When myths become reality, science is forgotten

Two of the most important economic realities are Monetary Sovereignty and Gap Psychology. Together these realities rule the U.S. government’s control of America’s economy — or they should rule if voters understood them.

1. Monetary Sovereignty tells you that the federal government has infinite power over its own sovereign currency. It makes all the laws that control dollar creation and dollar value.

At its whim, the government can create, destroy, and revalue dollars, so it needs neither taxing, borrowing, nor income of any kind to spend whatever it wishes and to set inflation at whatever level it deems.

It makes all the decisions concerning dollars.

2. Gap Psychology tells you that most people wish to distance themselves from those whose income/wealth/power is low and to come nearer to those whose income/wealth/power is excellent.

Because “rich” is a relative term, becoming richer requires that a person find ways to widen the income/wealth/power Gap below and to narrow the Gap above.

This is accomplished by gaining more for oneself and/or by forcing others to have less. Thus, impoverishing those below or above makes one richer, while enriching those below and/or above makes one poorer.

The rich in America, and in most countries, control the flow of information and America’s laws by financing the media (via advertising dollars and ownership), the economists (via university contributions and promises of employment), and politicians (via campaign contributions and promises of future employment.)

The voting public is subject to misinformation and disinformation regarding Monetary Sovereignty and the realities of Gap Psychology.

The public is told that Monetary Sovereignty is the same as monetary non-sovereignty, which would mean that the federal government would not control the currency it created from thin air.

The result of this disinformation campaign: Voting against one’s better interests has become the norm.

People falsely have been told that federal spending to narrow Gaps is unaffordable, unsustainable, and causes inflation. As an easily avoidable result, poverty, hunger, homelessness, lack of education, and Gap widening continue.

Here are examples of newspaper articles promulgating the myths that bind us to failure:

March 8, 2023
Biden plans new taxes on the rich to help save Medicare
Justin Sink and Josh Wingrove, Bloomberg News

Federal taxes do not fund federal spending. Money creation does. Therefore, new taxes on the rich will not “save Medicare.”

The government already has the infinite power to fund a comprehensive, no-deductible Medicare for every man, woman, and child in America. No federal taxes are needed or used.

By positioning the plan as requiring increased taxes on the rich, Biden dooms it to pushback from the most powerful influencers in America.

WASHINGTON — President Joe Biden’s budget will propose hiking payroll taxes on Americans making over $400,000 per year and allowing the government new power to negotiate drug prices as part of an effort the White House says will extend the solvency of a key Medicare program for another quarter century.

Both “hiking payroll taxes” and “negotiating drug prices” would unnecessarily take dollars from the private sector (aka “the economy.”) Biden’s proposal, though perhaps well-meaning, is recessionary. It also is unlikely to pass Congress.

Because the U.S. government is infinitely solvent, every agency of the government is as solvent as Congress and the President want them to be.

Medicare, a government agency, is as solvent as Congress and the President want it, just as other agencies — the military, SCOTUS, Congress, and the White House — are as solvent as our leaders wish them to be.

Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”

“The budget I am releasing this week will make the Medicare trust fund solvent beyond 2050 without cutting a penny in benefits,” Biden said Tuesday in an op-ed published in the New York Times shortly before the announcement. “

In fact, we can get better value, making sure Americans receive better care for the money they pay into Medicare.”

Every dollar paid into the Medicare “trust fund” is destroyed upon receipt.

All those dollars come from the M2 money supply measure and when they reach the Treasury, they instantly disappear from any money supply measure. Thus, they functionally are destroyed.

The Medicare “trust fund” is not a real trust fund. A “trust fund” implies a secure source of funding. However, a federal trust fund is simply an accounting mechanism used ent does not set aside the receipts or invest them in private ato track inflows and outflows.

ssets.In private-sector trust funds, receipts are deposited and assets are held and invested by trustees on behalf of the stated beneficiaries. In federal trust funds, the federal governm

Rather, the receipts merely are recorded as accounting credits in the “trust funds,” and then combined with other receipts that the Treasury collects and spends.

Further, the federal government owns the accounts and can, by changing the law, unilaterally alter the purposes of the accounts and raise or lower collections and expenditures.

At the touch of a computer key, the U.S. federal government could double or triple the number of dollars in the Medicare “trust fund,” without collecting a penny in taxes.

The crocodile tears for the impending “insolvency” of the trust fund are mere stage performance for the uninformed voters.

At this point, it’s appropriate to mention that despite disinformation to the contrary, federal deficit spending is not “socialism.” Socialism is government ownership of production and distribution, not mere spending.

The word “socialism” is used as an epithet to convince the naive public not to ask for federal benefits.

The president’s budget, which will be released Thursday, proposes raising Medicare taxes from 3.8% to 5% on annual income above $400,000, and eliminating a loophole business owners and higher-earners can exploit to avoid additional taxes, according to a White House fact sheet.

The sole benefit, and it is a theoretical benefit if the dollars actually are collected, would be to narrow the Gap between the rich and the rest, while impoverishing the economy.

But the rich will find loopholes to exploit, so the whole proposal is a combination of misinformation and naivety.

Biden’s plan would also help bolster Medicare reserves through some $200 billion in prescription drug reforms over the next decade by allowing the insurance program to negotiate costs on more medications and sooner after they come to market.

To the extent the federal government successfully cuts prescription costs, fewer dollars will flow from the Monetarily Sovereign U.S. government to the monetarily non-sovereign private sector, a recessionary effect.

The moves are part of a concerted effort by the White House ahead of looming negotiations over the debt ceiling and government funding, where Republicans vow to seek deep cuts to federal spending.

The debt ceiling is an anachronism based on ignorance. It does nothing to eliminate future spending, but risks punishing legitimate creditors to the federal government, a potentially earth-shattering event.

Though the Republicans claim to want “deep cuts in federal spending,” they have madeo proposals about where to make those cuts.

Though the Republicans claim to want spending cuts, they have been unable to point to significant areas that should be cut. “Untouchable” defense, education, health care, welfare, pensions and interest account for 93% of the budget.

The Republicans never wish to cut Defense because defence contractors are big, powerful providers of campaign cash.

Republicans would love to cut Education, Health Care, Welfare, or Pensions, but that might cost them votes, and they already have enough election problems with their stance on abortion.

Interest is untouchable because of their legal commitment and false narrative that the high rates fight inflation.

By subscribing to myths, the Republicans have backed themselves into a corner.

The only sensible and honest step would be to:

  1. Eliminate the debt ceiling.
  2. Acknowledge the fact that a Monetarily Sovereign government neither needs nor uses tax dollars or borrowing, because it pays all its dollar obligations by creating new dollars, ad hoc.
  3. Acknowledge the fact that inflations are caused not by federal spending but rather by scarcities of key goods and services (energy, food, construction materials, electronic parts, labor, etc.) and that these scarcities can be cured by federal deficit spending to obtain and distribute the scarce items.

Unfortunately, the government has devoted so much time and money to promulgating myths, it now is unable or unwilling to promulgate the facts.

House Speaker Kevin McCarthy has vowed the GOP won’t touch Medicare or Social Security, programs that share bipartisan support, particularly among elderly voters.

But Democrats, including Biden, have repeatedly highlighted past GOP efforts to overhaul the entitlement programs by reducing eligibility or benefits.

Ahead of the budget release, White House officials have challenged McCarthy to specify where he would pursue cuts.

It is likely that the Republicans will settle for either or all of three demands:

  1. Demand cuts to Healthcare by cutting Obamare and increasing deductibles and age-requirements for Medicare and/or
  2. Demand cuts to poverty aids and/or
  3. Demand cuts to Social Security via increases in age requirements.

All of those would increase the Gap between the rich, to whom the Republicans are beholden, and the rest of America, but would cause a backlash from voters.

Democrats are hoping Biden’s budget, which would reduce the deficit by $2 trillion over the next 10 years, will provide a political advantage by keeping benefits intact, with higher taxes on the wealthy helping to offset rising costs.

Because federal taxes are destroyed upon receipt, they would offset nothing. But, in the unlikely event taxes are properly administrated, they would help narrow the Gap between the rich and the rest.

That is why the Republicans will not allow them, but rather might risk opting for the 1-3 (above) penalties against the “not-rich.”

Medicare’s Hospital Insurance Trust Fund, also known as Part A, pays for hospital stays, nursing facilities, and hospices.

It is currently projected to reach insolvency as soon as 2028, according to the most recent Medicare Trustees report.

“This modest increase in Medicare contributions from those with the highest incomes will help keep the Medicare program strong for decades to come.

My budget will make sure the money goes directly into the Medicare trust fund, protecting taxpayers’ investment and the future of the program,” Biden said in his op-ed.

