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

Mitchell’s laws:
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
●Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
●The single most important problem in economics is the gap between rich and poor.
●Austerity is the government’s method for widening the gap between rich and poor.
●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.
●Everything in economics devolves to motive, and the motive is the Gap.

=========================================================================================================================================================================================================================

The “Occupy” movement will fail, because it is directionless, generally opposed to everything and in favor of nothing.

They should favor one goal: Narrowing the Gap between the rich and the rest, and in that effort, we offer them the Ten Steps to Prosperity:

===================================================================================
The Ten Steps to Prosperity:

1. Eliminate FICA (Click here)
2. Federally funded free Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Federally funded, free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually. (Refer to this.)
8. Tax the very rich (the “.1%”) more, with higher, progressive tax rates on all their forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)
10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

Initiating The Ten Steps sequentially will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
============================================================================================================================================================================================================

O.K., now that I have given the debt hawks heart attacks, let me assure you I am aware of the limit to deficit spending: It is inflation. So exactly where is that limit? No one knows, especially since for the past 40 years, inflation has not been related to deficit spending, but to oil prices. (Click here)

So my recommendation is to begin #1-#10, slowly and sequentially, today, and if/when inflation starts to occur, institute the first inflation-fighting program the Fed always uses: Raise interest rates. In the unlikely event that doesn’t do enough, begin to cut deficit spending.

We have total control over inflation, so there is no reason to cut today’s deficits for fear that some time in the unknown future, we may have inflation. We must feed the starving patient, now. Later, if ever he becomes fat, we always can cut back on his food.

By balancing interest rates and deficit spending, we can hold inflation at any level we choose, while accruing the benefits of increased money creation.

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

==========================================================================================================================================
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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY

Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
==========================================================================================================================================================================

What is the relationship between these “unrelated” stories?

CBS News, 4/14/2011, By Brian Montopoli
Tea Party Supporters: Who They Are and What They Believe

CBS News and the New York Times surveyed 1,580 adults, including 881 self-identified Tea Party supporters. . . Eighteen percent of Americans identify as Tea Party supporters. The vast majority of them — 89 percent — are white.
[…]
Fifty-three percent of Tea Party supporters describe themselves as “angry” about the way things are going in Washington, compared to 19 percent of Americans overall who say they are angry.
Asked what they are most angry about, the top four answers among Tea Party supporters who identify as angry were the health care reform bill (16 percent), the government not representing the people (14 percent), government spending (11 percent) and unemployment and the economy (8 percent).
[…]
Twenty-four percent of Tea Party supporters say it is sometimes justified to take violent action against the government. That compares to 16 percent of Americans overall who say violence against the government is sometimes justified.

And this one:

New York Times
If the Arab Spring Turns Ugly
By VALI NASR, ugust 27, 2011

THE Arab Spring is a hopeful chapter in Middle Eastern politics, but the region’s history points to darker outcomes. There are no recent examples of extended power-sharing or peaceful transitions to democracy in the Arab world. When dictatorships crack, budding democracies are more than likely to be greeted by violence and paralysis. Sectarian divisions — the bane of many Middle Eastern societies — will then emerge, as competing groups settle old scores and vie for power.

Syria today stands at the edge of such an upheaval. The brutality of Bashar al-Assad’s regime is opening a dangerous fissure between the Alawite minority, which rules the country, and the majority Sunni population. After Mr. Assad’s butchery in the largely Sunni city of Hama on July 31, on the eve of the holy month of Ramadan, the Muslim Brotherhood, a Sunni group, accused the regime of conducting “a war of sectarian cleansing.” It is now clear that Mr. Assad’s strategy is to divide the opposition by stoking sectarian conflict.
[…]
The struggle that matters most is the one between Sunnis and Shiites.

And this one:

Yahoo! News, 10/4/2011, by Chris Hawley, AP
Protests against Wall Street spread across US

Protests against Wall Street entered their 18th day Tuesday as demonstrators across the country show their anger over the wobbly economy and what they see as corporate greed by marching on Federal Reserve banks and camping out in parks from Los Angeles to Portland, Maine.
[…]
A slice of America’s discontented, from college students worried about their job prospects to middle-age workers who have been recently laid off, were galvanized after the arrests of 700 protesters on the Brooklyn Bridge over the weekend.

Some protesters likened themselves to the tea party movement — but with a liberal bent — or to the Arab Spring demonstrators who brought down their rulers in the Middle East.

And this story:

Chicago Tribune, 10/7/2011, by Mick Swasko and Ted Gregory
Mosque resistance questioned

For years, HOPE United Church of Christ advertised on its front lown plans to build a church on 14 acres it owns . . . and the minister there says he never heard so much as a peep of displeasure. But those plans fell through, and now that the church wants to sell the property to another religious group, protests have erupted at the Planning and Zoning Commission. Handmade signs critical of the deal have sprouted on utility poles.

