–Financial frauds who give exactly the same advice to every client, no matter what the situation.

The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.

We all are aware of the euro nations’ financial problems, especially the problems of the PIIGS – Portugal, Italy, Ireland, Greece and Spain. We have discussed the fact that because these nations, in surrendering their Monetary Sovereignty, surrendered their control over their money supply. They are unable to create the money necessary to support their economies.

I predicted in a 1995 speech at the UMKC,Because of the Euro, no euro nation can control its own money supply. The Euro is the worst economic idea since the recession-era, Smoot-Hawley Tariff. The economies of European nations are doomed by the euro.” However, not all European nations surrendered their Monetary Sovereignty. Among the nations choosing to remain Monetarily Sovereign are Poland, Romania, Sweden, Norway and the United Kingdom.

Here are some sample news items:

Bloomberg; 5/25/11: “Poland’s economic-growth forecast was raised to 3.9 percent from 3 percent at the Organization for Economic Cooperation and Development

5/27/11: According to Capital Economics, a British research group, Romania’s economy will grow by 3% this year compared to a previous forecast of 1%, followed in 2012 by a 2.5% advance. The recovery will be fueled by private consumption, but also by the resumption of investments. Also the research group states that Romania has the second best potential for economic development in the region, along with Bulgaria, Poland and Russia.

OCDE:1/2/11 – Sweden is expected to continue to recover strongly from the recession as high saving, low interest rates and an improving jobs market encourage consumers to step up spending, according to the OECD’s latest Economic Survey of the country.

Bloomberg: 5/26/11: The mainland (Norway) economy will expand 3.3 percent this year and 4 percent in 2012, after growing 2.2 percent in 2010, the Organization for Economic Cooperation and Development said yesterday.

The Monetarily Sovereign nations are doing better than the monetarily non-sovereign nations. No surprise there for those of you who have been reading this blog. The key, of course, is for a Monetarily Sovereign nation to realize it’s Monetarily Sovereign. Not all do.

Why the British economy is in very deep trouble, Financial Times, Posted by Neil Hume on May 26, 2011

Here’s something for the Chancellor and the Office for Budget Responsibility (OBR) to chew on: a warning from Dr Tim Morgan, the global head of research at Tullett Prebon, that the deficit reduction plan won’t work and the UK is headed for a debt disaster.

Morgan says sectors that account for nearly 60 per cent of UK economic output are critically dependent on debt (public or private) and set to contract rather than expand. This will render economic growth implausible and means the burden of public and private debt will prove too heavy for the nation to carry:

Over the past decade, the British economy has been critically dependent on private borrowing and public spending. Now that these drivers have disappeared – private borrowing has evaporated, and the era of massive public spending expansion is over – the outlook for growth is exceptionally bleak.

Sectors which depend upon either private borrowing or public spending now account for at least 58% of economic output. These sectors are now set to contract rather than expand, which renders aggregate economic growth implausible. And, without growth, there may be no way of avoiding a debt disaster.

The UK, wisely avoided surrendering its Monetary Sovereignty, then forgot why it did so. It thinks, “the era of massive public spending is over.” Why? It has no idea. It believes it’s monetarily non-sovereign.

This puts the UK in the same position as the U.S., whose politicians, media and old-time economists do not understand the implications of Monetary Sovereignty. Read any article or listen to any politician, and you will not be able to tell whether the subject is a Monetarily Sovereign nation or a monetarily non-sovereign nation. They say exactly the same things about both.

What would you think about an investment advisor who gives exactly the same advice to a wealthy, married old man with no children, as he gives to an impoverished single, young woman supporting five children? If someone says exactly the same things, makes exactly the same predictions, and offers exactly the same advice regarding two diametrically opposite monetary situations, that person is a fraud.

I have just described the debt-hawk media, politicians and old-time economists.

Rodger Malcolm Mitchell

No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a dopey teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it screwed up my future.”


–Punish bank executives for being too rich

An alternative to popular faith

         Here is the key sentence from an article by Jackie Calmes, Published: January 11, 2010 in the The New York Times:
        “With popular anger building as big banks show profits and pay sizable bonuses while unemployment remains high, the Obama administration has come under pressure at home and abroad to support a financial transactions tax on institutions and to heavily tax their executive compensation.”
        What an amazing sentence.
         First, consider the popular anger that “big banks show profits . . .” Would the citizenry prefer bank losses caused by bad bank management? What’s the approved size for profits?
         Second, consider the “sizable bonuses.” Banks are businesses. What should they do with profits aside from pay employees and shareholders? Are other businesses held to that standard?
         Third, consider “unemployment remains high.” What is the relationship here? Should banks hire millions of people, to get the employment rate down? Or, should banks engage in less than optimal business strategies, like lending to bad risks, to get the profits down?
         Fourth, consider the “financial transactions tax on institutions.” Get real. Any tax on a business is passed along to its customers. Ultimately, you and I will pay that tax.
         Fifth, consider “heavily tax their executive compensation.” A special tax created just for bank executives? What about a special tax just for Walmart executives? What about a special tax just for executives who live in New York, preferably Long Island?
         Nothing could better demonstrate the financial ignorance of the Obama administration. Or if it’s not ignorance, then it’s worse: pure pandering to populist, class-warfare motives. Oh, it temporarily might make you feel good to “get those rich jerks,” until you realize (if ever) that you are the one getting the shaft.

Rodger Malcolm Mitchell

-To: Diane Lim Rogers of Concord Coalition

An alternative to popular faith

        Here is copy of an Email sent to Diane Lim Rogers, the chief economist of the Concord Coalition. We been trying to discover what she does, other than to parrot the Concord, debt-hawk party line. We decided to ask her for some information a real economist would know and, considering her position, want to share.
        (Frankly, we didn’t expect an answer, and as of October 30th, have not received one. Instead, she removed our comments from her blog.)

October 7, 2009

“Hello Diane,
        For the past 17 years, the Concord Coalition has been “dedicated to educating the public about the causes and consequences of federal budget deficits (and) the long-term challenges facing America’s unsustainable entitlement programs.”
        By now, you must have assembled vast amounts of evidence supporting your mission. Can you share some of your evidence showing that our admittedly large and growing deficit has adverse economic consequences and cannot support entitlement programs?
        Thank you for any enlightenment you can provide.”

Rodger Malcolm Mitchell

-It isn’t “taxpayers’ money” .. Tax rates through the years

An alternative to popular faith

The media frequently claim federal deficits spend taxpayers’ money. This is, as Star Trek’s Mr. Spock said, “illogical.”

If deficits spent tax money, they wouldn’t be deficits. “Deficit” means spending beyond tax receipts.

“Ah,” you say. “But our children and grandchildren will pay the taxes.” Wrong again. There is no historical relationship between tax rates and deficits. In more than 50 years, tax rates have gone down or remained level, depending on your income. This, despite huge deficits and even a couple surpluses.

Tax rates 60-09

Since taxes do not supply the money for federal spending (the government creates money ad hoc, for all its spending) your children and grandchildren will not pay for today’s deficits, which can and will continue forever.

So don’t be concerned if GM and Chrysler don’t pay back their loans. In fact, be concerned if they do. Any payback merely takes money out of the economy and costs jobs — call it an “anti-stimulus” — and doesn’t put one penny in your pocket.

Rodger Malcolm Mitchell
For more information, see http://www.rodgermitchell.com