Opportunity lost: UK and Greek versions. What do they have in common?

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 between the rich and the rest..


In the U.S., and perhaps elsewhere, we speak of “snatching victory from the jaws of defeat,” but it is the ironic anagram, “snatching defeat from the jaws of victory” that is most appropriate, here.

Here is the UK version:

Osborne spells out new, post-election spending cuts

Chancellor George Osborne, fresh from a decisive election victory, pledged to recast the country’s economy by chopping welfare spending, lowering the tax bill for workers and tackling low productivity that could undermine the recovery.

In the first solely Conservative budget for nearly 20 years, Osborne used the turmoil in Greece to argue that the world’s fifth-largest economy needed less spending and less borrowing.

“Britain still spends too much, borrows too much,” Osborne told parliament.

“You only have to look at the crisis unfolding in Greece as I speak, to realise that if a country’s not in control of its borrowing, the borrowing takes control of the country,” he said.

Osborne pushed the target of achieving a budget surplus into the 2019/20 financial year from the 2018/19 financial year as projected under his previous budget plan.

Osborne, who has previously said he wants to tackle Britain’s hefty bill for tax rebates to low-paid workers, said he would freeze working-age benefits for four years.

“The benefits system should not support lifestyles and rents that are not available to the taxpayers who pay for that system,” he said.

Anyone reading that article would assume the UK is a monetarily NON-sovereign, euro user.

The line, “Britain still spends too much, borrows too much,” is exactly what the leader of a euro nation legitimately might say.

Even Osborne pretends Britain is monetarily non-sovereign like Greece.

But, of course, Britain is not Greece. Far from it. Britain did not surrender its Monetary Sovereignty (MS) to the troika, instead wisely retaining its own sovereign currency.

That was a brilliant move.

As a MS nation Britain retained total control over its money supply. Britain never can run short of its own currency. It creates money ad hoc, by spending.

Contrary to what Osborne claims, British taxpayers do not fund British spending. Even if all tax collections fell to zero, the British government could continue spending, forever.

The only reason — and I mean the ONLY reason — to cut spending, is in response to the threat of inflation. Even then, one should try other means first, i.e. increasing interest rates.

And borrowing cannot “control” a MS nation. First, the nation never needs to borrow; it has the unlimited ability to create its currency.

And second, even if it does borrow, it has the unlimited ability to service any debt of any size.

So Osborne lies — and lies — and lies.

He and his conservative party “chop welfare spending,” the spending that benefits the UK’s poorest citizens.

Why? What kind of morality causes a government to punish its weakest and poorest?

The conservatives cut spending for the poor, because they can. The poor have no power; the rich have the power, and greedily, wish to have even more.

Cruelty to the poor never is punished. It is rewarded.

Finally, the notion of achieving a surplus (taxes greater than spending) is outrageous for a MS nation. Why would a government that can create money at will, want to take more money from its own economy than it gives back?

What does this do to an economy? Shrink it, of course. What else could a reduction in funds possibly do?

Why shrink the economy? Because the rich are less affected than the rest, so the Gap widens. In a shrinking economy, the middle class becomes more desperate for work, thus increasing the power of rich employers.

In summary, the UK might just as well have adopted the euro, become monetarily non-sovereign and lost control over its money supply, because its government acts as though it has done just that.

Given its retention of Monetary Sovereignty, the UK could have been the greatest, most powerful nation in Europe.

Ah, those sad words, “could have been.”

Instead, the UK government has snatched defeat from the jaws of victory. Watch as the UK slowly sinks into recession, then depression.

Opportunity lost.

And now comes Greece:

Greece news live: Athens submits three-year rescue request after Alexis Tsipras is torn apart by euro MPs

Greece applies for a new three-year bail-out program after Tsipras is warned banking collapse and humanitarian crisis are four days away

George Saravelos at Deutsche Bank thinks Athens will have to bow down and accept much harsher bail-out conditions than those they have previously had rejected by creditors.

With banks closed, economic activity stalled, and the prospect of IOUs only days away, Mr Saravelos estimates any new three-year bail-out will come with harsher fiscal measures attached.

Greece has come within inches of pulling away from the slavery of euro-imposed austerity, only to see its leaders “bow down” to the troika, and submit a new bail-out plan.

Greece could have been Monetarily Sovereign. It could have had the unlimited ability to control its money supply, pay all its bills and support its own citizenry.

Instead the Greek leaders have caved to the rich bankers, and Greece will return to even worse poverty and misery.

What do the UK and Greece have in common? They are controlled by the very rich, whose primary goal is to widen the Gap between the rich and the rest.

Remember, it is the Gap that hands power and control to the rich. Without the Gap, no one would be rich, and the wider the Gap, the richer they are, and the more power and control they have.

[If everyone had $1 million, no one would be rich and no one would be in control. But if one man has $1 thousand, while everyone else as only $1, that one man is rich, powerful and has control.]

It is power and control that the rich want, and a widening Gap gives it to them.

So the UK and Greece will continue to do the bidding of the rich, widening the Gap, handing ever more power and control to the rich.

The Greek people voted. They wanted freedom from troika-imposed austerity. They wanted more control over their lives.

But their government will hand it back.

As for the British people, they have a history of bowing to royalty, don’t they?

Weep for the people.

Opportunity lost.

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.
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.

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.


21 thoughts on “Opportunity lost: UK and Greek versions. What do they have in common?

  1. What happened to Cuba’s economy? Doesn’t the government print it’s own money?
    Thanks for all your work here!


  2. One of the many things I’ve learned from reading this blog is that goal of a country is not to have a 0% unemployment rate, but rather to have everyone receive. This is logical. If robots can perform everyone’s labor, how can that be a bad thing? Jeb Bush does not see it that way. In this article,


    Jeb says “…people need to work longer hours and through their productivity gain more income for their families.”

    There many things wrong with this statement. Was it a good thing back in the 1700’s when everyone owned farms and worked 80 hour weeks? And since total income is equal to total spending, working longer hours will result in more income only if other people spend more. If everyone is working longer hours they are probably not spending more.

    This could be our next President!


    1. Right. Jeb must feel the poor don’t work hard enough.

      The rich always like to portray the poor as lazy slackers, who must be whipped and taught a lesson.

      The middle class believes this, which is why they sneer at “food stamp mamas,” and the unemployed.

      The rich, of course, work so very hard, giving orders from their recliners, resting on their yachts.


  3. I has such high hopes that the new Greek government would finally stand up to the bankers and take back their monetary sovereignty.

    That would have provide an example that could not be ignored to all the people of the world that monetary sovereignty is the answer to the LIE that the government does not have the money to do what is needed for its citizens.

    It takes a lot to make me cry, but I sobbed like a baby, but when I heard that the Greek government caved in.

    I only hope that in a few years when they are back to where they are today the Greek government will show the same courage that the Argentine and Icelandic government did.


  4. “Although devaluation is necessary, the government’s handling of events is deeply flawed. “The government has made the grave error of devaluing without implementing a comprehensive plan to reduce inflation,” says Luis Secco of Perspectiv@s, a consultancy. Without any transparency about the government’s intentions, or any sign of tighter monetary policy, an accelerated devaluation risks only increased inflation and even greater demand for dollars on expectations of further falls in the peso.”

    So Argentina needs to increase interest rates on the peso, right?


  5. Roger said, “What does this do to an economy? Shrink it, of course. What else could a reduction in funds possibly do?”

    Mike Norman, an MMT guy, wrote,

    “Next, in the U.S. the key number is $4 trillion. Matt Franko and I have been saying this for five years. Four trillion is the top line spending of the Federal Government. We have not been under that since 2008 and since 2009 (the first year we topped $4 trillion gross spending) the stock market and economy have been rising/growing.

    The deficit?

    Forget it. Those who have been focusing on that have been wrong. You’d think that a $1.2 TRILLION REDUCTION in the deficit since 2012 would have made them scratch their heads and wonder about their predictions by now, but they keep on going. I’ll say this again (and Matt Franko has said it here a million times), the deficit is EX POST. It’s what’s left over after everyone spends/earns/pays taxes.”


    I infer from this that top line government spending is more critical to an economy’s health than how dollars net out in the deficit number. I’m confused relative to your Recession Clock.

    Your thoughts? Thanks in advance.


  6. “. . . the deficit is EX POST. It’s what’s left over after everyone spends/earns/pays taxes.”

    Dead wrong. I don’t know where he got that idea.

    The deficit is when taxes exceed federal spending. Deficit has nothing to do with everyone’s spending and earning.

    I don’t seen how a zero deficit (the government takes as much out of the economy as it puts in), could be stimulative.


    1. He seems to be agreeing with Rodger that as long as Greece has a trade surplus it doesn’t matter if the government runs a deficit or a surplus.

      “The Greek crisis is function of their trade deficit, not government social spending: In order to grasp the true nature of the crisis, it is extremely important to understand that what has happened is a function of Greek trade deficits, not Greek government budget deficits. If Greece buys more goods and services from Germany than Germans buy from Greece, they must finance this by selling financial assets and/or borrowing. This creates external debt. Conversely, if they sell more to the Germans than the Germans buy, then Germany must sell financial assets to or borrow from Greece. This is true regardless of the government’s budget balance.”


  7. penny,

    Any monetarily NON-sovereign government — be it city, county, state or nation — that runs a trade deficit, eventually will run out of money.

    Monetarily Sovereign nations can run traded deficits forever, and never run out of money.

    Sadly, the author does not mention this difference, so his readers may think his otherwise true words refer to all nations.


    1. Well at least he shows that government deficits are not to blame.
      I was listening to public radio and a Greek bookstore owner claimed their
      debt problems are a result of Greek mothers doing everything for their kids including breathing. She has instilled in them a sense of entitlement.
      Of course his mom didn’t 🙂


  8. More on “Opportunity Lost.”

    As if it weren’t bad enough that the Greek government asked its people what they wanted, and then proceeded to ignore the vote . . .

    Greece Has Made No Preparation for a Grexit

    It’s as though the Greek leaders intentionally wish to destroy their own nation.

    All I can imagine is that they have been bribed to make the exit from the euro horrifying, as a lesson to other nations that may be contemplating the same thing.

    Opportunity Lost.


    Good article re. Opportunity Lost:

    “Greece Brought a Latte to a Gunfight”

    This is the endgame for the destruction of Greece by its own leaders. This nation could have prepared. It could have made the plans necessary to return to Monetary Sovereignty. It could have been a shining success.

    It could have. It didn’t.

    Opportunity Lost.


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