Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
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It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders..
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Here is how the meanness and zigzaggery of leadership jeopardizes your health, your income, and your lifestyle.
Introduction:
The U.S. federal government is different from state and local governments. It is different from businesses. It is different from you and me.
The federal government uniquely is Monetarily Sovereign. It is sovereign over the U.S. dollar.
The federal government, 240 years ago, created from thin air, the laws that created the dollar from thin air. The government created as many dollars as it wished, and gave those dollars the value it wished — an arbitrary number of grams of silver.
Today, the government still creates dollars, now at the press of a computer key, and still controls the value of the dollar (i.e. inflation), now by changing interest rates.
Being the absolute sovereign over the dollar, the federal government never can run short of dollars. It has no need to collect taxes. Even if all federal tax collections were $0, the federal government could continue creating and spending dollars, forever.
It also has no need for borrowing and indeed does not borrow. The so-called “debt” is not the result of borrowing, but rather the acceptance of deposits in Treasury security accounts at the Federal Reserve Bank — similar to your deposits in your bank savings account.
The federal government easily could provide comprehensive, no-deductible, health care insurance coverage for you and for every other man, woman, and child in America (Medicare for All), and do it while eliminating FICA and controlling inflation.
That is how much power the federal government has over its sovereign currency, the dollar.
Why then must you see articles like this:
Medicaid cuts could be catastrophic for Idaho schools
By Julie Wootton, Times-News | Posted Jun 14th, 2017 @ 1:40pmBeyond the typical classroom setting, some of the teenagers also receive services at school such as speech, physical or occupational therapy.
School districts pay for that mostly by using reimbursements from Medicaid, a federal program that provides health coverage to low-income Americans and people who have disabilities.
But the new federal American Health Care Act aims to cut Medicaid over 10 years by $880 billion — a total reduction of 25 percent.
Cutting Medicaid funding would place more financial responsibility on local school districts, said Sherry Bingham, special services director for the Minidoka County School District.
“Cuts by the federal government in reducing the amount of Medicaid monies to already underfunded special education programs would be disastrous.“
Spending by local school districts is paid for by local taxpayers. By contrast, federal spending does not cost taxpayers one cent. So, why would the politicians want to replace federal spending with local spending?
GOP Medicaid cuts to hit rural America hardest, report finds
by Phil Galewitz, Kaiser Health News @CNNMoney June 7, 2017: 3:52 PM ETTrump Country it may be, but rural counties and small towns also make up Medicaid Country — those parts of the nation whose low-income children and families are most dependent on the federal-state health insurance program, according to a Georgetown University report released Wednesday.
Medicaid’s enrollment has swollen to more than 72 million in recent years, and the ranks of uninsured Americans has fallen to 9% in 2015 from 13% in 2013. That’s largely due to the Affordable Care Act, which allowed states to expand Medicaid eligibility with federal funds. Thirty-one states, plus the District of Columbia did so.
Those gains may be in jeopardy under the House GOP health care bill that would replace major parts of the ACA — known as Obamacare — and dramatically cut federal funding for Medicaid.
Why do the politicians, who were elected by the lower-income, rural families, now put forth plans to hurt the people who elected them?
CNNMoney Reports
Medicaid cut could put jobs in Kentucky at risk
Cuts to Medicaid have far-reaching effects, not only on your health but on your income. Medicaid payments support hundreds of thousands of healthcare-related jobs in such disparate industries as manufacturers of hospital supplies and equipment to ambulance builders to drug stores and pharmaceuticals. And let’s not forget all the medical personnel that are paid, in part, by Medicare.
Every dollar the federal government pumps into Medicaid circulates into the economy as a job-creating stimulus dollar.
Your Money, Your America
In Texas, people with erratic incomes risk being cut off from Medicaid
by Shefali Luthra, Kaiser Health News @CNNMoney, June 15, 2017: 6:08 AM ETTo qualify for Medicaid in her home state of Texas, most children must come from families with incomes at or below 138% of the federal poverty level. In 2017, that’s $33,948 for a family of four.
Texas also has one of the country’s strictest Medicaid verification systems: It runs regular checks on family finances after children are enrolled to make sure they continue to qualify.
Poole and her husband work in seasonal industries. She’s an hourly employee in agriculture and he’s in oil. Their hours and incomes have changed on a monthly, even weekly basis. That means their nine children, five of whom were adopted, and all of whom have complex health conditions, could lose health insurance one month but then qualify the next, even though the family’s total income for the year does not exceed the eligibility threshold.
