–How to eliminate college student loan debt.

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

Mitchell’s laws:
Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

●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.

This post, “How to eliminate college loan debt,” also should be titled, “How America can keep up with the rest of the world.”

In several posts, including “How to build a more educated, more successful America” (Friday, Oct 3 2014), and “Five reasons why we should eliminate school loans” (Thursday, May 16 2013), we have told you the federal government should pay for college education.

The U.S. states and cities pay for grades K-12. Unfortunately, the states and cities, being monetarily non-sovereign, have difficulty funding this cost. So, the quality of K-12 education suffers.

By contrast, the U.S. federal government, being Monetarily Sovereign, can afford anything.

Here is what Europe thinks about the importance of a college education in today’s, highly competitive, technological world:

Germany Makes College Education Free as American Students Drown in Debt (Posted on Oct 4, 2014)

Although German students were paying only the equivalent of $630 a year for higher education, on average, the country’s elected representatives decided any tuition fees perpetuate inequality

German universities only began charging for tuition in 2006, when the German Constitutional Court ruled that limited fees, combined with loans, were not in conflict the country’s commitment to universal education.

The measure proved unpopular, however, and German states that had instituted fees began dropping them one by one. Higher education is now free throughout the country, even for international students.

“We got rid of tuition fees because we do not want higher education which depends on the wealth of the parents,” Gabrielle Heinen-Kjajic, the minister for science and culture in Lower Saxony, said in a statement.

Her words were echoed by many in the German government. “Tuition fees are unjust,” said Hamburg’s senator for science Dorothee Stapelfeldt. “They discourage young people who do not have a traditional academic family background from taking up study.

It is a core task of politics to ensure that young women and men can study with a high quality standard free of charge in Germany.”

The German government, unlike the U.S government, is monetarily non-sovereign. It does not have the unlimited ability to pay its bills. Yet, German politicians believe education to be so important, they vote to fund even advanced education.

American politicians are not as concerned about education.

German young people are not the only ones who find it much easier to be educated, than do American youngsters:

This Country Just Abolished College Tuition Fees
BY Joaquim Moreira Salles, Posted October 1, 2014

Free education is a concept that is embraced in most of Europe with notable exceptions like the U.K., where the government voted to lift the cap on university fees in 2010.

UK students often compare their plight to their American counterparts, but most Americans would be fortunate to pay as little as the British do: a maximum of $14,550 per year.

High tuition fees in the U.S. have caused student loan debt, which stands at $1.2 trillion, to spiral out of control. It is now the second-highest form of consumer debt in the country.

The U.S. as whole could take a note from Germany and make public universities free with relative ease.

As we noted, the U.S. federal government, being Monetarily Sovereign, can afford anything. It can pay any bill of any size at any time.

That said, even people who do not understand Monetary Sovereignty — people who think federal financing is like personal financing — believe the federal government can afford to pay for college:

Here’s Exactly How Much the Government Would Have to Spend to Make Public College Tuition-Free
Jordan Weissmann, January 3, 2014

A mere $62.6 billion dollars!

According to new Department of Education data, that’s how much tuition public colleges collected from undergraduates in 2012 across the entire United States.

The New America Foundation says that the federal government spent a whole $69 billion in 2013 on its hodgepodge of financial aid programs, such as Pell Grants for low-income students, tax breaks, work study funding. And that doesn’t even include loans.

If we were we scrapping our current system and starting from scratch, Washington could make public college tuition free with the money it sets aside its scattershot attempts to make college affordable today.

Note the “with the money” line, indicating Mr. Weissmann falsely believes dollars are limited for our Monetarily Sovereign federal government. Yet even he believes the federal government should pay for college educations.

Bottom line: The current system of state and local support for K-12 may have been fine for the 1700s – 1900s, when we were largely an agrarian society and our cities were low-tech. But in today’s, more complex, more competitive world, K-12 isn’t good enough.

Apparently, Europe understands this.

American politicians don’t, or at least pretend they don’t, for high college tuition is just one more way they widen the Gap between the rich and the rest. This, of course, is at the behest of the rich.

My advice: Contact your Washington representatives and demand that the federal government end the ridiculous, impoverishing local funding of K-12 and the equally impoverishing student loan program. Replace them with 100% federal funding of all education, including advanced education.

And don’t accept the lie about federal debt and deficits being “unsustainable” and the federal government being “broke.” (Thank you Mr. Boehner).

Educationally, we are falling behind. American needs our young people to be educated.

And not just the rich kids.

Rodger Malcolm Mitchell
Monetary Sovereignty

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. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.

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

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 growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.


9 thoughts on “–How to eliminate college student loan debt.

  1. @RMM: How do we know how much funding the federal government can provide without causing problems (e.g., inflation or hyperinflation)? There are a lot of great things that the government can provide to benefit society, but funding isn’t unlimited I think. How do we determine the limits to what the government can fund (how many dollars given to fund these programs)?

    Also, check out this website:


    I think that government can do a lot of good things for society as well, but this guy, Prof. Douglas J. Amy, does not appear to be educated about Modern Monetary Theory (MMT) and Monetary Sovereignty.


    1. I keep wondering why people are so paranoid about inflation (which we DO NOT have), but seemingly are unconcerned about addressing the problems we DO have.

      It’s one of life’s mysteries.

      Anyway, in answer to your question, the solution is quite simple. You spend until inflation rises above your target.

      Then you raise interest rates to bring inflation back down.

      Finally, if you can’t control inflation with interest rates (though that never has happened), you cut spending.

      What you don’t do is refuse to give a badly infected patient an antibiotic, because you worry that twenty years from now, someone may have a bad reaction to that antibiotic.

      Thanks for the link you provided. I had seen that before and you are correct. He understands the benefits of federal spending, but still thinks ” solving the financial problems of Medicare and Medicaid require some basic reforms in our health care system.”

      Doesn’t understand the difference between Monetary Sovereignty and monetary non-sovereignty.


  2. Yes and everyone is blaming Germany for the failing global economy. Germany kept wages low resulting in a trade surplus.

    As a non sovereign nation isn’t this what they had to do?


      1. What do you think of this analysis
        “After a decade of wage restraint, the German real exchange rate is strongly undervalued relative to the rest of the eurozone. This makes its goods artificially cheap, crowding out those of other eurozone countries from both eurozone and world markets. If Germany’s real exchange rate rose by around 20 per cent (and so returned to its value when the euro was launched), Spanish, Italian and French manufacturers would be able to retake market share. Their exports to eurozone economies and to the rest of the world would rise more rapidly, and the risk of deflation would diminish. The adjustment process for the eurozone – and for that matter, the world – would be less painful.”

        Click to access bulletin_93_js_st_article2-8164.pdf


        1. The analysis is good. Unfortunately, it’s a “Take from Peter to pay Paul” idea. The entire eurozone is one big monetarily non-sovereign entity (except for the EU).

          So taking from Germany to lift Spain et al, probably will put them all into bankruptcy.

          The eurozone needs money coming in from non-eurozone nations — or from the EU.


  3. If the Europeans so love the euro currency why don’t they go the whole length of the field and unify Europe into, say, the United States of Europe (USE)? The USA has dollars and the USE would use euros. The ECB expands its responsibility to a MS function like our Fed. So Italy, Spain, et al become states like Illinois and Alabama and still keep their identities and what’s left of their local culture.

    Instead of the world breaking up into more countries, we would have 16 less.


  4. @RMM: I would be curious to find out the federal government funding situation during the great depression in the 1930’s. Presumably with lower federal tax receipts, was the government decreased in size due to lack of funding? Were there any layoffs of federal government employees? Is this information known?


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