The ultimate law for the ignorant

Some laws are written by the ignorant for the ignorant. There is a website called “Stupid Laws” that lists many such laws.

For instance, the website lists (I can’t verify the truth of any of these):

sara jean underwood: Jay (the carnival barker) Carney
See the amazing penniless federal government. It’s poor.  It’s destitute. it’s impecunious. Would I lie to you?

Even if the above laws actually exist, their foolishness pales in comparison to this one, the ultimate law for the ignorant:

Democrats Press Ahead With Debt-Limit Vote Amid Standoff With GOP
Kristina Peterson, Kate Davidson

WASHINGTON—A partisan fight over raising the government’s borrowing limit is expected to ratchet up this week, with Democrats moving ahead with a vote in the face of strident GOP opposition, raising doubts about whether Congress will take action before the federal government runs out of cash.

Yes, we’re talking about the “Debt Ceiling,” that ultimate law for the ignorant.

The federal government, being Monetarily Sovereign, has the unlimited ability to create its own sovereign currency, the U.S. dollar.

The federal government has been creating dollars since the 1780s when it created the very first dollars from thin air.

It created as many dollars as it wished and gave those dollars the value it wished, imply by creating laws, also from thin air.

Since then, the only limits on federal dollar creation have been placed on the government by . . . the government.

Nothing limits the government’s ability to create laws, and nothing prevents those laws from creating dollars.

Interesting that no one complains about a law deficit, but people complain about a dollar deficit, when it is the laws that create the dollars.

Intermittently in America, there have been periods of “gold standards,” in which the government declared, in essence, “We will create dollars only up to the amount of gold we have.” 

But what does that limitation mean?

Assume the U.S. owned ten kilograms of gold. How many dollars would a gold standard allow the U.S. to create?

  1. __________$10 million
  2. __________$100 million
  3. __________None of the above
  4. __________All of the above
  5. __________Whatever number Congress and the President want

See the problem? The answer depends on how many dollars per kilogram are allowed by U.S. government laws.

So, the answer is #5. All gold standards rely on Congress and the President to create laws that will determine the circumstances by which dollars will be exchanged for gold.

Through the decades, the government amended its laws that changed this exchange value many times, or when convenient, rid itself of a gold standard until, in 1971, President Nixon did away with all gold standards, on a permanent basis it is to be hoped.

Given that the government has the unlimited ability to create the laws that create dollars, and to endow these dollars with any value vs. gold it wishes, of what purpose is a gold standard?

Contrary to popular myth, gold never has “backed” the U.S. dollar, if “backing” means to give value or security to the dollar. The government, arbitrarily and without notice, can change the dollar/gold exchange rate, so exactly what value does gold provide to a dollar? None.

The U.S. dollar is a debt of the federal government. All debts are backed by collateral. Most debts have two or more levels of collateral: A physical item plus the full faith and credit of the debtor.

For instance, the collateral for a house mortgage is the value of the house plus the full faith and credit of the borrower. Together, they comprise the “backing” for the mortgage.

The only — ONLY — collateral for the U.S. dollar is the full faith and credit of the U.S. government. Nothing else ever has backed the dollar, not the Grand Canyon, not the Great Lakes, not the Missippi River, not the “amber waves of grain,” and not gold.

The acceptance of the dollar worldwide is based solely on the full faith and credit of the U.S. government, which fools in Congress now are determined to destroy.

The standoff has alarmed Wall Street analysts and business leaders, who in recent weeks have issued warnings about a rising risk of a technical default, in which the government might be unable to make all of its regular payments in full and on time.

The threat of such a default could derail markets and hit U.S. economic growth.

There never is a time when the government is unable to make its payments. That “technical default” merely means the government would be unwilling to make its payments.

If you owe $100 that contractually is due for payment this coming Friday, but today, Wednesday, you decide you are not going to pay any more bills this week, does that mean you are unable to pay or actually are unwilling to pay?

Activating the so-called “debt limit” or “debt ceiling” merely means Congress arbitrarily has decided not to pay any more bills, even though it has the unlimited ability to create dollars.

The debt ceiling is not a budgetary method. It is not a way to rein in spending. It does not demonstrate fiscal wisdom. It demonstrates spiteful idiocy, the desire by one political party to damage the other political party, the American economy be damned.

The budgets and spending already have happened. The debt limit is nothing more than a method for stiffing creditors.

