Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
Mitchell’s laws:
●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.
●The single most important problem in economics is the gap between rich and poor.
●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.
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You never can win an argument.
If it’s a contest, to be won or lost, the other guy will refuse to lose. So all the logic and facts in the world will not dent his faith and brainwashed head.
Despite every economic fact showing that federal deficit spending is not “unsustainable,” as the rich would have you believe — and despite the basic simplicity of Federal Deficits = Economy’s Surplus — the man-in-the-street can’t/won’t get it.
His faith and belief, that federal finances are like personal finances, is too strong.
But on at least one occasion, I may have found a way. I asked a friend four questions. The dialog went like this (somewhat edited):
1. Question: Which is better for the U.S. economy, a trade surplus or a trade deficit?
His answer: A trade surplus.
2. Question: Why?
His answer: Because a trade surplus brings dollars into the economy, which helps grow the economy.
3. Question: So, which is better for the U.S. economy, a federal surplus or a federal deficit?
His answer (after a long pause): I’d say, a federal surplus.
4. Question: When the government runs a surplus, where do the dollars come from?
His answer (after an even longer pause): I see what you’ve been telling me.
Because the word “surplus” generally is good and the word “deficit” generally is bad, people tend to think that ALL surpluses are good and ALL deficits are bad. So they immediately accept the notion that a federal surplus must be good.
But when put into context of money into and out of the economy, a light can go on.
In retrospect, I might have done as well with just two questions:
Why is a trade surplus better than a trade deficit?
When the federal government runs a surplus, where does the money come from?
And those are the two questions I plan to ask of my Senators and Representative.
You might want to do the same. I’d be interested to learn what they tell you.
Rodger Malcolm Mitchell
Monetary Sovereignty
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The 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. Federally funded, 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)
Initiating The Ten Steps sequentially will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
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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.
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.
#MONETARYSOVEREIGNTY
Did what you asked to do. These are the answers of a Dutchman to your questions:
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1. Question: Which is better for the Dutch economy, a trade surplus or a trade deficit?
His answer: A trade surplus OF COURSE (“stupid question dude”). Everybody knows that!
2. Question: Why?
His answer: Because a trade surplus makes us rich and running a deficit will bankrupt the country, just like Greece. You can’t spend more than you earn. (“silly question”).
3. Question: So, which is better for the Dutch economy, a fiscal surplus or a fiscal deficit?
His answer (directly): A surplus OF COURSE! I already told you. We have to earn money in order to spend.
4. Question: When the government runs a surplus, where do the dollars come from?
His answer (without hesitation): From the Chinese. They buy all our stuff. Their economy is booming. They make us rich.
And the banks. They print money out of thin air. ex nihilo. Just like that. Luckily we have some real big banks who provide us with free money now. That’s what makes our country rich too. Why are you asking those stupid questions? This is all common knowlegde, tssss…
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So, now what???
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Ah, my fault.
I should have mentioned that your monetarily non-sovereign government NEEDS to run surpluses (or at least break even over time — or borrow), because unlike my Monetarily Sovereign government, yours can’t create your own sovereign currency.
Because the Netherlands uses the euro, you must be a net exporter — or borrow, borrow, borrow. And your government must tax.
In that sense, your national government is like your city governments, and you personally. You all need to obtain euros from somewhere. You personally need a “trade surplus” (i.e. earn more than you spend).
By contrast, the Chinese (and we Americans) are Monetarily Sovereign and can create all the sovereign money they wish. We can spend, spend, spend, and simply create the money to pay for it.
Since you consistently have run trade surpluses, you are fine, today. Heaven help you if you begin to run trade deficits. That is the fundamental problem with the euro.
Not every one of the euro nations can run trade surpluses, so those who don’t are impoverished.
The U.S. can run trade deficits, forever. Exporters send us their goods and services, which they create by great effort, while we send them dollars, which we create at the touch of a computer key.
We literally do not need to tax, though we do tax.
There is a sword hanging over the Netherland’s head, just waiting for you to be a net importer. Then, you’ll be in trouble.
The sword hanging over our head is our politicians pretending we are monetarily non-sovereign.
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I’d like to be able to ask Boehner and Dick Cheyney those questions. Those two absolute iron heads would find a way to avoid the logical response, probably just walk away muttering some weak excuse the way Jeb Bush did when cornered by a young lady who asked him if he’d still go into Iraq today. But kudos to him for changing his response two days later… only because he’s trying to get elected, otherwise he’d stick to his guns because Hey Saddam is dead and that makes it worth it.
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