Ignorant or dishonest? You decide

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 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..

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IMPROVEMENTS IN ECONOMY NOT ENOUGH TO CURE BUDGET WOES

WASHINGTON, DC – Maya MacGuineas, Executive Director of the Committee for a Responsible Federal Budget, released the following statement today in response to the Office of Management and Budget’s Mid-Session Review, which is now estimating a deficit of $445 billion.

“The good news is that the numbers moved in our favor. The bad news is that we still face a tremendously challenging situation.

“We cannot continue to allow this burden to multiply for our children and our children’s children.”

Hope as we might, we will not be able to grow our way out of the nation’s fiscal problems. “While improvements in the economy are always welcome, the higher receipts should not be viewed as license to spend more, but rather as an opportunity to take steps toward eliminating the deficit,” said MacGuineas.

Maya MacGuineas spoke of our “tremendously challenging situation” way back in 2004.

Then in 2007:  

The New America Foundation co-hosted a forum entitled The Unavoidable Challenge: Confronting Our Nation’s Fiscal Crisis with the Heritage Foundation and the Public Policy Institute.

Maya MacGuineas, director of the Fiscal Policy Program at New America and president of the Committee for a Responsible Federal Budget, kicked off the conference by emphasizing the size and inevitability of the problem and asserting the need for specific solutions.

She pointed to three options:

1. Do nothing and watch the problem metastasize;
2. Increase revenues, but taxes are already above historical levels, and, assuming no cuts in spending, would have to grow to more than 30% of GDP to handle the coming growth in entitlements in the short term, which would cripple economic growth; or
3. Cut spending, which must include entitlements.

Sen. Lindsey Graham (R-SC) argued that time is running out, and that currently scheduled benefits are unsustainable.

Note how tax increases (which the rich hate) “would cripple economic growth,” but spending cuts (which have the same effect on the economy as tax increases, but punish the middle and poor) are recommended.

That was in 2007, when Maya MacGuineas’s “tremendously challenging situation” morphed to her “fiscal crisis.” Her solution: Cut benefits to the middle classes and the poor.

Graham used the favorite right-wing word, “unsustainable,” a word which never is explained. Why are federal “deficits” and “debt” “unsustainable”? No one knows. (They mean “bad,” but “unsustainable” sounds so much more perspicacious.)

Let’s jump ahead three years:

Mid-Session Review Shows Unsustainable Path
July 23, 2010

“A trillion-dollar-plus deficit is manageable this year if, and only if, there is a plan to bring the debt back down to a manageable level over the decade.

This, however, is a recipe for fiscal disaster,” said CRFB president Maya MacGuineas. “We have got to do something about the coming tide of red ink before our creditors force us to make changes under their terms, instead of under our own.

“How many more terrible budget projections do we need before we decide enough is enough?”

“Our creditors” are T-security account depositors at the Federal Reserve Bank. The FRB pays them off by the simple expedient of returning their existing dollars, exactly the same way your bank pays you your savings account deposited dollars. No problem at all.

Somehow we survived MacGuineas’s $445 billion “challenging situation” back in 2004, and we survived Graham’s “unsustainable fiscal crisis” of 2007, and now, in 2010, we are faced with a trillion-dollar-plus “fiscal disaster.”

Can we sustain? Let’s jump ahead to 2012:

Our country’s debt trajectory is unsustainable.

Historically, debt held by the public has averaged less than 40 percent of GDP since 1970. Today’s debt is roughly 70 percent of GDP and rising fast, particularly due to the retirement</b. of the baby boom population and rapid health care cost growth.

The United States is currently at a crossroads, where fundamental but thoughtful changes can be made now, or else far more painful ones can be forced upon us down the road.

Well, years have passed and our “unsustainable fiscal crisis” still is “unsustainable,” and remains at “a crossroads” — a remarkably slow, unsustainable crossroads.

As always, the problem is “retirement” (Social Security) and “health care” (Medicare), and the solution, as usual, is to cut both programs — programs benefit the middle and lower income groups.

And now we arrive at 2015. The Committee for a Responsible Federal Budget (CRFB) continues its usual rant about federal (misnamed) “debt” and (misnamed) “deficits.”

More properly, the “federal debt” should be called “deposits” and “federal deficits” should be called “economic surpluses.”

The (misnamed) “federal debt,” actually is the total of interest-paying deposits in T-security accounts at the Federal Reserve Bank. Think: Savings accounts at your local bank.

The (misnamed) “deficits” are the surplus of federal dollars entering the economy via federal spending, vs. the dollars leaving the economy via federal taxes.

When was the last time your local bank’s debt increased? Answer: Every time someone like you made a deposit.

As you deposited dollars to your savings or checking account, did you say to yourself, “I’m putting my bank deeper into an unsustainable debt?”

That’s what the CRFB would say.