Neither the federal government nor any federal agency can be insolvent unless that is what Congress and the President want. Tax dollars do not go anywhere. They are destroyed. The “trust fund” is replenished at the whim of Congress, by passing laws.

Notice there is no pretense that Medicare Part B (or the military) is funded by special taxes, but rather is clearly funded by federal spending. All of Medicare could be funded that way, but for the interference of a fake “trust fund.”

Proposed changes to Medicare’s ability to negotiate prescription drugs would also benefit seniors on Medicare by lowering their out-of-pocket costs, the White House says.

Biden’s budget will specifically propose capping the cost of certain generic drugs, like those used to treat hypertension and high cholesterol, to $2 per prescription per month.

The budget also eliminates the fee patients have to pay on up to three mental or behavioral health visits per year.

The negotiation of prescription drug prices accomplishes nothing for the government and impoverishes drug manufacturers and the private sector. The federal government has the infinite ability to pay for drugs, whatever their prices.

Sending fewer dollars to the health care industry will cut economic growth.


Biden to offer deficit reduction plan
Tax proposals are aimed at trimming $3T over 10 years
By Jim Tankersley The New York Times

WASHINGTON — President Joe Biden on Thursday will propose policies aimed at trimming federal budget deficits by $3 trillion over the next 10 years as his administration embraces the politics of debt reduction amid a fight with Republicans over raising the nation’s borrowing

Trimming $3 trillion from the federal budget is identical to taking $3 trillion from the private sector, which unnecessarily will reduce Gross Domestic Product growth and usually causes a recession.

Reduced deficit growth (red line) leads to recessions. Note the downward trajectory of the red line at vertical gray bars. Increased deficit growth cures recessions. Note the upward trajectory during recessions, which cures them.

As always, ignorance about Monetary Sovereignty will lead to economic hardship. That is the usual effect of ignorance.

House Republicans have refused to raise the nation’s debt limit, which caps how much money the federal government can borrow, unless Biden agrees to steep cuts in federal spending.

To help increase federal revenues and reduce the nation’s reliance on borrowed money, Biden is expected to announce a new tax on American households worth more than $100 million that would apply to both their earned income and the unrealized gains in the value of their liquid assets, like stocks.

What Is an Oasis in the Desert?
Taking dollars from the private sector and sending them to the US Treasury, is like pumping water from an oasis and pouring it into the sea.

The voting public does not understand that it makes no sense to take dollars from the economy, which relies on dollars for growth, and give those dollars to the federal government, which has the infinite ability to create dollars.

Taking federal taxes from the private sector is like pumping water from an oasis and pouring it into the sea.

The federal government has run deficits every year since 2000, spending more money than it receives in tax revenue.

Translation: The economy has received more dollars from the government than it has sent to the government. This is necessary for economic growth.

The deficit ballooned under President Donald Trump after the onset of the pandemic recession, which spurred Congress to approve trillions of dollars in relief for individuals, businesses and state and local governments.

It remained elevated in 2021 under Biden, who signed a $1.9 trillion economic aid package he signed soon after taking office, but declined last year.

The deficit spending under Trump and Biden prevented recessions that otherwise would have been caused by COVID shortages.

Federal deficit spending grows the economy. The lack of federal deficit spending causes recessions. This lesson has not been acknowledged by Congress and the President, or by the voting public.

The nonpartisan Congressional Budget Office projects the deficit will grow slightly this fiscal year, to $1.41 trillion from $1.375 trillion, then continue to rise for the course of the decade, topping $2 trillion in 2032.

Translation: The federal government is projected to pump 1.41 trillion to three trillion growth dollars into the economy.

From 2024 to 2033, the budget office projects, deficits will total more than $20 trillion, driving gross federal debt to nearly $52 trillion.

Translation: The budget office projects the Monetarily Sovereign US government will have pumped a net total of fifty-two trillion growth dollars into the economy, at no cost to taxpayers (Taxes don’t fund spending.).

Through laws he has signed and executive actions he has issued, Biden has approved policies that would add about $5 trillion to the national debt over a decade, according to estimates by the Committee for a Responsible Federal Budget in Washington.

Translation: The CRFB projects $5 trillion will be added to Treasury Security deposits in the next ten years.


Monetary Sovereignty and Gap Psychology are two of the most important realities of the U.S. economy. Because the public has not been given the facts about these realities, voters have voted against their own best interests.

The current budget stalemate between the Republicans and Democrats is a manifestation of the misinformation/disinformation campaigns so detrimental to the U.S. economy and especially to Americans who are not rich.

Ignorance is expensive.

Rodger Malcolm Mitchell
Monetary Sovereignty

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


The Sole Purpose of Government Is to Improve and Protect the Lives of the People.


Many economists want poverty never to be cured. Here’s why.

Many economists want poverty never to be cured.

Here’s why: The most crucial question in economics is: “Can the federal government run short of money?”

Most economists will answer something on the order of, “The government always can print more dollars.”

While technically that is not correct — the government prints dollar bills, which are titles to dollars, not dollars in themselves — the concept is correct.

The U.S. federal government cannot unintentionally run short of dollars. With that fundamental truth in mind, logic dictates that:

  1. The U.S. government does not rely on your tax dollars. It simply could “print” all the dollars it spends, and in fact, that is what it does.
  2. Therefore, the U.S. government has no financial need to levy federal taxes.
  3. There is no financial need for the federal government to run a balanced budget.
  4. Federal deficits and debt are not a burden on the federal government or on federal taxpayers
  5. Since the federal government cannot unintentionally run short of dollars, no federal agency can run short of dollars unless the federal government wants that to happen.
  6. Medicare and Social Security are among the hundreds of federal agencies that cannot run short of dollars unless Congress and the President want that result.
  7. The so-called Medicare and Social Security “trust funds” are not real trust funds; they have no financial purpose. The federal government can and does support all federal agencies by creating dollars ad hoc.
  8. Medicare for All, Social Security for All, College Tuition for All, Housing Support for All, Food for All, etc., are well within the federal government’s ability to fund without levying a penny in taxes.

If you can find an error in the above logic, please let me know.

Why, then, does the government collect taxes?

Why does it threaten bankruptcy for Medicare and Social Security?

Why the concern about the federal deficit and debt?

The fundamental financial purpose of federal taxes is to control the economy by taxing what the government wishes to limit and by giving tax breaks to what the government wishes to encourage and reward.

Sadly, the government taxes — i.e., wishes to limit — your income, your healthcare, your retirement, and your other benefits, while it hopes to encourage and reward — i.e., give tax breaks to — the rich and their accumulation of wealth.

That is why the very rich pay a much lower percentage of their income and wealth as taxes than you do.

Donald Trump’s negligible tax payments are but one example.

While the economists generally admit that the federal government cannot become insolvent, they take their lead from the rich, who provide two fallback excuses for not supporting the middle classes and the poor:

Excuse #1: “If we support the middle and the poor by providing health care insurance, retirement insurance, housing aid, food aid, and college aid, the middle and the poor will refuse to work, destroying the economy.”

The tacit claim is that the not-rich are lazy takers who, lacking human aspirations, are not interested in improving their lives via labor but are content to wallow in their own poverty.

Never mind that the poor and middle classes labor much harder than do the rich, who are the real lazy takers.

Excuse #1 is part of the “the poor deserve their poverty, and we rich deserve our wealth” meme.

It is a subset of the white supremacy doctrine — part of the notion that “it was not luck that got us where we are but rather our natural superiority” — part of the “give the poor a few dollars, and they will those dollars to buy drugs and gamble.”

Excuse #2: “Federal spending can cause inflation, which will destroy the economy.”

All inflations are caused by shortages of critical goods and services, which makes sense intuitively and factually.

We can all agree that when something is in short supply, its price rises so that many prices rise when many things are in short supply.

That’s called “inflation.”

Today’s inflation is caused by COVID-related short supplies of oil, food, computer chips, lumber, housing, and labor.

Does federal spending cause these shortages? The reality is that only a very small percentage of federal spending is for the purchase of these things.

The vast majority of federal spending goes to people. Federal dollars for Medicare and other healthcare, Social Security, poverty aids, and even the military comprise nearly all of the federal government’s spending.

Only a tiny percentage goes for the purchase of goods, and even that percentage is largely labor-related.

So, when economists claim that federal spending causes inflation, they really claim that the American people receive too much money.

And further, when people have more money, they spend it on already scarce items, thus causing inflation.

Carried to its logical end, the economists claim that preventing and curing inflation requires impoverishing the middle classes and the poor.

The economists want you to have less money for driving your car, heating your house, buying your food, affording suitable housing, owning a TV, or going to college.

And they want businesses to devote less money to hiring people.

FICA and business-provided healthcare insurance are employment costs discourage hiring while reducing net wages.

Suppose the government did not require employers and employees to pay FICA and did not encourage companies to provide healthcare insurance (via tax deductions and the lack of Medicare for All). In that case, businesses could hire more people at higher net wages.

The entire anti-inflation argument is based on the poor and middle classes receiving poorer health care, food, housing, education, and net wages.

There can be no argument about the federal government’s unlimited ability to create its own sovereign currency. So, you might think the entire Big Lie about federal deficits being “unsustainable” devolves into inflation.

But that Big Lie is just a cover for a more profound lie, based on Gap Psychology, the human desire to widen the income/wealth/power gap below and to narrow the gap above.

The Gap is what makes one rich. Without the Gap, no one would be rich; we all would be equal. And the wider the Gap, the richer the rich.

A man owning a million dollars would be rich if everyone else owned only a thousand dollars, but he would be poor if everyone else owned ten million dollars.

The richer always wish to be more prosperous. They want the Gap below them to grow wider. So, they bribe our sources of information to convince us that the government should not provide Gap-narrowing benefits.

They bribe the media via ownership and advertising dollars. They bribe the politicians via campaign contributions and promises of future employment.

They bribe university economists via university contributions and employment in think tanks, which is why economists never want poverty to be cured.

They like bribes.

Everyone, from layperson to self-described expert, is fed the same Big Lie: “Federal finances are like personal finances.”

That lie includes misleading statements: The federal government should live within its means and run a balanced budget, deficits and debt are unsustainable, federal taxes fund federal spending, and federal expenditures causes inflations.

The facts are:

  1. The federal government, having the infinite ability to create dollars, has no “means” to live within.
  2. Running a balanced federal budget always leads to recessions and depressions
  3. Federal taxes not only don’t fund federal spending but federal tax dollars are destroyed upon receipt by the Treasury.
  4. All inflations are caused by shortages of critical goods and services, usually oil or food.
  5. Federal spending creates economic growth and even can cure inflations by curing shortages.

Here’s the evidence:

This graph demonstrates that recessions (vertical gray bars) occur not just when federal debt (red) shrinks but even when federal debt doesn’t grow enough.

Here is a list of periods in which the federal debt actually has shrunk:

U.S. depressions tend to come on the heels of federal surpluses.

1804-1812: U. S. Federal Debt reduced 48%. Depression began 1807.

1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.

1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.

1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.

1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.

1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.

1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.

1997-2001: U. S. Federal Debt reduced 15%. Recession began 2001.

A growing economy requires a growing supply of money.

Federal deficits pump money into the private sector, aka “the economy,” and by formula, increase economic growth (GDP=Federal Spending+Non-federal Spending+Net Exports.)

You and everyone else pay federal taxes with dollars taken from the M1 money supply measure  , which includes currency in people’s pockets or the M1 money supply measure  which includes currency that is in people’s pockets or in checking accounts.

There is no money supply measure for the federal government’s dollars because the government has the infinite ability to create dollars.

It has an infinite supply of money.

Former Fed Chairman Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”

Former Fed Chairman Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

Quote from Ben Bernanke when he was on 60 Minutes: Scott Pelley: Is that tax money that the Fed is spending? Ben Bernanke: It’s not tax money… We simply use the computer to mark up the size of the account.

Statement from the St. Louis Fed: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.”

Thus, all those M1 money supply tax dollars disappear from any money supply measure. They effectively are destroyed.

The federal government creates ad hoc dollars every time it pays for something. And as for the myth that federal deficit spending causes inflation, look at this graph:

If federal deficit spending caused inflation, the peaks and valleys of the red line (changes in federal debt) would correspond to the peaks and valleys of the blue line (inflation). There is no such correspondence.

If you’re looking for something that does correspond to inflation, look at this graph.

Oil prices (silver) correspond with inflation (blue). Inflations are caused by shortages.

Your major sources of information, the media, politicians, and university economists have been bribed to believe and to disseminate the Big Lie that federal finances resemble personal finances.

In fact, the two could not be more different.

  1. The federal government is Monetarily Sovereign; you, the states, counties, cities, and businesses are monetarily non-sovereign.
  2. The federal government can create unlimited numbers of dollars; you, the states et al, cannot create unlimited dollars
  3. The federal government destroys all the dollars it receives; you do not.
  4. The federal government never unintentionally can be insolvent; you can become insolvent if you do not have sufficient dollars to pay your creditors.
  5. The federal government never borrows dollars; you might have occasion to borrow.

