Twitter: @rodgermitchell; Search #monetarysovereignty
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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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Yesterday, a plane took off, while another plan landed — at the same time, on the same runway. Most Americans would have described it as a “near miss.” A TV reporter called it a “near hit.”

The word “near” has at least two, different, though similar, meanings, one related to physical distance (“nearby,” “close”) and the other related to conceptual distance (“almost,” “nearly”). The latter can be colloquial (“I near fell off my chair.”)

The TV announcer undoubtedly thought he was being liguistically correct. (The planes didn’t actually hit, so it was a “near” hit). But his usage was clumsy and made confusing by the word “hit.” (They didn’t hit; they missed.)

I believe “near miss,” using the close-physical-distance meaning of “near,” and including the word “miss,” is less confusing and more intuitive.

Naturally, this all sent me back to thinking about why some people find economics in general, and Monetary Sovereignty in specific, confusing and counter-intuitive — and how it can be dead simple.
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Mathematically, Monetary Sovereignty should seem intuitive. It relies, in part, on five, fundamental, very simple formulas:

1. Money = Debt
2. Federal Spending + Non-federal Spending + Net Exports = Gross Domestic Product (GDP)
3. Federal Deficits = Private Income
4. Demand/Supply = Value
5. Reward/Risk = Demand

Increase or reduce the left side of each equation to increase or reduce the right side. Simple and straightforward, mathematically.

But linguistically, Monetarily Sovereign economics can be confusing. Consider the fact that all money = “debt.” Here there is confusion about the meaning of money, and I suspect even greater confusion about “debt.”

If you “have” (own) a lot of money, that is a good thing, but if you “have” (owe) a lot of debt, that is a burden. So how can money = debt?

This confusion is about the two meanings of “have” (“owe” and “own”) and the two sides of debt.

For any debt, there is a debtor and a creditor. For the former, a debt is a burden and an obligation; for the latter it is an asset. When the government (the public sector) “has” (owes) debt, the public (the private sector) has (owns) the debt.

(Oops, more confusion. The public is the private sector and the federal government is the public sector — and state governments are part of the private financial sector).

If all money is debt, who is the creditor and the debtor for a dollar? The creditor is the owner of that dollar. The debtor is the federal government, which owes the creditor the collateral for the debt: “Full faith and credit.”

This collateral includes such valuable guarantees as:

–The government will accept U.S. currency in payment of debts to the government
–It unfailingly will pay all it’s dollar debts with U.S. dollars and will not default
–It will force all your domestic creditors to accept U.S. dollars, if you offer it, to satisfy your debt.
–It will not require domestic creditors to accept any other money
–It will take action to protect the value of the dollar.
–It will maintain a market for U.S. currency
–It will continue to use U.S. currency and will not change to another currency.
–All forms of U.S. currency will be reciprocal, that is five $1 bills always will equal one $5 bill and vice versa.

The notion that simple guarantees can be collateral may seem confusing to some, but it happens every day. When you use your credit card, you actually borrow money from the credit card company, and the collateral for your debt is your own full faith and credit (which is different from the federal government’s full faith and credit).

Which brings us to what I consider economics’ most confusing word — or at least the word misunderstood by the most people: Sovereignty.

There is an analysis of “sovereignty” at “Lunch really can be free.”

Think of the U.S. government as the God of the dollar. The government originally wrote the laws that created the dollar. Thus, like God, the government created the dollar from nothing.

Without the U.S. government, there would be no U.S. dollar.

The existence of the dollar depends on the laws created by the government, and the government created all those laws from nothing. Because the government never can run short of laws, the government never can unintentionally run short of dollars.

Even if all federal taxes fell to $0, the government would not run short of dollars.

Returning now to the five fundamental equations:

1. Money = Debt
2. Federal Spending + Non-federal Spending + Net Exports = Gross Domestic Product (GDP)
3. Federal Deficits = Private Income
4. Demand/Supply = Value
5. Reward/Risk = Demand

Looking at equation 1., why would anyone want less federal debt?
Looking at equation 2., why would anyone want less federal spending (i.e “smaller government”)?
Looking at equation 3., why would anyone want smaller deficits (since the government cannot run short of dollars)
Looking at equation 4., what is the best way to avoid inflation (reduced value of the dollar)? No, not decrease Supply. Remember equations #1, #2 and #3. The answer is to increase Demand.
Looking at equation 5., what is the easiest way to increase Demand? Increase the Reward for owning dollars (interest).

And that’s it. Five simple equations. Everything else merely devolves to arguments and speculation about details and interpretations.

What you read and hear in the media are the arguments, speculations and interpretations, but you seldom are told the fundamentals.

By concealing the fundamentals, those with an agenda are able to offer confusing, contradictory and harmful hypotheses, involving such notions as “small government,” “austerity,” “unsustainable debt,” “return to gold” and “unsustainable spending” — all nonsense based on nonsense, packaged into the BIG LIE.

When any of your friends, or a talking head on TV, expresses an opinion about economics, see if that opinion comports with the five equations.

You probably now know more than any of your friends.

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 higher, progressive tax rates on all forms of income. (Click here)

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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
Monetary Sovereignty Monetary Sovereignty

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