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Mitchell’s laws:
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
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Economics is a physical science and a social science. As a physical science it is heavily influenced by statistics. So we analyze of GDP, unemployment, money supplies, trends, per capita measures, deficits, debts, and on and on – all statistical measures.
However, statistical measures often fail in a social science, particularly with predictions and determinations of cause and effect. For example, while deficits generally are stimulative, they sometimes are not, and while increased income can increase spending, sometimes it can increase saving. People are not reliably statistical.
Economics devolves to motivation,, and this is where economists are particularly weak. While psychologists speculate on the motives for human actions, economists feel more comfortable with numbers.
Consider, for instance, confidence. Some economists claim that consumer and business confidence motivates stimulative actions. Most deride this as the “confidence fairy,” and say no statistical evidence supports the claim.
Yet, there is one motivation that does not receive sufficient attention: Government motivation. Though governments are powerful economic movers, and economists explore government actions, most economists do not explore government motivations.
Governments are people, and people act according to motivation. What then, motivates the U.S. government?
1. Bill Black, the brilliant banking expert at UMKC, continually criticizes the failure of the federal government to prosecute bank criminality, yet I cannot recall him mentioning the real motive for this failure. Why?
2. With all the evidence showing that austerity depresses economies worldwide, why do governments opt for austerity? What motivates them?
3. State and local taxes are massively regressive: (Institute on Taxation & Economic Policy)
“Virtually every state’s tax system is fundamentally unfair, taking a much greater share of income from middle- and low-income families than from wealthy families. The absence of a graduated personal income tax and the over reliance on consumption taxes exacerbate this problem in many states.”
Total State and Local Taxes Imposed on Non-Elderly Residents, as Shares of 2010 Income
–Lowest 20% income group: 11.1%
–Second 20% income group: 10.0%
–Middle 20% income group: 9.4%
–Fourth 20% income group: 8.7%
–Next 15% income group: 7.7%
–Next 4% income group: 7.2%
–Top 1% income group: 5.6%What motivates state governments to punish the poor more than the rich?
(And what motivates the anti-“Big Government” movement to prefer state governments, which are even more adverse to low income citizens than is the federal government?)
4. FICA, the most regressive tax in America, punishes lower salaried people, and does not affect the wealthy, who receive most of their income via investments. Why is FICA structured this way?
5. The income tax rates are higher for salaries than for investments. Why?
Unpunished bank criminality, damaging austerity, regressive state taxes, regressive FICA, highest tax rates on salaries – why do our national and local governments repeatedly favor the rich over the rest?
Are these just examples of economic ignorance? I suggest it is not ignorance; so it cannot be cured by teaching; it is informed and intentional, and there is a motive.
The motive is greed and Political Bribery by the rich – Political Bribery in the form of contributions, gifts and promises of lucrative employment later – Political Bribery that more economically influential than the statistical factors economists generally consider.
Yet few economists acknowledge the government motive for austerity and widening the gap between the rich and the rest is Political Bribery. Why? Bribery is not statistical and it is intentionally hidden — especially since the Supreme Court, in a particularly shameful act, legalized more Political Bribery than ever.
Educating a criminal that his crimes hurt his victims, is unlikely to prevent future crimes. Educating the President and Congress that austerity hurts America is unlikely to prevent future austerity. Yet, economists focus on education and generally ignore motivation. How often have you seen an economist point to Political Bribery as the primary source of laws that increase the gap between the rich and the rest?
Public understanding and anger, that crimes are being committed, is the necessary first step in combating the crimes. Because the public does not understand that the real motive for austerity is Political Bribery by the 1%, recessions are viewed as an inevitable part of the economic “cycle” and politicians are thought to be helpless to prevent economic chaos.
The motive is greed and Political Bribery. The solution is public anger. The first job for economists is to stoke public anger.
Change will come only from the public, not from the criminals. To motivate public, we first must disclose the bribery. Then, when the public is motivated, teach the economics.
Everything in economics devolves to motivation.
Rodger Malcolm Mitchell
Monetary Sovereignty
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Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports
#MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 