–The real benefits of the Platinum Coin Solution

Mitchell’s laws:
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●Cutting the deficit is the government’s method for taking dollars from the middle class and giving them to the rich.
●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.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
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Google “Platinum Coin Solution” and you will see what correctly is being touted as a solution to the inane federal debt ceiling. One paragraph of the U.S. statute on money and finance (revised by Congress in 2000) reads:

The Secretary may mint and issue bullion and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

What this clearly and unambiguously says is: The Secretary of the Treasury (currently Tim Geithner) has the power to mint a platinum coin in any denomination. He can, if he chooses, mint a $1 coin, a $1 trillion coin or a $100 trillion coin.

The Platinum Coin Solution proposes that the Secretary mint a $1 trillion coin and deposit it with the Federal Reserve Bank as an accounting partial offset to the federal “debt.” No new dollars would enter the economy. There merely would be a balance sheet adjustment made in Federal Reserve Bank accounts. So there would be no inflation implications.

For those of you who think this somehow is “cheating” or accounting slight-of-hand, you are correct. It is both. Of course the so-called federal “debt” also is cheating and accounting slight-of-hand.

The reason: The federal debt is quite unlike your debt or mine or your state’s, county’s or village’s debt, or even the debt of Greece and Italy. Because the U.S. government is Monetarily Sovereign, it creates the dollars to pay its bills. It never needs to borrow the dollars it already has the unlimited ability to create.

So, its “debt” is nothing more than the total of deposits in T-security accounts at the Federal Reserve Bank. The so-called “debt” is created this way:

Someone (you, me, China et al) decides to buy U.S. T-securities. So they instruct their bank to transfer already existing dollars from their checking account to their T-security account at the FRB. I stress “already existing” to show there are no inflationary implications to the purchase of T-securities.

A T-security account essentially is a bank savings account, so the purchase of U.S. “debt” simply is a transfer of already existing dollars from a checking account to a savings account. To pay off the “debt,” the FRB merely transfers the already existing dollars back. The only new dollars: Accumulated interest. So there are no inflationary implications to paying off the “debt.”

The Platinum Coin Solution provides an internal (actually, needless in the real world) accounting justification for making the above transfer. In summary, the federal “debt” really isn’t a federal debt, and the debt limit is a nonsensical limit on the size of deposits in the Federal Reserve Bank.

(Why anyone would want to limit these deposits of existing dollars, is a testament to the power of myth and semantics. Mistakenly call something “debt” and everyone wants to limit it.)

The Platinum Coin Solution makes the mythical federal debt disappear, instantly solving the mythical debt crisis. That is the reason it has been recommended. But there are other good reasons for the PCS.

The discussion about the Platinum Coin Solution will reveal the truth about the federal “debt,” that it not only is meaningless, but concerns about the debt harm those of us not part of the upper .1% income group.

If the Platinum Coin Solution achieves the level of national discussion, you will see great outrage expressed by the media (owned by the .1%) and by all politicians who receive campaign contributions from wealthy donors — especially of course, Republicans who have vowed slavish allegiance to the wealthiest.

Not only will the Republicans not be able to hold the nation hostage to the nonsensical “debt ceiling,” but the discussion will open the way to ending the suicidal austerity plans promoted by the bought-and-paid-for politicians and media.

No more need to cut Medicare. No more need to cut Social Security. No more need to extract FICA (the worst, most regressive tax in U.S. history) from the pockets of salaried people. Instead of cutting the the programs that support the middle- and lower-income classes, the federal government would be able to support programs to grow the economy and reduce unemployment.

And this panics the upper .1%. The austerity the rich have brainwashed the public into supporting, actually has one purpose only: To increase the income gap between the rich and the rest. It is the gap that makes some people rich and others poor. Without the gap, no one would be rich.

Watch for it: The screaming, hysterical rantings by politicians and the media, the innuendos and outright lies, the predictions of doom.

But, no, the Platinum Coin Solution will not cause inflation. New dollars will not be created.

No, the PCS will not give the government free rein to spend endlessly. Congress and the President will continue to control the purse strings, just as they always have, and just as they control the mythical “debt” limit. Nothing changes their ability to spend or not to spend.

What the PCS will do is end the destructive drive for a program that never has worked anywhere in the world or at any time in history: Austerity, i.e. deficit reduction. And it will help narrow the gap between the rich and the rest. And it will reduce unemployment. And it will allow Medicare for everyone. And it will allow Social Security to pay a living benefit.

And it will increase research and development for improved, life-giving drugs, scientific progress and education. And it will allow for improvements in our roads, bridges and dams, air and water. And many, many other benefits.

The majority of suggestions see a $1 trillion coin. I suggest a $100 trillion coin, so the mythical federal debt disappears forever, never again to rise from its stinking grave.

Good riddance, federal debt, for all the damage you have done, and continue to do, to America. And good riddance, ultra-rich, to your lies that brought the austerity monster to our nation.

The only question is whether the Supreme Court, which also has a romance with the ultra-rich, will find some reason to overturn the clear reading of the law.

Rodger Malcolm Mitchell
Monetary Sovereignty

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Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%

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 Imports

#MONETARY SOVEREIGNTY

–Who says the National Rifle Association and its followers aren’t good for the American economy?

Armored Backpack Sales Surge In Wake Of Newtown Shooting

SALT LAKE CITY — The reaction to the deadly Connecticut school shooting can be seen at gun stores and self-defense retailers across the nation, with anxious parents buying armored backpacks for children and firearms enthusiasts stocking up on assault weapons in anticipation of tighter gun control measures.

The armor inserts fit into the back panel of a child’s backpack, and sell for up to $400, depending on the retailer. The armor is designed to stop bullets from handguns, not assault weapons like the one used in the shooting at the Newtown, Conn., school.

Ken Larson, 41, of Denver, Colo., already had an armored backpack for himself and persuaded his wife to buy one for their 1-year-old after the latest shootings. He knows the backpack won’t guarantee his son’s safety. But, he added, it was a worthy precaution.

Who would have thought? Body armor for tots. It shows what capitalism can accomplish. As for the economy, think of millions of children, all outfitted with helmets, bulletproof vests, backpack armor, add in some night-vision goggles (for night school) and you’re talking millions, maybe billions, of dollars.

Robert Akers, a Rapid City, S.D., gun seller who specializes in (assault weapons), said the rush of customers had transformed his Rapid Fire Firearms store into a “madhouse” and that he’s not actively selling the guns and has turned off his phone. “The price is only going to go up higher,” he said.

Now, you’re into the really big economic stimulus: Guns. Big guns, little guns. Machine guns. And ammo. Lots and lots of ammo. Hollow points. Armor piercing. Phosphorus. You never know when you might run into a suspicious person who needs to be dealt with. Remember: Only the survivor gets to tell the story.

Anne Marie Albano, psychiatry director at Columbia University’s Clinic for Anxiety and Related Disorders, said parents should convey calmness, not anxiety. “This is not serving to keep children safe,” she said. “This is serving to increase their fear and their suspicion of their peers.”

Don’t you just hate those lily-livered, left-wing, bleeding heart liberals? Instead of worrying about children, why don’t they worry about microscopic embryos, the way we religious NRA members do.

Anyway, the more fear fear the kids have, the better for the child psychologist business. Start the kids young, and they could go to shrinks for the rest of their lives. Major money, there.

Austin Cook, general manager of Hoover Tactical Firearms in suburban Birmingham, Ala., said the spike in sales since Friday’s shootings has been so intense that federal background checks that typically take five minutes or less are now taking up to an hour.

Damn! I have to wait a whole hour before I can start killing people. What am I supposed to do in the meantime? Use a knife?

Cook said about 50 people were waiting in line for his store to open the morning after the shootings, and that he’s since sold nearly all of his assault weapons. Now, he’s trying to find more distributors.

“I can’t keep them in the store,” Cook said.

It very well could be that gun sales are just the stimulus the economy needs.

But if you truly are concerned about the safety of your child, forget about that flimsy backpack armor. Go to: Advanced Protective Services. Here’s what they do:

”We stand behind our clients to ensure the utmost in armed security guard protection. We specialize in customizing a plan to fit your specific situation and location.”

What kind of parent are you if you don’t provide your child with an armed bodyguard (although I’m not sure “standing behind” your kid is the best way to protect him.) Don’t be so cheap. Spend a few thousand. Isn’t your kid’s life worth it?

Then again, why depend on someone else to protect your child, when your child can protect himself. Go to Guns for the Children. [It’s a joke, but with serious undertones. Do check it out.]

Our mission

Kids in developed countries are at much more of an advantage when it comes to having quality weapons. In underdeveloped countries many kids are stuck using small knives or stones. The fortunate ones are able to get machetes. At Guns for the Children we are trying our best to provide quality and dependable arms and ammunition to children whose only wrongdoing was not being born in the best country in the world, the United States.

Hey, why should those foreign kids be be able to protect themselves, while your kid is unarmed? Get him his own gun to take to school. While waiting for a mass murderer, he can settle schoolyard arguments in a flash – a muzzle flash.

Finally, as for the half dozen, high powered AK47s you’ve stockpiled (and, of course, you’re looking for more), if they don’t protect your kid in school, and the armored backpack won’t really stop a bullet, and the armed security guard winds up accidentally shooting your kid, and your kid turns out to be a bad shot, here’s an excerpt from the Funeral Home Resource:

Pick out a coffin or urn and choose whether, if a casket, you want it open for the funeral, and whether you want a viewing. Also consider small touches like burying the child with a favorite toy, book or blanket.

Yes, those small touches cost money, but they really are good for the funeral business. How about including a little pink gun, so your child can stand her ground in the afterworld. It’s the least you can do for her – and for the American economy.

As the NRA says, “The only thing that stops a bad guy with a gun is a good guy with a gun.” I believe it. My only question is, with the millions of guns being sold, how many are purchased by good guys and how many by bad guys?

But who cares, really? We’re talking dollars, here. So thank you NRA and other gun nuts, for setting us on the path to fortune and freedom.

And, may your deaths be ironic.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–Et tu, Vanguard??

Vanguard, which provides investment funds with reasonably low management fees, sent me (I am invested in their funds) an Email, describing the effects of the “fiscal cliff” legislation.

For your interest, here is what Vanguard says:

The legislation includes the following provisions:

*For most taxpayers, income tax rates would remain unchanged at the 2001/2003 levels.

*Individuals earning more than $400,000 and couples earning more than $450,000 would be subject to a higher 39.6% top marginal rate.

*These same upper-income earners would face an increase in capital gains and dividend tax rates from 15% to 20%.

*Individuals earning more than $250,000 and couples earning more than $300,000 would see the return of a phase-out on personal exemptions and itemized deductions.

*The tax rate on large inheritances (estates valued at $5 million for individuals and $10 million for couples, indexed for inflation) would rise from 35% to 40%, the estate and gift tax regimes would remain unified, and spouses would continue to have access to unused estate tax exemption amounts.

*The alternative minimum tax (AMT) would be permanently adjusted for inflation, preventing more families from being subject to the AMT.

*401(k) and other defined contribution retirement plans could provide plan participants with a newly expanded opportunity to convert their pre-tax savings in plans into Roth savings.

*The IRA charitable rollover provision would be extended for 2012 and 2013 (with special ability to make use of the provision for 2012 distributions).

*Unemployment benefits would be extended for one year.

See anything missing?

The Vanguard guys, being wealthy managers, directed virtually all their attention to the piddly, little rich-guy tax increases (most of which the wealthy are too clever to pay anyway), and forgot all about the biggest, worst, most damaging tax increase of all: the FICA increase.

I saw an estimate that the FICA tax increase will rip $150 billion from the pockets of salaried people, dramatically increasing the gap between the rich and the rest. Whether or not the number is correct, the real number is sure to be large.

On an individual level, that extra 2% will take $1,000 away from a salaried person earning $50,000 per year. I guess that problem isn’t worth the attention of Vanguard’s wealthy managers.

Incidentally, I’ve seen several comments claiming the 2% FICA increase, wasn’t really an increase, because the previous level was meant to be a temporary decrease. That inane argument will be of great comfort to working people, who now will have additional dollars taken out of their paychecks.

(I suppose if all the income taxes had been raised to pre-Bush levels, they too would not be considered increases.)

Anyway, I hope you find this interesting, both from its content and its non-content.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–Florida Sun Sentinel clearly expresses the ignorance of the day

The Florida Sun Sentinel is a nice little paper that periodically publishes some news. It’s editorials generally are of the safe “Crime is not a good thing” variety. But occasionally, the editors must feel the need to attack a big problem, and the result is the following mess:

Now, avert “fiscal abyss

Of all the reaction to Washington’s last-minute compromise for averting the “fiscal cliff,” the most clarifying message comes from China, our biggest foreign creditor.

The United States, said China’s Xingu news agency, must deal with a budget deficit that threatens not just a “fiscal cliff,” but a “fiscal abyss.”

“In a democracy like the United States, tax increases and spending cuts — the exact dose of medicine needed to cure its chronic debt disease — have long proved hugely unpopular among voters. So the politicians have chosen to kick the can down the road again and again. But as we all know, the can will never disappear. Sometime and somewhere, you might trip over it and fall hard on the ground, or in the U.S. case, into an abyss you can never come out of.”

How “clarifying.” Tax increases and spending cuts, to remove dollars from our economy (i.e. applying leeches to cure anemia), are just what our recession-wracked economy needs. How do we know? Our dear friends, the Chinese, say so. And, as we all know, they have our best interests at heart.

China’s reaction is important because it has become our major foreign banker, our dealer, and at some point, it could turn off the tap.

For those of you who have not yet become familiar with Monetary Sovereignty, “turn off the tap” is a meaningless, actually ludicrous, phrase when applied to the U.S. government. China is neither our banker nor our dealer.

China merely is a depositor in its T-security account at the Federal Reserve Bank. What would happen if China “turned off the tap,” i.e stopped depositing? Absolutely nothing.

The U.S., now being Monetarily Sovereign, would continue to create its sovereign currency exactly the same as it has since August 15, 1971, when it went off the gold standard. The U.S. never, ever can run short of the dollars it has the unlimited ability to create.

And what would happen if China wanted its dollars back? The Federal Reserve Bank would transfer China’s dollars from its T-security account to its checking account, also at the Federal Reserve Bank. Visualize you transferring dollars from your savings account to your checking account. Is this a problem?

Note to Sun Sentinal: Federal finances are not like personal finances. Learn the difference before you write further nonsense.

The ignorance continues:

And what will happen to the United States when the banks refuse to loan us any more money? Must we face an abyss to act?

How does one address the abject ignorance of the above comment? Banks do not lend the federal government anything. The federal government, having the infinite ability to create its sovereign currency, does not need to ask banks or China or anyone else for its sovereign currency.

Many of us took a measure of relief in Congress having passed a New Year’s Day compromise bill to avert dramatic spending cuts and tax hikes, a “fiscal cliff” combination that economists said would have shocked our tattered economy back into recession.

What Congress did was slightly raise taxes on the rich and dramatically raise taxes on the middle class (FICA), neither of which tax increases takes us further from the fiscal cliff. We, in fact, have moved much closer to economic disaster.

Most notably, the compromise will raise taxes on families that make more than $450,000 a year, which seems fair in this era of growing income inequality.

The Sun Sentinel editors conveniently omit the huge tax increase on the not-rich. That is the tax increase that will widen the gap (more like a gulf) between the .1% and the 99.9% – exactly what the .1% wants.

What happened to the promised two-for-one spending-cuts-to-tax-hikes once promised by the Democrats?

President Obama says there’s more to be done on spending cuts, but where are the specifics? If the cuts proposed for the Pentagon and other government programs were too severe, where, exactly, will we pare back?

Yes, spending cuts are exactly what our money-starved economy needs. — to completely collapse. And let’s not be so coy about “where, exactly will we pare back?” We all know where: Social Security and Medicare, that’s where. Those are the programs that support the middle class. Spending cuts will further widen the gap / gulf between the middle and the top.

In averting the cliff, it appears the Democrats won the battle, but lost the war for the hearts and minds of average Americans, who are keenly aware of the threat our national debt poses to our national security.

“. . . threat to our national security”? Huh? Deposits in T-security accounts at the Federal Reserve Bank constitute threats to our national security?

I’ll tell you what constitutes a threat to our national security: Misleading editorials in newspapers.

The budget war is not over. In February, the new Congress will convene to decide on spending cuts. And in March, it will decide whether to increase the federal borrowing limit.

Cut spending and limit deposits in T-security accounts – could it get any worse? Yes, it could. Read the next paragraph:

Let us vigorously address the spending choices we face now. Do we continue unemployment compensation indefinitely? Do we adjust cost-of-living raises for Social Security recipients? Do we change pension plans for government employees? Do we end certain tax credits? Do we raise the age of eligibility for Medicare? Do we pare back Pentagon spending?

With the possible (?) exception of ending “certain” tax credits, all of the above “solutions” involve cuts to middle- and lower-class net income. In short, the Sun Sentinel is acting as yet another paid shill for the rich.

My suggestion: Everyone write to the Sun Sentinel editors, explaining to them, the basic facts of Monetary Sovereignty. A little paper like the Sun Sentinel, that only receives a handful of letters each day, might be responsive.

If even one newspaper’s editors began to write the truth, who knows what wonderful things could happen.

Or we can just surrender, and let our economy be dragged down by the .1%

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

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