Tag: all money is debt

–Economic disaster: Congress in agreement

The debt hawks are to economics as the creationists are to biology.

By Z. BYRON WOLF ABC News; July 27, 2010; “Debt Commission: Dealing With Federal Debt Likely To Require Tax Hikes, Spending Cuts. On both sides of the aisle, lawmakers are coming to terms with hard political fact: services are going to have to be cut and taxes are going to have to go up to keep the $13 trillion-plus national debt from skyrocketing into infinity and beyond.”

Our leaders have no idea what they are talking about. Cutting services and raising taxes is not a “hard political fact.” These are the absolute worst steps we could take, not just unnecessary, but massively harmful to our economy. The infamous DEBT COMMISSION, whose assignment it is to reduce the economy’s money supply, is akin to a “blood commission,” whose job it is to reduce the blood supply. Money is the lifeblood of an economy.

The same people who complain there are not enough jobs, also want to reduce money creation, the very thing that creates jobs. Our leaders act like doctors, who apply leeches to cure anemia. The country needs lower taxes, not higher. The country needs more federal spending, not less. These politicians, totally ignorant about economics, make economic decisions with the expected result.

And don’t be fooled by statements that taxes only will be increased on the rich. That simply is not true. All taxes destroy money. Period. Destroying any money, whether currently owned by rich or poor, decreases the total money supply, which hurts the entire American economy. You cannot drain water from only one end of a bathtub. A tax on Bill Gates hurts us all. It benefits no one.

And what are the “unnecessary” services that will be cut? See: SERVICES, and decide what we should eliminate — remembering that eliminating any federal spending reduces the money supply.

I cannot express in stronger terms how outrageously harmful this all will be. I urge you to contact your Senators, your Representatives and your media, and tell them to learn economics before making these terrible economic decisions that absolutely, positively will injure us all.

If Congress were employed by Al-Qaeda, they could not hurt America more than they now wish to do. If someone told you, “I have a plan to destroy billions or even trillions of American dollars,” you rightfully would brand him a traitor. More countries die from enemies within than from enemies without.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity

–$1,000 reward

The debt hawks are to economics as the creationists are to biology.

Politicians continue to worry about the size of the federal debt:

“The president knows that Republicans support extending unemployment insurance, and doing it in a fiscally responsible way by cutting spending elsewhere in the $3 trillion federal budget,” said Representative John A. Boehner of Ohio. “At what point do we pivot and start being concerned about our children and our grandchildren?” said Senator Mitch McConnell of Kentucky.

I will pay $1,000 to the first person (including you, Representative Boehner) who can demonstrate why the U.S. federal government will be unable to service its debts.

Wait, I’ll make it even easier. I’ll pay $1,000 to the first person (including you, Senator McConnell) who can demonstrate why the U.S. federal government will be unable to pay its debts, even if all taxes and all federal T-securities were eliminated. And I’ll throw in an extra $1,000 if you can show how the U.S. taxpayer and/or taxpayers’ grandchildren owe the federal debt.

Readers, please feel free to pass this on to your political representatives. I have my checkbook in hand.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity

–Politics vs. people

Mitchell’s laws:
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●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 poor.
●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.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Everything in economics devolves to motive, and the motive is the Gap.

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Today’s headline: “Fears grow as millions lose jobless benefits”
Body copy: Senate Republican leader, Mitch McConnell of Kentucky, said: “The fastest-growing parts of this Democrat economy aren’t jobs — they’re the crushing burden of the national debt and the size of the federal government.”

The “crushing burden” is not national debt, which crushes no one. The crushing burden is the false belief the national debt is a crushing burden.

As a result of this false belief, millions will lose jobless benefits, taxes will be increased, Medicare doctors will receive less than they should, Social Security payments will begin later, Medicaid payments will be cut, defense spending will be reduced, federal funding of K-12 education and school breakfast programs will be cut, mass transit funding will be cut and federal assistance to the states will be reduced — all because of a myth with no factual support.

So you, dear reader, will suffer a significantly degraded life style, all because the debt hawks say the federal debt is a crushing burden and the debt causes inflation, neither of which is supported by any data.

Go to any debt hawk web site and ask them for data proving the U.S. federal debt is unsustainable or causes inflation. If they answer you at all (unlikely), they merely will give you statistics regarding the size of the debt, but no evidence it has a negative effect on America.

Here are a couple debt hawk sites you can visit:
Concord Coalition
The Cato Insitute
The Heritage Foundation
The Manhattan Institute
The Hoover Institution

Go ahead. Contact any of them. Despite impressive doctoral credentials, and oodles of statistics, they have no evidence to back their claims. Why? No such evidence exists, though massive evidence shows the misnamed “debt” (should be called “net money created”) is necessary for economic growth.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity

–Why the slow recovery?

The debt hawks are to economics as the creationists are to biology.

Recessions and recoveries ultimately are associated with money, and more specifically with money growth. In general, less money growth = less economic growth. (That actually is something of a tautology, since economic growth is measured in money.)

There are several definitions of money, most differing on the basis of liquidity, the ease of converting to currency. The most liquid form is called M1, which consists of currency and checking account deposits.

The government no longer measures the less liquid forms, M3, L and the most inclusive form: Debt of Domestic Non-Financial Sectors. And for many reasons, the supplies of the various money forms do not move together. For instance, there are periods when M1 goes up or down more than M2, even though M1 is part of M2.

I found an interesting pattern relative to recessions. In the following graph, you see a strong tendency for one form of money, Federal Debt Held by the Public, to grow more slowly before recessions, then grow quickly during recessions, then resume growing more slowly after recessions.

M1 exhibits a similar, though less consistent pattern, and M2 is less consistent yet. One consistency is: Following every recession, at least one of the money forms grows at an increasing rate — every recession except the most recent one:

Here, despite (or because of) worries about deficits, every measured form of money has shown a sharp decline in growth rate. Perhaps this overall decline in money growth is responsible for the slowness of the recovery — yet another bit of evidence that debt fear has hurt our economy, and increased federal spending is desperately needed.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity