–The euro comes to Puerto Rico

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.
•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.
•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.
•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..


The euro nations, having surrendered the single, most valuable asset any entity can have — their Monetary Sovereignty — now deal with the inevitable austerity that surrender requires.

The process always is the same:

1. A monetarily NON-sovereign government does not have the ability to create money. So, to pay its bills, it must have income. This income can come from three sources: A positive balance of trade, taxes and/or borrowing.

(As an aside, you personally are monetarily NON-sovereign. To pay your bills, you must have income. To survive long-term all monetarily NON-sovereign entities must have net income.)

2. Mathematically, not all nations can rely on a positive balance of trade. Those with a negative balance of trade must acquire money by increased taxing and/or borrowing.

3. Increased taxing impoverishes the private sector, which reduces the tax base and makes future tax increases ever more difficult — an endless whirlpool of impoverishment — so monetarily NON-sovereign nations increasingly turn to borrowing.

And here is where the divide between euro nations vs. U.S. states, counties and cities occurs.

Euro nations borrow from the troika (the European Central Bank [ECB], the European Commission [EC], and the International Monetary Fund [IMF]), a rapacious group that follows typical loan-shark protocol:

Lend to borrowers who cannot pay, then repeatedly lend more to pay the previously unpayable debt, then impose draconian punishments for non-payment — a protocol the guarantees endless debt slavery. The troika must have learned from the Mafia.

By contrast, most U.S. cities, counties and states, though also monetarily NON-sovereign, are blessed by a positive balance of trade with the Monetarily Sovereign U.S. government (which never can run short of dollars).

This brings us to Puerto Rico, financially much like a U.S. state:

Hedge funds tell Puerto Rico: lay off teachers and close schools to pay us back
Report commissioned by 34 hedge funds says government had been ‘massively overspending on education’ despite spending only 79% of US average per pupil

Billionaire hedge fund managers have called on Puerto Rico to lay off teachers and close schools so that the island can pay them back the billions it owes.

The hedge funds called for Puerto Rico to avoid financial default – and repay its debts – by collecting more taxes, selling $4bn worth of public buildings and drastically cutting public spending, particularly on education.

Perfect: The loan sharks (this time not the troika, but the equally rapacious hedge fund managers) demand that Puerto Rico further enslave and impoverish its people by squeezing them for more taxes and cutting education.

And of course, the wealthy hedge fund managers want further to rape the Puerto Rican economy by purchasing government property at bargain basement prices.

This is exactly what is happening to Greece. Loan sharks are the same, the world over.

The report, entitled For Puerto Rico, There is a Better Way, said Puerto Rico could save itself from default if it improves tax collection and drastically cuts back on public spending.

It accused the island, where 56% of children live in poverty, of spending too much on education even though the government has already closed down almost 100 schools so far this year.

Could it be any more disgusting than stealing the futures of already impoverished children?

The article goes on with ever more shocking suggestions from the loan sharks. You should read it to see how low it is possible for rich criminals to sink (the same rich criminals who complain loudly about the petty crimes committed by poor criminals).

And what is the solution? Quite simple, really.

Institute the “Ten Steps to Prosperity” (below) In the case of Puerto Rico’s education problem, see especially Step #4: Free Education, Including Post-Grad, For Everyone

That would rid PR of the loan sharks, permanently.

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.


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