States, being monetarily NON-sovereign, and limited in their spending ability, look for ways to cut benefits. The federal government has no such need.
Medicaid Cuts In Wisconsin Would Undermine Training For Adults With Disabilities
June 14, 20172:32 PM ET
And, it’s not just the cut themselves that are destroying Medicaid and the Affordable Care Act (ACA) program; it’s the uncertainty.
Blue Cross and Blue Shield of NC spells out how much Trump-fueled uncertainty hikes premiums
POSTED 12:31 PM, MAY 27, 2017, BY CNN WIREMany insurers say that the uncertainty emanating from Washington D.C. is prompting them to request even steeper hikes in premiums for 2018.
Blue Cross and Blue Shield of North Carolina is spelling out just how much it could cost consumers.
The insurer is requesting a rate hike of nearly 23% for next year. But it said it would have only asked for an 8.8% bump if President Trump and House Republicans agreed to fund the Obamacare cost-sharing subsidies through 2018.
The mere fact that the GOP wants and threatens to cut federal Medicaid payments is sufficient to sabotage ACA. As the Trump administration warns about cuts, these threats alone weaken the program, which the politicians then use as further “proof” the program should be cut.
It is a self-fulfilling, repeating act: Threaten, weaken, cut; threaten, weaken, cut.
And then, to add to the uncertainty, we have the zigzaggery of a confused administration:
Trump, in Zigzag, Calls House Republicans’ Health Bill ‘Mean’
By THOMAS KAPLAN, JENNIFER STEINHAUER and ROBERT PEARJUNE 13, 2017President Trump bluntly derided a House attempt to repeal the Affordable Care Act as “mean.” and in doing so, injected himself in a brewing Senate battle that his fellow Republicans had prayed he would avoid.
At a White House lunch, Mr. Trump alerted his guests that a bill passed by the House this spring — one he lauded last month as a “great plan” that was “very, very incredibly well-crafted” — was now “mean.”
“I really appreciate what you’re doing to come out with a bill that’s going to be a phenomenal bill for the people of our country: generous, kind, with heart. That’s what I’m saying. And that may be adding additional money into it.”
We have written about meanness, before: The Meaning of America — now worse.
Now suddenly, the entire thrust of the GOP — to cut benefits for the poor and to save taxes for the rich — a thrust that has caused insurance companies to raise rates or to leave the plan altogether — now the “Party of the Rich” has become the “Party of the Zigzaggery” with no real direction other than to destroy everything, Obama and to widen the Gap between the rich and the rest.
Of course, both parties can share the blame for spreading “the Big Lie” — the lie that federal “debt” (deposits) must be reduced, and federal deficits cut (when exactly the opposite is true).
So you, the public, will suffer from their lies and zigzaggery, if you accept without question, their dishonesty and their incompetence.
The solution is simple and straightforward: FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (Step #2 of the Ten Steps to Prosperity.)
Anything else is “mean.”
Rodger Malcolm Mitchell
Monetary Sovereignty
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The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.
Implementation of The Ten Steps To Prosperity can narrow the Gaps:
Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:
Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012
Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.
The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.
MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
Thanks again for the excellent commentary.
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Thank you.
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“The so-called “debt” is not the result of borrowing, but rather the acceptance of deposits in Treasury security accounts at the Federal Reserve Bank…”
Securities, Bonds, etc.. are all, in essence, types of promissory notes and they only have value because of the contractual obligation of future performance.. aka paying back the money promised in the future… by collecting it via taxation.
These promises to pay back money are given full faith, and credit.
Now that there is something valuable in existence, money can be created to represent it.
This is a natural law requirement of representative currency.
The private people, who are actually the ones who delegated this sovereign power to government, can not only use the same method to create money, but the bulk of the currency that has been created and in circulation, be it money of account (credits in bank accounts) or money of exchange (paper/coins), was created by the private sector using their inherent sovereign power.
MMT is a flawed theory, based on total ignorance of the FACT that US Treasuries are debt instruments that are going to be paid back by future generations of tax payers.
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You are correct that US Treasuries are debt instruments, but they are not paid back by future generations of taxpayers.
Even if all federal tax collections were $0, the federal government could repay all of it’s so-called “debt” tomorrow if it chose to.
The “debt” is the total of T-securities (T-bills, T-notes, T-bonds). When you “lend” to the federal government, your dollars are taken from your checking account and placed into your T-security account at the Federal Reserve Bank.