The federal government can cure inflations, not by raising interest rates (which exacerbates shortages), but by spending to alleviate shortages.

For instance: To lower the price of oil, the government could financially support oil exploration and processing, and/or invest in renewable energy.

To lower the price of food, the government could financially support farming and food production R&D.

To ease the price of labor, the government could eliminate the FICA tax while providing Medicare for All (relieving businesses of this financial obligation).

To lower the prices of electronics, the government could invest in computer chips and electronic R&D.

In short, reducing inflation actually requires additional government spending, not less.

Any time you read or hear someone equating federal finances with personal finances, you will know they are lying or ignorant about economics.

Similarly, any time you read or hear someone saying federal debt or deficits are “unsustainable,” they, too are lying or ignorant.

If you have played the board game Monopoly, you know the Bank mimics the federal government in that it cannot run out of money. By rule, the Bank is Monetarily Sovereign.

The players comprise the “economy,” and they do not need to worry about the Bank’s deficits or its debt being “unsustainable.”

The Bank always is able to pay $200 for passing “GO.”

If you find Monetary Sovereignty puzzling, just think of Monopoly. That may help you visualize the reality of the U.S. economy.

The purpose of the Big Lie is to widen the Gaps between richer and poorer, and more specifically, between the very rich and the rest of us.

Economist charlatans never want poverty cured because the cures would reveal their ignorance, deception, and/or their receipt of bribes from the rich.

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


The Sole Purpose of Government Is to Improve and Protect the Lives of the People.


Another reason for real Medicare for All

The U.S. federal government, being Monetarily Sovereign, has infinite dollars. It never can run short of dollars.

The government can pay for comprehensive, no-deductible health care for every man, woman, and child in America without collecting a penny in taxes.

This would not be the Bernie Sanders Medicare for All, which is merely an expansion of our current Medicare. It would  be a comprehensive, no-deductible, no FICA, no Part A, Part B, Part C, Part D, Medicare that truly is for All. It would cover everything and everyone one.The 10 Poorest States in America

And it would not be government-provided health care. It would be government-funded healthcare. Everyone still would have their own doctors. Hospitals would remain privately owned.

The only differences would be that insurance companies no longer would be the middlemen, and everyone would have free health care.

There is no functional reason why America needs privately-owned, for-profit insurance companies that collect medical dollars but provide no medical services.

It is a costly scam. The insurance companies, in essence, tell you, “Give me your healthcare dollars. We’ll give some of them to doctors, nurses, and hospitals and keep the rest for ourselves.”

What’s the purpose of having middlemen take some of your hard-earned medical dollars?

It would be far better for the federal government to tell you, “You don’t have to give us anything. We’ll create the dollars and pay them to the doctors, nurses, and hospitals. It won’t cost you a cent. You and your doctors will make all the medical decisions. We’ll just pay for them.”

That is the way medicine should and could operate.

An article in today’s Palm Beach Sun Sentinel reminds me of these simple facts. Here are excerpts:

More than half of hospitals in rural Miss. facing closure
Leaders at the publicly owned Greenwood Leflore Hospital in Greenwood, Miss., say they will be out of business before the end of the year without a cash infusion. Rogelio V. Solis/AP
By Michael Goldberg Associated Press
JACKSON, Miss. — Over half of Mississippi’s rural hospitals are at risk of closing immediately or in the near future, according to the state’s leading public health official.

Dr. Daniel Edney, the state health officer, spoke to state senators at a hearing last week about the financial pressure on Mississippi hospitals. Edney said 54% of the state’s rural hospitals — 38 — could close.

Rural hospitals were under economic strain before the COVID-19 pandemic, and the problems have worsened as costs to provide care have increased.

Mississippi’s high number of low-income uninsured people means hospitals are on the hook for more uncompensated care. At the same time, labor costs weigh on hospitals as they struggle to pay competitive wages to retain staff.

Why does America have uninsured (for healthcare) people when the federal government has infinite dollars? It makes no sense at all.

“The costs on an income statement for a hospital have skyrocketed,” said Scott Christensen, chair of the Mississippi Hospital Association Board of Governors. “The liabilities on the balance sheets of hospitals around the state have reached some unsustainable levels given what we face.”

The crux of the problem facing Mississippi’s hospitals is that revenues have not kept pace with rising costs, Christensen said.

The strain is most acute in Mississippi’s Delta region, an agricultural flatland where poverty remains entrenched. Greenwood Leflore Hospital has been cutting costs by reducing services and shrinking its workforce for months.

But the medical facility hasn’t been able to stave off the risk of imminent closure. Hospital leaders say they will be out of business before the end of the year without a cash infusion.

At Greenwood Leflore and other hospitals across the state, maternity care units have been on the chopping block. Mississippi already has the nation’s highest fetal mortality rate, highest infant mortality rate and highest preterm birth rate, and is among the worst states for maternal mortality.

Does anyone care? Do the Republicans who run Mississippi care?

A rising number of healthcare deserts are emerging in the Delta, but financial pressures are bearing down on hospitals in more prosperous areas of the state as well, experts at the hearing said.

But hospitals in poor communities often treat patients who don’t have insurance and can’t afford to pay for care out of pocket. An expansion of Medicaid coverage would reduce costs that result from uncompensated care.

Gov. Tate Reeves and other Republican leaders have killed proposals to expand Medicaid, which primarily covers low-income workers whose jobs don’t provide private health insurance.

Opponents of expansion say they don’t want to encourage reliance on government help for people who don’t need it.

This is the same -old, same-old trope that poor people are lazy takers, and giving them help will make them even lazier.

It is a vicious lie promulgated by the richer to keep the more destitute down. It is the classic expression of Gap Psychology, in which the richer want to widen the Gap between them and the poorer.

As a near-term solution, the Mississippi Hospital Association has suggested the state’s Division of Medicaid work with federal officials to raise the Medicaid reimbursement rate cap.

The move would lower the cost of providing care for people who are already covered under the state’s current Medicaid plan.

It’s a Band-Aid, as are Medicaid, Obamacare, and Medicare. They all should be merged to provide comprehensive, no-deductible, 100% coverage, fully government-funded, no taxes healthcare insurance for every American of every age and every income. No exceptions.

Finally, it isn’t “socialism.” The rich falsely chant “socialism” every time a benefit for the not-rich is mentioned. But socialism is government control, not government funding.

With real Medicare for All, the government only would take over funding from the for-profit insurance companies. All Medical decisions would remain with your doctors and hospitals.

It is a disgrace of American politics that we don’t already have it.

Rodger Malcolm Mitchell
Monetary Sovereignty

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


The Sole Purpose of Government Is to Improve and Protect the Lives of the People.


Why the economy is devilishly hard to predict: Chaos

An animation of a double-rod pendulum at an intermediate energy showing chaotic behavior. Starting the pendulum from a slightly different initial condition would result in a vastly different trajectory. The double-rod pendulum is one of the simplest dynamical systems with chaotic solutions.

Animation of a double-rod pendulum showing chaotic behavior. Starting the pendulum from a slightly different initial condition results in a vastly different trajectory.

Here is why the economy is devilishly hard to predict. Think first of the weather. We all agree it’s hard to predict, though it’s based on just a few simple facts:

  1. The sun is essentially a point source of our heat that heats the ground and water and, to a lesser degree, the air.
  2. Hot air rises; cool air falls; the earth’s uneven surface turns, and all that motion creates wind.
  3. Warm water evaporates, forms clouds, and comes down as windblown rain or snow when it cools.

Add in a few other things like cloud covers, volcanos, and the human creation of CO2, and that’s about it. The whole thing, though complex and chaotic, can be described mathematically.

You could predict the weather with sufficient data, the proper formulas, and the fastest supercomputers. It’s just numbers.

Now consider economics, the science of money. It’s a bifurcated science, part Monetary Sovereignty and part Gap Psychology. The Monetary Sovereignty part is similar to the weather in that it can be described mathematically.

  1. A monetarily sovereign entity creates laws from thin air, and these laws create money from thin air.
  2. Money is scarce to users but never scarce to issuers. Being able to create infinite laws, the monetarily sovereign entity can issue unlimited money. It never can run short, even without collecting taxes.
  3. All money is a form of debt; it’s the issuer’s debt in that the demand for any one form of money is based on the issuer’s full faith and credit. If the issuer has good credit: People want that money. Bad credit: No one wants that money.
  4. Because money is an infinitely available exchange medium, money’s value is generally based on the scarcity of the goods and services for which it is exchanged. Scarcity makes goods more valuable, thus requiring more money in exchange.