All those who favor the debt ceiling, knowingly or unknowingly, want the United States of American to become a (take your pick) a welcher, a moocher, a deadbeat, a freeloader, a sponge, a parasite, or a reneger.

Employing a debt-ceiling is not a sign of thrift or prudence. It is the mark of a crook.

House Majority Leader Steny Hoyer (D., Md.) said Friday that the chamber would vote this week on a measure to suspend the debt limit and a short-term measure extending the government’s funding beyond its expiration at month’s end. 

The correct wording for the above paragraph should be, “House Majority Leader Steny Hoyer (D., Md) said Friday that the chamber would vote this week for the U.S. government to pay its bills.”

It’s a disgrace that the House actually has to vote on whether or not the government should pay what it legitimately owes. What next? A vote on whether or not to hold elections in the future? A vote on whether or not to create sensible laws?

The House will “ensure that America pays its bills on time,” Mr. Hoyer said in a letter to House Democrats Friday.

How very reassuring.

Raising the debt limit doesn’t authorize new spending, but rather allows the Treasury Department to issue new debt to cover spending that Congress has already authorized, including payments to bondholders, Social Security recipients and veterans.

Republicans have said they won’t help Democrats raise the borrowing limit, as a protest over the trillions of dollars in new spending the party is moving through Congress.

Then we come to that oft-misused word, “debt.” In federal lingo, “debt” means T-bills, T-notes, and T-bonds, none of which are debt as you know it, and not even “bills,” “notes,” or “bonds.” And it definitely isn’t “borrowing.”

In the usual sense, borrowing is what one does when one wants money for some use. But the federal government always has had the unlimited ability to create dollars. So, it has no need to borrow.

Rather than “borrowing,” those T-securities represent deposits. When you invest in any T-security, you open a T-security account in your name and then make a deposit into that account.

The government — the so-called “borrower” — never touches those dollars as a borrower normally would. I doesn’t need your dollars.

Some time later, usually upon maturity, you take your money from that account. This erroneously is referred to a “paying off the debt,” but it actually merely means closing out your account and receiving your money.

Think of a bank safe deposit box. The bank never touches the contents. That is how T-security accounts operate.

Republicans have said they won’t help Democrats raise the borrowing limit, as a protest over the trillions of dollars in new spending the party is moving through Congress.

Again, it’s not “borrowing.” And it’s not frugality.

Let’s tell it like it is: The sole function of the debt ceiling is for the minority to obstruct the majority. There is no other purpose.

The “debt ceiling” has nothing to do with debt. It has nothing even to do with finances. It strictly is a political game, a dangerous political game, strictly played to thwart the opposing party.

It’s a game of “chicken,” with the future credit of the United States at risk.

“Let me be crystal clear about this: Republicans are united in opposition to raising the debt ceiling,” Senate Minority Leader Mitch McConnell (R., Ky.) told reporters last week.

“If they want to do all of this on a partisan basis, they have the ability and the responsibility to ensure that the federal government not default, and they will have to take care of that,” Mr. McConnell said.

Democrats have pointed out that they voted with Republicans to suspend the debt limit three separate times during the Trump administration, including in the fall of 2017, when the GOP sought to advance tax cuts using budget reconciliation.

“We didn’t play games. We didn’t risk the credit of the country. We did it,” Senate Majority Leader Chuck Schumer (D., N.Y.) told reporters last week.

McConnell is a traitor in every sense of the word. He repeatedly has been willing to damage America if he feels that will benefit the Republican party.

Yet, you perhaps would be more impressed with the Democrats’ “holier than thou” position if they simply had voted to eliminate the useless, misleading, dangerous, downright stupid debt ceiling, altogether.

In a Sept. 13 letter, the heads of several financial-services industry trade groups urged congressional leaders to raise or suspend the ceiling and emphasized the vital importance of the U.S. Treasury market for investors around the world.

A coalition of real-estate and mortgage-industry groups sent a similar letter Sept. 16 warning about potential instability in the housing market stemming from a debt-limit impasse, and permanently higher borrowing costs.

Treasury Secretary Janet Yellen has said her agency could run out of cash to keep paying the government’s bills some time in October.

Unless Congress raises the ceiling, the Treasury might need to halt more than 40% of its payments, including some to U.S. households, they estimated.

“With no clear path toward debt-limit resolution over the near term, we are at the point where this could begin to impact financial conditions,” they said in a note to clients.

The White House on Friday issued a more blunt warning: Failing to suspend the debt limit could lead to a recession, at a time when the Delta variant has already clouded the economic outlook.

The Republicans again demonstrate more loyalty to party over country, so a recession prior to the next election would be exactly what they want.

And guess which payments would be the first to be halted. All payments that benefit the poor and middle classes. The”Party of the Rich” will do nothing to hurt the rich.

And that’s what this game of chicken is all about.

Raising the debt limit wouldn’t facilitate future spending, and Congress would still need to raise the debt limit this fall even if no new major spending programs are enacted.

That is because Congress has already approved spending and tax policies that result in large budget shortfalls, which the Congressional Budget Office projects will total $12 trillion over the next decade.

In recent years, those budget gaps were driven by large bipartisan budget deals, a GOP tax cut and more than $5 trillion in pandemic relief.

The debt ceiling is the ultimate law for the ignorant. It is a con job on you, an innocent public, to make you believe it is a way for Congress to be thrifty.

But the whole notion of “thrift” for an organization that has the infinite ability to create money, makes no sense and is in fact dishonest. It is especially dishonest for the Republican party which specializes in giving tax breaks to the rich.

Sadly, by misusing words like “debt,” and “borrow,” and by equating the Monetarily Sovereign federal government with monetary non-sovereign states, counties, cities, business, and you, the two political parties have managed to convince you the government can’t afford to provide you with benefits.

So, no free Medicare for you and everyone. No free Social Security for you and everyone. No free college for your children. And, there are all those needless federal income taxes you pay,  year after year.

You are being conned by the ultimate con job. Hello, sucker.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell



The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics. Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all
  4. Free education (including post-grad) for everyone
  5. Salary for attending school
  6. Eliminate federal taxes on business
  7. Increase the standard income tax deduction, annually. 
  8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
  9. Federal ownership of all banks
  10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.


A visit to the Holocaust museum through the golden door.

Sen. Joseph McCarthy

It takes only two things to keep people in chains:

The ignorance of the oppressed
and the treachery of their leaders.


There are about 100 holocaust museums in the United States, alone. There probably is one a convenient driving distance from you. Many more are in nations around the world.

The largest one is in Washington DC and there is one in Skokie, IL. I’ve visited both.

The museums publish a magazine titled, “Memory & Action, the fall, 2017 edition of which contained an article titled, “History speaks to us for a reason.” It describes the neo-Nazi rally in Charlottesville, VA and the dangers of accommodating such loathsome and unAmerican attitudes.

A key sentence in the article was:

“The holocaust teaches us the dangers of unchecked hatred and that while it may start with the targeting of one group, it always spreads.”

Remember those words, “unchecked hatred” and “targeting of one group.” Some may feel safe with the hatred of blacks, browns, immigrants, gays, Muslims, or Jews. Some may even join in the hatred if they themselves are not part of the scapegoated group.

But it always spreads.  When hatred is officially approved it knows no boundaries.

Another article in the magazine was titled “Why I Went to Auschwitz.” It was written by former all-star pro basketball player, Ray Allen, Jr. It was one of the most moving articles I ever have read.

It included these passages:

Why do we learn about the Holocaust? Is it just so we can make sure nothing like this ever happens again? Is it because six million people died? Yes, but there’s a bigger reason, I think.

The Holocaust was about how human beings — real, normal people like you and me — treat each other.

We shouldn’t label people as this thing or that thing. Because by doing so, you create these preconceived notions, which is how we get into these horrible situations in the first place.

Ray Allen recognizes the danger of people like you and me labeling other people as this thing or that thing. Today, the label is “illegals.” It is the label by which we justify hatred.

When a nation’s political leader labels Mexicans as criminals and rapists, and labels Muslims as terrorists, and claims Nazis and white supremacists are no worse than liberals, and labels Deferred Action for Childhood Arrivals (DACA) children as criminals and murderers, it marks the beginnings of that nation’s moral fall.

In yet another article, this one titled, “An Act of Faith,” we read these lines:

“The Nazis’ persecution of Jews and other minorities is inconsistent with the Christian commandment to love one’s neighbor,” said Father Charles Callagher.

“And yet radical church leaders like Father Charles Coughlin were able to sway vast numbers of Catholics toward antisemitism.”

How did people of faith reconcile their beliefs with a political ideology of hatred?

How indeed, could the “religious” excuse the words and actions of a philandering, lying, hate-mongering politician, and still call themselves righteous?