This time around the Islamic Center wants to buy the land and someday build a mosque there, said HOPE’s pastor, the Rev. Timoth Sylvia. . . “This display of true ignorance . . . breaks my heart, raises my concern and honestly angers me,” Sylvia wrote to congregants and friends. . .”

I suggest the relationship is anger and frustration at the economy, and specifically at the politicians who caused the economic problems by neither understanding nor caring about Monetary Sovereignty and the needs of the people.

Few of the public, the media, or the economists understand Monetary Sovereignty. The world is crashing, and they don’t know why. People want answers from their leaders, but the politicians have demonstrated cluelessness about the plight of the middle and lower classes. The people feel they have no savior to whom to turn. They are desperate, as witness the popularity of the Tea/Republican presidential candidates, a veritable rogues gallery of economic ignorance.

So the people cast about for devils to exorcise, and the most convenient devils are big government (Tea Party), Banks and other financial institutions (Wall Street protesters), Muslims (Pastor Sylvia’s flock and neighbors), and even religious foes. (Arab spring). Casting out sin is as old as civilization. Witch burning always has been an attempt to appease the gods, who caused our problems, and it had the added benefit of “doing something,” when no one knew what else to do.

At the top of this, and many previous posts, you will see the rule, “Economic austerity causes civil disorder.” As the economy worsens, you will see more and more protest movements, each of which has misdirected goals. Unless the politicians understand, and act according to, Monetary Sovereignty, look for more powerful protests world wide, revolution becoming the norm rather than the exception. So long as Rick Perry’s prayers don’t bring rain, and the Tea Party’s appeals for austerity don’t bring recovery, people will grow angrier and angrier.

Our government thinks bleeding our economy will cure our economic anemia. Unless this changes, there will be an “American spring,” where Americans turn on Americans, and guns become the law of the land. The “greatest generation” followed a strong leader, by working together during times of stress, and so reaped beautiful victory and economic success. Today’s “worst generation,” given no strong leader, will reap ugly chaos and despair.

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

==========================================================================================================================================
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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY

Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
==========================================================================================================================================================================

The basic Tea/Republican belief, when referring to anyone poor, unfortunate or needy is, “Screw you, I’m O.K.” They disguise this as patriotism (as in the Tea Party Patriots) or “self-sufficiency,” which works great so long as one is completely self sufficient (which may include perhaps one or two people in all of America).

Here is a must-read for all those right-wing patriots who viscerally hate immigrants, and who supply phony rationalizations for deportation like: “They take Americans’s jobs.” or “They don’t pay taxes.” or “They commit crimes.” or “They broke the law by coming (staying) here.” or “They don’t speak English.”

Washington Post, October 4, 2011
We need to stop America’s brain drain
By Vivek Wadhwa

In 1980, when I came to the United States to study, this was the only land of opportunity for skilled immigrants like me. It took less than 18 months for me to get a permanent resident visa, and I became a citizen as soon as I became eligible five years later. I came here to study, but ended up founding two technology companies, which employed hundreds of Americans. Later in life, I decided to give back to America by becoming an academic.

If I was arriving today, I would not have taken the same path.

Like the students from India and China that I teach, I would have looked at the bigger opportunities back home after I graduated. And even if I wanted to make America my home, I wouldn’t have had the choice: The waiting time for permanent resident visas for educated workers from India is now 70 years, according to National Foundation for American Policy.

This is a big problem for the U.S. because immigrants have founded 52 percent of Silicon Valley’s companies and created millions of American jobs. This won’t be the case in the future.

For the past six years, I have been researching the contribution of skilled immigrants to U.S. competitiveness. After realizing how fast the tide was turning, I have been raising the alarm that America is experiencing its first ever brain drain. I know that many of our policy makers are concerned but have been unable to enact legislation to fix the problems. They have been mired in battles about the plight of the unskilled and undocumented immigrants. But, given the dire state of our economy, it seems there may be an opportunity for change.

I have been invited to testify before Congress. On Wednesday, at the invitation of Rep. Zoe Lofgren (D-Calif.). I will present my findings before the House Judiciary Committee’s Subcommittee on Immigration Policy and Enforcement. In my remarks, I will present to committee members three main points: First, the world’s best and brightest are not begging to be let into the United States anymore. Second, the U.S. no longer possesses the advantage in entrepreneurship that some believe it does. And, finally, the U.S. is providing an unintentional gift to China and India by causing frustrated, skilled immigrants to return home thanks to a burdensome visa application process.

In short, America grew because of immigrants, but when times are difficult, the xenophobes climb from under the rocks, and promote their “Screw you, I’m O.K.” philosophy, much to the detriment of the nation. Yes, some immigrants look, act and talk differently from native-born Americans, but that difference is what contributes to our creativity and our power.

As a nation of immigrants, with plenty of land mass to absorb immigrants, it is amazing how our government has adopted such unnecessarily restrictive policies.

And no, we should not allow every person on earth freely to enter the U.S., but our blind, mindless immigration restrictions don’t prevent terrorists and criminals from reaching our shores. They find a way. Those blind, mindless restrictions keep out the good people and their children and their children’s children – people ready to become loyal, contributing citizens, who will defend and grow America — and we are poorer for it.

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

==========================================================================================================================================
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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY

Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
==========================================================================================================================================================================

Here’s a good news, bad news story. First the good news.

Bipartisanship lives! And it will likely cost taxpayers money.
Posted by Suzy Khimm,10/05/2011

(SOURCE: BLOOMBERG) The GOP-crafted House appropriations bill cuts the agency’s budget by more than $600 million, compared with 2011 funding levels, while the Senate has proposed more than $450 million in cuts. Perhaps most significantly, both chambers would reduce funds for enforcement in 2012 by more than $266 million — more than $700 million under what the agency had requested for the year.

House Democrats, in particular, have denounced the bipartisan proposals for a funding cut, saying it would hamper the IRS’s ability to close the “tax gap” — the estimated 16 percent of revenue that the government loses because Americans fail to pay their taxes in full. “The IRS estimates that this cut will end up costing $4 billion per year due to the lack of enforcement on tax cheats,” Rep. Norm Dicks said of the House proposal. “This cut literally increases the deficit.”

Of course, Ms. Khimm doesn’t know what she is talking about. How does collecting less tax cost taxpayers money? Right. It doesn’t. That “cost taxpayers money” phrase has to do with the myth that taxes pay for federal spending.

That’s true in monetarily non-sovereign governments (states, counties, cities, Greece, Ireland), but is not true for the Monetarily Sovereign U.S. federal government. Cutting U.S. federal taxes saves taxpayers money. Period.

Now for the bad news:

The National Treasury Employees Union, which represents federal workers, warns that the cuts would result in layoffs of 3,000 to 4,000 IRS employees, increasing the burden on an agency that’s already short-staffed. A 2011 report by the Treasury Inspector General concluded that hiring of new revenue officers hasn’t kept pace with attrition, even as the number of tax returns continues to rise and the tax code itself has grown more complex.

This adds people to the unemployment lines. Very bad. They should be paid for at least a year, or given other federal jobs.

Now for more good news:

As a result, the percentage of delinquent tax accounts that have been resolved “has steadily decreased,” the Treasury IG concludes.

Ultimately, the lost potential revenue could end up outstripping the upfront savings from IRS budget cuts. The agency’s “general rule of thumb is every additional dollar spent on enforcement brings $4 to $5 dollars of additional revenue . . . and there generally has been a reasonable return on enforcement dollars,” says Eric Toder, co-director of the Urban Institute-Brookings Tax Policy Center. “I don’t think, at the end of the day, this really saves the government any money.”

Someone please tell Mr. Toder that a Monetarily Sovereign government doesn’t need to “save” money. It pays its bills by instructing creditors’ banks to mark up the creditors checking accounts. The federal government can send these instructions, endlessly.

Update: A Senate Democrat who works on appropriations issues further explains the party’s thinking on the IRS cuts: “They are right –they took a sizable hit…With less money to allocate, cuts had to be made and because of its size, IRS – which represents about 54% of the subcommittee’s discretionary funding – took a big hit. They’ll still be taking in revenue, but it is counterproductive, unfortunate and something everyone hopes can be fixed…The point is it’s about choices and everyone making do with less.”

No, it is productive and fortunate, and if by being fixed, the Democrat means to find a way to collect more taxes, that’s one heck of a lousy “fix.”

In this regard, here is the full text of a letter I sent to Bruce Dold and Tony Hunter, the top two executives of the Chicago Tribune, with whom I have been corresponding:

Bruce and Tony,

Here is a great idea for a timely editorial: “How reducing the federal deficit, with higher taxes and/or reduced federal spending, will stimulate economic growth.”

Rodger Malcolm Mitchell

I don’t expect a response, though I’d love to see them try to write that editorial.

Only one dunce cap for Suzy Khimm. She’s just the messenger, and as a typical media writer, she has been trained it is not necessary to understand economics when writing about economics.

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

==========================================================================================================================================
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. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY