–Great news! Court says it’s O.K. for you to give a billion dollars to elect and bribe politicians

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

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 ultimately 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.
●Everything in economics devolves to motive, and the motive is the gap.
======================================================================================================================================================================================

Great news! In its McCutcheon decision, the dominating right wing of the U.S. Supreme Court says it is O.K. for you to give a billion dollars to elect and bribe politicians. So get your checkbook out.

What? You don’t have a billion dollars? You’re saying that due to austerity, you’d be lucky to have $10 to elect and bribe politicians, and they won’t listen to you anyway??

But what about free speech?

Republican Speaker John A. Boehner: “What I think this means is that freedom of speech is being upheld. You all have the freedom to write what you want to write. Donors ought to have the freedom to give what they want to give. I’m all for freedom.”

See, according to the right wing, writing and talking are the same as money. (Remember this the next time you go to the grocery store and talk your way into a loaf of bread. Or better yet, talk your way into a mansion and a Rolls Royce.)

So long as speech is “free” (meaning, “There are no restrictions on giving it), campaign contributions also should be “free” (meaning, “There should be no restrictions on giving it).

Of course, this means the rich have much more free speech than you and I have, which is only right, because the rich are smarter and more valuable to America than you and I are. Agreed?

But wait, here is a voice of sanity — the usual voice of sanity:

Justice Clarence Thomas said he agreed with the decision, but wrote separately to say that he would have gone further and wiped away all contribution limits.

Thanks for that illuminating thought, Justice Thomas.

Let’s put this as delicately as possible: If Clarence Thomas agrees with it, that is proof positive the decision was senseless. He long has been a reliable measure of senselessness in the Court.

But wait again. Here comes Chief Justice Roberts:

Roberts wrote: “Money in politics may at times seem repugnant to some, but so too does much of what the First Amendment vigorously protects.

If the First Amendment protects flag burning, funeral protests and Nazi parades – despite the profound offense such spectacles cause – it surely protects political campaign speech despite popular opinion.”

So there you have it. If the Constitution protects Nazis, funeral protests, and anything else you don’t like, then clearly it protects the right of the rich to elect and bribe politicians, because those all are totally the same things.

According to Roberts, if you don’t like it, the Constitution protects it — especially if it benefits the rich and increases the gap between the rich and the poor. That will be the Roberts Court legacy.

And by the way, Justice Roberts, don’t use weasel words like “campaign speech.” It’s not campaign speech; it’s “campaign money”.

But wait, yet again. We have the usual voice for the poor and middle classes, the Cato institute, which despite its claims, is and has been, controlled by the notorious Koch brothers:

“In a truly free society, people should be able to give whatever they want to whomever they choose, including candidates for public office. The Supreme Court today correctly struck down the biennial campaign contribution limits and gave those who contribute money to candidates and parties as much freedom as those who spend independently to promote campaigns and causes. But it should have gone further.“

Cato/Koch thinks rich people should be able to bribe politicians as much as they want, because as you know, politicians are honest, and their votes cannot be bought.

Also, voters, being well-informed, are not influenced by TV, radio, billboard, and phone marketing (It is surprising that rich people foolishly would waste their billions buying TV, radio, billboard and phone marketing, since these things have no effect.)

Bottom line, if you are among the lower 99.9%, you have three alternatives. You can:

1. Demand a Constitutional amendment that will set campaign contributions limits. (That shouldn’t take much more than 20 years at best and will be fought every step of the way by the Republicans.)
or
2. Demand a law in which every citizen is given a “free speech voucher,” good for $10,000, which he can divide among as many or as few political candidates as he wishes, with no other contributions allowed. (The right wing Supreme Court will rule it unconstitutional, because you want it and the rich don’t.)
or
3. Stop electing right wingers, especially Republican Presidents and Senators. (You voted for the guys who nominated the Supreme Court, and now you’ll live with pro-rich, anti-you policies for many, many years.

Unless your net worth is at least $100 million, you are naive to vote for a Republican President. (But if your net worth is more than $100 million, you are naive not to vote Republican, or you sincerely care about America.)

So which are you?

Rodger Malcolm Mitchell
Monetary Sovereignty

====================================================================================================================================================
Nine 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
8. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
9. Federal ownership of all banks (Click here)

—–

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.
Two key equations in economics:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports

THE RECESSION CLOCK

As the federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise. Federal deficit growth is absolutely, positively necessary for economic growth. Period.

#MONETARY SOVEREIGNTY

–Is this the end, or just the beginning, of money?

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

What is money? Simple answer: Money is a medium of exchange. After that, things get a bit complex.

Some say money is a store of value, but in the event of inflation, money’s not a very good store. Similarly, money is a comparative measure of value, at any one moment in time, but again, not a very good measure over time.

Historically, money has been whatever a government said it was, because money is backed by the full faith and credit of the issuer, and historically, governments have been the issuers.

But, the times, they are a’changin’.

Modern money has no physical existence. Money is numbers in an account. Think of that seemingly universal explanatory example, the game of Monopoly. It has variously denominated bills that players exchange for properties, rents, fines and rewards. Those bills are not money. They are evidence of money; they are titles to money.

Monopoly easily could be played with a scorekeeper and scorecards instead of bills. Players simply could have their balances increased or decreased, according to the rules of the game. The notations on the scorecards would be money – and not the physical notations, but the “meanings” of the notation symbols. In fact, there is a computer version of Monopoly, in which everything is composed of symbols; nothing is physical.

Money then, is a score. It is wholly symbolic and not at all physical. But who decides what those symbols mean and who keeps score? The answer: Anyone whose full faith and credit is trusted enough. Players of Monopoly trust the game’s rules.

The U.S. government can create dollars, because Americans and foreigners trust the full faith and credit of the U.S. government enough to accept dollars (in accounting notations) in exchange for goods and services.

Banks too, create dollars, because Americans and foreigners trust the full faith and credit of the banks and the banking system, sufficiently to trust the accounting notations telling them how much money (accounting notation) exists in their bank accounts.

So let us change our definition of money: Money is a trusted score that is used as medium of exchange. Without trust, there cannot be money.

And we are not talking about absolute, unconditional trust. That doesn’t exist in this world. We mean the level of trust you have for the central government, for big businesses, for small businesses, for relatives, etc.

Read Understanding Federal Debt. Full faith and credit, where we describe the elements that go into trust, i.e. into full faith and credit.

Central governments and banks are not the only entities that are trusted to keep accurate scores. You trust the electric company. You trust the gas company, the phone company – at least at the level necessary to be the collateral for money.

For instance, many people have trusted the process behind the bitcoin, together with the currency exchange markets such as Mt. Gox. While this trust remained intact, bigcoin functioned as money. Recent problems with Mt. Gox have weakened bitcoin as a trusted currency.

Which brings us to: M-Pesa, a form of money based on the full faith and credit of mobile-phone companies Safaricom, Ltd and Vodacom.

M-Pesa allows mobile-phone users to deposit, withdraw, and transfer money, paybills and purchase airtime. Like all forms of money, M-Pesa is not physical. It is nothing more than an accounting service.

I urge you to read the Wikipedia description:

M-Pesa

In 2002, Researchers at Gamos and the Commonwealth Telecommunications Organisation, funded by Department for International Development UK, documented that in Uganda, Botswana and Ghana, people were spontaneously using airtime as a proxy for money transfer. Africans were transferring airtime to their relatives or friends who were then using it or reselling it.

M-Pesa (M for mobile, pesa is Swahili for money) is a mobile-phone based money transfer and microfinancing service for Safaricom and Vodacom, the largest mobile network operators in Kenya and Tanzania

The service allows users to deposit money into an account stored on their cell phones, to send balances using SMS technology to other users (including sellers of goods and services), and to redeem deposits for regular money.

Users are charged a small fee for sending and withdrawing money using the service. M-Pesa has spread quickly, and has become the most successful mobile phone based financial service in the developing world.

One rightly could argue that M-Pesa is not money, but rather a money-transfer service, but the line blurs. The airtime that users of M-Pesa purchase, is itself used as an exchange medium, i.e. as money.

The existence of M-Pesa, a corporate-based money service, evidences two features of Monetary Sovereignty truths:

1. Money is not physical. Money is an agreed-upon record. Those who claim gold or dollar bills or any other physical element to be money, simply are wrong. Vodaphone and Safaricom do not supply anything of a physical nature.

2. Sovereign money is unlimited. It never can run short. Vodaphone will not run short of credits for airtime minutes. Whether or not those minutes ever are used is irrelevant.Some may never be; some not. They simply are exchange units.

Vodaphone neither needs to borrow credits nor to tax users for credits. The terms “deficit” and “debt,” so often wrongly applied to the U.S. dollar, are meaningless when discussing M-Pesa airtime. Vodaphone does not need to borrow credits nor tax users to obtain credits.

Those who believe the federal government can run short of dollars, or have burdensome debts, or need to borrow dollars from another country, simply are wrong. The value of M-Pesa is based on the full faith and credit of the issuers.

