Mitchell’s laws: The more budgets are cut and taxes inceased, the weaker an economy becomes. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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They call themselves CNNMoney Perhaps they should change their name to CNNMyth.
National debt: Washington’s $5 trillion interest bill
By Jeanne Sahadi | CNNMoney.com – 4 hours agoInterest rates on U.S. bonds may be ridiculously low, but that doesn’t mean the country’s future interest payments on the national debt will be. Uncle Sam will shell out more than $5 trillion in interest payments over the next decade, according to the latest projections from the Congressional Budget Office.
That’s more than half of the projected $11 trillion increase in debt held by the public during that period. Those figures assume that a host of expensive policies such as the Bush-era tax cuts are extended.
Over the decade, more than 14% of all revenue the government is projected to collect will be sucked up by interest payments. That’s a lot of money that can’t be used on the country’s other priorities.
Ms. Sahadi (of CNNMoney) doesn’t understand the difference between Monetary Sovereignty and monetary non-sovereignty. She thinks the federal government is unable to continue creating unlimited dollars, as it has been doing for the 40 years since it became Monetarily Sovereign.
How discouraging that even a group with “Money” in its name, doesn’t understand money.
Indeed, between 2013 and 2022, estimated interest costs will be:
higher than Medicaid spending;
equal to half of Social Security spending;
close to what is spent on all of defense.
Translation: The interest payments by the federal government will stimulate the economy more than Medicaid, half of Social Security and close to what is spent on defense. This is a bad thing???
It’s unfortunate the rates are so low. With higher rates, we might be out of this economic slump, and unemployment would be lower.
The (CBO’s) estimated interest costs assume a fairly steady and moderate increase in rates over the decade. If it turns out that rates rise one percentage point higher than CBO projects, that could add roughly $1 trillion to interest costs over the decade.
That will put $1 trillion more dollars in the pockets of bond holders, who will spend those dollars. How else does Ms. Ms. Sahadi (of CNNMoney) think an economy grows?
However things turn out, a lot of the money paid in interest will go abroad, said Charles Konigsberg, president of the Federal Budget Group. That’s because more than 40% of the country’s public debt is owed to institutions and individuals outside the United States.
Agreed, that’s not as good as domestic dollars, but it’s still good. The U.S. federal government has the unlimited ability to create dollars, so those dollars go abroad at zero cost to us. But they do enrich other nations, who then become better trading/tourism partners. A wealthy world is a better world for America.
A recent analysis from the independent Committee for a Responsible Federal Budget estimates that three of the four GOP presidential candidates’ economic plans would increase deficits and interest costs, some substantially.
Newt Gingrich’s economic plan could raise interest costs by $900 billion over the next decade; Rick Santorum’s by $640 billion; and Mitt Romney’s by $40 billion. But that number could rise substantially if he doesn’t find enough measures to offset the costs of his latest tax cut proposals.
Hmmmm . . . Suddenly, I find the GOP more attractive. If only they weren’t hypnotized by the Tea/Limbaugh/religious fundamentalist groups, who seem to have little knowledge and even less concern about economics and the welfare of America.
Bottom line: Interest costs our Monetarily Sovereign U.S. government nothing, because the government pays interest at will, simply by pressing a computer key. But interest does enrich us monetarily non-sovereign people and monetarily non-sovereign businesses by adding dollars to the economy. That’s one of the reasons why, despite much of the interest going overseas, interest rate changes and domestic GDP growth tend to be parallel. .
Rodger Malcolm Mitchell
http://www.rodgermitchell.com
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No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports
#MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
