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.
======================================================================================================================================================================================

Here is the definitive, right-wing solution to poverty and health care. (You decide whether this video is howlingly hilarious or truly sad.):

Fox commentator admits America has Third World health care

The real solution — the only solution — is federally funded, free, comprehensive, no deductions Medicare for every man, woman and child in America.

Why don’t we have it? Because the upper 1% income/power group doesn’t want us to have it. They want us to believe that if the government pays for it:

1. The government will run out of dollars. You and I won’t.
2. We’ll have a Weimar, Zimbabwe, Argentina hyper-inflation (which we never have had in almost 240 years of wars, depressions, recessions, plagues and right-wing politicians).
3. Our grandchildren will have to pay the federal debt (rather than paying for our health care).
4. Health care will be worse, because the government is not as wise, generous or compassionate as the rich insurance companies, which are famous for their wisdom, generosity and compassion.
5. Poor people are “lazy” (per Paul Ryan) and are takers looking for a free lunch, and if you’re poor, stop being poor.

Who could argue with such facts?

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

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.
======================================================================================================================================================================================

Barry Ritholtz is a self-proclaimed expert, who when I tried to explain Monetary Sovereignty, wrote: “Jeebus, you fucking sovereign guys are such dreadful bores.” On such brilliance does his reputation lie. [See link]

Recently, he wrote an article published in the Bloomberg View, and I felt obligated to contact the editor, so as to help spread Barry’s fame.

Here is the full text of the article:

Mr. Greiff:

This is re. your article in Bloomberg View: Understanding why you think QE didn’t work, by Barry Ritholtz:

As you know, QE (Quantitative Easing) is the Fed’s purchase of privately-owned T-securities. The above-mentioned article states that people are wrong to believe QE doesn’t work. He’s right, but for the wrong reason.

He claims people don’t think QE works, because the economy has not recovered much, despite several QEs. Ritholtz says people don’t consider the counterfactual, i.e what would the economy have been without QE.

Again, he is right, but again he is wrong about why QE actually does not work, i.e. QE does not stimulate the economy, because it was not designed to stimulate the economy.

By “redeeming” T-securities before their redemption date, the Fed reduces the supply, which increases the price of those T-securities still available. As with all fixed interest securities, when the price goes up, the interest rate goes down.

The sole purpose of QE was to reduce long term interest rates, and by all available evidence, reducing interest rates does not stimulate anything. In fact, it is recessionary. (See: Low interest rates do not help the economy.)

QE does not add dollars to the economy, for the simple reason that those dollars already are in the economy. T-securities are nothing more than deposits (similar to savings accounts) at the Federal Reserve Bank. To redeem your T-securities, the federal government merely transfers your dollars from your T-security account to your checking account.

The process is identical with transferring dollars from your savings account to your checking account. No new dollars created.

Unless you believe that transferring dollars from your savings account to your checking account is stimulative, you readily can see that QE adds no dollars to the economy, and so stimulates nothing.

But, why is QE recessionary? Because by lowering interest rates, QE reduces the amount of interest the federal government pays into the private economy.

So, bottom line, Ritholtz is correct that criticisms of QE are misplaced, but not for the reason he suggests. QE was designed not to work, because by reducing the amount of interest the federal government pays, QE reduces the deficit — and that was the goal all along.

QE is an austerity tool, and austerity is a lie, sold to the populace — a lie that absolutely is guaranteed to depress an economy. It’s part of the BIG LIE.

Because the poor are hurt by recessions more than are the rich, the purpose of austerity is to widen the gap between the rich and the rest. It’s what the rich pay the media and the politicians to do.

Now we are tormented with the headline, “Federal Reserve continues scaling back bond buying, By Jim Puzzanghera, LA Times“, which is akin to saying, “Fed will reduce its efforts to slow the economy”

Some excerpts:

With the economy slowly improving, Federal Reserve officials are shifting their efforts from stimulating the recovery to restoring normal monetary policy — although new Chairwoman Janet L. Yellen tried to stress that day remains far away.

Central bank policymakers voted Wednesday to cut the Fed’s bond-buying stimulus program to $55 billion a month, the third reduction since December.

Federal Reserve Chair Janet Yellen said the central bank is still falling short of its goals for full employment and price stability.

It is unknown how transferring dollars from T-security accounts to checking accounts, while reducing federal deficit spending, will help achieve full employment and price stability. But explanations are for chumps, not for those in authority.

