–How economic ignorance benefits America

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.
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On rare occasions, economic ignorance can benefit America. As readers of this blog know, our Monetarily Sovereign federal government can “afford” to pay any bill at any time. There is no limit to the federal government’s ability to pay creditors by marking up their checking accounts.

Old-line economists’ ignorance of this fact has caused massive hardship, but at least in one situation, this ignorance is beneficial. The Washington Post published an article titled, “Amid new guidelines, Va. woman’s deportation case comes down to the last minute,” By Eli Saslow. Here are excerpts:

In a country with 11 million illegal immigrants, the government can only afford to deport 400,000 people per year. Immigration courts had record backlogs; some judges were booked solid into 2014. Democrats and Republicans were divided over how to reform immigration, and Congress was gridlocked. States such as Arizona have attempted to pass their own laws, only to be sued by the federal government.

In truth, the federal government could pay for an increased number of judges and courts to try all the cases. It could deport every illegal immigrant, thereby losing 11 million people, the vast majority of whom are honest, hard-working, tax-paying assets to our society. Their loss would create great damage to America.

New guidelines had empowered ICE employees to use “prosecutorial discretion” and offer their own case-by-case solutions. But each of their decisions — each case — required a series of calculations that echoed across the immigration debate.

Did granting an illegal immigrant more time in the United States solve a problem or prolong it? Would the United States benefit from focusing exclusively on deporting serious criminals? Or did dismissing hundreds of thousands of immigration violations qualify as ignoring the law?

Dismiss or pursue?

How would you decide? What facts would help you make a decision? Take the case of Paula Goday, the focus of the Washington Post article:

An enforcement officer looked over Paula Godoy’s file in the late afternoon. It was more than 25 pages. The law supported her deportation: She had entered and reentered the country illegally, and her case already had cost the government time and money. She had been detained briefly in two crowded facilities and then outfitted with a tracking device on her ankle.

But the new guidelines supported leniency: Godoy’s attorney had attached more than a dozen documents to her application to depict her as a person with strong ties to the United States. Here was a photocopy of her daughter’s U.S. proof of birth; her father’s permanent-resident card; her brother’s driver’s license; her 2010 tax statement. Here, near the back of the packet, was a grainy, black-and-white photo from early August that showed Godoy in a hospital bed, too tired to smile, with her new daughter wrapped in a receiving blanket.

The enforcement officer confirmed the details in the file and then consulted with his supervisor. It was after 5 p.m. Fourteen hours left. Time to decide. He picked up his phone to make the call.

Godoy was cleaning a house in suburban Richmond when her phone rang. She stepped out to the curb and answered. It was an officer from ICE, and he said they had reached a decision.

“Si?” she said. Yes?

Reprieve is brief

Three days later, after the government had decided to grant her a stay of removal, Godoy left her apartment in Richmond for an appointment with Malik. She had been given six more months in the United States thanks to the new guidelines, and at first she had been overcome by relief. She had unpacked her makeshift suitcase and taken a day off work to spend with her boyfriend. Cousins had brought over pupusas. ICE had said it would remove the tracking device on her ankle.

But, within a few days, her elation had given way to confusion and then a familiar dread. She wanted to ask Malik what the decision meant for future. She sat down in his office and thanked him for his work.

“It’s good but not all good,” he told her.

He explained that nothing about the decision or the new guidelines had granted her legal status; that she would possibly need to file for another stay of removal soon; that she should set aside some money to buy her next deportation plane ticket. He explained that her solution was only temporary. It wasn’t a fix.

“Technically,” Malik said, “you now have less than six months.”

And already her countdown had started again.

The “law ‘n’ order, right wing, stone hearts would say, “Kick her out. She steals jobs from citizens. If she’s illegal, she’s illegal,” ignoring the simple truths that employed workers spend money begetting more employment, and the law is a man-made artifact. Change the law, and she could be legal, today.

So here we have Paula Godoy, the tax-paying mother of a legal citizen, a good person and an asset to America, dangling on the cusp of being tossed out of the country, because current, easily changed law does not consider her to be an individual, but rather to be a document.

Her salvation, and the salvation of the other beneficial immigrants, may not lie in the logic of her situation, but rather in the ignorance of federal financing which says the federal government is too “broke” (John Boehner’s word) to deport her.

How’s that for irony?

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


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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

–Will the “Super Committee” actually consider what deficit reduction will do to unemployment?

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.
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A most remarkable, though belated, awakening may be under way. Read about the letter from several Senators to the deficit reduction super-committee. The letter urged the Co-Chairs of the Joint Select Committee on Deficit Reduction to take steps to ensure that Congress and the public get an independent estimate of their proposal’s impact on jobs – and do no harm to employment in America.

In part, the letter said,

We must do more to focus our national agenda on job creation and restoring our middle class. With that goal in mind, we ask you to take steps to ensure that your deliberations about deficit reduction do not worsen, and hopefully improve the jobs picture.

The letter specifically asks the Select Committee to adopt two principles:

That the proposals be analyzed by CBO for impact on employment; and
That the overall package not result in any net decrease in employment.

The letter is remarkable, not only for it’s recognition of economic reality, but for its bow to political reality. The economic reality is it is 100% impossible to stimulate employment while reducing the federal government’s money creation (aka deficit spending). The political reality is the voting public cares more about jobs than deficits.

The letter also is remarkable for the low bar it sets. It doesn’t ask this committee of luminaries to do anything positive; just don’t do anything negative. This is the measure of success. It’s like saying to the doctor, “Your goal is not to cure the patient; just don’t kill him.”

It will be interesting to see the independent estimates of the Committee’s proposals. It also will be interesting to see how the Tea/Republicans bob and weave to show that somehow, by a miracle of fudged mathematics, reducing the money supply will increase employment. I have a feeling we soon will see a spate of double-talk and fake data analysis beyond anything even this moribund Congress has produced.

Contrast the above message with the “don’t play small ball” message delivered by “60 leading economists, budget experts, former Treasury secretaries and former law makers. They essentially told the Committee not to consider what will happen to the economy, the poor, the sick, the unemployed, those losing their homes, the elderly and the children, but rather to focus on cutting federal deficits.

I’ll continue to keep you informed about the request to consider the effect of deficit cuts on unemployment. Meanwhile, keep a sharp ear for chest-thumping, flag-waving gobbledegook from the debt-hawks, as they realize how untenable their position has become.

By the way, here is another reminder about what happens when deficit growth declines: Recessions. (And recessions are cured with increased deficit growth.)

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


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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

–Here comes the International Monetary Fund, the world’s economic bull in a china shop.

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.
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If one could point to any organization more economically ignorant that the U.S. Congress, you would have to decide between the European Union and the International Monetary Fund. Focus for now on the IMF, which has been damaging the world’s economies for many years. Here are excerpts from a 9/21/11 article written by Carlo Cottarelli, Director of the IMF’s Fiscal Affairs Department:

The fiscal outlook in most countries is stronger than we expected two years ago. Let’s take the five largest European countries. The chart below shows, in gray, the increase in the public debt to GDP ratio that we were projecting two years ago for the period 2012 through 2014.

It also shows in blue the increase in debt over that same period that we are projecting today. As you can see, debt ratios are now projected to go up by less than we previously expected. In some cases, they are even expected to fall. This reflects the commitment that these countries have made to reduce their deficits over an extended period.

Four euro nations and one non-euro nation

Look closely at the IMF graph. It shows five countries, four of which are monetarily non-sovereign, and one of which, the U.K., is Monetarily Sovereign. As readers of this blog know:

Debt/GDP is meaningless for a Monetarily Sovereign nation, and a Monetarily Sovereign nation is not comparable with a monetary non-sovereign nation. While deficit reduction may be necessary for monetarily non-sovereign nations, it not advisable for Monetarily Sovereign nations, except in the rare case of otherwise uncontrollable inflation.

Debt/deficit reduction removes money from an economy, which always leads to recessions and depressions. Mr. Cottarelli does not recognize this fact, because he works for the IMF, which invariably spreads its austerity nonsense, and as a result, never helps any nation recover from any economic problem. They are the classic “apply-leeches-to-cure-anemia” organization, damaging everything they touch and never learning from history.

For the United States, for example, commitment to a credible program to reduce debt and deficits over the medium term could free up space for a short-term stance that is more attuned to the economic cycle. From this perspective, the American Jobs Act proposed by President Obama can play an important role in supporting growth and employment, if it is embedded in an appropriate medium-term framework to bring down the public debt.

Given the size of the adjustment needed in the United States, this framework will need to involve an increase in tax revenues, and it will be important to ensure that the burden of this is distributed equitably across society. Reform of entitlements—both health care and social security—to contain the growth of spending on these items is also needed.

Could more ignorance be displayed in just two paragraphs? Reducing federal debt and deficits does not “free up” anything. Federal spending is not limited by debt or deficits. Deficit reduction is an economic disaster, as Americans are doomed to discover within the next few months.

Increasing tax revenues always hurts an economy. And “reform of entitlements,” the upper-class euphemism for “cutting income for middle- and lower-class who need it most” also always hurts an economy.

Because he does not know which nations are Monetarily Sovereign and which are not, nor does he even understand what Monetary Sovereignty is, and because he is in a position whereby he should know better, I award Mr. Cottarelli and the entire IMF, the maximum of five dunce caps.

(Note to IMF: Despite running a large deficit in dunce caps, I never will run short — just as the U.S. government never will run short of dollars)

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


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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

–A solution for our economy: Flood all Tea Party homes

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.
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Every day in every way, the Tea Party and its followers destroy America:

Washington Post, 9/22/11
House approves spending measure opposed by Senate; shutdown possible
By Rosalind S. Helderman and Paul Kane

Washington lurched toward another potential government shutdown crisis Friday, as the House approved a Republican-authored short-term funding measure designed to keep government running through Nov. 18 that Democrats in the Senate immediately vowed to reject.

While the disaster victims and their children wait beside their ruined homes, praying for help, Congress struggles keep the government running one more month. One more month. Perhaps these impoverished Americans should write to the Tea Party Patriots for help.

Senate Democrats are urging the House to pass a stand alone disaster relief measure. The GOP-controlled House on Wednesday rejected $3.7 billion in disaster relief as part of a bill to avert a government shutdown.

$3.7 billion. This year, the federal government will spend about $4 trillion, but Congress can’t even agree on $3.7 billion – less than one thousandth of the budget.

Speaker John Boehner (R-Ohio) said on Thursday there is no threat of a government shutdown despite Congress’ failure on Wednesday to approve a temporary budget extension that would have allowed the government to operate through mid-November.

The bill, which will keep federal agencies funded through Nov, 18, passed over staunch objections from Democrats, who opposed a provision that would pair increased funding for disaster relief with a spending cut to a program that makes loans to car companies to encourage the production of energy-efficient cars.

In Tea Party logic, you take your choice: Help the victims of natural disasters or save energy. Not both. Stupid? Of course. But we are talking about the Tea Party, a group that thinks reduced money growth will cause economic recovery.

So my suggestion is: Flood all houses inhabited by Tea Party members, then ask them whether they want help from the government.

I award the Tea/Republicans two dunces for ignorance and two traitors for cruel heartlessness toward suffering Americans:

Unpatriotic flagUnpatriotic flag

(Note to Tea/Republicans: Despite running a large deficit in dunces and traitors, I never will run short — just as the federal government never can run short of dollars)

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


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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