What is the fundamental motive for everything in politics?

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders..

Economics is a branch of Psychology so, as in Psychology, everything in Economics devolves to motive.

Illinois Senator Dick Durbin is one of my Senators. He actually does not, or pretends he does not, understand Monetary Sovereignty.

He repeatedly sends Emails indicating his beliefs that:

  1. Federal financing is just like personal financing
  2. The federal government can run short of its own sovereign currency, and
  3. Just as state and local government spending are funded by state and local taxes, federal spending is supported by federal taxes.

As those who understand Monetary Sovereignty know, the three statements are false, false, and false.

So, is this “real” ignorance or is it political ignorance? Durbin is a very experienced, and very careful politician, who seldom (never?) strays into controversial territory, so I suspect he intentionally espouses popular political “ignorance.”

Image result for dick durbin
What’s “Monetary Sovereignty”? Hmmm, don’t tell me. I’ve heard of it.


After all his years in office, he knows what’s true, and he knows what his voters think is true, and when in doubt, he leans toward the latter. No Galileo he.

His motive is to stay in office, not make too many waves, and to continue enjoying all the perks of being a Senator with seniority.

This lends a small bit of irony to an Email I just received from him:

The Durbin Report: Senate Republicans Are Still Secretly Working To Repeal Health Care For Tens of Millions of Americans

Fellow Illinoisan,

If you asked me what Senate Republicans plan to do with their health care repeal effort, I couldn’t tell you. I bet most of them couldn’t even tell you.

It is incredible to me that Republicans will not tell the American people which version of their cruel repeal effort we’re supposed to be voting on in just a few short days.

Is it the one that throws 22 million Americans off insurance, including one million Illinoisans? Or is it the one that throws 32 million people off insurance?

The one that would increase individual market premiums by 25 percent? Or the one that would increase them by 100 percent?

Every week, it seems like there’s a different ploy thrown on the table, each idea worse than the one that came before it. With failure after failure, Senate Republicans have just pushed the American public further into the dark.

Instead of this secretive, one-sided exercise, they should be rolling up their sleeves and working with Democrats to strengthen our current health care system for all Americans.

Depending on which Senate Republican bill you look at, their plan would throw somewhere between 22 million and 32 million people off insurance, increase premiums between 20 and 100 percent for middle-class families, decimate the Medicaid program which serves one in five Illinoisans, undermine protections for people with pre-existing conditions, cripple our fight against the opioid epidemic, and cut funding to hospitals nationwide, especially rural hospitals.

Not to mention provide hundreds of billions in tax give-aways for wealthy Americans and big corporations.

Senate Republicans have held zero hearings, and every bill of theirs was crafted in secret and opposed by medical and patient advocacy groups from every corner of the country, as well as Governors from red states and blue states.

Secret bills, no transparency, and no input from those who would be impacted the most is how Republicans want to pass a bill that would impact 1/6 of our economy and literally every single American.

This is no way to govern. This shell game must end. Democrats and Republicans should instead come together and strengthen the Affordable Care Act.

Sincerely, U.S. Senator Dick Durbin

Durbin’s letter is factually correct, but it doesn’t address the omnipresent question: Why would any intelligent politician vote for something so immoral, so ignorant, and so obviously wrong for America?

And the answer always is the same:

The leadership, the base, and the rich are more important to the GOP than are the needs of the general public and of the nation.

For the Republicans, the leadership is comprised of Donald Trump, Mitch McConnell, and Kevin McCarthy. The base consists of the rich and the most rabid right wingers, who as a group are anti-poor, anti-immigrant, anti-government, anti-deficit, anti-science, anti-gay, anti-abortion, pro-rich, pro-Christian, pro-gun, and pro-incarceration.

So the Republicans continue their practice of voting against anything and everything Obama — at least 60 votes to destroy ACA before Trump became President, and now more votes afterward — not because of any desire to benefit the American people, but rather because the leadership, the base, and especially the rich want it. That is their motive.

There is one, fundamental, common, overriding motive that unites today’s Republicans: Gap Psychology.

The income/wealth/power Gaps between the richer and the poorer have been widening for years. It is these Gaps that make people rich. Without the Gaps, no one would be rich (We all would be the same), and the wider the Gaps, the richer they are.

It is a fact of human psychology that we want the Gap below us to widen and the Gap above us to narrow.

So in voting to deny 20+ million people adequate health care, the Republicans in Congress merely obey the desires of their base, their leadership, and rich to widen the Gap — in this instance, the health Gap.

The Gap the Gap is the motive of motives, the boss of bosses, the king of kings in Psychology and thus, in economics.

Rodger Malcolm Mitchell
Monetary Sovereignty


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.
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.
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.
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.
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.


–A personal musing. What is the future of jobs? Do jobs matter?

The debt hawks are to economics as the creationists are to biology. Those, who do not understand monetary sovereignty, do not understand economics. Cutting the federal deficit is the most ignorant and damaging step the federal government could take. It ranks ahead of the Hawley-Smoot Tariff.

A personal musing. What is the future of jobs? Are we wrong to focus on job creation? Here is an excerpt from an article that ran last year:

CBS Reports; WALLINGFORD, CT., Jan. 5, 2009
The Future of Jobs in America; Innovation, R&D, and Education are Keys to Job Creation, By Anthony Mason

For 23 straight months now, the U.S. economy has been hemorrhaging jobs. . . One in six Americans, 17 percent, is underemployed. That’s nearly 25 million people who are out of work, have given up looking, or been forced to take a part time job. The recession has wiped out 15 percent of our manufacturing workforce. That’s more than 2 million jobs that will likely never come back.

Here is an excerpt from a recent article:

Jobs in China, By ANDREW JACOBS, The New York Times, 12/12/2010
In 1998 . . . Chinese colleges produced 830,000 graduates. . . . Last May, that number was more than six million and rising. . . The economy, despite its robust growth, does not generate enough good professional jobs to absorb the influx of highly educated young adults. And many of them bear the inflated expectations of their parents, who emptied their bank accounts to buy them the good life that a higher education is presumed to guarantee.

It widely is believed America suffers from a shortage of jobs. I suggest that may not be true. Rather, America suffers from a shortage of money.

It began with the Industrial Revolution. Since then, machines have done more work that people once did. Machines chased people off labor-intensive farms to manufacturing and white collar work. Then, machines run by people, chased people off those jobs. Soon, machines run by computers began to take over. But someone had to build and program the computers, so jobs in electronics industries expanded. Now computers have begun to build and program computers.

So from where will the next jobs come? And does it matter?

Most people really don’t want a job; they want money. Yes, some jobs may offer personal satisfaction, and may occupy otherwise dull hours, but for most people seeking jobs, money is the primary goal.

Wait, Rodger. People do not want money. They want what money will buy. They want more security, better shelter, food, clothing, health care, education. They want admiration. They want envy. They want accomplishment. They want to win.

O.K.., money can’t buy everything, but it can buy much of what people want. A jobs is a means to obtain money, which in turn is a means to obtain the things we want. And that Rube Goldbergian “means-to-a-means-to-a-means” connection is being superseded by machines.

Those who have seen the “Star Trek, The Next Generation” TV series are familiar with the “replicator.” It can synthesize any non-living product, seemingly out of thin air. If such a device existed today, our money and job needs would decline radically. Yes, we might continue to work for satisfaction, for creativity, or to fill otherwise-empty hours – but not so much for money, since there would be little need for money other than perhaps to pay for some services. The replicator could supply our product needs.

Replicators may seem far off, but we are evolving in that direction, where machines supply more and more of our product needs. And as that happens we butt up against what will be increasingly difficult questions: Why must we work to obtain money – and why must people struggle to find jobs to obtain money – especially since money is free?

That’s right. Money is free. The U.S. federal government has the infinite ability to create money out of thin air. In essence, the U.S. government is a “money replicator.” At the touch of a button, the government could supply each of us with unlimited money. Want $1 trillion? No problem. Here, take $2 trillion. There is no physical money; it’s all just data, and data is infinite.

Extreme amounts of money creation would reduce the value of money (aka “inflation”), but the point is this: There is no fundamental reason why anyone in America should lack food, clothing, shelter, education, health care simply for lack of a job. There is no job-related reason for poverty in America. Our “money-replicator” government has the power to lift everyone from poverty and supply all their basic needs.

This brings us to an important difference between why people want to work and why the economy wants people to work. While people work to obtain goods and services, the economy wants people to work to create goods and services. If we all owned replicators, and if no one worked, eventually we would have no progress and no services, and the economy would collapse.

There may be a compromise, between where we are today and an economy with no jobs at all. I’m not sure exactly where that compromise is, and surely it would change over time, but here are a couple of “what-ifs.” What if:

–The government’s “money replicator” gave every man, woman and child enough to pay for food, clothing, home, health care, entertainment and education through college — i.e. ended poverty?
–Those who wanted more than basics could work, but the standard, legal work days were lowered from 8 hours to 6 hours to 4 hours or less, providing more jobs for all who wanted them?
–Federal taxes, being unnecessary, were phased out?

Of course, the devil is in the details. What about Inflation? Motivation? Progress? International relations? I have some thoughts on these, which I plan to provide in later posts. I believe we eventually will loosen the connection between jobs to money to goods and services. It won’t be “if” but “when,” and it will be an improvement over our current situation of too much joblessness, poverty, illiteracy, homelessness, sickness and struggle.

Time and energy devoted to the creation of jobs may take us down the wrong path. Perhaps we should focus on the creation and distribution of money.

What are your thoughts?

Rodger Malcolm Mitchell

No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind me of the guy whose house is on fire. A neighbor runs with a garden hose and starts spraying, but the fire continues. The neighbor wants to call the fire department, which would bring the big hoses, but the guy says, “Don’t call. As you can see, water doesn’t put out fires.”

–The trade deficit myth

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

WASHINGTON (AFP) 10/14/10: The US trade deficit ballooned in August as the gap with China hit a fresh record, official data showed Thursday, suggesting further weakness in the economic recovery.

The Commerce Department said the August trade deficit rose nearly nine percent from July to 46.3 billion dollars. That was far worse than economists predictions of a 44.5 billion dollar gap. […] “The ongoing, American job-destroying leakage of national wealth to China confirms the House’s wisdom in passing the anti-currency manipulation bill last month,” said Alan Tonelson, a research fellow at the US Business and Industry Council.

“President Obama finally needs to wake up as well, urge Senate passage, and help American businesses and their employees fight foreign protectionism,” he said.

Look at the pejorative words used to describe the trade deficit: “Ballooned,” “weakness,” “far worse,” “job-destroying,” “leakage of national wealth,” “foreign protectionism.” Sounds like we are one step from financial disaster, and the trade deficit is pushing us there.

But what does “trade deficit” mean? Simple: It means foreign countries send fewer of our dollars to us, than we send to them. Where did the dollars we send to foreign countries come from? We created them out of thin air. And were did the dollars foreign countries send to us come from? We created them too, also out of thin air.

The U.S. is monetarily sovereign, meaning the U.S. federal government has the unlimited ability to create dollars – as many as it wants, whenever it wants. Given that unlimited ability, why would we care how many U.S. dollars foreign governments send us?

Further, our imports help supply us with the world’s best, cheapest, most convenient, most desirable goods and services, else we wouldn’t import them. We get the best of everything, and all we have to do is give the world our dollars, which we create at the touch of a computer key. So what’s the problem?

“But,” you say, “all this importing destroys American jobs.” Oh, really?

First, let’s be honest, it really isn’t jobs we want. We want money. Not that Americans are lazy, but for the vast majority of people in this world, jobs merely are a means to an end, and the end is acquisition ability.

So when we bemoan unemployment, we really bemoan lack of income. Unemployment and employment figures should be replaced with acquisition-ability figures. If domestic unemployment were 90%, but every man, woman and child had the financial ability to acquire everything he/she wanted, we would be a wealthy country. (Think of a nation with all the citizens living on generous, guaranteed pensions, and all the work being done by foreigners – something similar to an extreme Saudi Arabia.)

Today, the problem is not that the economy is starved for jobs. The problem is that the economy is starved for money. Ironic isn’t it, when you consider that our own government can create all the money we need.

Second, the main inhibition of job creation is not foreigners working for low wages and receiving “strong” money. The main problem is taxes. We want our businesses to be more competitive, so what do we do? We tax them.

We want businesses to hire more people, so we make them pay a FICA tax on every single hire. And we make them pay a tax on the profits they otherwise could use for expansion and hiring.

Then we tax the employees, so they have less to spend on goods and services. And we want more investment, so we tax the profits on investment. And when the federal government is finished taxing, the states levy more taxes, and the counties levy even more and the cities levy more, yet.

And when every American is taxed, taxed and taxed again, we blame foreigners for ruining our economy.

Rather than railing against foreign protectionism, our first step should be to cut taxes – especially since the federal government, the unlimited creator of dollars, neither needs nor uses tax money.

If the federal government immediately would eliminate FICA, and support Social Security and Medicare by deficit spending, the recession would end, today. And if the federal government would send each state a flat amount of money according to population – say $10,000 per person – we would have instant prosperity for all states, counties and cities.

Trade deficit merely means sending more dollars overseas than “overseas” sends to us. This leaves us “starved” for dollars, and all the while we are the sole creators of dollars. Does this make sense?

And oh yes, deficit spending has not caused inflation since we went off the gold standard in 1971. Not only are we a long way from inflation, but inflation easily is cured. So let’s not use phony fears of inflation as an excuse for keeping those economy destroyers called “taxes.”

Oh, you don’t believe me about inflation? Well consider this. The effect of exports is to bring dollars into the U.S. economy, which is identical with what federal deficit spending does. So if you like exports, you should like federal deficit spending, for exactly the same reason.

“The fault is not in our foreign neighbors, but in ourselves.”

Rodger Malcolm Mitchell

No nation can tax itself into prosperity


–Why the U.S. owns China

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

Despite all appearances, we own China. China has sold its soul to the U.S. By focusing on export, and accumulating dollars and T-securities, China has strengthened the dollar. Now, what can China do with its enormous cache of T-securities? If it stops “lending” to us, i.e. stops using its dollars to buy more T-securities, it simply will accumulate more dollars.

So, what else can China do with its dollars? Three bad choices: It can trade more dollars for other currencies. This would flood the market with dollars, weakening the dollar, and making export to the U.S. more difficult (while making our export easier). Or, it can increase its worldwide purchase of assets – real estate, hard and soft goods, etc. – which in addition to being politically risky, also would flood the world with dollars. Or it simply can keep more dollars in it’s checking account at the Federal Reserve Bank.

So aside from purchasing T-securities, which effectively locks up (actually destroys) dollars, China is stuck. If they wish to keep exporting to us, they are forced to keep accepting dollars, which in turn, forces them to purchase T-securities. All those pundits who worry about “What will happen if China stops lending us money?” do not understand that China cannot stop buying T-securities.

China does not lend us yuan; it cannot use yuan to buy T-securities. It lends us only dollars, the dollars we previously created. The U.S. does not need China to lend us dollars; we are a monetarily sovereign nation with the unlimited ability to create dollars. We don’t need China’s.

Previously, we discussed the China trade deficit myth, when we said:

”A trade deficit is an example of one country devoting great effort to creating scarce materials for another country in exchange for something that requires no effort by the other country. In that sense, China is our servant. They work, sweat and strain and use their valuable resources to create and ship to us the things we want, while we, hardly lifting a finger, ship dollars to them. Who has the better deal?”

“To satisfy our desires, China could ship us every yard of cloth and every ounce of steel in their country; they could burn all their coal and oil; they could employ every man, woman and child in dismal sweatshops; they could empty their nation of all physical resources, and still we would have plenty of dollars to send to them, simply by touching a computer key.”

So, we own China. By emphasizing export rather than internal money creation (aka deficit spending), China has dug a deep pit for itself. Yes, China has had strong economic growth, but at what price? It has received in return for its exports, an asset it cannot use – U.S. dollars. These dollars are unusable, not because they are worthless. On the contrary, dollars are quite valuable. The problem is that in using the dollars, China would depreciate their value, which would destroy China’s export-based economy.

Of course, China knows this. Sadly, U.S. pundits, who fret about our so-called “debt” to China, don’t understand it. And the debt-hawks, who believe exporting is more prudent than deficit spending, really don’t understand that for a monetarily sovereign nation, deficit spending is the most prudent, controllable way to grow an economy.

Rodger Malcolm Mitchell

No nation can tax itself into prosperity