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.
●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.
==================================================================================================================================================================

Is the U.S. government truly Monetarily Sovereign?

In one sense this may seem to be a question of semantics, but it goes deeper than that.

The citizens of a Monetarily Sovereign government primarily use for their money, the sovereign currency of that government. So U.S. citizens use the dollar, the sovereign currency of the U.S. And UK citizens use the pound, the sovereign currency of the UK.

By contrast, Illinois citizens use the dollar, which is not the sovereign currency of Illinois (Illinois has no sovereign currency). And citizens of France use the euro, which is not the sovereign currency of France.

So we say the U.S. is MS and France is monetarily non-sovereign.

That is not to say, however, that the U.S. always acts as though it were MS. We have the nonsensical debt limit laws, which can prevent the U.S. from paying its bills — just like a monetarily non-sovereign government.

And we have the nonsensical Congress and President, who continually try to cut federal deficits and debts, as though the U.S. were monetarily non-sovereign.

But there is even more monetary non-sovereignty buried in our MS government, and that has to do with banks. Dollars are created primarily in two ways: Private bank lending and the federal payment of bills.

Under any dollar definitions (M1, M2, M3, L, Credit Market Instruments), private bank lending creates the vast majority of dollars, about 80% (again, depending on definitions). So immediately, one could say the U.S. government is not sovereign of the dollar if private banks create most of the dollars.

But it gets even “worse.” When the federal government pays a bill, it sends instructions (not dollars) to the creditor’s private bank, telling the private bank to increase the balance in the creditor’s checking account.

At the moment the private bank follows those instructions (and not before), dollars are created. In fact, the federal government doesn’t send dollars anywhere. It sends instructions (checks or wires) and it sends receipts (paper dollar bills).

So in that case, who actually “creates” those dollars, the federal government through its instructions or the private banks by following those instructions?

Scott Baker wrote an article titled, “Is this the end of debt-money at last?”, that discussed money creation in general, but contained one sentence I found especially interesting: “No nation can be truly sovereign if it cannot create its own money.”

[Incidentally, there is a good explanation of money creation at this video: Money in a Modern Economy]

By that measure, the only way the U.S. could become truly (or more) sovereign over the dollar is if all banks were federally owned, which just happens to be Step 9 in the “10 Steps to Prosperity.”

There is no public purpose served by private banking. See: The end of private banking and How should America decide “who-gets-money”?

In summary, Monetary Sovereignty is a comparative, not an absolute. The U.S. is Monetarily Sovereign when compared with state and local governments, euro governments, businesses, you and me. But it could and should be more MS. That would require, for instance, federal ownership of all banking functions.

Equally important, it would require the President, Congress, the media and the mainstream economists to stop telling the Big Lie: the lie that federal deficits and debt are “unsustainable, and the lie that the federal governments spends “taxpayers’ money.”

The economy requires federal deficits. The debt is meaningless. And the government does not spend taxpayers’ money.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded 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. 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 (.1%) more, with higher, progressive tax rates on all 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)

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

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

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.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

THE RECESSION CLOCK

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

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.
●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 right wing has told you that private industry always is better, more honest, more responsive, more creative, more consumer-friendly — more of everything good and wholesome — than is any form of government, especially more than the federal government.

You have been treated to the Libertarian/Tea/Republican Party’s endless attempts to reduce the size of the “too big” federal government, especially those parts of government most helpful to the lower- and middle-income/wealth/power groups.

There is a Libertarian anarchy blog that refers to the federal government as the “Leviathan,” so to give its readers the impression of an great monster, hovering over the land, crushing everything in it sight.

These anti-government folks seldom are clear about what “too big” government really means. How many government employees is “too big”? How many agencies is “too big”? How much spending is “too big”? How many laws is “too big”? How strict enforcement is “too big”? How many government services are “too big”?

For instance, if any government spends a trillion dollars, is it too big? Is spending a billion too big? A million?

Of course, the answer depends on many factors, but the anarchists never consider the many factors To them, all cuts to government employment, agencies, spending, laws, enforcement and services are good (except those affecting the upper .1%, of course).

The primary purpose of anti-government rhetoric is to eliminate regulation and to set the stage for privatization. (See: Presenting!! The Great Privatization Scam!

The rich hate to be regulated, and they love privatization.

Regulations can reduce the ability of the rich to steal, and privatization can increase the ability of the rich to steal. Deregulate and privatize — a perfect combination for widening the Gap between the rich and the rest.

Those who fly know what happened when airlines were deregulated. (Compare United Airlines’ and American Airlines’ service with the superior service provided by the better foreign airlines.)

And the privatization of everything from prisons to parking meters often has had poor results.

Here is an example close to all our hearts: The Internet, which we invented:

What France has taught me: Americans are suckers who have themselves to blame for crappy broadband
Chris O’Brien

We were (mostly) happy Comcast customers. We subscribed to Comcast broadband, which gave us up to 25 Mbps download speeds for $85 per month.

At various times, I tried to switch from Comcast, but the DSL speeds offered by rival services were just too slow where we lived. So, we stuck with Comcast because, in the end, we had no real choice.

In total, roughly, were paying $229 per month for our telecom costs.

Now we live in the city center of Toulouse, France, in an apartment where I’m a broadband customer of a company called Numericable. Here’s what I get for $63 per month: 100 Mbps download speed, 250 cable channels, a home telephone with unlimited international calling, and a mobile phone that includes unlimited minutes and 3GB of data usage each month.

So, our telecom costs here will be $83 per month. About one-third of the cost — for services that are astronomically superior.

I was reminded of it again recently with a story in the New York Times, “Why the U.S. Has Fallen Behind in Internet Speed and Affordability.”

Here’s my big lesson from living in France for two months: Government has played a strong role in ensuring competition, and that has increased choice and driven down prices for consumers.

Americans have been told that they have a choice. Either you believe in government regulation, or you believe in free markets. Government intervention is the enemy of innovation and competition.

Unfortunately, a gullible American public has swallowed it whole.

It’s important to understand the dynamics of each market to determine the appropriate level of regulation to increase efficiency, fairness and innovation. In some cases, that might mean a lot of regulations. In other cases, it might be none.

In the case of France Telecom (which later became Orange), the French government set strict rules for the sharing of its former telecom infrastructure. More importantly, it has continued to enforce those rules.

So, when I moved to Toulouse, I had a difficult time choosing between broadband and mobile packages offered by Orange, SFR, Bouyges, Numericable, and Free. My 100 Mbps service prompts some disparaging frowns from new French friends who have 1Gbps connections for the same price as I pay, thanks to the fiber optic line that runs to their house. My 500-year-old apartment building doesn’t have fiber.

Compare that to telecom policy in the U.S. Years ago, the government broke up Ma Bell, only to end up with more regional monopolies. Eventually, rules about costs of sharing networks and other factors such as weak enforcement of competition rules drove many telecom startups out of business.

Instead, the incumbents went on a consolidation binge, with the U.S. government demanding only modest concessions as they rubber-stamped deal after deal. Today, your choices are pretty limited. As a result, the incentives to invest in network infrastructure are low, and costs are high.

As the Times story says: “For relatively high-speed Internet at 25 megabits per second, 75 percent of homes have one option at most, according to the Federal Communications Commission — usually Comcast, Time Warner, AT&T, or Verizon.”

The real problem is that the average American has bought into this false choice: government vs. competition.

Expect that for years to come, you’ll continue to overpay for crappy broadband. This is the price you pay for being suckers, and it’s a big one.

Now we hear from right-wing favorite and reliable nut-case, Ted Cruz. (See: “Net neutrality regulations put government in charge of Internet prices, services”, By Lauren Carroll)

Net neutrality is the “biggest regulatory threat to the Internet,” according to Sen. Ted Cruz. Cruz said, Obama’s net neutrality proposal “puts the government in charge of determining Internet pricing, terms of service and what types of products and services can be delivered.”

See, the inference? When a monopoly like Comcast, whose primary purpose is to extract as much money as possible from the American public, is in charge of pricing, product and service, that’s a good thing. But having the government determine these things, that’s bad.

Who says so? The monopolies, of course. And Cruz doesn’t even have to justify his statement. So brainwashed is the American public, that all Cruz needs to say is “puts the government in charge” and the people gasp in terror.

They prefer being ruled by an avaricious private monopoly than by the government, which is not ruled by a profit-motive.

But this you can write down and put in your safe deposit box for future reference: Private monopolies always, always, always provide inferior service at high prices, unless they are strictly regulated by a government. Always.

Some Internet service providers, however, don’t want this kind of government regulation. Regulations would stop Internet service providers from entering into financial arrangements that would give particular websites prioritized access to Internet users (kind of like cable companies’ arrangements with cable channels).

Many problems with the American economy exist because Americans cannot understand when government is better or worse than private industry. The widespread belief is that private industry always is better, and that simply is not true.

So we limp along with lousy, expensive Internet service, lousy airline service, lousy, expensive private prisons and in my hometown of Chicago, lousy, expensive parking meters and expensive private toll roads.

Sometimes private is better; sometimes government is better. And Americans, looking for the simple answer, don’t want to learn the difference.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded 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. 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 (.1%) more, with higher, progressive tax rates on all 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)

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

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

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.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.

THE RECESSION CLOCK

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY