–The G7’s backwards thinking about the Japanese yen. Save Japan from its friends. Friday, Mar 18 2011 

The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.
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Once again, the mainstream economists have things backwards. I recently came across this article:

Is G7 yen intervention a good idea? by MICHAEL SCHUMAN, 3/18/2011
In a highly unusual step, the G7 agreed on Friday morning to coordinate their efforts to control the sharp rise in the Japanese yen. The decision today was prompted by a sudden surge of strength by the yen that by Thursday morning (in Tokyo) had pushed the Japanese currency to a record high against the U.S. dollar. Though the yen had subsequently pulled back a bit, it was still at a level worrying to Japanese policymakers. Japan freaks out when the yen strengthens, because it makes Japanese exports more expensive in international markets and thus can dampen economic growth.

Last week, I posted about why charitable contributions to Japan were meaningless. Now, the economists want to facilitate Japanese exports. Before you read any further, stop and think about this question: What is the purpose of Japanese exporting? The answer is not what you may have been told.

The purpose of Japanese exporting is to import yen. Japan doesn’t want to expend massive amounts of time, energy, labor an raw materials just so they can supply us with cars, computers and television sets. The Japanese are a nice people, but they’re not that generous. No, the sole purpose of expending time, energy, labor and raw materials is to acquire yen.

But, Japan is Monetarily Sovereign. It has the unlimited ability to create its sovereign currency, the yen. Even were Japan’s exports to fall to zero, the Japanese government could create sufficient yen to support its economic growth. Japan has no need to import yen (i.e. export goods and services).

The G7 (soon to be overtaken by the E7, but that’s another story) is using an obsolete gold-standard philosophy in a post-gold-standard world. Today, Monetarily Sovereign nations do not need to import their sovereign currencies. Stimulating Japan’s yen imports is like stimulating rain over the ocean.

And in any event, Japan soon will create and spend trillions of yen to rebuild its nation. That massive influx of yen will weaken the yen, and the G7 can breathe a sigh of relief. It also will engage in an orgy of back patting, for accomplishing something not only unnecessary, but something that would have happened naturally.

But what can you expect from a group that still has no concept of Monetary Sovereignty, perhaps partly because three of the “7” (France, Germany, Italy) were foolish enough to surrender their own Monetary Sovereignty.

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

No nation can tax itself into prosperity, nor grow without money growth.

MONETARY SOVEREIGNTY

–Interview with Abby Romaine on WNZF. Is she the smartest lady on the air? Thursday, Mar 17 2011 

The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.
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Today, Abby Romaine again interviewed me on her WNZF show, Center: Uncensored. From what I can tell, Abby is the only radio broadcaster in existence who understands Monetary Sovereignty. This is particularly frightening, as Monetary Sovereignty is the basis for all modern economics.

The two things I puzzle about: How did she come to understand, and why is she the only one? Yes, there are MMT economists who get it, but if anyone out there knows of another media person, whether radio, TV or newspaper, who understands Monetary Sovereignty I sure would like to know his/her name. The editors of the WSJ and the Chicago Tribune don’t get it. No newsperson gets it. No columnist gets it. But Abby does.

Those interested in writing to this brilliant lady can reach her at: abby.romaine@gmail.com

Anyway, today she and I discussed Ron Paul, perhaps the nation’s leading architect of economic ignorance, and the Tea Party (formerly known and the Republican Party) and John (“America is broke”) Boehner, and the deficit and the debt.

I enjoy talking with Abby, because I like talking with smart people, but I probably mouthed off too much (Old people do that). My only concern is that Abby gets it. She understands that a growing economy requires a growing money supply, and federal deficits are the federal government’s method for growing the economy. She understands that federal debt could be eliminated tomorrow, simply by crediting the bank accounts of T-security holders. She understands that federal debt is not the accumulation of federal deficits, but rather that debt could exist without deficits and vice versa. And she understand that a nation with the unlimited power to create money never can be “broke.”

Why am I concerned? Because not being a radio guy, I don’t know if listeners would rather hear two people argue, and she and I don’t argue. She does play excerpts from Tea Party speeches, and perhaps that provides enough counterpoint. But Ron Paul? This guy is so ridiculous, even staunch conservatives find him an embarrassment. Maybe she should play some excerpts from an Obama speech. He at least sounds more rational, though he too is ignorant about our economy.

By the way, I thought Obama, coming from the rough ‘n’ tumble of Chicago politics would be endowed with major testosterone. But, he seems to be wimping out. The Tea (Republican) Party has a plan: Cut federal spending, which will slow the economy. Obama and the Democrats will be blamed for the poor economic performance, and in 2012, the Teas will be able to foist their own guy or gal on the American public, which by the way is exactly how the Teas won the House last year.

Never mind that executing this plan will hurt America. That isn’t a Tea concern. Cynically, they are interested solely in power. Paraphrasing my question of Abby: “What do you call American citizens who knowingly hurt America?” Then I answered my own question: “I’d call them traitors.” The irony is, the Teas love to wrap themselves in the America flag.

Second thought: That’s not irony; it’s marketing. Address the negative head-on, and turn it into a positive. Remember when cigarette advertising featured doctors telling us how healthful smoking is? Or Volkswagon bragging about how ugly the Beetle was? The Teas make a virtue out of cutting the benefits Americans enjoy.

Anyway, Obama has allowed the Teas to define the discussion. He doesn’t argue, as he should, that cutting federal spending is the dopiest idea since taxing Social Security benefits. Instead, he forlornly whines that yes, the deficit is too big, and we should cut it — only please cut it less. Just when we need leadership, we get groveling. As a Chicagoan, I’m embarrassed. Mayor Daley never groveled. He lied (They all do), but he never groveled.

If Daley were president, I suspect he’d look the reporters in the eye and say, “To cut federal spending is just, plain stupid.” And he’d be right.

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

No nation can tax itself into prosperity, nor grow without money growth.

MONETARY SOVEREIGNTY

–Ohmigosh. So THAT’s what less government means!! Thursday, Mar 3 2011 

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.
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Reality comes as a shock to the Tea Party:

Tea Party voters, by almost 2-1, oppose Social Security cuts
1:00 pm March 3, 2011, by Jay Bookman

From the Wall Street Journal:

WASHINGTON— Less than a quarter of Americans support making significant cuts to Social Security or Medicare to tackle the country’s mounting deficit, according to a new Wall Street Journal/NBC News poll, illustrating the challenge facing lawmakers who want voter buy-in to alter entitlement programs.

In the poll, Americans across all age groups and ideologies said by large margins that it was “unacceptable” to make significant cuts in entitlement programs in order to reduce the federal deficit. Even tea party supporters, by a nearly 2-to-1 margin, declared significant cuts to Social Security “unacceptable.”

Isn’t it fun to march around, shouting you want less government — until you realize what you’ve been shouting? The Tea Party (and the rest of the right wing) remind me of rebellious teenagers, who don’t want any help or suggestions from their parents. But when they need money for the dance, or for some clothes or to go to college, then it’s “Mommy, Daddy, help me. Ple-e-e-ase!”

One can only hope the politicians and the public come to their senses, soon.

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

No nation can tax itself into prosperity, nor grow without money growth.

–Watch, as politicians flush Medicare, Medicaid and Social Security down the drain Sunday, Feb 27 2011 

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.
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I’ll give you straight talk; I won’t mince words. It was inevitable, the debt hawks, not having found enough places to cut federal benefits, now want to cut your Medicare, Medicaid and Social Security, as well as just about every other federal benefit they could think find:

By ERIK SCHELZIG Associated Press, Feb. 27, 2011

House Republicans specifically want to target entitlement programs, like Medicaid and Medicare, the speaker (John Boehner) said.
“To not address entitlement programs, as is the case with the budget the president has put forward, would be an economical and moral failure,” Boehner said. “By acting now, we can fulfill the mission of health and retirement security for all Americans without making changes for those in or near retirement.”

Your benefits from these three programs already are far too low, and the debt hawks want to cut more. Why? They have absolutely no idea. Write to any debt hawk and ask this simple question: “Why do you want to cut the deficit?” If you get any answer at all (unlikely), it will be something nebulous like, “The deficit is unsustainable,” or “We’re living beyond our means.” In short, generalized BS based on nothing.

Never, will you receive a solid statement of exactly what would happen in the future, if the government keeps spending. Never will you be shown any supporting data. The reason: What will happen is: We will prosper.

But here is a solid statement of what will happen if government spending declines: We will have another recession or a depression. We will have fewer doctors, less medical research, poorer roads and bridges, worse education, poorer security, more states not able to pay their bills, more poverty and overall a reduction in our quality of life. How do I know? Read some of the posts in this blog, beginning with Summary, and work your way forward.

I’m sure you recall all that phony wailing about our children and grandchildren being hurt by deficits. Total nonsense. Use your brain. What do you think cutting federal programs will do to our children and grandchildren?

And the gall of these people talking about “fulfilling the mission of health and retirement security” by cutting spending. That’s classic double-speak. It’s like the southern senators criticizing the freedom marchers for “upsetting law and order.” No, Jim Crow upset law and order, and to fulfill the mission of health and retirement requires more money, not less.

And then there is the complete crap about how cutting federal spending somehow will alleviate unemployment. Are you kidding? What next? Cure hunger by withholding food?

In short, cutting federal spending is nuts. Anyone who thinks the economy works better or can grow, with less money, is equally nuts. The Tea Party anti-government mantra is the biggest fraud ever perpetrated on America. It makes absolutely no sense at all. Every dollar cut from the so-called “deficit” (more properly, “money supply”), is a dollar taken right out of the economy and right out of your pocket. These Tea Partiers make Bernie Madoff look honest.

Boehner wants to cut social programs “without making changes for those in or near retirement”. In other words, he wants to screw you young people. Why? Because he knows the older people would vote the Republicans out of office, if they get screwed, but he figures you young folks are so detached from retirement, you won’t realize what is being done to you until it’s too late. Anyway, aren’t most rich people older? No need to upset the wealthy contributors.

Today, you may not understand Monetary Sovereignty (though the basic concept is dead simple), but I suspect you’ll begin to understand it better when Medicare, Medicaid and Social Security and the rest of the economy go down the drain, and you’re left with insufficient medical care, insufficient retirement and a lousy world for your kids and grandchildren.

Then, you’ll have only yourself to blame, because you didn’t even take the trouble to learn Monetary Sovereignty, and instead, like little obedient sheep, you marched to the voting booth and elected those jerks. You didn’t contact your Congressperson; you didn’t write to the media; you didn’t argue; you didn’t demand. You just bent over and let them do it to you.

And that, my friends, is the straight talk I promised you.

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

No nation can tax itself into prosperity, nor grow without money growth.
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