–Throwing sand on the fire, and other childish solutions to the cold.

Mitchell’s laws:
●The more 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.
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I told this true story about a year ago, and it’s worth repeating now, because of an article I just read:

I can remember an incident from the time I was five years old. I was at a family picnic. My uncle had built a bonfire for warmth, and my parents, uncles and aunts threw branches and leaves into it, which made the fire flare up in a big roar.

We kids loved it, but were not allowed to throw things into the fire, because it was considered dangerous. I recall whining about this, so after a time, my father said, “O.K., you can throw sand into the fire.” Thrilled, I picked up a handful of sand and threw it in, but the fire didn’t grow. So I threw another handful and another, but instead of flaring up, the fire grew smaller.

Finally, much to my dismay, the fire went out, and all the fun went out with it. I thought I was building the fire, but I was putting it out. And on the drive home, when I realized what I had done, I felt so sad. My father had lied. I had misunderstood the difference between wood and sand. That’s what I remember. That feeling of sadness and betrayal and ignorance.

That story again came to mind when I read this is the article, in the November 7th, Florida Sun Sentinal.

Nationwide strike in Greece protests new austerity plan
By Anthee Carassava

Shopkeepers rolled down shutters, transport screeched to a halt and state agencies were closed Tuesday as millions of Greeks walked off their jobs to protest the toughest measure yet unveiled by the government in its bid to slash the nation’s deficit and jump-start the stalled economy.

But three years of piled-on austerity and five years of recession have unleashed a wave of public unrest.

The new measures include futher pay cuts, tax hikes and an increase in the average retirement age. The plan would also sack thousands of public employees and slash severance payments in a society where unemployment has hit 25 percent.

Samaras’ government says the measures are necessary to bring down Greece’s deficit and squeeze out a primary budget surplus.

It’s a lie that putting sand on a fire will stimulate that fire, and it’s an equal lie that cutting federal deficits will stimulate the economy. As a five-year-old, I had misunderstood the differences between wood and sand. Today, the American and Greek adults misunderstand the differences between Monetary Sovereignty and monetary non-sovereignty.

So they pour sand on their fire.

Please remember my little sand-on-the-fire story, as you read and hear lies about the U.S. having to cut federal spending and President Obama’s “grand bargain” of deficit cuts. The purpose of those lies is to widen the gap between the rich and the rest.

The poor and middle will suffer first, but even if you’re rich, eventually you’ll suffer as America’s fire slowly winks out.

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

–What does Obama’s victory mean for the future of America? Will the cavalry ride to the rescue?

Obama didn’t win; the Republicans lost. As German news magazine Der Spiegel said even before the vote:

It seemed like a new beginning for America when he took office. But, Obama didn’t close the Guantanamo Bay detention camp, nor lift immunity for alleged war criminals from the Bush-era, nor regulate the financial markets, and climate change was hardly discussed during the current election campaign. The military, the banks, industry — the people are helpless in the face of their power, as is the president.

Not even credit default swaps, the kind of investment that brought down Lehman Brothers and took Western economies to the brink, has been banned or even better regulated.

We want to believe that Obama failed because of the conservatives inside his own country. Indeed, the fanatics that Mitt Romney depends on have jettisoned everything that distinguishes the West: science and logic, reason and moderation, even simple decency. They hate homosexuals, the weak and the state. They oppress women and persecute immigrants. Their moralizing about abortion doesn’t even spare the victims of rape. They are the Taliban of the West.

Still, they are only the symptom of America’s failure, not the cause. In reality, neither the idealists and Democrats, nor the useful idiots of the Tea Party have any power over the circumstances.

The political system is in the hands of big business and its lobbyists. The checks and balances have failed. And a perverse mix of irresponsibility, greed and religious zealotry dominate public opinion.

The downfall of the American empire has begun. It could be that the country’s citizens wouldn’t be able to stop it no matter how hard they tried. But they aren’t even trying.

The picture that emerges is of an American president, weak before the forces of wealth and evil. The Presidency, Congress, even the Supreme Court, all have been compromised by big money. Is it as hopeless as Der Spiegel says?

Now that Obama is a lame-duck President, he has left himself so little time. Future accomplishments for history to judge, will have to take place in the next two years. Even so, his problem will be the mid-term elections, which will occupy those running.

Sadly, Obama will focus on his “grand bargain”: $2.50 of spending cuts for every dollar in new tax revenue? He and his advisers surely know both federal spending cuts and tax increases reduce GDP growth. His “grand bargain” is a plan to reduce GDP growth — a plan to widen the gap between rich and poor.

And that is how he will be remembered, because his motivation for deficit cuts is not based on ignorance. Rather it is based on his knowledge – the knowledge that spending cuts and tax increases each impacts the lower 99% income groups far more than the upper 1% income groups.

The Supreme Court may give Obama some possibility for accomplishment. If the elderly on both sides have the decency to retire, Obama could nominate enough justices to swing the balance away from the 17th century thinking of the current majority.

But then what? The “grand bargain,” even with a more humane Supreme Court, still spells a weakening economy and an ever widening gap between the rich and the rest. Are we lost, or is there a cowboy film in our future – a cavalry that will ride to the rescue?

I believe there is, and in a twist of plot, the face of that cavalry is in shades of brown – and young. For seemingly, in America today, the people who truly understand why this great nation was founded, are the young and the people of color, and thankfully, they are the fastest growing segments of our population.

Romney’s base, the mean-spirited, selfish, white male, is on the decline, no longer to be the majority, and we will be all the better for it. While the young, the Latin and the black don’t have the money, they have the votes and the real morality (not the phony religiosity), and that combination will be unstoppable.

If (big IF) Obama wanted history to remember his administration favorably, he would focus on two simple initiatives:

1. Use the voice of the Presidency to educate the public about Monetary Sovereignty — the need for increased federal deficit spending to grow the economy. Then, using this truth as his sword, cut taxes for everyone – rich and poor – and increase spending on such programs as Medicare for all; increased Social Security benefits, science, education, ecology, poverty.

2. Ease immigration policy and provide a short, sweet path to citizenship. “Give me your tired, your poor, your huddled masses yearning to breathe free”. Immigrants built America. They created the American dream. They, not the selfish excluders, will be the future of American greatness and pride.

Obama has drifted through mediocrity. Accomplishing just these two initiatives would move him toward greatness. His time is running short.

Our time is running short.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–The 13 key election issues and the single most important one

Actually, there are dozens of election issues, and depending on your situation, some will be more important to you than others. But the following are those I believe have had the most press and will influence the most voters.

13. The federal deficit and debt. I made this #13 only because it is a factual non-issue, though the mainstream press, politicians and economists talk about it incessantly. There is not one good reason to reduce the deficit and debt, and many great reasons not to. This entire blog discusses those reasons, so no need to belabor the point here.

Both candidates have been on the wrong side of this issue, though Romney’s Tea Party, right-wing influence puts him more in the wrong.

12. Social Security and Medicare. Being Monetarily Sovereign, the U.S. easily can (and should) pay for Medicare for every man, woman and child in America. Obamacare is a small step in the right direction. Romney’s vouchers are a large step in the wrong direction.

Similarly, Social Security benefits should be increased while that dreadful, regressive FICA is eliminated. Neither candidate has demonstrated any understanding of this. Can we get a 3rd party candidate, here? Anybody?

11. Economy/Unemployment. This relates to #13., deficit and debt, in that deficits are absolutely, positively necessary to grow the economy, which in turn, would reduce unemployment.

Again, Romney’s Tea Party and religious-right connections are a negative. He says his business experience would reduce unemployment, though his successes came from firing people. The business world does not need a businessman to run businesses; it needs a President who will allow businesses to grow.

Romney’s desire to reduce business taxes is a big plus for him. Taxing business is like stealing corn from the goose that lays the golden eggs — in short, stupid.

10. Trust, integrity, the law. Romney has changed positions on most, major issues, has refused to reveal his earlier tax returns (probably for good reason), has presented a phony tax return (to be revised after the election) and has told some of the most astounding whoppers in recent Presidential elections. Trust?

Obama began his career with a crooked real estate deal, and with the connivance of Timmothy Geithner, has not prosecuted a single criminal bankster, but rather has rewarded their criminality.

The dishonesty award goes to Romney in a photo-finish, partly because he wants to get rid of regulations. In essence, he wants to stop crime by cutting back on police.

Frankly, I’m not sure honesty is much of a criterion for the Presidency. It’s results that count.

9. Foreign Policy. Romney’s experience is nil, and his dopey trip overseas was an embarrassment of yesteryear, gunboat bluster. The “Ugly American” rises again.

Obama began where Romney is now. His naive attempts at even-handedness between our enemies and our friends has gained us enemies and lost us friends. Iran, North Korea, Israel/Palestine, Afghanistan/Pakistan – all are policy disasters.

I lean a bit toward Obama’s newly acquired experience, but it’s a grudging lean. Both candidates are weak.

8. Supreme Court. This actually is one of the most important issues, though it hasn’t received enough emphasis from the candidates. It also is a no-brainer, in that the thought of adding a couple more 16th century Scalias and Thomases to the Court, should make your skin crawl.

Civil rights? What civil rights? And what’s wrong with money buying elections?

Because Justices rule “forever,” a right-wing President nomination and even more right-wing Court, would be an ongoing disaster for the underclasses.

A huge plus for Obama.

7. Education/Science. This should be one of the most important issues, but no one is saying much about it. Romney wants to get rid of Public Broadcasting. As for Obama: ???

NASA languishes. R&D is being cut. Where will the progress come from?

Here’s another area where we could use a 3rd party candidate before we become a 3rd world country.

6. Immigration. If Romney had his way, only wealthy, doctor WASPs would be allowed to enter the country and everyone else would be deported. Obama’s more liberal policy is more in keeping with the poem on the Statue of Liberty (“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”). It’s what this great nation is all about.

America is not overcrowded, and immigrants are an economic plus. We need a reasonable path to citizenship for the millions who already live here. Obama is a bit closer to that reality.

5. Energy. Romney is of the “drill-baby-drill” school. Obama is adrift in a sea of indecision. For fossil-fuel sources, I give a huge edge to Romney. For alternative fuels, no one has an edge.

Point goes to Romney.

4. Global warming / Environement Romney doesn’t believe that billions of tons of CO2 added to the atmosphere causes global warming. As a true right-winger, he really doesn’t care about the environment. He’d allow every forest to be cut, every acre to be mined, and every lake to be polluted, if the Koch Brothers asked him.

Obama cares, but has no coherent, overall policy. So you take your choice: Bad policy vs. no policy.

3. Gun control: The NRA has won. Though more Chicago residents — 228 — have been killed so far this year in the city than the number of U.S. troops killed in Afghanistan – 144 — over the same period, neither candidate has shown any stomach for fighting this battle.

The right-wingers love their guns and religion (funny how those two always go together) more than do the left-wingers. So vote according to your conscience and on whether you want to kill your neighbor before he kills you.

2. Leadership/Courage/Chutzpah: For someone having the power of the President of the United States, Obama has shown remarkably little leadership. His signature achievements – Obamacare and killing bin Laden, were done with minimal input from him.

Members of the Democratic party complain about Obama’s lack of push on major issues. Romney prefers to lead from behind, as he will adjust his beliefs to suit his audience.

Neither candidate has demonstrated courage, but in one area, Romney is supreme: Chutzpah. He shows no embarrassment whatsoever in taking both sides of any issue.

And now, for the single, most important issue facing the voters – most important because it affects the most people, and will have the longest-lasting implications for America as we know and love it:

1. The gap between the upper 1% income groups and the lower 99%. The moral issue is clear. We should not allow the 1% to trick us into blaming the victims – into believing the poor are responsible for their poverty.

The 1% like to blame poverty on sloth. That is a lie. The so-called “food stamp mother” is a false caricature designed to demean the have-nots.

Much of success is good fortune. The rich always seem to feel they worked harder, but the truth is, every successful businessman was aided by a huge helping of luck, plus a helping hand from others. Few people want to be poor; they just don’t see a path out of poverty. America should provide that path, for their sake and for America’s sake.

The economic issue often is less clear, but more important. As the gap widens, a nation loses its character and its progress. Economies grow from the bottom.

The Saudi approach (a few rich; all others, poor) does not lead to national success. Economic progress requires the 99% to pursue the American dream, and that pursuit requires the reasonable possibility of achievement.

As the gap widens, resentment builds, pride shrinks and revolution looms on the horizon. The 1%, living in blissful economic apartheid, do not realize their own greed and disregard for fellow Americans, eventually will be their undoing.

Romney’s notorious “47%” speech succinctly revealed his true character – or lack of it. While Obama has taken only tentative steps toward helping the underprivileged, Romney will be a disaster for the 99% and for the American dream.
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There are myriad issues, and each is most important to one group or another, but the bottom line issue is this: What is the America that will make you proud to say, “I am an American and this is the American way”?

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–Mooing along with the herd, the mainstream scientific method

Believers in Modern Monetary Theory (MMT) and Monetary Sovereignty often wonder why the clear and obvious bases for their hypothesis so actively are resisted by the public. We encounter not just reasonable doubt, but sarcasm and anger.

We wonder, “Why do people so passionately object to paying less tax and receiving more benefits?”

Recently a blogger, whose name is hidden to protect the ignorant – we’ll call him “F” — labeled Modern Monetary Theory (MMT), and by association, Monetary Sovereignty, “fringe theories.” An example of his commentary is:

I am continually baffled by people who give views far outside the mainstream, and insult people with conventional views — as if these non-consensus views were obvious and widely accepted by most experts.

That does not mean they are wrong. Sometimes — although rarely — very fringe theories become accepted (ie, some of today’s views were once on the fringe, but few fringe views become widely accepted).

After scores of fruitless debates with such people, I concluded that this attitude tends to characterize ideologues, people with an idée fixe. That does not mean that they’re bad, or wrong. It, in my experience, means that debate with such people is a waste of time (ie, a rule based on a generalization).

F is referring to MMT and MS, and his use of the words “fringe theory” is a gratuitous slap disguised by phony reasonableness. His comment has nothing to do with the merits of MMT and MS. It merely is his excuse for saying they are wrong, without having to justify why.

For the F’s of the world, science stands still. He does not acknowledge that every new scientific idea begins in the “fringe.”

This thread touches on one of my major shocks from the comments on [my] website: the degree to which my bland, mainstream views (with which most people will agree) are fiercely attacked as if they were extraordinary violations of common sense.

Ah, the innocence of those “bland, mainstream views,” and the implication that “most people” agreeing is proof of correctness. We attack F’s views, not just because they violate mathematics and common sense (which they do), but when demanding reductions in the federal deficit and debt, F joins those who put America at risk. “Bland,” indeed.

The mainstream takes umbrage at Monetary Sovereignty calling their ideas not only wrong, but obviously and dangerously wrong. But those ideas are motivated not by sincere applications of science, but by the greed of the upper 1% income group. .

In short, F, you and the populace have been had by the 1%.

Gross Domestic Product (GDP) is the most popular (mainstream) measure of economic growth. It is calculated by adding federal spending, non-federal spending and net exports. More specifically:

GDP = Government Consumption & Investment (federal spending) + Personal Consumption Expenditures + Private Domestic Investment (non-federal spending) – Net Imports

Because U.S. Net Imports removes about $500 billion a year from GDP, the total of federal spending plus non-federal spending must exceed that $500 billion sent overseas, just for GDP to exist, let alone grow. Basic algebra.

But the mainstream economists wish to reduce, or even eliminate, the federal deficit, and the only ways to do that are to cut federal spending and/or to increase federal taxes – both of which reduce federal and non-federal spending. In short, F’s “bland, mainstream view” is to reduce the only elements responsible for economic growth.

And we shouldn’t attack that??

I have called the mainstream view, “Applying leeches to cure anemia.” (I’ll accept any better analogies.) Meanwhile, there is not one iota of evidence that federal deficits and debt are “unsustainable” or excessively inflationary or any of the other “sky-is-falling” deficit scenarios depicted by the mainstream, and further, not one iota of evidence that cutting the federal deficit and debt will stimulate the economy. All the evidence is on the other side.

So, shame on us “fringe” theorists for daring to attack these bland, mainstream unsupported, harmful views. Better that we should stand back and say nothing and join the safety of the majority, while the country descends into recession, depression and ultimately, into anarchy (when the income gap, between rich and poor, grows large enough)?

In the previous post, I described how President Obama’s “grand bargain” will widen that gap, and I speculated on his motivation, i.e. he is bought and paid for by the upper 1% income group. (Ask him about his real estate deal with convicted felon Tony Rezko.)

But while the 1% is motivated by the desire to increase the gap, and the Republicans and Democrats are motivated by the 1%’s bribes, none could accomplish their misdeeds without the acquiescence of the public. And standing at the public’s source of this river of misinformation, you’ll find mainstream economists.

What motivates mainstream economists to ignore science, mathematics and common sense, to hold fast to ideas that cannot be supported by data? Let me count the ways:

1. Some economists have won what misleadingly are called “Nobel Prizes,” for proving the world is flat, and by heaven, they are not about to admit the errors of their ways.

2. Those awarding the prize have staked their reputations on the mainstream idea of reducing the factors making up GDP in order to increase GDP. Economists know the prize will go to the mainstream, so they follow the mainstream.

3. Some economists receive money from the upper 1% income group, and one does not bite the hand that feeds you.

4. Professors need to publish, and mainstream publications are far more likely to publish articles parroting mainstream propaganda.

5. And what shall one do about those annually revised, profitable textbooks forced on the students every semester – textbooks espousing the mainstream view?

6. Finally, no one is granted economics department tenure for advocating a hypothesis embarrassing to the head of the economics department, and that guy already has published mainstream pap.

So you have the great Harvard University and the even greater (for economics awards) University of Chicago, pumping out mainstream nonsense, which the media, the politicians and bloggers like “F” accept without resistance, while professors at the University of Missouri, Kansas City (may their name be blessed) courageously tell the truth about our economy.

Would that their voices were louder.

As the bought-and-paid-for Obamas, Romneys and Bernankes, Senators and Representatives, newspaper and T.V. “journalists, Fox News and mainstream economists all do their utmost to indoctrinate the populace with lies, a handful of heroic economists – Randall Wray, Warren Mosler, Bill Black, Billy Mitchell, Stephanie Kelton, Mathew Forstater and others fight to save America.

And endure the F’s of the world sneering at “fringe” theories.

Of course, one day, as either the evidence continues to pile on their heads, or the angry mobs impale them with pitchforks, these mainstreamers will tell everyone, “You misunderstood me. I knew Monetary Sovereignty all the time. When I said the deficit should be reduced, I really meant it should be unreduced. That always has been my bland, mainstream view.”

Bottom line, there are many reasons why the public resists the facts of Monetary Sovereignty – and perhaps the most powerful reason is: The mainstream disputes it. We humans are predisposed to join the collective, especially when the F’s of the world say so.

As the Borg in Star Trek said, “Resistance is futile.”

Or maybe not.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

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