But the real value of M-Pesa is the demonstration that money can be the child of any entity having sufficient credit. If you are trusted (and laws permit), you could issue money and have your money accepted.

I for instance could create “mitchells,” and create them out of thin air (just as the federal government does), by sending instructions to your bank, tell the bank to increase the balance in your checking account by an amount equivalent to a certain amount of mitchells.

My money would be of my own design, and would have no physical presence. If the banks trusted my full faith and credit, they would do as they are told, which would create more mitchells.

I never would need to borrow mitchells. I never would need to tax anyone to obtain mitchells. I simply would create it by sending instructions. If anyone paid me in mitchells, I would note the payment, but the mitchells themselves would be destroyed, as they are unneeded and so, have no value to me.

And none of the above has anything to do with gold or anything else that is physical.

Today, many nations supply their sovereign currency, Bitcoin and M-Pesa may be just the forerunners of many moneys provided by many non-government sources. While this may seem to exacerbate an exchange problem, in fact, the problem is trivial for computers, which instantly can make appropriate conversions.

The real problem is the one that exists today: The relative value of each issuer’s full faith and credit.

So what do you think? Are bitcoin and M-Pesa signs of the end of money or the beginning?

Rodger Malcolm Mitchell
Monetary Sovereignty

—–

#MONETARY SOVEREIGNTY

–How one bad legal decision — Part II.

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

In the inevitable irony of incompetence blended with malfeasance, the right-wing Supreme Court is on the precipice of biting the hand that feeds the right wing: Corporations.

In their unseemly zeal to destroy anything Obama and everything liberal, the SCOTUS passed Citizens United, giving corporations the same rights of free speech the Constitution grants to American citizens.

The clear goal was to award the rich millions of times more “speech” than the poor have, thus to widen the gap between the rich and the rest.

And now we have the Hobby Lobby and Conestoga Wood cases, which following the same logic as Citizens United, claim corporations also have freedom of religion, which allows them to avoid civil laws. That a mythical legal construct can have a religion, boggles all logic, but that is today’s right wing.

We discussed the nonsense of this at How one bad legal decision can beget an endless series of bad legal decisions.

There is some speculation that SCOTUS might try to straddle its position, by saying that a “closely held corporation” (i.e. family owned) has religious rights, while a publicly owned corporation does not. So Hobby Lobby, which is family owned, could use its religious beliefs as grounds for avoiding civil law.

And of course, you know what civil law they would like to avoid: Obamacare. It’s an end run by the so-called “religious” (as opposed to scientific or fact-based) right, to stick it to Obama. (Apparently 47 useless House votes weren’t sufficiently stupid.)

Forget about the twisting and turning that would be required to define a “closely held” corporation, and forget what happens when one share of a “closely held” corporation is sold to someone not close. And forget about all those ridiculous religious beliefs that exist, or have existed, through the ages, being used as defense against civil law. (Don’t you dare cut your hair, shave or grow two types of crops in the same field.)

Even the right-wing militant Justice Scalia said (when he wrote the majority opinion in a relevant case,Employment Division v. Smith):

“The rule respondents favor would open the prospect of constitutionally required religious exemptions from civic obligations of almost every conceivable kind ranging from compulsory military service, to the payment of taxes, to health and safety regulation such as manslaughter and child neglect laws, compulsory vaccination laws, drug laws, and traffic laws; to social welfare legislation such as minimum wage laws, child labor laws, animal cruelty laws, environmental protection laws, and laws providing for equality of opportunity for the races.”

Wow, imagine something too crazy even for Scalia! But those problems are mere details in this nutty, SCOTUS-created picture. If SCOTUS yields to its inborn temptation to do the bidding of the rich, this whole exercise might come back to bite the rich in the butt.

If a “closely held” corporation’s rulers have the right to foist their religious beliefs on the public — that is, if a corporation not only has free speech rights but also religious rights — has the corporate veil been pierced?

Remember, a corporation is based on the legality that its shareholders are exempt from punishment for most corporate actions. (Were it not so, you never would buy a single share of stock.)

In fact, the sole reason for the corporate structure, as opposed for instance, to a partnership structure, is the shareholders’ limited liability laws. (That “Ltd.” at the end of British corporate names stands for “limited.”)

As we ask in “How One Bad Legal Decision . . . ” “Is a corporation merely a surrogate for its president? Or its chairman? Or its board of directors? Or its shareholders?”

If a corporation is nothing more than a personal proxy for its shareholders, then how can the shareholders claim immunity from legal redress for wrongs committed by the corporation? If, for instance, Hobby Lobby were to declare bankruptcy, wouldn’t all of its “closely holding” shareholders automatically be liable? If not, why not.

And if an employee of Conestoga Wood were to fire a black man because he married a white woman (violating someone’s religious beliefs), why wouldn’t not only this employee be liable, but each of the CW’s “closely holding” officers also be personally liable, according to the logic of Citizens United?

Like a rabid dog, that bites everything and everyone in sight, friend or enemy, the right wing is in the process of biting its own butt. Corporations are not going to like this one.

The twisting and turning by this most inferior of Supreme Courts, should be fun to watch.

Rodger Malcolm Mitchell
Monetary Sovereignty

—–

#MONETARY SOVEREIGNTY

–Forbes, the magazine for the rich, posts the BIG LIE to widen the gap

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

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 ultimately 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.
●Everything in economics devolves to motive.
======================================================================================================================================================================================

Forbes is a magazine for rich people. And, rich people want to widen the gap between them and the rest of us.

So, Forbes dutifully publishes the BIG LIE — the austerity myth that our Monetarily Sovereign federal government could run short of its own sovereign currency, and therefore must increase taxes or cut spending (especially spending that benefits the non-rich).

Here is a particularly egregious example:

Increasing Social Security Benefits Would Wreck Retirement Security
Jeffrey Brown, Contributor

A number of Senate Democrats – including Senators Elizabeth Warren, Sherrod Brown, and Bernie Sanders, among others – have publicly supported increasing the generosity of the U.S. Social Security system.

Note that it’s not help for people who need help. It’s “generosity.”

Decades of research by academic economists, bipartisan and non-partisan commissions of experts, the Congressional Budget Office, and even Social Security’s own actuaries have proven beyond a reasonable doubt that the current system is financially unsustainable.

It is puzzling, therefore, that that any rational policymaker would suggest that the answer to the financial shortfalls is to increase benefits.

Total, 100% BIG LIE bullsh*t. Immediately, the author demonstrates ignorance (intentional?) of the difference between a Monetarily Sovereign government (the U.S., Canada, Australia, China, UK et al) and a monetarily non-sovereign entity (Illinois, Chicago, Cook County, Walmart, euro nations, you and me).

A Monetarily Sovereign nation cannot run short of its own sovereign currency. The U.S government cannot run out of dollars. Even if federal taxes fell to $0, the government could pay all its bills, forever.

A monetarily non-sovereign entity, like Illinois, has no sovereign currency, so it can run short of dollars. Simple as that.

Those who do not understand (or pretend not to understand) the difference, should be barred from writing for any widely read publication, and instead should be doing stand-up comedy at a local club. But of course, there is a motive, and the motive is to widen the gap between the rich and the rest.

How can any federal financial obligation be unsustainable? It can’t. Social Security benefits could be tripled, and the government could “sustain” them, even without FICA.

After years of playing defense on Social Security, some Democrats appear to have concluded that arguing for a benefit increase is the best way to avoid a benefit decrease. The problem is that trying to maintain the status quo is mathematically impossible and fiscally irresponsible.

Correct — but only IF the “status quo” is the continuing fiction that FICA pays for Social Security benefits.

Last year, President Obama acknowledged the need to reduce long-term expenditures when he expressed support for changing the cost-of-living calculation in a manner that many economists consider to be a more accurate measure of inflation (the chained CPI). In addition to being a smart technical fix, this action would reduce long-term Social Security expenditures.

The President is doing what always has worked for him, even back in his days as a Chicago politician: Do what the money tells you to do. How else do you think a guy who was a what? — a community organizer? — a guy who accomplished nothing, suddenly found himself as President of the United States of America?

He obediently did what the money told him to do.

Obama still does what the money (campaign contributions and promises of lucrative employment later + a big Obama library) tells him to do (Hello, Penny Pritzker). And the money tells him to widen the gap — to cut Social Security benefits and to increase FICA.

Unfortunately, the backlash from the liberal wing of his own party caused the President to drop this proposal from the budget.

How unfortunate that only FICA was increased. Too bad Obama also wasn’t able to decrease benefits, so he really could fulfill his side of his bargain with the rich.

To be fair, there are good policy reasons for Senators to feel strongly about preserving Social Security as the centerpiece of the U.S. retirement system. It is nearly universal. It offers benefits in the form of a life annuity and thus provides income guaranteed to last for life. Every January, benefits are adjusted for cost-of-living (even if done so imperfectly). It also offers important disability benefits, as well as benefits to non-working spouses of covered workers and, in some cases, other dependents.

Yes, but those are benefits to the middle classes and the poor. They don’t widen the gap.

The problem is that the system’s finances are not designed nearly as effectively as the benefits. Because of an ongoing collision between demographics and the program’s pay-as-you-go financial structure, Social Security is substantially underfunded. The program is already running cash flow deficits, meaning that the payroll and income tax revenues coming in to support the program are not sufficient to pay for the monthly checks being sent to beneficiaries. This problem is projected to worsen every year for the foreseeable future thanks to the Baby Boomers entering retirement in droves.

And there, people, you have in a few short sentences, the BIG LIE — the lie that our Monetarily Sovereign government can run short of its own sovereign currency, so must engage in austerity, to prevent those worthless “takers” from approaching the benevolent “makers.”

In the short term, the Social Security Administration has the legal authority and obligation to continue to pay full benefits. It will do so by redeeming the trillions of dollars of special-issue government bonds that it holds in its trust funds. But all reasonable projections indicate that these trust funds will be completely drained in another two decades or so (give or take a few years depending on the specific assumptions being made). When that date comes, Social Security will only have enough money coming in to finance about three-fourths of promised benefits.

By now, Jeffrey Brown’s nose must be three feet long. The government does not pay its bills by redeeming bonds. It pays by sending instructions to banks, which it can do endlessly. Bonds and taxes do not create dollars. Federal spending creates dollars.

Nor do so-called Social Security “trust funds” pay for benefits any more than military “trust funds” are necessary to pay for the army or Supreme Court “trust funds” are necessary to pay for justice’s salaries. Federal “trust funds” are an accounting fiction, that pay for nothing.

What happens if Congress fails to act before then? The Social Security Administration cannot spend money it does not have, and thus it will have to immediately slash benefits by 25% or so. This would wreck retirement security for an entire generation.

If Congress increases the generosity of Social Security benefits today, it will only make the day of reckoning come sooner and will require the size of future benefit cuts be greater.

See folks, it’s this way: The federal government, which 235 years ago, created its sovereign U.S. dollars out of thin air, by passing appropriate laws, suddenly and mysteriously has lost its ability to create its sovereign dollars — so you poor, ignorant slobs must suffer. Terribly sorry.

Twenty years is not a very long time horizon when the subject is retirement. About half of individuals claiming Social Security benefits today will still be alive when the trust funds run dry. Not to mention the tens of millions that will be retiring over the next two decades. It is difficult to explain why increasing the risk of substantial benefit cuts is a good thing for retirees.

But it’s oh, so easy to explain why cutting your benefits and increasing your taxes is a good thing for you retirees. All we have to do is repeat the BIG LIE, over and over, and soon you’ll believe it.

The intellectually honest debate this nation needs to have is not about whether to reform Social Security. Doing so is a necessity. The debate we need is about the mix of benefit cuts and tax increases that we want to impose on ourselves to restore fiscal balance to the program.

Now remember: Cut benefits; increase taxes; widen the gap. Cut benefits; increase taxes; widen the gap. Cut benefits; increase taxes; widen the gap.

This is a good thing for you and your children and grandchildren.

And let’s be clear – despite what politicians on both sides of the aisle may tell you, there really is no third way. Borrowing simply leads to bigger tax increases or benefit cuts down the road. Increasing the retirement age is simply a particular method of reducing benefits. And converting part of the benefits to personal accounts does nothing to solve the financing shortfalls.

Understand: Not only are “cut benefits; increase taxes; widen the gap” good solutions, but they are the only solutions. Don’t even bother trying to find a better solution, because there are no other solutions. So stop thinking, and just accept what we tell you. Got it?

And there lies the rub. Our elected officials would prefer not to discuss the relative virtues of cutting benefits and raising taxes, because both positions are unpopular with voters. But as policy makers, they have a responsibility to make exactly such decisions. Sadly, recent pronouncements suggest we are no closer to having that discussion than we were a decade or two ago. And yet the clock keeps ticking …

Oh, that ticking clock. Even back in 1940, the deficit was called a “ticking time bomb.” Now, it’s a “ticking clock,” which must be an amalgam of time bomb and the ever-popular symbol of the BIG LIE “debt clock.”

After all these years: Still ticking. Still lying.

And the populace: Still believing that BIG LIE, thanks to the likes of Forbes et al.

Rodger Malcolm Mitchell
Monetary Sovereignty

—–

#MONETARY SOVEREIGNTY

Share this:

Share this:

Share this:

Share this: