Mitchell’s laws: Reduced money growth never stimulates economic growth. 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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President Obama continues to promise he will reduce the federal debt, or at worst, not let it grow. During the next nine months, leading to the election, we probably will hear repeated assurances, not only from him, but from whomever the Republicans nominate, that the debt will be “controlled,” we will “live within our means” and that we will be “fiscally prudent” – all nonsense, worse than nonsense – harmful – for a Monetarily Sovereign nation..

I don’t know whether the President truly is ignorant of economics or merely says what people want to hear. In either case, he should be ashamed. A real leader learns the truth, does not fear the truth, and will speak the truth. One day the world will judge Barack Obama. It will find him brave or cowardly, honest or deceitful, knowledgeable or ignorant, strong or weak.

Most presidents care deeply about their legacy. I hope President Obama does. Perhaps he will see this letter or others expressing similar facts.

Mr. President,

Every form of money is a form of debt. The money measure called “M1″ includes: Currency (debt of the federal government), traveler’s checks (debt of the issuer) and demand deposits (bank debt). The measure called “M2″ also includes savings deposits and CDs (bank debts). The measure called “M3″ also includes larger liquid assets (debts of the issuer).

All the “Ms” are money and debt. The broadest money measure, which includes all the Ms, plus additional forms of money, is what the government calls: Debt Outstanding Domestic Nonfinancial Sectors – DODNS. People owning a great deal of DODNS are wealthy.

Money/debt is what nourishes every economy. Money/debt is the sustenance, the support, the driving force behind every economy. Think of money/debt as the economy’s food, without which the economy cannot survive. When the food supply, i.e. the money/debt supply, grows, the economy grows, as this graph demonstrates. Note the parallels between Debt growth and GDP growth:

Today, our economy is starved of its food, so it grows slowly or not at all. Remarkably, to cure the starvation problem, you have have set the fool’s goal of trying to grow the economy while withholding the economy’s food. You may not recognize the equality between debt and money, and think that while money is good, debt is bad. If so, it is like believing cars are good, but autos are bad.

The U.S. became Monetarily Sovereign on August 15, 1971, which put us in the enviable position of being able to create money at will (unlike the euro nations, which are monetarily non-sovereign).

The government creates money by deficit spending. To pay a bill, it simply instructs a creditor’s bank to mark up the creditor’s account. The government can send those instructions endlessly. It never can run short of instructions. It needs neither to borrow nor to tax. That is the definition of Monetary Sovereignty.

The single biggest economic problem facing America and the world is the widespread ignorance regarding Monetary Sovereignty – the belief federal finances are like personal finances. This ignorance has led and will continue to lead, to an endless series of recessions – so far, on average, one every five years — along with their resultant human misery.

We citizens only can pray that one day we will have a leader, whose knowledge and courage will allow him to reveal the truth, and put us on a path to economic growth. He will use our Monetary Sovereignty to feed our economic growth.

If you prove to be that leader, your name will be added to the list of great American Presidents: Washington, Lincoln, Roosevelt et al. If not, your name will be listed alongside Hoover. You hold your legacy in your own hands.

Good luck to you – and to all of us.

Rodger Malcolm Mitchell

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

Mitchell’s laws: Reduced money growth never stimulates economic growth. 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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It seems we have come to the point where every time a President and his party want to accomplish something, the other party (not wanting the President to receive credit for anything good coming to America) decides to filibuster — and to hell with the nation. So much for patriotism.

I feel sure our founding fathers did not want one Senator to be more powerful than the President of the United States, and one party repeatedly to obstruct the work of Congress, though seemingly the Senate party chiefs favor that outcome.

Here’s what the New York Times says:

NY TIMES EDITORIAL: Filibustering Nominees Must End
Published: January 28, 2012

The system for reviewing presidential appointments is broken. The process has been hijacked by cynical partisanship and cheap tricks.

This is not a new problem, but it has gotten intolerably worse and is now threatening to paralyze government, as Republicans use the filibuster to try to kill off agencies they do not like. The number of unfilled judicial seats is nearing a historic high.

It is time to end the ability of a single senator, or group of senators, to block the confirmation process by threatening a filibuster, which can be overcome only by the vote of 60 senators. We agree with President Obama’s call in the State of the Union address for the Senate to change its rules and require votes on judicial and executive nominees within 90 days.

This is a major change of position for us, and we came to it reluctantly. The filibuster has sometimes been the only way to deny life terms on the federal bench to extremist or unqualified judges. But the paralysis has become so dire that we see no other solution.

Today, 18 judicial nominees wait for Senate votes even though they were approved by the Judiciary Committee, 16 unanimously. It can take a year for a nominee to receive a vote, an extraordinary hardship — since many cannot work while they wait — that threatens to reduce the pool of highly qualified candidates.

Goodwin Liu, a liberal law professor nominated last year to an appellate bench, was filibustered even though he was entirely in the legal mainstream, supported by conservatives including Kenneth Starr and Clint Bolick. His offense: He once dared to criticize Justice Samuel Alito Jr. as being too conservative.

It is not just judicial appointments that are frozen. When Congress created a vitally needed Consumer Financial Protection Bureau as part of the financial reform law, Republicans in the Senate decided to block confirmation of a chief so the agency could not exercise its full regulatory powers.

Senators also use filibusters to block nonpolitical positions, like the administrator of the General Services Administration — to demand passage of a pet project, out of pique or, most troubling, as part of the Republicans’ electoral strategy to block anything Mr. Obama wants.

The nation votes for a president, who needs to be able to appoint top officials and judges. The Senate needs to decide whether to give its consent or not. Voters could then watch and reach their own judgments. And with fewer vacancies, government and the judiciary could do the nation’s work.

I like to advise President Obama about his speeches, though there is no evidence he is aware of my existence, much less my advice. But, for better or worse, here is the “filibuster” speech I suggest for President Obama:

“Let them filibuster. Let them filibuster a day, a week, a month. Let them filibuster until the November elections at which time you voters will let these fools know what you think of obstructionist Senators, who don’t give a damn about governing or what’s best for America, but care only about political gamesmanship and personal power politics.

Your Senators were sent here by you, and paid to accomplish something, to help protect you and build America. You didn’t send them here to sit on their butts and collect pay, perks and pensions, while one party member reads from the telephone book.

So, I’m just going to propose what I believe is best for America, and let the bastards filibuster. Each day I’ll remind you who’s stopping America’s business, and what their motive is. Then, when they get home, they can answer to you.”

That might work. What do you think? Meanwhile, I award three Benedict Arnolds to all those Senators who have filibustered, and will filibuster, not to protect America, but to advance a selfish political agenda.

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

Mitchell’s laws: Reduced money growth never stimulates economic growth. 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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I’ll be on vacation the next couple of days, so I thought I’d leave you with this from my imagination and belief:

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

==========================================================================================================================================
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

Mitchell’s laws: Reduced money growth never stimulates economic growth. 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.
==========================================================================================================================================

O.K., that’s not a real quote from Mr. Bernanke, but it should be. He keeps doing exactly the opposite of what is needed to grow the economy, and when the economy doesn’t grow much, he does the same thing, even more so.

Let’s keep it in language simple enough even for politicians:

1. Adding money to the economy stimulates it; taking money from the economy slows it.

2. High interest rates force the federal government to pay more interest on its bonds, notes and bills. Low interest rates allow the federal government to pay less interest.

3. Government interest payments go into the economy (except for foreign payments). This enriches and stimulates the economy. Low interest rates provide less money, so enrich and stimulate less than do high rates.

And this is why, contrary to popular myth, low interest rates do not, can not and never will grow the economy. If you own any T-securities, you understand that the government pays you less when rates are low, which gives you less money to spend. (As my grandson would say, “Well, duhhh!”)

Fed says no rate hikes until at least late 2014
Reuters, By Pedro Nicolaci da Costa

WASHINGTON (Reuters) – The U.S. Federal Reserve on Wednesday said it will not raise interest rates until at least late 2014, even later than investors expected, in an effort to support a sluggish economic recovery. Without making major shifts to its outlook for the economy, the central bank described the unemployment rate as still elevated and said it expects inflation to remain at levels consistent with stable prices.

It depicted business investment as having slowed, dowgrading its assessment from the December meeting. Economic conditions “are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014,” the central bank said in a statement.

If the Fed can convince financial markets it will be on hold longer than they had anticipated, long-term interest rates could drop as investors price in the new information. There is also the possibility that officials will announce an explicit inflation target, perhaps a hard marker of 2 percent or a range of 2 percent or a bit below.
.
Fed officials appear likely to bide their time in determining whether more monetary stimulus is needed. Many economists expect they will eventually decide on another spurt of Fed bond buying – probably one focused on mortgage debt.

In response to the deepest recession in generations, the Fed slashed the overnight federal funds rate to near zero in December 2008. It has also more than tripled the size of its balance sheet to around $2.9 trillion through two separate bond purchase programs. The policy is credited with having prevented an even more devastating downturn, but it has been insufficient to bring unemployment down to levels considered normal during good economic times.

In December, the U.S. jobless rate stood at 8.5 percent, and some 13 million Americans were still actively looking for work but could not find it.

In short, the Fed’s low-rate policy reduces the federal deficit, which in turn, reduces economic growth.

One might ask how the Fed could not understand this basic truth. While I try to answer many questions about our economy, that is one question for which I have no answer.

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