Mitchell’s laws: To survive, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Reduced money growth cannot increase economic growth. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Have you read about it?

Huff Post Politics, 9/17/11, By Mary Bottari: Janesville, WI — As President Obama gets ready for his big jobs speech Thursday, America’s nurses have a message for him. “Heal America, Tax Wall Street!” the signs read as nurses rallied in front of 61 Congressional offices this week.
[…]
“It’s time for the Wall Street financiers who created this crisis and continue to hold much of the nation’s wealth to start contributing to rebuild this country and for the American people to regain their future,” explained Rosanne DeMoro, Executive Director of National Nurses United, in a press release.

The nurses are joining groups across the nation and around the world calling for a financial transaction fee on high-volume, high-speed Wall Street trades, to tamp down dangerous gambling and to raise revenue for heath care, jobs and other critical needs.
-to-1.

Popular misunderstanding #1: Federal taxes pay for federal spending. Wrong. “Rebuilding this country for the American people” does not require any federal taxes to be increased. Money is the lifeblood of an economy, and a financial transaction fee will reduce the money supply, leaving less available for rebuilding this country.

They found that CEOs are hording their wealth; the gap between what workers are paid and what their CEOs are paid is rising fast. In 2009, it was 263-to-1. In 2010, it was 325.

Popular misunderstanding #2: Taxing the rich helps the poor. Wrong. The only thing that helps the poor is increasing the incomes of the poor. Reducing the incomes of the rich doesn’t do that. It does the opposite, by reducing the money supply.

. . . at 25 of these firms, CEO compensation was greater than the company’s entire federal corporate income tax bill. Corporate free-loader, Prudential CEO John Strangfeld, made $16.2 million in 2010, but his entire company got a $722 million refund from the federal government.

Popular misunderstanding #3: A business’s taxes should to exceed the pay of any one employee. Wrong. There is no connection between the two. In fact, business taxes should be eliminated. They are the ultimate anti-stimulus. How taxing business helps the economy is a question never answered.

“Where’s the shared sacrifice?” asked the nurse who cited the study in front of Wisconsin Representative Paul Ryan’s Janesville office. . . . Nurse Dena McEwen . . . discussed the hard times that have hit so many families. Her 40-year-old sister nearly died of gangrenous gall bladder infection because she was out of work and without health care. A neighbor tried to commit suicide when she could not afford medications.

Popular misunderstanding #4: The wealthy should suffer if the poor have to suffer. Wrong. If you lose your bladder, having a wealthy person lose his bladder will not help you. What will help you are programs that will keep you from losing your bladder – more medical research, better health care for everyone, more and better doctors and nurses – programs the Tea/Republicans wish to cut.

All of these misunderstandings have existed for decades, but it took the Tea/Republicans to solidify them into a powerful movement for ignorance, a movement that is destroying America. The nurses say they must work harder, because Americans coming to them are sicker, the result of losing jobs that provided health care insurance.

As I read these pitiful articles, I repeatedly am reminded of yesteryear’s medical quacks who applied leeches to treat anemia, thereby killing their patients. The Tea/Republicans are removing the lifeblood of our economy – money – thereby killing America.

Out of ignorance, the anemic patients went along with their medical quacks, and out of ignorance the American voters are going along with their economic quacks. We, our children and our grandchildren all will suffer for our ignorance.

As an aside, many of my own friends, mostly college graduates and some with advanced degrees, don’t get it. They mouth the same ignorance as one would expect from the uneducated: “The debt is too big.” “The deficit can’t grow forever.” “The government is broke.” Explanations of why a Monetarily Sovereign government is different from monetarily non-sovereign people, are met with glassy eyes or even anger. Thankfully, my wife gets it completely, and whenever she hears a politician spew his ignorance, she looks at me, smiles and rolls her eyes. Thank God, I married a brilliant woman.

Anyway, sorry for the digression. I’ll just end with:

Ignorance kills.

Unlike the politicians, the nurse’s hearts are in the right place. So, I award the nurses just one, very sympathetic dunce cap.

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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY

Mitchell’s laws: To survive, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Reduced money growth cannot increase economic growth. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Speaker Boehner speaks:

Washington Post, 9/15/11: Boehner insisted that the path to creating jobs is to cut spending.

“If the supercommittee can rein in federal spending, the economy will rebound. The joint committee is a jobs committee.”

If anyone can demonstrate how cutting federal spending stimulates the economy and creates jobs, please let us know. Also, please give me your address; I have a bridge I’d like to sell you.

While Boehner relies on Americans being ignorant of economics, I suspect he himself knows exactly what he is doing. His focus is on the 2012 election, and to hell with struggling Americans. I suspect he knows full well that cutting federal spending will push the nation back down into recession, just in time for the Republicans to claim that President Obama caused the problem.

For this comment, Boehner is awarded three traitor flags for putting party politics ahead of America’s future:

Rodger Malcolm Mitchell

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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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY

Mitchell’s laws: To survive, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Reduced money growth cannot increase economic growth. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Mark, one of our readers, called our attention to this article:

AMERICA’S DEBT CHALLENGE, By Jeanne Sahadi @CNNMoney September 12, 2011:
NEW YORK — When it comes to cutting deficits, don’t play small ball. That was the message Monday in a letter to Congress’ national debt super committee from a group of more than 60 leading economists, budget experts, former Treasury secretaries and former lawmakers.
[…]
Fiscal experts estimate that to stabilize the debt held by the public at today’s level — roughly 67% of GDP — by the end of the decade, lawmakers would need to institute about $4 trillion worth of deficit reduction over 10 years. If the committee only recommends $1.5 trillion in deficit reduction, the country’s accumulated debt will still be on track to grow faster than the economy indefinitely.

They predict the federal debt (i.e. the total of outstanding T-securities) will grow faster than GDP. This has been true since 1971, when we went off the gold standard. So? As readers of this blog know, the Debt/GDP ratio is meaningless. The letter writers make an ominous statement to strike terror into your heart, but as usual, provide no data to support it.

We do know this much, however. Slow deficit growth leads to recessions.

“We believe that a go-big approach … is necessary to bring the debt down to a manageable and sustainable level, improve the long-term fiscal balance, reassure markets and restore Americans’ faith in the political system,” the letter said.

Total garbage. What does “manageable and sustainable” mean? They have no idea. What is the benefit of “long-term fiscal balance”? They have no idea. And as for restoring American’s faith in the political system,” are you kidding? Any American who has faith in Washington must have no source of news.

Signing the letter were a number of former lawmakers from both sides of the aisle, including Republican Judd Gregg and Democrat Bob Kerrey, as well as a bipartisan bevy of former presidential economic advisers, including Christina Romer, Martin Feldstein and Glenn Hubbard. The letter was also signed by former Treasury secretaries Robert Rubin and Paul O’Neill, as well as Erskine Bowles and Alan Simpson, who co-chaired President Obama’s 2010 fiscal commission. Several fiscal experts rounded out the group. Among them: William Gale of the Brookings Institution and Maya MacGuineas of the nonpartisan Committee for a Responsible Federal Budget, which organized the letter.

May their names live in infamy. And look at what “organized the letter.” The Committee for a Responsible Federal Budget. This notorious bunch wouldn’t understand Monetary Sovereignty if their mothers read it to them from their coloring book.

Next week, President Obama will send the super committee his proposal for how to reduce the debt over time, and he’s promised it would be big enough to stabilize the debt in the long run.

I’m afraid no president ever has been more over his head than President Obama. For every issue, whether it be Israel/Palestine, Pakistan, Afghanistan, Iraq, Iran, Syria, Egypt, the euro, Medicare, Social Security, the Tea Party or the federal budget, we repeatedly think to ourselves, “This guy simply does not get it.”

Here is the man who perfected the “Obama compromise” (doing exactly what the other guy wants and calling it a compromise). But in all fairness, can we really expect someone who was both a Harvard graduate and a University of Chicago professor to understand anything about the real world?

I must admit I voted for him, because I thought a Chicago politician would be smarter. Turns out he was just carried along by the real Chicago politicians. Now, he’ll have to depend on Rahm Emanual to save Florida for him (but that’s another story).

Three years ago, Byron York wrote an article about President Obama for the National Review online. It ended with this sentence: “He’ll dazzle the country with his message of hope and possibility. But we shouldn’t expect much to actually get done.”

Anyway, cutting the federal deficit absolutely, positively will lead to a recession if we are lucky and a depression if we are not. I award all those who signed the letter four dunce caps.

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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY

Mitchell’s laws: To survive, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Reduced money growth cannot increase economic growth. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Continuing the discussion from the previous post, “Closing the gap between rich and poor: Eliminate all local taxes,” how about the elimination of all private banking?

What if the federal government took over all banking functions and eliminated private banks? What would be the advantages and disadvantages?

No bank ever would become insolvent. There would be no “runs” on banks by depositors. Savings would be 100% protected. Clearly, an advantage.

The lack of a profit motive would eliminate “credit default swaps” and other strange investment derivative beasts that helped lead to the Great Recession. Advantage.

The lack of a profit motive also would eliminate the temptation to lend to credit-poor borrowers. Advantage.

The absence of outrageous, multi-million dollar salaries would translate into less expensive banking services, plus services offered in “bank deserts,” where the poor are required to use expensive, neighborhood check-cashing services. Advantage.

There would be no need for reserves and for the massive bureaucracy needed to track reserves, nor for the massive compliance bureaucracies, nor for FDIC insurance. Advantage in efficiency.

No need for Fannie Mae or Freddie Mac. Advantage.

There would be no need for the Fed or for the likes of Greenspan and Bernanke. Advantage.

Bankers would hate the idea. Huge advantage.

Frankly, I’m having trouble thinking of disadvantages. O.K., I can think of one disadvantage. Government workers have the reputation of being without imagination or the willingness to take risks. Since lending always entails risk, and lending against new ideas involves even more risk, might federally owned banks choke off innovation or on the other hand, be subject to political pressure to grant bad loans?

I’m sure that would be the objection from those who believe the private sector can do no wrong and the government can do no right. But there are non-bank people in the private sector, known as “venture capitalists” who could provide investment capital.

Perhaps the question about socialized banking boils down to whether you feel banking should be considered just another profit-making business or a public service. Unless convinced otherwise, I suspect the negatives of privately-owned banks outweigh the positives.

What do you feel?

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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY