–Why you don’t want Congress or your friends to fly your plane

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

To make a plane stall and crash, you either increase its load (by pointing the nose up), or you decrease its power (by easing off the throttle). So, if you already are stalling, which is better: To increase the load or to decrease the power?

Dumb question, right? Either approach would send your plane into a death spiral.

That’s the debate Congress currently is having about our economy. Should they increase our tax load or decrease our federal spending power? Dumb debate, right? Either approach (aka “austerity”) will send us into an economic death spiral.

It widely is understood that increasing your taxes depresses the economy, by taking spending money out of your pocket. It also widely is understood that cuts in federal spending depress the economy, also by taking spending money out of your pocket.

So Congress, it its wisdom, is telling you that a some combination of tax increases and spending cuts magically will grow the economy. Huh?

Excuse me, Congress, but combining two wrongs does not make a right. It just makes a “worse.”

Consider FICA. The U. S. federal government, being Monetarily Sovereign, does not use FICA to pay for Social Security and Medicare. Even if FICA were $0, the government could fund Social Security and Medicare, forever. The U.S. simply never can run short of its own sovereign money.

All FICA does is take spending money from your pockets, thereby depressing the economy. FICA is the single, most economically harmful tax in American history, as it punishes the lower and middle classes. So predictably, Congress wishes to increase FICA and other tax collections as a “solution” to the recession.

And consider Social Security. It adds spending money to your pockets, thereby stimulating the economy. So predictably, Congress repeatedly cuts SS by increasing the qualifying age and by taxing benefits.

In short, to cure the recession, Congress wishes to implement a combination of the two acts that will worsen the recession – tax increases and spending cuts – and thereby send us into an economic death spiral.

Why?

Its what the super rich tell them to do. As Romney’s tax returns demonstrated, the super rich are hardly touched by tax increases. The man paid so little taxes, he had to phony up his returns to show increased tax payments. The life style of the super rich hardly is touched by recessions and depressions.

But the middle and lower classes suffer from tax increases and spending cuts and recessions. So tax increases and spending cuts help increase the gap between the super rich and the rest. And Congress, bought and paid for by the super rich, does exactly as asked: Increase that gap.

The super rich, using Congress as its stooges, has convinced the populace that the federal deficit is “unsustainable” and that the U.S. must “live within its means.” This is 100% nonsense — an absolute lie – for the U.S. can “sustain” any amount of deficit, and does not have a “means” to live within.

But ask your friends if the deficit should be reduced and they will say, “Yes,” because they have been brainwashed by the super rich into believing federal finances are like their own, kitchen table, personal finances.

You never want to be in a plane piloted by Congress or by your friends. If the plane ever gets into a stall, they either will increase the load or cut the power – or a combination of the two — sending you into a death spiral.

Which is where we are headed, now.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%

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:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports

#MONETARY SOVEREIGNTY

–The arithmetic of austerity. It’s not a “fiscal cliff.” It’s a “death spiral”

“Austerity” is a reduction in the federal deficit, which is accomplished via reduced federal spending and/or increased federal tax collections.

According to debt hawks, the “ideal” condition is a balanced federal budget, where spending equals taxes. Under this “ideal,” balanced condition, a nation with a trade deficit (as the U.S. has), will send more dollars overseas than return to our economy. Under a balanced federal budget, the total dollars in the U.S. will decline by the amount of the trade deficit.

Recently, the U.S. trade deficit has averaged about $45 billion per month. So our federal deficit must be at least $45 billion per month for the economy to break even, not counting the effects of inflation.

A common measure of economic growth, Gross Domestic Product, equals Federal Spending + Non-federal Spending, less the Trade Deficit. Austerity requires federal spending to decline and/or non-federal spending to decline, with the later being negatively affected by tax increases.

Austerity always causes GDP to be less than what it would have been, had there not been austerity.

The question then, is what effect does GDP have on austerity? As shown, for GDP to decline, federal spending and/or non-federal spending must decline.

Reduced GDP causes non-federal spending to decline, which causes lower tax collections. If nothing else changes, these reduced tax collections will increase the federal deficit, which will demand further austerity.

To maintain a balanced budget, federal spending also would have to be reduced, but since federal spending is part of GDP, the reduction in federal spending would reduce GDP.

Thus, we have an “austerity death spiral” to depression. Reductions in deficits beget reductions in GDP, which beget more deficits, which can be reduced only by reducing GDP further – a never-ending downward helix, or in the vernacular, an austerity death spiral.

Aside from reversing the trade deficit into a trade surplus, the only way to end the austerity death spiral is to increase the deficit, via federal spending increases and/or reduced taxes.

Republicans want to maintain “low” taxes and to decrease federal spending. Democrats want to increase some taxes and to decrease some spending. Either approach will lead to an economic death spiral.

Can we avoid the austerity death spiral simply by running a trade surplus? Yes, but the world’s balance of trade always is zero. So, if we run a trade surplus, other nation(s) must run a trade deficit. We would avoid depression by impoverishing other nations, which would cause them to have recessions and depressions.

In today’s world economy, where no nation is an “island,” causing foreign recessions and depressions comes back to hurt our own economy, as witness the negative economic effects the euro nations’ own austerity-induced death spirals have had on us.

Straightforward arithmetic shows that deficit reductions (aka “austerity”) reduce GDP, which in turn begins an economic “death spiral” to depression.

Keep this in mind as the politicians in Washington, at the urging of the wealthy class, debate the best way to cause our economic austerity death spiral.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

#MONETARY SOVEREIGNTY

–U.S. Chamber of Commerce’s ongoing effort to screw the middle class (and the poor, too)

This post contains a letter from the U.S. Chamber of Commerce website, demonstrating what the rich want to do to the rest.

First, let’s clarify who the U.S. Chamber of Commerce is. They are not a government organization. They are a private group, dedicated to right-wing causes, particularly the effort to widen the gap between the upper 1% income group and the lower 99%.

Their website admits their right-wing tilt:

Myth: The U.S. Chamber is spending $100 million to defeat President Obama’s agenda.

Fact: Here is U.S. Chamber President Tom Donohue in a Business Week interview:

Question: You have been crisscrossing the country to raise up to $100 million to back a “Campaign for Free Enterprise,” which you will launch on October 14th. Some people have seen it as something of a declaration of war on the Democratic priorities. Why do you feel such a campaign is needed, and what will it focus on?

Donohue: First of all, it’s not a declaration of war against anyone. The issue is very, very clear. This is going to be very positive program. We are going to remind, promote, educate and encourage in every way we can so that people remember, or learn, what made the greatest economy in the history of the world-[what] created more jobs, created more wealth, created more innovation, created more opportunity-was a free-enterprise economy with free and open trade with open capital markets, with the right to fail and fall right on your face and get up and try it over again, the right to make money, and the right to make it in a system with moderate regulation and taxes.

Translation: Yes, we spent $100 million to defeat President Obama, hoping to prevent any efforts to regulate the industries that caused the Great Recession or to hold financial criminals accountable for actions. So?

Anyway, you people are “takers.” The rich are the “makers.” You should be thankful to the rich for all they do for you.

Now for the letter that demonstrates what the rich want to do to you. Sadly, Obama plans to do pretty much what the Chamber wanted Romney to do, just a bit less so.

Multi-Industry Letter for Financially Sustainable National Entitlement Programs
Release Date: Wednesday, November 14, 2012
TO THE MEMBERS OF THE UNITED STATES CONGRESS AND THE PRESIDENT:

The undersigned organizations call on Congress and the President to immediately begin a process to fundamentally restructure our nation’s entitlement programs—Medicare, Medicaid and Social Security—and to put these valued and important programs on a sustainable financial path.

Translation: “Restructure” and “sustainable financial path” are code words for cut funding for programs that primarily help you “takers” of the middle and lower classes.

“In the past few years, the federal government has been recording the largest budget deficits since 1945, both in dollar terms and as a share of the economy. Consequently, the amount of federal debt held by the public has surged. At the end of 2008, that debt equaled 40 percent of the nation’s annual economic output, a little above the 40-year average of 38 percent. Since then, the figure has shot upward: By the end of this year (2012), the Congressional Budget Office (CBO) projects, federal debt will exceed 70 percent of GDP—the highest percentage since shortly after World War II.”

Translation: The dollars currently deposited in T-security accounts at the Federal Reserve Bank exceed 70% of the value of all goods and services produced in the United States in 2012.

We have no idea why net dollars deposited in FRB bank accounts over the past 30 years should be compared with goods and services created this year , but please be shocked, anyway.

If we are ever to get control of these large deficits and rising debt levels, we must get control of the principal cause of these deficits—federal spending.

Translation: We know Congress already controls all budgets, so “get control of” is our code for “reduce.” We want to cut your Social Security and Medicare, but we aren’t honest enough to say so.

For 2012, the total projected outlays for the federal government for all spending (mandatory, discretionary and net interest) is $3.56 trillion. Of that total, mandatory spending (Medicare, Medicaid, Social Security and other social programs) is $2.05 trillion or 57.6% of total spending.

Translation: We are angry that so much federal spending goes to you “takers” of the middle and lower classes. This is unfair to the rich, who are the “makers” in this economy.

Meanwhile, total revenue collected by the federal government is $2.44 trillion. About $1.12 trillion is collected via the individual income tax, $181 billion comes from corporate income tax and the rest, $1.03 trillion, comes from Social Security, excise and other taxes. When the expenditures are netted against the revenues, we see a deficit of $1.2 trillion.

Even a cursory examination of these numbers indicates that mandatory spending is not only the biggest category of federal spending but it already exceeds all revenue collected from federal income taxes by a wide margin. Even more troubling, according to the Congressional Budget Office (CBO), mandatory spending is projected to increase in the next 10 years from just over $2 trillion to over $3.5 trillion. At that time, it will represent almost 65% of total spending.

Translation: You poor and middle class people pay most of the personal income tax, virtually all of the corporate income tax (via reduced salaries) and virtually all of the FICA tax. But we want you to pay more — and of course, to receive less. And so far, you agree.

A primary reason for the growth of debt is demographics. Starting in January of this year, an estimated 10,000 baby boomers began retiring daily. The baby boomer wave of 77 million Americans entering our entitlement programs has started. They will place a significant and sustained increase in the share of the population receiving benefits from Social Security and Medicare, as well as long-term care services financed by Medicaid.

Medicare is the third largest program in the federal budget and cost nearly $560 billion in 2011 — or 16% of total federal spending. Federal spending for Medicare and Medicaid rose from 2.2% of GDP in fiscal year 1985 to 5.6% in 2011 according to CBO. Well over half of that was Medicare, and the retirement of the baby boom, combined with growth of health care costs, is projected to push Medicare spending from 3.7% of GDP in 2011 to 6.4% of GDP in 2035.

Translation: If we toss enough statistics at you, you’ll become confused. You’ll want to pay more and receive less? Your ignorance is our best weapon.

Driving these realities is the underlying worker-to-beneficiary ratio. In 1965, there were about 4.6 workers for each Medicare beneficiary. In 2005, there were about 3.8 workers for each Medicare beneficiary. In 2020, there are projected to be only 2.2 workers for each Medicare beneficiary.

Translation: We’ve brainwashed you into believing that Medicare benefits depend on your taxes, which (don’t tell anyone) they aren’t. But as long as you fools keep believing, we’ll keep lying.

As President Obama said on October 3, Medicare is “the big driver of our deficits right now.”

Translation: I can’t believe we spent $100 million to defeat this guy. He’s one of us!

The federal government spends more on Social Security than it does on any other single program. The CBO estimates that outlays for Social Security in fiscal year 2012 will total $769 billion, accounting for more than one-fifth of all federal spending.

The cost of the Social Security program will rise significantly in coming decades as more members of the baby-boom generation reach retirement age and longer life spans leads to longer retirements. As a result, a significantly larger share of the population will draw benefits.

In 2010, for the first time since the enactment of the Social Security Amendments in 1983, annual outlays for the program exceeded annual revenues excluding interest credited to the trust funds. CBO projects that the gap will continue and that outlays will be greater than revenues by around 10% over the next decade. After that, the shortfall will only grow.

Translation: We want you to work until you die. But, if you do retire, you should exist homeless, sick and starving. We know it doesn’t cost anyone a cent to pay federal benefits. Our government is Monetarily Sovereign, after all. But giving you “takers” money doesn’t help us widen the income gap.

Conclusion

Our nation’s entitlement programs are unsustainable. If we do not make sensible reforms, the programs will go bankrupt—and so will the nation. No one can dispute that.

Translation: We know a Monetarily Sovereign government is not like you and me. It cannot be forced into bankruptcy, since it has the unlimited ability to create its sovereign money. But since you don’t understand that, we’ll keep screwing you with the same old lies. It’s worked so far.

As Congress and the Administration work to resolve America’s growing financial challenges and escalating debt, they must begin to fundamentally restructure these entitlement programs.

Translation: It all your fault, you people who hope to live a decent life after retirement, you sick people who need health care, you poor people who can’t afford food and housing – this recession is all your fault. So we have to cut your benefits, you selfish “takers.”

The undersigned organizations urge you to immediately:

Extend all of the expiring tax rates;
Extend vital expired tax provisions;
Provide alternative minimum tax (AMT) relief; and
Find spending cuts to replace a sequestration never intended to go into effect.
Short term action is not a substitute for long term fundamental fiscal reform. In addition to
immediate action on the fiscal cliff, we also urge you to:

Firmly commit to tackling comprehensive tax reform in the next Congress; and
Agree to develop a long term plan to address America’s excessive spending, particularly entitlement spending.

Translation: Don’t raise income taxes, especially on the rich, but do cut benefits for the middle and poor classes. That seems fair doesn’t it?

Sincerely,

Adirondack Regional Chamber of Commerce – NY, Air Conditioning Contractors of America, Air Movement and Control Association, International, American Apparel & Footwear Association (AAFA), American Bakers Association, American Beverage Association, American Composites Manufacturers Association, American Council of Engineering Companies, American Forest & Paper Association, American Gas Association, American Institute for International Steel, American International Automobile Dealers Association, American Iron and Steel Institute, American Land Title Association, American Meat Institute, American Road & Transportation Builders Association, American Trucking Associations, Arizona Chamber of Commerce and Industry, Arizona-New Mexico Cable Communications Association, Arkansas State Chamber of Commerce/Associated Industries of Arkansas, Ashland Area Chamber of Commerce – OH, Associated Builders & Contractors, Inc., Associated Equipment Distributors, Associated General Contractors of America, Associated Oregon Industries, Association Forum of Chicagoland, Association of Commerce & Industry of New Mexico, Association of Washington Business, Baton Rouge Area Chamber – LA, Beaver Dam Chamber of Commerce – WI, Bismarck-Mandan Chamber – ND, Boise Chamber of Commerce – ID, Bossier Chamber of Commerce – LA, Buckeye Valley Chamber of Commerce – AZ, Buffalo Niagara Partnership – NY, Business Council of Alabama, California Manufacturers & Technology Association, Campbell County Chamber of Commerce – WY, Carroll County Chamber of Commerce – GA, Carson Valley Chamber of Commerce – NV, Central Louisiana Chamber of Commerce, Chamber of Commerce of St. Joseph County – IN, Chamber Southwest Louisiana, Chambers of Commerce Alliance of Ventura & Santa Barbara Counties – CA, Chandler Chamber of Commerce – AZ, Chemung County Chamber of Commerce – NY, Chester County Chamber of Business and Industry – PA, City of Central Chamber of Commerce – LA, Connecticut Business Industry Association (CBIA), Currie Associates, Dallas Regional Chamber – TX, Dayton Area Chamber of Commerce – OH, Denver Metro Chamber of Commerce – CO, East Parker County Chamber of Commerce – TX, East St. Tammany Chamber of Commerce – LA, Eastern Contractors Association, Inc., Edison Electrical Institute, Electronics Representatives Association, Fabricators and Manufacturers Association, International, Fairfax County Chamber of Commerce – VA, Fergus Falls Area Chamber of Commerce – MN, Financial Executives International, Financial Services Roundtable, Flagstaff Chamber of Commerce – AZ, Florida Chamber of Commerce, Fountain Hill Chamber – AZ, Fox Cities Chamber of Commerce and Industry – WI, Fullerton Chamber of Commerce – CA, Galesburg Area Chamber of Commerce – IL, Gallup McKinley County Chamber of Commerce – NM, Garden Grove Chamber of Commerce – CA, Gateway Regional Chamber of Commerce – NJ, Georgia Chamber of Commerce, Granbury Chamber of Commerce – TX, Greater Albuquerque Chamber of Commerce – NM, Greater Beaumont Chamber of Commerce – TX, Greater Columbia Chamber of Commerce – SC, Greater Durham Chamber of Commerce – NC, Greater Fort Wayne Chamber of Commerce – IN, Greater Irving-Las Colinas Chamber of Commerce – TX, Greater North Dakota Chamber of Commerce, Greater Palm Bay Chamber of Commerce – FL, Greater Raleigh Chamber of Commerce – NC, Greater Reading Chamber of Commerce & Industry – PA, Greater Sandoval County Chamber of Commerce (GSCCC) – NM, Greater Shreveport Chamber of Commerce – LA, Greater Summerville/Dorchester County Chamber of Commerce – SC, Greater Tampa Chamber of Commerce – FL, Greater Lehigh Valley Chamber of Commerce – PA, Hastings Area Chamber of Commerce & Tourism Bureau – MN, Hilton Head Island – Bluffton Chamber of Commerce – SC, Hong Kong.China.Hawaii Chamber of Commerce – HI, Huntingdon County Business and Industry – PA, Huntington Beach Chamber of Commerce – CA, Indiana Chamber of Commerce, International