There your dollars remain until your T-security is paid off, at which time those dollars in your T-security account are transferred back to your checking account. No new dollars needed.
None of these transactions are in any way related to taxes. They are just dollar transfers, back and forth.
The federal government, being Monetarily Sovereign, could go the rest of eternity without levying any taxes, and still spend as much as it wishes.
That is the fundamental difference between the Monetarily Sovereign federal government and the monetarily non-sovereign state and local governments.
Bottom line: Federal taxes do not fund federal spending.
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Indirectly, the public debts *are* paid back by future generations of tax payers. Technically, the government collects the taxes, and IT repays the debts with them but the ability to pay comes from the ability to tax.
When pressed for the Statutes at Large containing the Act that changes the fundamental nature of debt, taxes and tax collection, like all MMT advocates, you will fail to do so.
You people seem to fail to grasp the natural law of money.
It doesn’t matter if a government has been delegated sovereign money powers by We, the People, nations that start violating natural laws self destruct.
This is the reason the monetary system doesn’t work the way MMT is claiming it does and why the Trillion Dollar Coin was ultimately rejected.
This idea of “creating money out of thin air” is known to cause the money to fail and there is nothing “modern” about it.
Besides, if the US was actually creating money out of nothing, rather than how it really does (by monetizing the value of the debt instruments), there would be no National Debt. They wouldn’t account for the Debt.
If the debts are not going to be repaid, then the very thing that is valuable (the debt instrument), ceases to have any value and the money representing this value also ceases to have any value.
This is the natural law of representative currency that MMT fails to comprehend.
Besides, the sovereign power to create money remains with the people who uses the same methods that nation states use to create money… because we can’t delegate sovereign powers that we don’t have… and delegation is not relinquishment.
There is nothing “modern” about MMT, and in the past, any nation that ignored the natural laws of money have destroyed their economies: their money became worthless because it no longer represented anything of value.
The only thing modern in what the US is doing since the New Deal is that the concept of “value” that representative currency is created to represent is simply not limited to gold & silver any more.
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Christopher,
1. This site is MS, not MMT.
2. How were the original dollars created, if not out of thin air?
3. Do you understand the difference between monetary non-sovereignty and Monetary Sovereignty? What you have described is monetary non-sovereignty. If you wish to know what Monetary Sovereignty is, click here.
4. Every Monetarily Sovereign nation — Canada, the U.S., the UK, Australia, Japan, etc. creates money out of thin air. They have not failed.
6. The European Union, which is Monetarily Sovereign, creates euros out of thin air. The euro-using nations (France, Germany, Italy), which are monetarily NON-sovereign, cannot create euros out of thin air. The EU has not failed.
5. The word’s “National Debt” are misleadingly ascribed to the total of deposits in T-security accounts at the Federal Reserve Bank. Have you ever “lent” money to the U.S.? If so, you deposited dollars into your T-security account at the FRB. To pay you back, the FRB transferred your dollars back to your checking account.
6. Gold and silver are just metals, like platinum, copper, iron, palladium, aluminum, lead, uranium, etc. None ever were money, nor ever will be.
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Kindly forgive the lateness of this response, I tend to get busy.
I am only going to respond to 2.: How were original dollars created, if not out of thin air?
Rather than limit my response to just Dollars, I am going to give a brief history on money.
Many people, when they think about money, are of a mind that the money is valuable. While this has some merit, the simple truth is that money represents the existence of something of value and inherits it’s value from the asset it represents. Money has been like this since it was invented with the exception of gold and silver Coins, which were developed much later and are technically a return to the barter system, rather than actually being money. While that may seem strange to some people and provoke debate, they will find that the use of “money of exchange” in the form of tokens made of paper, wood, bamboo, etc.. as “warehouse claim tickets” occurred long before people started smelting gold & silver and striking coin. In fact, gold and silver coin as the medium of exchange was turned to originally as a type of security feature to stop counterfeiting because of the difficulty of mining and refining it, not because it was scarce or inherently valuable (it became valuable later because of being used in this way). Even older than the invention of “money of exchange,” is the invention of the ledger (in a very crude form), and so the oldest form of money is actually money of account — debits and credits on a ledger.
In light of that, the answer to the question of how the original Dollars were created was via making an entry in the general public ledger representing the value of certain assets, and this was never limited to gold & silver reserves. This ledger entry IS the creation of money.
The statement that “money is created out of thin air” implies that entries in the general public ledger are just made without actually representing anything of value, this is not only a lie, but it is fraud.
Further, while the Federal Reserve System expanded the monetary system to allow for the accounting of debt based assets on the ledger of the Federal Reserve Bank, the Fed never credits an account until the borrower perfects the debt instrument (sings the loan contract). It doesn’t matter if the borrower is public, private, a human being or even a political corporation like the United States. See, it’s you who seems to fail to see that the People are the Sovereign, and this preserves the Sovereign’s power to create money.
So, at the root of the creation of money, it is the borrower creating it.. by creating the asset… that is accounted for on the ledger.
Regarding the use of debt based assets, there are actually 2 entries made in the ledger of the FRB, in one account the debt is recorded, and in a separate account the credit is recorded. The banks don’t loan money from savings accounts or their own, they haven’t done this since 1933. Money is borrowed into existence.
Further still, when money that is borrower into existence is repaid, that money is destroyed. Consider the accounting:
when you add a positive to a negative (even on a ledger), they cancel one another out.
IE, someone borrows $1000.00,
The ledger:
Borrower Account 1: -$1000.00
Borrower Account 2: $1000.00
The Borrower spends the money…
The ledger:
Borrower Account 1: -$1000.00
Borrower Account 2: $0.00
The borrower earns some money:
The ledger:
Borrower Account 1: -$1000.00
Borrower Account 2: $100.00
The borrower uses the fund in Account 2 to make a loan payment:
The ledger:
Borrower Account 1: -$900.00
Borrower Account 2: $0.00
^^^ Notice how that $100.00 just vanished as the debt in account 1 was diminished?
The National Debt represents the money the United States has borrowed into existance.
All of the Treasury securities are different kinds of debt instruments aka promissory notes aka loan contracts that each have subtly different terms and conditions.
This use of debt based assets in the creation of money of account is true of all central banks.
Bankers who start just making ledger entries without any assets (either debt based or debt free), go to jail.
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You said, ” . . . the simple truth is that money represents the existence of something of value and inherits its value from the asset it represents.” That is correct. For the U.S. dollar, that “something of value” is not anything physical. It is the full faith and credit of the United States government.
As for whether the People are sovereign or the Government is sovereign, I consider that question to be sophistry.
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You are misrepresenting the “Full Faith and Credit” slogan, or rather, parroting someone else misrepresentation.
The “something of value” is shown on the Balance Sheet of the US Treasury (and the Balance Sheet of the Federal Reserve Bank).
Specifically, with regards to that slogan, the debt instruments reflected on the US Treasury Balance Sheet.
The “Full Faith” portion is related to the faith in the Borrower (and that could be a public or private Borrower), that they are going to honor the promise of future performance when they prefect the debt instrument. This is what make the debt instrument valuable to the Creditor(s).
The value of these assets (debt instruments) is then shown as a “credit” on account.
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Right, the U.S. dollar is only a number on a balance sheet. It is not a physical entity.
It has value only because of the federal government’s full faith and credit. That is the only “something of value” backing the dollar.
The owner of a dollar is a de facto creditor to the federal government. A dollar BILL is a Federal Reserve NOTE. The words, “bill” and “note” denote both money and debt. The reason: Every form of money actually is a form of debt. The collateral for that debt is the full faith and credit of the U.S. dollar.
The debt is owed by the issuer, and the Creditors do not have a claim on America’s “Purple mountain majesties or our “amber waves of grain.” All a creditor to the U.S. can rely on is full faith and credit.
All debt requires collateral. The collateral for federal debt is “full faith and credit.” This may sound nebulous to some, but it actually involves certain, specific and valuable guarantees, among which are:
A. –The government will accept only U.S. currency in payment of debts to the government
B. –It unfailingly will pay all it’s dollar debts with U.S. dollars and will not default
C. –It will force all your domestic creditors to accept U.S. dollars, if you offer them, to satisfy your debt.
D. –It will not require domestic creditors to accept any other money
E. –It will take action to protect the value of the dollar.
F. –It will maintain a market for U.S. currency
G. –It will continue to use U.S. currency and will not change to another currency.
H. –All forms of U.S. currency will be reciprocal, that is five $1 bills always will equal one $5 bill and vice versa.
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The start of the predominant use of debt based assets in money creation is most notable in 1933-34.
The slogan “Full Faith and Credit” was part of FDRs “New Deal” and its meaning, as a slogan, was as I stated.
“Full faith” that the debtor will pay the debt which causes the debt instrument to be an asset with a Dollar value equal to the liability.
You are confusing it with the Constitutional clause regarding “public acts, records, and judicial proceedings of every other state.”
Those numbers on the ledgers have value because those number represents the assessed Dollar value of the assets being reflected on the ledger… not because of faith, but because of knowing. The assets are proven to exist and evidence of them is kept. There is no faith required. However, the Constitutional clause of “Full faith and credit”, is that the general public ledger of the US Treasury is accurately accounting for the value of the assets because it is a public record.
Not all assets are debt based assets, but the Full Faith and Credit SLOGAN is DIRECTLY related to the use of debt based assets in money creation and is distinctly different than the Constitutional CLAUSE.
There are also 2 ledgers where money of account is being created: The general public ledger of the US Treasury, AND the Federal Reserve Bank’s ledger. They are not one and the same. They are, however, both using debt instruments as some of the assets in money creation, and ultimately, the assets recorded on both create & sustain the value & number of Dollars: M3
And there are 2 kinds of Notes circulating in tandem: US Notes & Federal Reserve Notes (which are redeemable in lawful money per USC 411, ergo, FRNs are not lawful money, only legal tender – were more people redeeming FRNs then more US Notes would be created – There are only $300 million US Notes in circulation, which are Bills of Credit – the other kind of lawful money mentioned in the Constitution in addition to gold and silver Coin).
“All debt requires collateral” is untrue. Private borrowing, however, which is creating money of account on the ledger of the Federal Reserve Bank typically does require collateral.
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Thank you for the history.
1. All money is a form of debt. There are no forms of money in existence, nor ever has there been a form of money in history, that was not a form of debt. The collateral for every form of money is in part, the credit of the issuer, plus any other collateral that may be offered.
You yourself can create “Christopher Bucks,” or whatever you wish to call them, and they would be perfectly legal for use by you and anyone who trusted their collateral and your full faith and credit.
Bitcoin is a form of money that relies entirely on the full faith and credit of the issuer and the blockchain.
2. Full faith and credit includes the guarantees I’ve previously outlined.
3. I suggest this phrase is sophestry: ” . . . not because of faith, but because of knowing.” But perhaps there is a difference between “faith” and “knowing” that I don’t understand. You could explain it to me.
4. All debt does require collateral, and unless you provide an example of debt that does not require collateral, I’ll stick with my “faith” (or is it “knowing”?) that every form of debt has collateral.
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1. Bronze, Silver, Gold, etc… coins are all forms of money that are not debt and a very notable fiat currency originated in Rome — the aes signatum, (signed bronze) which, in turn, was the precursor of the first Roman true coinage, the aes grave (heavy bronze). These were established by “official decree”.
The social contract determines what money is, not 2 individuals in a society. Just because Christopher Bucks could become money, it doesn’t happen until the vast majority of the society I am a member of agrees that it is and the social contract (written or implied) is amended.
2. Only in the paradigm people are misusing that slogan in. None of your examples are a matter of the public acts, records or judicial proceedings of any State or the US. If you make personal guarantees and don’t have them notarized or filed into the public record… neither are those.
3. *shrug* maybe I could but I am not going to bother. Do you have a hard time distinguishing between opinion and fact as well?
4. The example: US Bonds (are NOT Securities). There are plenty of public debt instruments that require no collateral to secure them… except Securities. The requirements of collateral are confined to all the private debt instruments and that came later in the legislation because people started defaulting on their debts after they borrowed money into existence… which is the root cause of inflation.
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Christopher,
To be clear, not all forms of debt are money, but all forms of money are debt.
Gold and silver coins are a form of financial debt. All financial debt has collateral. The collateral for coins is, in part, the full faith and credit of the issuer. You may not understand the significance of “full faith and credit,” so please see: https://mythfighter.com/2010/02/23/understanding-federal-debt/
Acceptance of ALL forms of money relies on the full faith and credit of the issuer, whether that issuer is a government, a corporation, or an individual.
Consider the chips given out by your local casino. They are a form of money, a financial debt, supported by the full faith and credit of the casino. You can use them in every way you use money.
Money does not require acceptance by the “the vast majority of society” See: (https://www.investopedia.com/tech/most-important-cryptocurrencies-other-than-bitcoin/) for examples of money not accepted by the vast majority of society. There are many forms of money of which you, your relatives, your friends and indeed “the vast majority of society” never even have heard.
A coupon issued by a single. small store is a form of money. It is a financial debt collateralized by the full faith and credit of the store, though not accepted by the vast majority of society. When you take your coupon into the store, you assume you will receive something of value, and you rely on the full faith and credit of the store.
No “public acts, records or judicial proceedings are necessary to give value to that store’s coupons, though they are money in every sense of the word.
Some securities are debt/money (i.e. bonds, dollars), and some are not (corporate stock). Not all debt is money, but all money is debt.
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Money is the exact opposite of debt.
You might want to pretend that the ‘note’ is only a liability, but in fact, it is also an asset.
So spare me you incomplete and erroneous responses.
You can’t spend negative balances in yrou checking account.
Debt isn’t money.
Credit is money. Only the positive entries in accounts are spendable.
Just because one personas accounts receivable is a positive entry and is directly related to someone elses accounts payable doesn’t make the debt a credit… jackass.
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Every U.S. dollar is a debt of the federal government. Every debt is backed by collateral. The collateral for U.S. dollars is the full faith and credit of the U.S. government. See: “Understanding Federal Debt. Full Faith and Credit” (https://mythfighter.com/2010/02/23/understanding-federal-debt/) That is what ultimately gives the dollar value.
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You can’t seem to grasp that you’re only seeing one side of the debt instruments: liability|debt
US Dollars are actually the positive credit entries in accounts… not the number of US dollars owed which is what debt is.
You’re unsound.
Your also unsound in what ‘full faith and credit’ means:
https://www.forbes.com/sites/francescoppola/2017/10/31/how-bank-lending-really-creates-money-and-why-the-magic-money-tree-is-not-cost-free/#2dbd2c873073
“Firstly, it is entirely incorrect to say that money is “spirited from thin air.” It is not. Indeed, Zoe herself said it is not, in the previous paragraph. Money is created when banks lend. The rules of double entry accounting dictate that when banks create a new loan asset, they must also create an equal and opposite liability, in the form of a new demand deposit. This demand deposit, like all other customer deposits, is included in central banks’ measures of broad money. In this sense, therefore, when banks lend they create money. But this money has in no sense been “spirited from thin air”. It is fully backed by a new asset – a loan. Zoe completely ignores the loan asset backing the new money.
Nor does the creation of money by commercial banks through lending require any faith other than in the borrower’s ability to repay the loan with interest when it is due.”
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As you said, ” . . . the creation of money by commercial banks through lending require any faith other than in the borrower’s ability to repay the loan with interest when it is due.”
Correct. Thank you for your correct definition of full faith and credit. And there are other factors in full faith and credit, which you will see if you read the referenced article.
As you said, “Money is created when banks lend.” and ” . . . they must also create an equal and opposite liability, in the form of a new demand deposit.”
That is exactly how money is created — from thin air. Where there was $10, suddenly there is $20 — which banks create from thin air. The federal government does that too, which is how we now have a $20 trillion “debt” from thin air.
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Did you ever grasp that what it really created out of thin air is the “promise” from the borrower?
Without that, the banks don’t create the money they lend. They can’t. They have need a perfected debt instrument.
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Dr. Stephanie Kelton at UMKC states that the USA is “a money issuer not a money user” and she/they are MMT people. On this they agree with MS.
The idea of money as a physical item rather than a legal one is very hard for people to dismiss. Like a 21st century TV weatherman who refers to sunrise and sunset, money is an illusion perpetuated over centuries by so-called “authorities” who have managed to affect our conditioned reflexes to the point of NO-n- sense.
Also, “the ability to pay comes from the ability to tax” can’t be true other wise we wouldn’t have government shutdown threats. The ability to pay comes from the ability to create purchasing power. Taxation is legal theft induced by econ 101, scarcity model thinking. MS operates from a sufficiency model which is continually regenerative and indestructible.
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It’s difficult for people to accept the fact that while their state & local taxes pay for state & local spending, their federal taxes pay for nothing.
Not one person in a thousand understands the differences between monetary non-sovereignty and Monetary Sovereignty.
It will take a very loud, well-known, and highly-respected voice to penetrate the wall of ignorance.
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Unfortunately, the loud respected voices want to remain that way. MS will raise eyebrows and shut them up.
Rachel Maddow comes to mind but her ratings would drop, at least she fears so, I suspect. I think she has the guts and could probably ” penetrate the wall of ignorance ” with the right presentation. If she would use a “what if” or “have you heard about” Monetary Sovereignty? and try to introduce it as a new idea on the internet horizon using her excellent powers of explanation, provided of course her bosses would allow it.
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