Yellen indicated rates could start rising as soon as early next year. The comment sent the Dow Jones industrial average tumbling 170 points in a matter of minutes.

See, it’s like this. If the Fed plans to do less to harm the economy, stocks will fall, because . . . uh well, because.

The market reaction demonstrated the worries investors have that the Fed’s era of easy money is coming to an end.

I must have encountered that term “easy money” a thousand times, and still don’t understand it. Borrowers have more difficulty getting loans today, than in the past. And lenders earn less interest (Have you looked at your CD rates, lately?). Further, the government pumps less money into the economy when rates are low.

So what’s “easy”? ‘Tis a mystery.

“My goal — and I will throw myself into this as wholeheartedly as I can — is to make rapid progress, as rapid progress as we possibly can, in getting this recovery back on track and putting Americans back to work,” Yellen said.

The BIG LIE is alive and well in Washington.

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

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.
======================================================================================================================================================================================

As usual, the Fed is expected to do its job and Congress’s job.

TIME
Markets Need Janet Yellen to Kick Them in the Pants
Rana Foroohar March 19, 2014

She gets hammered by pundits and bankers alike for supposedly ending Bernanke style clarity . . .

“Clarity.” The only one deeper into deliberate obfuscation was Greenspan (so maybe today, less double-talk is considered “clarity, by some.)

For starters, Bernanke’s “clarity” over the last few years was largely Yellen’s doing, in the sense that she’s the one that came up with the 2 % inflation target rate . . ..

Then, there’s the supposedly “hawkish” rate increase (the median interest rate forecast increased 0.25 % to 1 %)

Again, let’s all practice mindfulness, and focus on what we know will happen if rates stay low forever. Bubbles will form—and they will pop.

This gets to the myth that low rates stimulate the economy, when in fact, there is zero relationship between low interest rates and GDP growth.

And as for bubbles, she probably is referring to the real estate “bubble,” which was not caused by low rates, but rather by bad lending practices. (No matter what the rate, if you give everyone off the street a 100% loan against phony collateral, you’re going to have a bubble.)

The Fed’s $4 trillion money dump has already created what Yellen and other Fed leaders know are price distortions in everything from emerging market equities to commodities to certain real estate markets.

The so-called “money dump” was Quantitative Easing (QE), which didn’t dump any money and didn’t stimulate the markets.

The sole purpose of QE was to keep long-term interest rates low. Period. (The Fed has direct control over short term rates via the Fed Funds rate.)

But that isn’t stimulative, although it did distort prices. (When was the last time you bought a bank CD?)

Many people might wish that the Fed’s easy money and low-interest rate policy could do more for the economy, it probably can’t.

Not “probably” can’t. Absolutely can’t.

There are complicated structural reasons why we are in the longest and weakest recovery of the post WW II period.

Structural, yes. Complicated, not so much. The simple reason is the deficit is too low and is declining. (See: The Recession Clock ticks; the recession draws closer

That shows just how dependent investors have become on Fed news going in one direction only and how removed some asset prices have become from fundamentals.

Asset prices are not removed from fundamentals. They are removed from what the Fed, the market, Congress and Ms. Foroohar claim are the fundamentals.

Yes, there are several fundamentals, but by far the most important one is federal deficit spending, i.e. money creation, and that is Congress’s job, not the Fed’s job.

If I were President, this is what I would tell the Fed Chairman: “You have one job: Keep inflation near a 1.5% – 2% target.

“Forget about then stock markets. Forget about housing, and the crooked bankers and GDP. Those are all the responsibility of Congress and me.

“Focus all your attention on inflation.

“If you see inflation begin to creep up, raise interest rates. If we are in danger of deflation, lower interest rates. That is your job.”

But what is the likelihood of that, when Congress and the President have a handy whipping boy to blame for economic problems (while taking all credit for any recovery).

My question is: If Congress and the President are not responsible for the economy, what the hell is their job?

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

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.
======================================================================================================================================================================================

Do you want to see a (usually) reliable recession predictor?

Look at the “0” line.

1. What usually happens when the employment/population ratio dips below zero growth? (Hint: look at the gray bars)

Now, remembering that Gross Domestic Product = Federal Spending + Non-federal Spending – Net Imports:

2. What does the federal government do about Spending that gets us out of recessions?
3. What should the federal government do about Spending to prevent recessions?
4. What is the federal government doing right now?

I don’t know how you see it, but to my eye: When the employment-population ratio falls (dips below 0), we have a recession. And the federal government is doing exactly the wrong thing to prevent it.

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