Council of Shopping Centers, International Foodservice Distributors Association, International Franchise Association, Ironworker Employers Association of Western PA, Irvine Chamber of Commerce – CA, Jeff Davis Business Alliance – LA, Jefferson Chamber of Commerce – LA, Joliet Chamber of Commerce – IL, Kalispell Chamber of Commerce – MT, Kentucky Chamber of Commerce, Kershaw County Chamber of Commerce – SC, Kingman Area Chamber of Commerce – AZ, Lake Havasu Area Chamber of Commerce – AZ, Lodi District Chamber of Commerce – CA, Long Beach Area Chamber of Commerce – CA, Los Angeles Area Chamber – CA, Los Angeles Metro Hispanic Chamber of Commerce – CA, Loudoun County Chamber of Commerce – VA, Lubbock Chamber of Commerce – TX, Manatee Chamber of Commerce – FL, Marshall Area Chamber of Commerce – MN, Maui Chamber of Commerce – HI, Melbourne Regional Chamber of East Central Florida, Mesa Chamber of Commerce – AZ, Metal Powder Industries Federation, Metals Service Center Institute, Michigan Chamber of Commerce, Minneapolis Regional Chamber of Commerce – MN, Minnesota Chamber of Commerce, Mississippi Associated Builders & Contractors, Inc., Missouri Association of Manufacturers, Missouri Chamber of Commerce, Monroe Chamber of Commerce – LA, Montana Chamber of Commerce, Moore County Chamber of Commerce – NC, Motor and Equipment Manufacturers Association (MEMA), Myrtle Beach Area Chamber/CVB – SC, NAHAD – The Association for Hose & Accessories Distribution, Nashville Area Chamber of Commerce – TN, National Asphalt Pavement Association, National Association of Chemical Distributors, National Association of Manufacturers, National Association of Wholesaler-Distributors, National Beer Wholesalers Association, National Black Chamber of Commerce, National Electrical Contractors Association (NECA), National Federation of Independent Business, National Grocers Association (NGA), National Marine Manufacturers Association, National Parking Association, National Restaurant Association, National Retail Federation, National Roofing Contractors Association, Nebraska Chamber of Commerce & Industry, New Jersey State Chamber of Commerce, Non-Ferrous Founders’ Society, North American Die Casting Association, North American Equipment Dealers Association, North Carolina Chamber, North Country Chamber of Commerce – NY, North Platte Area Chamber & Development Corporation – NE, Northeast PA Manufacturers & Employers Association, Northern Kentucky Chamber of Commerce, Northumberland County Chamber of Commerce – VA, NUCA, representing utility and excavation contractors, Nuclear Energy Institute, Ohio Chamber of Commerce, Ohio Society of CPAs, Opelika Chamber of Commerce – AL, Orange County Business Council – CA, Oshkosh Chamber of Commerce – WI, Outdoor Amusement Business Association, Inc., Oxnard Chamber of Commerce – CA, Palm Desert Area Chamber of Commerce – CA, Pennsylvania Chamber of Business and Industry, Pennsylvania Manufacturers’ Association, Petroleum Marketers Association of America, Plano Chamber of Commerce – TX, Precision Machined Products Association, Prince William Chamber of Commerce – VA, Redondo Beach Chamber of Commerce and Visitors Bureau – CA, Rehoboth Beach-Dewey Beach Chamber of Commerce – DE, Retail Industry Leaders Association, RI Manufacturers Association, River Heights Chamber of Commerce – MN, River Region Chamber of Commerce – LA, Rochester Area Chamber of Commerce – MN, Rockport-Fulton Chamber of Commerce – TX, Rush Strategies LLC, Ruston-Lincoln Chamber of Commerce – LA, S Corporation Association, Salem Area Chamber of Commerce – OR, Salisbury Area Chamber of Commerce – MD, Salt Lake Chamber – UT, San Angelo Chamber of Commerce – TX, San Antonio Manufacturers Association, San Diego Regional Economic Development Corporation – CA, Santa Clara Chamber of Commerce and Convention-Visitors Bureau – CA, Schuylkill Chamber of Commerce – PA, Scottsdale Area Chamber of Commerce – AZ, Small Business & Entrepreneurship Council, Snack Food Association, Society of American Florists, Society of Chemical Manufacturers and Affiliates, South Baldwin Chamber of Commerce – AL, South Bay Association of Chambers of Commerce – CA, Southern Wayne County Regional Chamber – MI, St. Cloud Area Chamber of Commerce – MN, St. Tammany West Chamber of Commerce – LA, State Chamber of Oklahoma, Steel Manufacturers Association, Tempe Chamber of Commerce – AZ, Texas Association of Business, The Chamber of Commerce serving Johnson City – Jonesborough – Washington County – TN, The Chamber of Commerce serving Middletown, Monroe and Trenton – OH, The Chamber of Reno, Sparks, and Northern Nevada, The Greater Jackson County Chamber of Commerce – AL, The Greater Lafayette Chamber of Commerce – LA, The Kansas Chamber, The Longview Chamber of Commerce – TX, The Ohio Manufacturers’ Association, The Real Estate Roundtable, Torrance Area Chamber of Commerce – CA, Tucson Metropolitan Chamber of Commerce – AZ, Tulsa Metro Chamber – OK, Turfgrass Producers International, U.S. Chamber of Commerce, United Fresh Produce Association, United States Telecom Association, Utah Valley Chamber of Commerce, Valley Industry & Commerce Association (VICA) – CA, Vista Chamber of Commerce – CA, Warsaw Kosciusko County Chamber of Commerce – IN, Western DuPage Chamber of Commerce – IL, White Pine Chamber of Commerce – NV, Women Construction Owners & Executives, USA, Woodworking Machinery Industry Association

Sincerely,

U.S. Chamber of Commerce

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

Rodger Malcolm Mitchell
Monetary Sovereignty

#MONETARY SOVEREIGNTY

–Economics of today for the worlds of tomorrow: Telepresence

Mitchell’s laws:
●The more 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 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.
==========================================================================================================================================

Here we are talking about the economics of tomorrow, while mainstream economists have not yet caught up with the economics of today.

For new readers of this blog, the economics of today recognizes that the U.S. government has the unlimited ability to create its own sovereign currency. The government never can run short of dollars; it doesn’t need to ask you or me for dollars.

The U.S. is Monetarily Sovereign. Illinois, Chicago, Cook County and Greece are not. But, mainstream economics has not progressed past August 15, 1971, when the U.S. went off the gold standard. Today’s economists, media and politicians still claim the U.S. must “live within its means,” and that the federal deficit is “unsustainable” and the debt must be reduced.

In short, the economics taught in most college and universities does not recognize the fundamental differences between Monetary Sovereignty and monetary non-sovereignty. Ignorance is passed down the generations.

Like a traveler who relies on connecting flights, if you miss the first flight (today’s economics) you will miss the next flight. An article in the November 10, 2012 issue of NewScientist magazine provides a few hints at what will be tomorrow’s economics:

It’s Thursday morning and 7-year-old Devon Carrow-Sperduti is meant to be starting school in 5 minutes. His mum is getting impatient. Devon is like any child his age – in all but one respect.

When Devon gets to Winchester Elementary School in West Seneca, New York, he chats with his friends between his classes, he sometimes gets told off by his teachers for not paying attention and, occasionally, he bumps into walls. It is an inevitable consequence of attending school as a robot.

Devon has allergies that prevent him from physically being at school. Instead, he stays at home and logs into a two-wheeled, 1.5-metre-tall Segway-like robot called VGo, which is waiting in the school grounds. He navigates between classrooms by peering through a camera, and talks with classmates and teachers via a real-time video screen displaying his face. “He’s treated the same as everyone else,” says his mum.

