Tag: debt

–The world is coming to an end. This time I really mean it. Trust me.

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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The world is coming to an end. This time I really mean it. Trust me with your money.

Does the following article remind you of the debt hawks telling us the federal deficit and debt are “unsustainable” and a “ticking time bomb” (their favorite words)?

NEW YORK (CNNMoney) 5/19/2011

By now, you’ve probably heard of the religious group that’s predicting the end of the world starts this weekend. Harold Camping and his devoted followers claim a massive earthquake will mark the second coming of Jesus, or so-called Judgment Day on Saturday, May 21, ushering in a five month period of catastrophes before the world comes to a complete end in October.

At the center of it all, Camping’s organization, Family Radio, is perfectly happy to take your money — and in fact, received $80 million in contributions between 2005 and 2009. Camping founded Family Radio, a nonprofit Christian radio network based in Oakland, Calif. with about 65 stations across the country, in 1958.
[. . . ]
Camping first inaccurately predicted the world would end in 1994. Even so, he has gathered even more followers — some who have given up their homes, entire life savings and their jobs because they believe the world is ending.

Anyone believing preachers, whose predictions never come true, is a dupe. We laugh at such people, or pity them. We feel the same about the people who believe those the seers who tell us the federal debt is a “ticking time bomb.”

(Hello false prophets: N.Y. Times, David Ibata, James Warren, Lexinton Herald-Leader, L.A. Times, Richmond Times, Dallas Morning News, Fortune Magazine, Bloomington Pantagraph, Ross Perot, Kansas City Star, Porter Stansberry, The Bradenton Herald, Providence Journal, NewsMax, USA Today, Reason Alert and the hundreds of others who have used that term to describe the federal deficit or debt)

Our laughter and pity also go to the dupes who believe the false prophets telling them the federal debt is “unsustainable.” (Too many to mention)

The debt-hawks have been wrong every hour of every day, every month and every year for at least the 70 years I’ve documented. That’s a ton of wrong, although dupes don’t seem to notice. The next time you’re tempted to believe a debt-hawk about the federal deficit or debt, send some money to Harold Camping – or wait, better yet, send it to me. The world is coming to an end. Believe me.

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


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No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a dopey teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it screwed up my future.”

MONETARY SOVEREIGNTY

–Can increased federal deficit spending actually prevent inflation?

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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Can increased federal deficit spending actually prevent inflation?

TIME magazine recently ran an article about inflation, which supplements what I’ve written earlier about the cause of inflation (See: The Cause of Inflation)

Think Commodity Prices Are High Now? Just Wait
Posted by ZACHARY KARABELL Monday, May 16, 2011

The just-released monthly inflation report showed that prices for most goods eased a bit. The exception of course is oil, and even though oil prices globally have declined in recent weeks, most Americans are paying ever more for gasoline even as inflation overall remains statistically tame.
[. . .]
But the real issue today is that inflation is almost entirely a product of rising raw material costs and for now, these are being born not by individuals but by companies. Many economists assume that eventually, these rising input costs will be passed on to consumers in the form of higher price tags.
[…]
The emerging world is hungry for goods, for food, cars, appliances, gadgets, homes, and clothing. And governments in Sao Paulo, Beijing, and New Delhi are authorizing vast spending on modern infrastructure. China’s is well known, but Brazil and India both have significant needs that are only now beginning to be met.

I just returned from a conference with some of the world’s leading money managers, and one theme was clear: there has been massive underinvestment in the global supply chain of industrial metals and raw materials. This is less about oil and gas than about things like copper, iron ore, palladium, titanium, zinc, rhodium, and a host of other “iums” that are the essential, irreplaceable inputs for the industrial world that we all inhabit and that billions are on their way to inhabiting. Simply put there is yawning gulf between demand and supply. . .

That means we are in for a period of rising commodity inflation, including oil and of course food as more people consumer more calories and crop yields strain to increase.
[. . .]
So unless China truly implodes or Brazil stops growing, or hundreds of millions in India and Indonesia stop believing that they have a right to the same middle class lifestyle that has characterized the West for the past century, we are at the early stages of a spike in commodity prices the likes of which we have never seen. And judging from debates in Washington over how much to spend on Planned Parenthood and how much to reduce pension of state workers, we are nowhere near prepared for this world that we are entering.

Debt-hawks endlessly cite the Weimar Republic’s hyper-inflation (which occurred 90 years ago under special economic circumstances) as an example of what growing U.S. federal deficits will cause “soon,” “some day” or “inevitably.” Factually they are wrong.

Hyper-inflation has been caused by circumstances unique to each affected nation, but always involve massive printing of money in response to existing inflation, not as the cause of, inflation. Analogy: Gasoline is necessary to make a car run, but if the car bursts into flame, you don’t keep adding gasoline. Hyperinflated nations pour gasoline on an already burning car.

Mr. Karabell writes the truth. Historically, inflation has been caused by rising production costs. In the economists’ mantra, “Inflation is too much money chasing too few goods.” The debt hawks focus on the “too much money” side, while the real cause has been too few (or really, too expensive) basic goods. Oil, whose price is manipulated, has been the main culprit, (See: INFLATION) and as a result of insufficient spending on basics, many other commodities are about to have increased involvement.

So yes, there will be inflation, “soon,” “some day” or “inevitably,” just as the debt-hawks predict, but the cause will not be federal deficit spending, as they surely will claim, but rather, oil prices and shortages of other basics.

In fact, inflation could be prevented were the U.S. to pump more money into oil exploration, other energy development, mining, plant and equipment development, R&D of all types, farming, wood and other basics. Pumping more money would include tax breaks as well as deficit spending.

To build our economy efficiently, we need increased investment in its foundations.

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


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No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a dopey teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it screwed up my future.”

MONETARY SOVEREIGNTY

–What would happen if the U.S. sold its gold reserves?

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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A reader of this blog asked, “What would happen if the U.S. sold its gold reserves?” It was such a timely question, I’d like to share the answer with everyone:

If the government sold its gold reserves, the price of gold would decline (supply and demand), and the total supply of dollars would decline (all money sent to the government is destroyed), which would increase the value of dollars (i.e., a deflation) probably leading to a recession or a depression.

So if anyone suggests the U.S. sell its gold to “pay off the debt,” (which is ridiculous in a Monetarily Sovereign nation), you can tell them what this foolish act would cause.

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


==========================================================================================================================================
No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a dopey teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it screwed up my future.”

MONETARY SOVEREIGNTY

–Poor Newt. He dared depart from Tea Nuttiness, and now he has been excommunicated.

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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It’s amusing and also sad to watch the Tea (formerly Republican) Party twist and turn over its nonsensical, misdirected extremism. I’m no Newt Gingrich fan, but he probably is the most intelligent right winger around, and his comments, though still not recognizing the fundamental truth of Monetary Sovereignty, are considerably less nutsy than what we hear from the Tea/Republican folks.

From Vanity Fair, by Juli Weiner May 17, 2011

Newt Gingrich is in hot water with the Republican establishment for breaking rank and criticizing Representative Paul Ryan’s budget plan.

Heaven forbid criticizing someone who wants to emasculate Medicare and destroy federal social programs.

On Sunday’s episode of Meet the Press, Gingrich said that the Ryan plan was too much of a “radical change” for his taste, taking issue with the proposed modifications of Medicare in particular. “I don’t think right-wing social engineering is any more desirable than left-wing social engineering,” Gingrich explained . . . Republicans are not happy.

I’ll give this to the Tea (formerly Republican) Party. They are consistent. No matter how incredibly stupid their heroes’ proposals are, they will stick with them until the bitter end, and they will criticize anyone who doesn’t. Hewing to the party line is more important than proposing something intelligent and beneficial for America.

House Majority Leader Eric Cantor (R-VA) said . . . in a radio interview. “There’s no question there was a misspeak here. . . I think that many have said now he’s finished. I haven’t had a chance to really dissect what in the world he’s thinking … so I probably would reserve judgment on that.”

Serves you right, Newt, for daring to try to inject a bit of commons sense into the dialog. The Tea (formerly Republican) party has no use for that.

Gingrich took a stab at damage control earlier today during an appearance on Bill Bennett’s radio show. The Washington Post’s Right Turn blog provides a devastating summary of the interview: Gingrich begins by denying he really criticized Paul Ryan. He then is forced to listen to his own words and tries to rewrite them, suggesting he wanted to improve on the Ryan plan.

Bennett will have none of that and instructs Gingrich. . . that no one could have understood him to mean that. Then Gingrich begins to backpedal furiously. He loves Ryan, loves, loves, loves him. And Ryan’s budget (which includes the Medicare plan) is swell. It is at this point that Bennett tells him his campaign is over unless he retracts and apologizes. For emphasis he shares a conversation with a Gingrich supporter who has the same take. As it wraps up, Gingrich issues a non-apology and then sheepishly admits Bennett’s advice may be wise. At least he didn’t blame his “misspeak” on his love of country?

President Obama must be smiling. He needs to do nothing except stand back and watch the Tea (formerly Republican) Party dismantle itself. The Teas injected gobs of idiocy into the Republican Party, and much to their disgrace, the Republican bought into it. And now they are stuck with it. They equally are stuck with Paul Ryan, who is economically clueless, and have discarded Newt Gingrich, the closest thing they have to wisdom.

Yes, you can fool some of the people all the time, but that “some” is getting smaller and smaller for the Tea/Republicans.

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


==========================================================================================================================================
No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a dopey teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it screwed up my future.”