The right-wing, online publication, Breitbart, published on January 19th, 2018, an article titled, Live Updates – Schumer Amnesty Shutdown: Washington on Edge as Cliff Approaches.

It is typically is one-sided, including such lines as:

“Senate Democrats barrel the United States of America toward a government shutdown at midnight.”

The Democrats are pushing for this shutdown because they are hellbent on getting amnesty for a significant population of illegal aliens who were recipients of the unlawful Barack Obama-era Deferred Action for Childhood Arrivals (DACA) executive amnesty program.

The White House and congressional Republicans have been more than willing to offer a deal and proposal to handle this problem, but the Democrats have been unwilling to give up chain migration, the visa lottery, and funding for President Trump’s planned border wall.

The Schumer Shutdown is already proving to be very politically painful for Senate Democrats.

“Instead of voting to support our military and to ensure vulnerable children have access to health insurance, Baldwin went along with Chuck Schumer and Nancy Pelosi to pick Washington over Wisconsin,” Alec Zimmerman, spokesman for the Republican Party of Wisconsin, said

The article goes on and on and on, devoting more than 15,000 words (!) to saying just two things:

  1. The DACA children are illegal aliens who deserve no protection, and
  2. The shutdown is all the Democrats’ fault.

Because the DACA children have been stigmatized as “illegal” and “alien,” they are perceived as non-human, foreign beings, to be shunned, deported, or worse.

In response to this shameful article, I wrote this comment:

Have you folks ever visited a Holocaust museum? There’s a big one in DC, a smaller one in Skokie, IL, and many others around the country. You should visit.

In these museums, you will see what cruelty does.

You will be amazed at how similar the Nazi’s hatred of the Jews is to some American’s hatred of undocumented immigrants. The same words are used to describe the scapegoats.

The German government falsely accused the Jews of all sorts of crimes; the purpose of these accusations was to justify the cruelty.

Now Trump accuses the immigrants of crimes to justify the incredible cruelty of deporting these men, women, and children.

Shall we kick down their doors, cram them into boxcars and ship them to misery and death. Has that become the American way, now?

Is that who we now are — today’s Nazis?

The similarities between Trump and Hitler are chilling — the boastful hatred of a group, the hatred of media who dare to criticize, the never-ending lies, the appeals to base instincts.

Equally chilling are the similarities between the German people who believed Hitler and the American people who believe and follow Trump. The same sarcasm, the same anger, the same false claims, the same rabid defense of the leader. The same cruelty masquerading as “defense of country.”

Some people say it can’t happen here, but it is happening already. It is happening. The most cruel and selfish among us are leading us now.

I pray we wake up before we become Nazi German, Nazi Poland, Nazi Romania, Nazi Austria and all of WWII Europe.

America, the America that makes us proud, is disappearing, and being replaced by a dark, shameful America. Don’t let this happen to you.

The response was typical, predictable, and inadvertently proved exactly what I said. Here are some word-for-word examples:

“If by ‘living among us’ you mean displacing US workers, lowering wages, and sponging off of our tax dollars. If you were under employed or unemployed by these illegals then maybe you too would see them as ‘MONSTERS’, (your word). Let them go back to their shΐthole countries and eat garbage. I DON’T CARE.”

“We have to be relentless in hanging this on Chuck Schumer and the DEMONRATS and their RINO comrades. NO DACA! BUILD THE WALL! DRAIN THE SWAMP!”

“Shut it down AND ensure that welfare bums get no checks. The leftist scum will be calling their congressman on their Obama phones and crying LOUD!
Bring on the shutdown leftist scum!!!”

“This Democrat shutdown is over AMNESTY. Democrats demand our President DROP TO HIS KNEES and kiss their arses to SCREW THE AMERICAN PEOPLE and give amnesty to illegal aliens. NO MORE AMNESTY. F__ Amnesty and F__ Democrat Liars and F__ MSM “journalists”. To HELL with the DC Shithole. Bring on November!”

“If they don’t fund the government by 10PM, then Republican Senators should end the filibuster, deport them all, and fund the wall.”

“Pelosi snuck out to the dog park to have a big DogShyte Sundae…Two scoops for Nasty !! #releasethememo !”

“He’s the delusion idiot. #1 these aholes are not citizens are was the Jews. #2 An ethnic group is not being targeted even if the majority of them are #3 It’s only about enforcing laws, not ethnic cleansing. Bu then you lame ass lefties love the distortion and hyperbole of propaganda and slinging analogies that don’t fit. You and your whole ilk are pathetic losers!”

Image result for russian flagSome of the above may come from Russian bots. Reportedly, their online comments are more numerous than real comments, so it’s hard to know which are which.

But, if ever you go to Breitbart, or any other extreme, right-wing site, you will see essentially the same language. You will see the “unchecked hatred” and the “targeting of one group” the Holocaust Museum warns us about.

You will see the labeling and the preconceived notions Ray Allen lamented about.

While any nation always has latent bigotry and xenophobia lurking in the background, there have been only a few times in recent American history where this has come to the fore.

Democrat Franklin Roosevelt’s wartime mass detention of Japanese American citizens is a permanent stain on our history.  It was caused by war hysteria beginning with the Pearl Harbor bombing.

Roosevelt offered no proof that American citizens of Japanese descent offered any danger to America, but his words appealed to a frightened populace, all-too-ready to hate an “enemy.”

Shortly after the war, during Democrat Harry Truman’s administration, Republican Senator Joseph McCarthy gained power and notoriety for labeling his enemies as “communists,” and to a lesser degree, as “homosexuals.”

He had no proof of these claims, but he had a loud megaphone, and his words appealed to the weak-minded who wished to blame someone, anyone, for their own failings.

The rampant xenophobia McCarthy created cost many of his victims their jobs; they both personally and financially often were ruined.

Today, it is happening here again: A politician gains followers and political power by railing against supposed “aliens,” or “enemies of the state.” Those who protest against the lies and unfairness are themselves labeled as “soft on crime, “soft on aliens,” or soft on whatever the politician wishes to stigmatize.

In every case, innocent men, women, and children are injured unfairly by the politician’s lust for greater power. In every case, America is damaged, not only by the loss of good people, but by the loss of reputation.

We Americans like to think of ourselves as the model for all other nations, the place where the rest of the world aspires to be. But with each McCarthy wannabe, that reputation is damaged.

As a result, never since the beginning of World War II, has America been held in such low esteem.  We have become pariahs on the international stage.

And the fault is our own. No excuses. No lies. We did this, and we continue to do this to ourselves.

It’s time to take down the Statue of Liberty as a meaningless sham.  We have lost what it once stood for.

America no longer is the brave “golden door.” We are bigots and cowards now.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell


 “Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!”

Do you know what “unsustainable” means? If not, it’s costing you money.

It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders.

Image result for big lie
The CRFB makes the Lie simple and big, and tells it often

The word “unsustainable” is a favorite among federal debt fear-mongers. They use it all the time. It is a lie, a Big Lie. It is the biggest lie in all of economics.

Do you know what it supposedly means regarding the federal debt? Specifically, what aspect of the federal debt do they claim can’t be sustained?

While you think about that, read this Email I received from my favorite debt fear-mongers: The Committee for a Responsible Federal Budget (CRFB)

Committee for a Responsible Federal Budget (CRFB)

We Must Increase the Statutory Debt Limit and Take Action to Deal with the Debt
August 2, 2017
For Immediate Release
The United States government is quickly approaching the deadline for raising the debt ceiling. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, released the following statement:

The United States faces two major debt challenges: one urgent and acute, the other gradual and long-term but still pernicious. Without a prompt increase in the debt limit, policymakers would threaten default on America’s obligations and could even spark a global economic crisis.

Correct. The day the United States stops paying its bills is the day the world’s economy collapses, making the “Great Recession” of 2008 look like a picnic.

So why does Congress threaten us with it?  In fact, why is there a debt ceiling at all?

Federal “debt” is not like personal debt. When you “lend” to the federal government, you tell your local bank to transfer your dollars from your checking account and deposit your dollars into your Treasury Security Account at the Federal Reserve Bank (FRB).

That is the way you buy a T-bill, T-note, or T-bond, which together make up the federal “debt.” You simply transfer your dollars from one of your bank accounts to another one of your accounts at another bank, the FRB.

The dollars are still yours. They just have been moved from one of your accounts to another of your accounts.

Thus, the so-called federal “debt” is nothing other than the total of those deposits in Treasury security accounts at the world’s safest bank, the Federal Reserve Bank.

The so-called “debt” is bank deposits, very much like your savings account deposits at your local bank.

At the same time, the national debt is currently higher as a share of the economy than at any time since just after World War II, and it is rising unsustainably.

The debt fear-mongers often mention the fact that the “debt” (T-security deposits) are a high percentage of Gross Domestic Product. But why is this a reason for concern?

Would you be fearful if your savings account deposits were a high percentage of your income?

You might question whether that was the best use of your money, but it would not constitute a danger to you.

The debt fear-mongers seem to be implying that the “debt” (deposits) are paid off by the economy, and that somehow if the debt is a high percentage of the economy, it can’t be paid off.

Related image
Paying off the federal debt just means transferring your dollars from one of your bank accounts to another of your bank accounts.

That is total nonsense.

Since the misnamed “debt” is deposits, it is paid off the way all your bank deposits are paid off: The Federal Reserve Bank merely transfers your existing dollars from your T-security accounts, back to your checking account.

It’s like transferring dollars from your savings account to your checking account.

The federal government could pay off the entire “debt” tomorrow if it wished, simply by transferring dollars from one account to another. No new dollars needed.

We need to increase the statutory debt limit as soon as possible. We should have done so already to avoid creating undue and potentially costly uncertainty, and we most certainly should not wait until the last moment to make this necessary increase. No Member of Congress should even consider holding this must-pass legislation hostage.

We don’t need to increase the statutory limit; we need to eliminate the entire “debt ceiling” rule. It is total nonsense, meant to deceive you into believing the federal government is limited in its ability to fund social programs.

At the same time, it is important to recognize that the near-record national debt is on an unsustainable path and changes need to be made.

And there’s that inevitable word “unsustainable.” What does it mean? You never will be told. It’s a word meant only to frighten you.

The United States has been “sustaining” growth in the federal debt for many years. Here is a graph showing the Gross Federal Debt Held by the Public. (It is “held by the public,” because you, the public, own the dollars in those T-security accounts at the FRB.

In 1940 the total of “debt” held by the public was $41 billion.

By 2015 the “debt” had reached $13 trillion and climbing.  Over the past 75 years, the Federal Reserve Bank has “sustained” a 31,000% increase in T-security deposits. 

So, where’s the crisis?

Back in 1940, Robert M. Hanes, the president of the American Bankers Association, said the federal “debt” (deposits) were a “ticking time-bomb which can eventually destroy the American system.”

Every year since then, the debt fear-mongers have issued hand-wringing claims that the debt is “unsustainable,” or a “ticking time bomb,” or a threat to the world as we know it.

We have endured, or shall we say, “sustained,” more than 75 years of hysterical predictions that never come true, about bank deposits at the FRB — and yet, after more than 75 years, the public still has not caught on to the scam.

Would you believe someone who consistently has been proven wrong for more than 75 years?

Given that the debt ceiling is one of the few reminders of this fiscal reality, it would be prudent for policymakers to attach or simultaneously pass measures to help slow the growth of our national debt. In the past, some debt ceiling increases have been productively paired with deficit-reduction policies or processes.

What is the “fiscal reality,” the CRFB writes of? They don’t say.  But the real “reality” is that contrary to what you have been told, the federal government does not issue T-securities to fund spending.

In fact, the federal government’s method for creating dollars is to pay creditors. Unlike you, and me, and the states, counties, and cities, the federal government needs no income. It creates dollars, ad hoc, every time it pays a bill.

When the federal government pays a creditor, it sends instructions (not dollars) to the creditor’s bank, instructing the bank to increase the balance in the creditor’s checking account. At the instant the creditor’s bank obeys those instructions, new dollars are created and added to the money supply.

The instructions then are cleared through the Federal Reserve Bank, which is owned by the federal government. Thus, the federal government has the power to approve its own payments, which is why no federal check ever has bounced.

This power is known as “Monetary Sovereignty. The federal government is sovereign over its sovereign currency, the dollar. It can do anything it wishes with the dollar. It can create dollars at will, and it can give the dollar any value it chooses. It can create or prevent inflation to whatever level it chooses.

(This is in contrast to state and local governments, which are monetarily non-sovereign regarding the dollar. They use the dollar but it is not their sovereign currency;  they cannot create dollars at will, nor can they control inflation.)

Debt fear-mongerers try to confuse you by falsely implying federal finances are like state and local (and personal) finances.

If T-securities simply are deposits in accounts at the FRB, why do they exist?

