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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 the rest..
•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..


Let’s begin with a few facts upon which most people agree:

1. Being Monetarily Sovereign (sovereign over its own currency), the federal government can “print” unlimited dollars.
(It doesn’t really “print” the dollars, but the important point is the U.S. government cannot run short of its own sovereign currency — the currency it originally created from thin air 200+ years ago.)

2. It benefits the nation for American business to be strong.
(Strong business hire more people, pay more salaries and provide more goods and services than does weak business.)

3. Reducing cost is a good way to improve profits and to strengthen a business.
(Profits are the difference between sales and costs.)

4. Federal taxes represent a large cost to most businesses.

5. To reduce this cost, a few companies have instituted an “inversion.”

Clinton’s Plan to Complicate Corporate Taxes
BloombergView, December 10, 2015, By Paula Dwyer

To Hillary Clinton, corporations are being unpatriotic when they combine with a smaller foreign company and then move their legal addresses overseas, where taxes are lower. (Known as an “inversion.”

This week she released a plan to stop such tax-avoidance trickery, which has been on the rise in recent years.

(Inversion) isn’t good for America.

As Clinton says, mergers should be carried out for business reasons, not to take advantage of tax loopholes.

Inversions also erode the tax base needed to maintain roads, rails and ports, support basic research, enforce trade treaties and perform the million other tasks that allow U.S. companies to conduct business across 50 states with little friction.

See anything wrong with this?

Since the federal government has the unlimited ability to create its own dollars, why does it need to take dollars from business? And why is taking dollars from business, which weakens American business, considered “patriotic”?

And why does the Monetarily Sovereign U.S. need to get dollars from business in order to “maintain roads, rails and ports, support basic research, enforce trade treaties and perform the million other tasks . . . “?

Clinton, though, has a propensity to address problems with complicated five-point plans involving a mix of legislative and executive actions, when a simple solution — lowering U.S. corporate taxes to match what the rest of the developed world charges — would suffice.

And if lowering taxes to match what the rest of the developed world charges is a good idea, wouldn’t lowering taxes below what the rest of the world charges be an even better idea?

Think of the competitive​ advantage it would give American business. Think of the additional jobs, the additional salaries.

She would require U.S. shareholders to own half or less of the combined company as a condition for avoiding corporate taxes.

(She) would even try to undo numerous completed inversions by making the 50 percent hurdle retroactive to May 2014.

She would also require companies to pay an “exit tax” before inverting.

She would also ask Congress — or the U.S. Treasury Department if Congress fails to act — to crack down on the practice of “earnings stripping.” This happens post-inversion, when a U.S. unit borrows heavily from its new foreign parent. The loan is then repaid from operations in the U.S., where interest on debt is tax deductible.

All this is a complicated, convoluted effort that will cut corporate profits by making business pay more taxes. So what are we talking about, here?

Deferral from taxation of overseas earnings is the very feature of U.S. tax law that’s driving inversions in the first place.

Multinational companies refuse to repatriate more than b><$1 trillion in earnings unless Congress lets them bring the money home at a much lower rate than the existing 35 percent levy. As a result, companies are inverting to get their hands on that cash.

Few corporations actually pay 35%, but shouldn’t business planning rather than tax maneuvering be the prime concern of corporations?

When American companies spend time, effort and money to buy small overseas companies, for the sole purpose of cutting taxes, that is not the best business use of their time, effort an money.

It’s downright inefficient​.

Finally, Clinton would apply the $80 billion or so in new revenue over 10 years, which she claims she’d raise by closing inversion loopholes, to provide tax relief for research, community development and manufacturing.

Hmmm . . . “Tax relief for research and manufacturing.” She would tax business more so she could tax business less. Soundsl like a perfect political plan.

Clinton is acting because Donald Trump has politicized corporate inversions, or any attempt by a U.S. company to close plants and send jobs overseas.

Companies “send jobs overseas” to cut costs. One cost is taxes. So cutting taxes would help discourage companies from “sending jobs overseas.”

Clinton’s proposal wouldn’t fix the biggest underlying defect: The U.S.’s corporate tax is higher than what the 34 advanced countries in the Organization for Economic Cooperation and Development charge.

The OECD average is 24 percent. What’s more, the U.S. taxes companies on their global income, unlike most other countries, which tax only profits earned within their borders.

Get it? U.S. companies send jobs overseas to cut costs. Taxes are a cost. U.S. companies pay higher taxes than do foreign companies.

So the Clinton solution? Increase taxes on U.S. companies by eliminating inversions.

It makes no sense, and Clinton knows it. But . . .

As a Democrat fighting for primary votes against the more-liberal Sanders, Clinton can’t afford to favor corporate tax cuts.

You see, the politicians, media and economists have been so effective in convincing voters that federal financing is like state and local government financing (otherwise known as “the Big Lie”), and so federal taxes “must” be necessary, that now Clinton doesn’t dare reveal the truth: Federal taxes do not fund federal spending.

Yes, those tax dollars that businesses send to the U.S. Treasury are unnecessary.

If all business taxes were reduced to $0, the federal government be unaffected (It could continue spending as always), U.S. businesses would prosper, the American public would prosper, and the economy would grow massively.

But liars become enmeshed in their own lies. (“Oh, what a tangled web we weave . . .”) Trapped by “the Big Lie”, the politicans don’t dare do the right things, even if they wanted to.

So they come up with nonsense solutions (raise U.S. business taxes to encourage U.S. business to stay home), in the hope the public will not notice the illogic.

In short, they are betting on the public’s ignorance.

A pretty good bet.

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 Click here
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.


Recessions come only after the blue line drops below zero.

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.