Like the weather, Monetary Sovereignty, though complex and chaotic, can be described mathematically. Given sufficient data, one could predict the flow and value of money.

Except . . .

Except for Gap Psychology, the human desire to widen the income/wealth/power Gap below and to narrow the Gap above. We want to distance ourselves from those below us and come closer to those above us.

Gap Psychology is based on human emotions about comparisons. Consider a middle-income, middle-wealth person today. He (she) has much more and much better “stuff” than even a wealthy person of yesteryear.

Today’s “middle” people have air-conditioned, heated homes and cars, televisions, cell phones, computers, and indoor flush toilets. They drink purified water, eat purified foods, and receive painless (relatively) dentistry. They have modern medical care paid for by insurance. Vaccination protects them from dozens of diseases, many fatal.

They fly or drive hundreds of miles in a few hours on paved roads. They ride escalators and elevators up tall buildings.

They are middle-income, middle-wealth, but by the standards of yesteryear, they are fabulously wealthy. Even John D. Rockefeller, possibly the richest person in history, didn’t have what the average Joe in America has now.

You would feel poor if you had smelly plumbing, mud streets, no air conditioning, and a horse-drawn buggy to get around.

Gap Psychology creates the appeal of lotteries and Las Vegas, expensive cars, natural diamonds rather than fake ones, and celebrities. Gap Psychology is the genuine desire to earn more money, own more wealth, and have more power, in short, to be more prosperous.

“Rich” is not absolute. It is a comparative.

There are two ways for you to become more prosperous, i.e., to widen the Gap below or narrow the Gap above. You either must acquire more income, wealth, and/or power for yourself, or others must lose income, wealth, and power.

And this is where economics becomes hard to predict. It is based on human psychology, which devolves into individual psychology and often into one person’s psychology.

Gap Psychology causes people to vote against poverty aid lest it narrows the Gap below. That narrowing would make you feel poorer. Gap Psychology encourages people to vote against their freedoms if that vote would restrict the poor even more, thus widening the Gap.

There is no mathematics to predict that an incompetent psychopathic President would receive enough votes to be elected. And there is no mathematics to measure what that incapable psychopath would do to the economy.

One such President added duties on Chinese goods (for which you paid and which raised prices). COVID came along, and its denial caused hundreds of thousands of Americans to die and raised prices further. Shortages and inflation were direct results.

There is no mathematics to reveal that millions would ignore their eyes, ears, and brains to continue believing the most recent election was stolen. A mob is chaotic.

It took losing a war, but the German people finally understood what Hitler had done to them, and belatedly they rejected white supremacy and fascist hatred. The Italians hung Mussolini by his heels.

Recently, Italy elected a pro-Russia, anti-gay conservative to be Speaker of their lower house of Parliament.

One day earlier, an ultra-conservative lawmaker, who collects fascist memorabilia, became their Senate Speaker; a month earlier, a neo-fascist conservative became Prime Minister.

Mussolini must be laughing (upside down) in his grave. Who could have predicted post World War II Italy’s (and America’s) failure to learn where extreme conservatism leads?

Chaos theory describes the difficulty of predicting some events because of the “butterfly effect.” Some small events can multiply upon themselves until a butterfly flapping its wings in Brazil eventually results in a hurricane over Florida — or an extreme conservative being re-elected.

Edward Lorenz  described chaos this way: “When the present determines the future, but the approximate present does not approximately determine the future.”

American economics is a blend of Monetary Sovereignty and Gap Psychology.

The former is a factual and mathematical description of money. It could allow us to predict our economic future if we were logical machines having sufficient data.

The latter results from human psychology, individual and herd, which is chaotic. Here, logic disappears, as witness the likes of Donald Trump, Herschel Walker, Lauren Boebert, Marjorie Greene, Ted Cruz, Matt Gaetz, Jim Jordan, et all, intentionally being chosen by many voters.

Think about it. These politicians, and others of their ilk with economic and political power, actually received votes from sentient human beings. It boggles.

For the same reasons why Psychology is not a science, Economics, which relies on psychology, is not a science. They are beauty contests with results in the eyes of the beholders.

And as with beauty contests, where no strict criteria are possible, everyone is absolutely, positively, unequivocally sure about the correctness of their opinions.

Now, try to predict who the next U.S. President will be and what effects she will have on the economy.

Rodger Malcolm Mitchell
Monetary Sovereignty

Twitter: @rodgermitchell Search #monetarysovereignty
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