The single, most important question in all of economics.

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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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The realities of the U.S. economy can be is difficult to explain to people who have been led to believe federal economics resembles personal economics.

False notions of “affordability,” “taxpayer dollars,” and “debt/deficit sustainability” hide the truth behind many layers of intuition and misleading propaganda.Image result for money printing machine

Sometimes, the solutions to the most infuriatingly complex problems can be visualized by a single, simple concept.

Heliocentrism, the simple fact that the entire solar system revolves around the sun, is an easy way to visualize mathematically complex planetary motions.

And what could be simpler than E=MC2 as a way to visualize a relationship between matter and energy.

In that vein, consider the difficulty in visualizing solutions to the many, disparate and difficult problems in economics, among which are: What should a government do about economic growth, deficits and debt, spending affordability, employment and unemployment, interest rates, imports and exports, poverty, and defense spending?

The answers to such questions are made even more difficult by the variance in government type: National vs. local.

I suggest that the answers to the biggest, most difficult economics problems facing any government can be visualized by one simple question:

If the U.S. government can “print” money, why does it collect taxes?

Try it, yourself. Answer the question and see whether your answer leads you to other questions and answers, eventually taking you to an explanation of Monetary Sovereignty.

The realities of Monetary Sovereignty seem to be quite counter-intuitive to many people, and there is a strong human reluctance to deny intuitive beliefs.

So perhaps the best way to influence someone’s opinion may be to help them uncover the facts rather than being told the facts.

Next time you debate what the federal government should do about a specific problem, you might advance the discussion by asking the most important question in all of economics.

It could be a useful first step.

Rodger Malcolm Mitchell
Monetary Sovereignty

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THOUGHTS

•All we have are partial solutions; the best we can do is try.

•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 no matter how much it taxes its citizens.

•The more federal budgets are cut and taxes increased, the weaker an economy becomes..

•No nation can tax itself into prosperity, nor grow without money growth.

•Cutting federal deficits to grow the economy is like applying leeches to cure anemia.

•A growing economy requires a growing supply of money (GDP = Federal Spending + Non-federal Spending + Net Exports)

•Deficit spending grows the supply of money

•The limit to federal deficit spending is an inflation that cannot be cured with interest rate control. The limit to non-federal deficit spending is the ability to borrow.

•Until the 99% understand the need for federal deficits, the upper 1% will rule.

•Progressives 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 the rich and the rest.

•Austerity is the government’s method for widening the Gap between the rich and the rest.

•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

MONETARY SOVEREIGNTY

Published by Rodger Malcolm Mitchell

MBA Northwestern, business turnaround expert, economist

Published

22 thoughts on “The single, most important question in all of economics.”

  1. Because printing is too easy, and taxes are hard. Life is supposed to be hard so taxes go hand in hand with the demands of scarcity thinking. Printing money is abundance, anti-scarcity thinking. Shame Shame.

    Stop that utopian dreaming and come down to Hell on Earth handed over to us by our forebears and today’s authorities who know it all, but really know nothing about making the world safe. It’s so much more fun rolling the dice on our future. Let’s keep spinning the barrel and pulling the trigger.

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      1. The same as yours.

        Can they create fried chicken?

        How about medical care?

        How about a house?

        And no, these things don’t get created because people want “money”, they get created because people want other things of value.

        You know this but act like you don’t. Why?

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        1. I can’t do any of those things. I pay a restaurant, a doctor and a builder, the same as the government does. So, in your mind, I don’t create “value”?

          Not sure what your point is, but machines create “value” every day, and people pay for those machines. So do the people create “value” or do the machines?

          Does sending a rover to Mars create “value.” Does paying for a heart transplant create “value”? Does feeding the poor create “value”?

          The government does all those things.

          Is your point, paying for something doesn’t create “value,” and if so, why do you demean funding? Do you think funding isn’t valuable?

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          1. Perhaps to you this is “semantics”, but I doubt that.

            I must ask, if the government created an equal amount of money of what already exists (double the money) will we get double what you outline?

            Will we overnight be able to help 2 poor people instead of one? The answer is NO.

            That’s what I mean by stating the government does not create value.

            Money creation is simply another form of tax for which citizens have no say. It does not create value.

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    2. Flash, you might restate that as “The private sector creates value but not US dollars.” Technically, I think, that would be more accurate, and more meaningful.

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        1. I guess it’s a matter of semantics. I tend to view reserves and cash as “dollars” and bank deposits as credit against reserves, measured in “dollars”. Flash’s ideology demands, to him, that the federal government is incapable of creating value.

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          1. O.K., but that means you consider about 90% of all dollars in existence to be a “credit against reserves, measured in ‘dollars.'” I have no objection to that, but it seems like an artificial distinction that doesn’t help clarify. Again, however, I don’t object.

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          2. For banks to create “dollars” just doesn’t resonate with the claim that the federal government is the sole issuer of US currency, unless “currency” is narrowly defined as cash and coin.

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          3. You’re right. The problem may be with what it means to “issue” a dollar. The federal government is the sole sovereign issuer. but banks, and many other lenders, create the vast majority of dollars, over which they are not sovereign issuers.

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          4. For you too.

            All money creation does is devalue existing money stock.

            In our deflationary world not many can see the devaluation.

            The clever ones can make a distinction between less price drops = inflation.

            It’s the reason people like Rodger keep asking where is inflation.

            We must be near the end of the world when the majority of people have been coned to think that what is good for them is bad for them and what is bad for them is good for them. Rodgers theory is a perfect example of how to con the masses. Poor people have no clue while people like Rodger enjoy their time in country clubs.

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          5. I sure am glad you have it all figured out Flash. I guess all food creation does is devalue existing food and all car creation does is devalue existing cars, huh? So, instead of using money, which you obviously disdain, what would be your suggestion for a different type of economy?

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  5. If you don’t read right-wing websites, you have no idea what is going on out there.

    And if you wonder why the Trump family’s lies and misdeeds are ignored by his followers, read just one, sadly typical, comment from a popular red site.

    This is word-for-word, misspellings and all:

    Moe

    Trust me, obama is dirty, far more than Trump in sneaky deeds and purpose. The national debt rise from 7.4 to 19 trillion before he left office. There has been refusal for an audit.

    Read how many billions was given away bu him to foreign nations on his agenda. The Former President’s Act 2912 passed by democrats majority in Congress gave him doe is retirement benefits like 1.5 million a year free vacations. They entered the White House with less than 200,000 in wealth and left with millions and millions. They dirty trust me.

    Trump was elected because of the sneaky illegal deeds he got away with. I could list them but your in total denial. Climate change is bullshit that Obama agree to pay for with our money without our consent. He is proabaly heavily invested in it like Al Gore is.

    When this nation goes broke and Obama supporters hit the street to protest the disaster they created. You deny he spend more money in eight years than we did in nearly 200 years, and for you that is acceptable, next you will be telling me it was approved by congress? The guy belongs in a prison cell with most of his cabinet heads and advisors.

    Your democratic party is dead, he murdered your party’s only chance to hold on to power or regain power. Trump will be re-elected, that is how much America believes he screwed us all.

    It is hard to imagine that Moe and his ilk ever will be influenced by facts or by logic. Trump knows this, which is why he supplies neither.

    His method is a mix of outright lies, half-truths, false accusations, and innuendo, all designed to appeal to the prejudices and ignorances of brain-dead zombies.

    When his lies are exposed, his followers don’t care, nor does he.

    If you believe what the National Enquirer, Nigerian princes, Alex Jones, or egomaniacal dictators tell you, Trump is perfect.

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  7. I don’t know what lies you’re claiming Trump has made, but I’m a progressive and it looks to me like Trump is finally reducing the U.S. war-mongering after Bush and Obama had greatly increased it. That’s why I voted for Buchanan in 2000 and supported Kucinich in 2004. I would have voted for Sanders this time, but I settled for Trump and, so far, things look promising. I voted for Obama in 2008 because I didn’t want jackass war-monger McCain to be pres. I didn’t vote for him the second time. I voted for Ron Paul. I certainly didn’t support Obama’s welfare program for the insurance companies, Obama-Care. I also never fell for the global warming hysteria, unlike most liberals.

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