same way that they create military ranks and armies.
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Calgacus,
I think I see where you are coming from – and I sure am not trying to confuse anyone. I’m also unsure that the words “fractional reserve” and “government borrowing” are creations of propaganda. I think it’s easy to see the opposite is true. When was the last time you heard someone in the street talk about how the Central Bank allows banks to expand the money supply via fractional reserve? The majority of Americans don’t understand what the debt means – I will go a step further and say that alot of “economists” don’t get it either. But let’s leave the argument aside.
I’ll take the insane raving comment, and although I agree that MS/MMT/FF/Keynes may appear to make more sense, they are flawed. The only way any of these would work is if the government could control all aspects of life. Simple fact – it doesn’t.
Money and credit are indeed different things, and I will venture and say that you know it – you are just looking at it from the wrong perspective. You think they are the same because they spend the same. Big mistake.
I’m not talking about gold and silver when I refer to fractional reserve banking – I’m referring to the way credit gets created out of thin air. If I borrowed $20 from you, who has the rights to the $20 – me or you? I do. Is it 100% guaranteed that you will again have rights to the $20 bill? You may never see the $20 ever again – you will if I chose to pay you. So no – you having $20 (money) in your pocket is not the same as someone owing you $20 (debt).
Banks take this a step further – they take money deposited (savings) with them and lend it, they take money on checking accounts and sweep it, etc… The money that you see in your account is actually not there – it’s been lent times and times over. Banks fund payments based on forecasts. Have you heard of Maddoff? Where do you think he got the idea? Our whole banking system is a Maddoff scheme. Hopefully that is commoner sense.
With regards to governments creating markets – I’m not sure I understand your definition of markets. Are you saying that 2 sides could not come together if it were not because of the government?
Perhaps I’m over-thinking this – but I really thought markets were created by people. On one side you have someone who wants to purchase something on the other one that wants to sell. In order to get whatever the seller has to offer, the buyer has to offer something of equal value in return. In today’s world, the buyer and seller use currency to make the exchange – nonetheless – it is still an exchange of value.
The only place the government has a hand in the transaction is in the management of the currency and taxes. Without knowing much about money – you don’t have to be too smart to figure out that the government can skim as much as it pleases by issuing more money. Am I making this up Calgacus? What would you call me if I did the same?
The government “creates” the army by using funds from tax receipts and the skimming the currency. At the end of the day, the government creates squat. The people do.
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Shish,
I advise you to read https://mythfighter.com/2010/08/13/monetarily-sovereign-the-key-to-understanding-economics/ and https://mythfighter.com/2013/07/27/i-just-thought-you-should-know-lunch-really-can-be-free/
What you are expressing is what the man-in-the-street believes about money and economics.
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