And when our federal government cuts taxes and/or increases spending, this is a surplus for our economy. That’s a good thing, folks, even though MacGuineas thinks it’s a deficit “crisis.”

It puts dollars into the pockets of “our children and our children’s children.”

Bottom line: For more than 10 years, MacGuineas and her accomplices, have told you the federal deficit and debt are unsustainable crises, with catastrophe imminent. The were wrong in 2004, still wrong in 2007, wrong again in 2010 and 2012 — and every year in between — and continue to be wrong today.

We continue to sustain, our economy grows and our children have not been asked to pay the government’s debt (a legally impossible request).

The right wing “solution” to this non-problem inevitably is to cut benefits to the middle and lower income groups, which is their real goal.

So the question is: Are they ignorant or dishonest and well-paid tools of the very rich?

You decide.

Rodger Malcolm Mitchell
Monetary Sovereignty

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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.

THE RECESSION CLOCK

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.

#MONETARYSOVEREIGNTY

18 thoughts on “Ignorant or dishonest? You decide

    1. how does the FED effect short term, as opposed to long term, interest rates? by raising the rate by .25%, does that really effect someone that bought a 10 year bond 5 years ago, as opposed to someone that bought a bond today? does it matter, to someone that is contemplating buying a car, or say, a condo, tomorrow? I’m an average joe, or blow, how does this effect me, or should I just go back to my IPhone?

      Like

      1. Banks pay the short-term rate when they borrow to adjust reserves. They would pass this rate on to borrowers.

        Other lenders borrow from banks, so they, in turn, pass on the rate increase.

        This has no effect on the rates paid by existing borrowers, but when rates increase, the price of existing debt falls, because people can buy new debt that pays more.

        The new rate affects the exchange rate of the dollar, making the dollar stronger, which reduces inflation.

        Bottom line, you are correct. A quarter point is almost meaningless, and in fact, even a larger bump would have minimal effect on sales of goods and services.

        The microscopic negative economic effect of higher interest is matched by the microscopic positive effect of increased federal spending on interest.

        Like

  1. Right. There may be a dual “mandate,” but the Fed does not have the power to achieve the dual goal.

    The Fed can prevent/cure excessive inflation. It also can induce increased insanity in financial markets.

    It cannot:
    1. Lift inflation above zero.
    2. Increase GDP, increase employment, decrease unemployment or increase median football scores on odd-numbered Sundays.

    If I were President, I would call in Yellen and say, “You have but one mandate: Prevent inflation from rising above 2%. That’s it.

    “Now go home and do your job, while Congress and I run the economy.”

    Like

  2. 2% inflation is effectively still deflation territory, wouldn’t you agree? It’s hardly wealth creation. Even China is in relative deflation as growth is down 4%.
    IMO this deflation is now a permanent fixture in the planet’s economies. Next we’ll probably have stagflation for a while, followed by collapse. What a rosy picture!
    Demographics [Harry Dent’s theme], the declining utility of energy, the declining utility of credit, are all standing in the way of any future good times.
    Unless we start again with a new cheap universal energy source, we can only go downhill from now on.

    Like

  3. The hatred spread by Trump and the Republicans is having an effect…

    Wheaton College, a prominent evangelical school in Illinois, suspended a professor for posting on Facebook that Muslims and Christians “worship the same God.” The professor is not Muslim. She just favors peace for the Christmas season. Her suspension will last through the spring semester, and might be changed to a termination.

    Christianity: the religion of “love.”

    https://www.washingtonpost.com/news/acts-of-faith/wp/2015/12/16/do-muslims-and-christians-worship-the-same-god-college-suspends-professor-who-said-yes/

    Like

    1. There are fools and bigots in every religion.

      Example:

      This University President’s Solution To Islamist Terror Is ANGERING Lots Of Liberals!!

      In a pretty funny moment, he says “if some of those people in that community center had had what I got in my back pocket…” he trails off as the applause overtakes his speech but it’s clear that he’s talking about a firearm.

      But the very mention that someone might have the Constitutional God-given right to defend themselves with a gun when a terrorist attacks them just makes liberals seethe with rage and anger.

      Yes, if you check the bible, you will find the passage that mentions the need for everyone to carry a gun in their back pocket.

      Like

      1. That article brings three things to my mind.

        FIRST, if someone wants to rob me, and he knows that most people are armed, then he will not merely threaten me with a gun. He will immediately shoot me to death without a word, and then rob me. This is what I must live with in a society of gun nuts.

        SECOND, that speaker, Jerry Falwell Jr., is the son of the late televangelist Jerry Falwell. This creep preaches hate while he exploits the student loan scam. Meanwhile the stadium is full of evangelical “Christians” who are just as violent and hate-filled as the Muslim jihadists that these “Christians” want to exterminate.

        THIRD, again I say that in U.S. society, guns are necessary for maintaining the Gap between the rich and the rest. Republicans can rob us of food, money and shelter, but we will submit as long as they let us keep our guns. Take my last penny. Take my health. Take my life. Take everything. Just leave me my gun.

        Likewise I will vote against any politician who wants more gun control, no matter how much that politician boosts my peace and prosperity. If I am given a choice between [a] my gun and [b] free health care, universal social security, and a high-paying job, I will choose [a] because…Merika.

        True patriots don’t mind living in shantytowns of cardboard boxes, as long as they can keep shooting each other.

        The rich know this. That’s why they encourage U.S. peasants to have more guns. The rich themselves are protected by cops, soldiers, and private security.

        Like

  4. O.K., dear readers, if you think the answer to the question, “Ignorant or Dishonest” is “Dishonest,” about one vote for “Ignorant.”

    Facts a low priority at Republican debate”

    Hey, why should someone who for months has been campaigning to be President of the United States — the person who wants his/her finger hovering above the red button — have any idea what the “nuclear triad” is?

    ………………………………………………………………………………………………………………………………………………….

    And then there’s this from the Birther-In-Chief (who now refuses to talk about his birtherism). It seems ridiculous even for Trump, but then again, nothing is ridiculous for Trump so long as his followers keep buying it:

    NO ONE ACTUALLY DIED AT SANDY HOOK OR ANY OTHER MASS SHOOTING

    Like

  5. Words of wisdom from the right:

    Donald Trump left Joe Scarborough stunned after being asked about Vladimir Putin killing journalists

    Scarborough pointed to Putin’s status as a notorious strongman.

    “Well, I mean, it’s also a person who kills journalists, political opponents, and invades countries. Obviously that would be a concern, would it not?” Scarborough asked.

    “He’s running his country, and at least he’s a leader,” Trump replied. “Unlike what we have in this country.”

    “But again: He kills journalists that don’t agree with him,” Scarborough said.

    The Republican presidential front-runner said there was “a lot of killing going on” around the world and then suggested that Scarborough had asked him a different question.

    “I think our country does plenty of killing, also, Joe, so, you know,” Trump replied. “There’s a lot of stupidity going on in the world right now, Joe. A lot of killing going on. A lot of stupidity. And that’s the way it is. But you didn’t ask me [that] question, you asked me a different question. So that’s fine.”

    Scarborough was left visibly stunned.

    “I’m confused,” the MSNBC host said. “So I mean, you obviously condemn Vladimir Putin killing journalists and political opponents, right?”

    “Oh sure, absolutely,” Trump said.

    If you watched the Republican Presidential debate, that dialog will seem typical.

    Like

    1. but he, trump, is right with regard to his “our country does plenty of killing” comment. also, the irony of scarborough asking about vlad invading countries, as if the US is not greatest purveyor of terrorism in the world. if you need any evidence, I suggest you ask the inhabitants of the 7 nations that have been occupied since Obama took office…. I could speak to the “killing of journalists and political opponents” comment as well, but I will leave that for another day……

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      1. A bit of false parallelism there.

        So all nations and all governments are equally bad and equally good. Right?

        No sense in criticizing anyone or anything, since none of us is perfect. Right?

        And North Korea and South Korea and China and Russia and the U.S. all are equal with regard, say, to human rights. Right?

        “. . . asking about vlad invading countries, as if the US is not greatest purveyor of terrorism in the world.”

        Aw c’mon. That’s high school debate stuff. Don’t allow your imagination run too wild. Some things are not parallel

        For instance, when I hear false parallels between treatment of blacks in American and the Holocaust, I feel like throwing up.

        So, don’t force me to throw up. I’m wearing a new shirt.

        Like

        1. no false parallelism at all. I suppose you believe that when the US invades a country it is for the citizens of said invaded country, and not for the corporations, and oligarchs that you constantly write about… when did I say “all nations and all govts are equally (your italics) bad and equally (my italics) good? when did I say that no one should be criticized?

          and then you devolve to insults, because I do not subscribe to your belief in the exceptionalism of the US, yes? when did I mention N. Korea? and why would you bring S. Korea into this argument? are you sure you meant to include them in your diatribe? I would hope not, although I am sure ms harris will come to your defense. you need to stick with monetary sovereignty. I assume this will NOT be published, contrary to your previous declarations, however.

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          1. It means that since you enjoy making outlandish comments, here is my outlandish comment about your point that “the U.S. is the greatest purveyor of terrorism in the world”:

            That is the most stupid comment ever made in the history of the universe.

            If ever you wish to come back down to earth, feel free to write.

            Like

          2. “I am sure ms harris will come to your defense.”

            Rodger and I agree on most domestic issues, but we live in two different worlds with regard to foreign issues.

            That’s life. No matter who we are, no one will ever agree with us about everything.

            Like

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