  1. They provide a means for interest rate control and inflation control. By setting the interest rates on T-securities, the Fed influences all interest rates, and adjusting interest rates is how the Fed controls inflation.
  2. T-security accounts provide a safe investment for conservative investors, including nations, worldwide. The Chinese, for instance, deposit their dollars into T-security accounts, because the Federal Reserve Bank is the world’s safest bank. It’s the safest place to hold dollars.
  3. To facilitate an antiquated law requiring FRB deposits to equal deficit spending. The law became outmoded in August, 1971, when the U.S. went off the gold standard.

The government has the power eliminate T-securities entirely, and to continue deficit spending, forever.

While first and foremost we encourage policymakers to pass the needed increase immediately, we also support their using this opportunity to take long-overdue action to deal with the debt.

When your credit card bill arrives, you pay it. But if it’s too high, you may also need to adjust your borrowing habits going forward.

The CRFB, like all debt fear-mongers, draws a false parallel between federal financing and personal financing.  You, as a user of dollars, can run short of dollars to pay your bills.

The federal government, as the sole issuer of dollars, never can run short of its own sovereign currency.

So why all the propaganda about “ticking time bombs” and “unsustainable debt”? Very simply:

Very simply:Image result for the rich bribe the government

  1. The world’s governments are run by the very rich.
  2. The Gap between the rich and the rest is what makes the rich, rich.  Without the Gap, no one would be rich (We all would be the same), so the primary goal of the rich is to widen the Gap.
  3. The Gap can be widened either by the rich having more, and/or the rest of us having less.
  4. Most deficit spending is for social programs that help narrow the Gap between the rich and the rest of us.
  5. The rich bribe the three primary sources of economic information: the politicians (via campaign contributions and promises of lucrative employment later), and the media (via advertising money and ownership), and the economists (via university contributions and employment in “think tanks) to convince you the government can’t afford the social programs that narrow the Gap.

For more information contact Patrick Newton, Press Secretary, at
Committee for a Responsible Federal Budget, 1900 M Street, NW
Suite 850, Washington, DC 20036

No, don’t bother to contact these people. They won’t answer you. They are owned and operated by the rich and by toadies to the rich. They do not want you to know the facts. They want you to believe the Big Lie.

So, instead, contact your Senators and your Representative, and tell them you know the federal debt ceiling is a lie, designed to cut your social benefits. Tell them you will vote for the first one who tells the truth.

And please contact your local media; tell your friends. Get the word out.

This charade has cost you way too much for way too long.

Rodger Malcolm Mitchell
Monetary Sovereignty


The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.


–Ignorance at work: $14,300,000,000,000: Debt Limit Showdown Looming

The debt hawks are to economics as the creationists are to biology. They, who do not understand monetary sovereignty, do not understand economics.

Once again, Congress and the President will go through the meaningless debt limit dance. It truly is frightening how ignorant of economics these people can be.

First, it is Congress and the President who decide how much to spend and how much to tax. So presumably, the purpose of a debt limit is Congress’s way of preventing itself from spending too much or taxing too little. In short, by enacting a debt limit, Congress tells voters:

“We are too stupid and reckless to know that when we increase spending or reduce taxes, this will add to the debt, so we need to set a limit to tie our hands. Then after we debate for months, deciding exactly what to spend and what to tax, we can go back later and in a few days revise all the well-considered decisions we made earlier. Or we can close down the government. Even after we pass spending or taxing bills, they never can be relied upon, so no one can plan for the future. That’s how we geniuses run the economy.”

Second, and even more important, a monetarily sovereign nation should not set a “debt limit,” because that nation has no limits on its ability to service any debt of any size. So, here Congress tells voters:

“We are too stupid to understand, and too lazy to learn, what monetary sovereignty means. We think we still are pre-1971, when we were under a gold standard, and a limit on debt was necessary. We do not know why we eliminated the gold standard, and we don’t care. We’ll continue to act as though it still were in effect. Don’t blame us; we’re just politicians.”

When you read and hear all the debate about the debt limit, you will experience the ultimate of Congressional and Presidential prevarication. If anyone simply tells the truth — “The debt limit not only is unnecessary, but harmful” — it indeed will be a miracle.

Rodger Malcolm Mitchell

No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind me of the guy whose house is on fire. A neighbor runs with a garden hose and starts spraying, but the fire continues. The neighbor wants to call the fire department, which would bring the big hoses, but the guy says, “Don’t call. As you can see, water doesn’t put out fires.”