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●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
●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.
●Austerity is the government’s method for widening the gap between rich and poor.
●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.
●Everything in economics devolves to motive, and the motive is the Gap.
Three years ago we published, “Federal Debt: A ‘ticking time bomb’.” The post listed article after article, going back to 1940, describing the federal debt as a “ticking time bomb.”
Now, after 75 years, the so-called “debt” has reached $17 trillion, and that “time bomb” still is ticking. It must have the slowest fuse in history. Those articles were written by people who either were ignorant of economics or were liars.
In the 1700’s, before the U.S. existed, there were zero U.S. dollars. Then, the U.S. government created from thin air, certain laws, and those laws created from thin air, the U.S. dollar. Poof! A few million were created from nothing.
The government could have created as many as they wished.
And that is how the U.S. dollar still is created: From thin air. Poof!
There is no legal limit to the number of dollars the federal government can create. Unlike you and me and the cities, counties and states, the federal government, being Monetarily Sovereign, has the legal right to create as many dollars as it needs.
The U.S. government never can run short of dollars. Reader Ian Winograd ruined my holiday weekend by bringing to my attention an article denying that fact. Thanks Ian.
Written by someone who undoubtedly knows better, and quoting someone else, who also knows better, this article is so filled with misstatements, lies and outright bullsh*t, that it’s stunning, even in this day of bribed media whores and paid-off political skanks.
The media whore, who wrote the article, is Terence P. Jeffrey, editor in chief of CNSNews.com. The political skank is Treasury Secretary Jacob Lew. They both either are ignorant of economics or are liars. In either event, they both should be fired.
Right from the very first word, media whore Jeffrey lies. There is nothing about the Treasury issuing new T-securities that in any way resembles a Ponzi scheme (a scam in which returns to early investors are paid with money from new investors).
Ponzi schemes eventually run short of money, when the flow of new investors runs dry. But the federal government never — NEVER — can unintentionally run short of dollars. Never.
Jeffrey merely is disseminating The Big Lie (the lie that the federal government can run short of dollars), and for spreading that lie he surely is not qualified to hold his job.
The U.S. Treasury has been forced to issue $1,040,965,000,000 in new debt since fiscal 2015 started just eight weeks ago in order to raise the money to pay off Treasury securities that were maturing and to cover new deficit spending by the government.
The Big Lie continues. When you “lend” to the federal government, you buy a T-security. You transfer dollars from your bank checking account to your T-security account at the Federal Reserve Bank. A T-security account is essentially a savings account.
The federal debt is nothing more than the total of T-security accounts (savings accounts held at a bank), in this case the Federal Reserve Bank. You essentially have transferred dollars from your checking account to your savings account.
Is this a cause for your concern? Do you fret when you make that transfer? Do you say, “My bank has too much in deposits; I better deposit less money?” And your bank isn’t even Monetarily Sovereign.
To “pay off” your T-security account, the FRB does what any bank does: It merely transfers dollars from your T-security account back to your checking account. No new dollars needed.
(Even if new dollars were needed, the government simply would create them from thin air, just as it already has created the $17 trillion dollars worth of “debt” dollars in existence.)
During those eight weeks, Treasury took in $341,591,000,000 in revenues — not enough to finance ongoing government spending let alone pay off old debt that matured.
More of The Big Lie. Federal taxes do not pay for federal spending. Even if all federal taxes fell to $0, the government, being Monetarily Sovereign, could continue spending, forever.
Here is how the federal government spends: It sends instructions (not dollars) to each creditor’s bank, telling the bank to increase the numbers in the creditor’s checking account. At the instant the bank does as it is instructed, dollars are created.
There is no limit to the amount of instructions the federal government can send. (Well, there is one limit: Inflation, but inflation is not an issue today, and the article is not even talking about inflation. It’s lying about ability to pay.)
In testimony before the Senate Finance Committee in October 2013, (Jacob) Lew explained why he wanted the Congress to agree to increase the federal debt limit—and why the Treasury has no choice but to constantly issue new debt.
“Every week we roll over approximately $100 billion in U.S. bills,” Lew told the committee. “If U.S. bondholders decided that they wanted to be repaid rather than continuing to roll over their investments, we could unexpectedly dissipate our entire cash balance.”
Rather than tell the truth — that the federal government never can run short of dollars — the Secretary of the Treasury of the United States of America, perpetuates The Big Lie. He pretends that federal financing is like personal financing. He pretends so-called federal “debt” is a great burden on the government.
He doesn’t reveal that federal “debt” is bank deposits, which could be “paid off” simply by returning depositors’ dollars.
The Treasury has taken out what amounts to an adjustable-rate mortgage on our ever-growing national debt.
More bullsh*t. Jeffrey again equates federal financing with personal financing. He should know better.
If the Treasury were forced to convert the $1.4 trillion in short-term bills (on which it now pays an average interest rate of 0.056 percent) into 30-year bonds at the average rate it is now paying on such bonds (4.919 percent) the interest on that $1.4 trillion in debt would increase 88-fold.
And yet even more bullsh*t. When the government pays interest, that adds dollars to the economy. It is stimulative. If you own any T-bills, T-notes or T-bonds, you enjoy the interest you receive. You spend those dollars, thereby growing the economy.
In total, this article ladles bullsh*t on in a think paste, designed to cover the truth.
Why do Jeffrey and Lew tell The Big Lie? They are bribed.
The upper .1% income/wealth/power group wants to widen the Gap between them and the rest of us. It is the Gap that makes them rich. Without the Gap, no one would be rich, and the wider the Gap, the richer they are.
So the rich bribe the Jeffreys and the Lews and the politicians and the other scum of America to spread The Big Lie, that taxes must be increased (especially on the lower income groups that don’t get those big rich tax breaks) and benefits must be decreased (especially for social programs).
The bribes are in the form of well-paid jobs. “Just keep spreading the bullsh*t boys, and you’ll have great jobs forever.”
Bottom line, either the editor in chief of CNSNews.com and the Secretary of the Treasury of the United States are ignorant of the facts or they are liars. I don’t think they are ignorant of the facts, but either way, they are not qualified to hold their jobs.
It’s bad enough to be a whore — a liar for money — but what would you call people who lie, knowing their lies hurt America?
I’d call them traitors.
Rodger Malcolm Mitchell
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. (Refer to this.)
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.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.
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 growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.