Devon attends school by proxy. The children view Devon’s robot as Devon himself. One day, another child also might attend Devon’s school by proxy. Then presumably, the two robots, or rather, the two children, will talk and play, face to face, video screen to video screen.

Devon isn’t the only one routinely transporting himself to another location like this. He joins surgeons, soldiers and an increasing number of other workers who are turning to an army of surrogates often hundreds of kilometres away. These virtual travellers can hold down nine-to-five jobs, fight wars and perform life-saving operations.

This year, you’ll be able to buy one for the same price as a laptop, and eventually they will be controlled by thought alone and will transmit a sense of touch back to their pilot. It means our senses will become immersed in another location like never before. Researchers, legal experts and ethicists are realising that the way this technology will be used over the next decade and beyond is not only going to affect the way we live and work, it is also going to disrupt economies, challenge laws and may even transform social norms.

Today’s economics describes today. But tomorrow’s will be far different. Yesterday’s economics already has caused, extended and worsened the Great Recession, by limiting GDP growth. Try to imagine what will happen as economists and politicians, steeped in obsolete beliefs, try to cope with the future.

Marvin Minsky, one of the pioneers of robotics, coined the term “telepresence”. He used it to refer to the suite of technologies that allow a person to feel as if they are present at a place other than their true location. In his futuristic vision, these robotic systems would pave the way for a “remote-controlled economy” and would transform society.

If you’re in the US and need part of your prostate removed, for example, it is likely you will experience the skills of a telepresent surgeon using a robotic manipulator – 90 per cent of these operations are now performed this way.

Scalpels have even been wielded across oceans: in 2001, surgeons in New York removed the gall bladder of a woman in Strasbourg, France. Meanwhile, soldiers today routinely control aerial drones and robots for surveillance, bomb disposal and even attacks.

In fact, their use is now so common in the US army that some commentators argue that remote-controlled warfare could come to be seen as a defining trait of Barack Obama’s presidency.

Today’s economics is based on the inefficiencies of human output and wealth creation. We spend much of our working lives preparing for work, traveling to work, traveling for work and traveling from work. We search for information, file information, convey information to someone else, forget information and die with our information.

So far, the signs suggest that people have been using telepresence to visit family and friends, tour buildings like museums, work remotely with distant colleagues or, for doctors and nurses, to check on patients from afar.

The next wave of telepresence under development in laboratories suggests the technology will become significantly more immersive. For example, a team led by Mel Slater at University College London (UCL) has built a surrogate robot whose actions mirror a person’s body movements. Hold out your arm for a handshake, and the robot’s arm follows suit.

Early this year, a student called Tirosh Shapira controlled a robot using only his thoughts – he was at Bar-Ilan University in Israel, inside an fMRI brain scanner, and the robot was in France.

“It was mind-blowing,” [Shapira] says. “I really felt like I was there. When the guys in France surprised me by placing a mirror in front of the robot I was like ‘oh I’m so cute, I have blue eyes’, not ‘that robot is cute’.”

The line between “me” and “it” and between “here” and “there” is blurring. If all your senses tell you you’re in a remote location, and if you can move your arms and legs in that remote location, where are you, really?

Many researchers have begun to explore the looming economic, legal and social impacts. What might be the consequences of it becoming easier for everybody to move about remotely?

For a start, telepresence could disrupt labour markets. One plausible scenario for the technology is to allow low-wage foreign workers to be employed for jobs that were impossible until now.

After all, it has happened before – more than a decade ago, improved internet speeds and coverage meant nations like India became prime targets for Western companies to outsource online and telecommunication services at lower cost.

Consider how a retail business like Home Depot or Tesco might use telepresent workers. It could stop employing as many local assistants to do jobs like directing customers to products in-store, or potentially even operating machinery, and hand those tasks to employees overseas instead.

“One remote worker could be responsible for 10 stores and 30 robots,” says Matt Beane at the MIT Sloan School of Management, who has also been investigating the impact of telepresence technology. “I’d be very surprised if in 10 years, 10 per cent of that kind of work wasn’t being performed by remote workers.

Or take the implications of medicine continuing on its path towards remote procedures. It is bound to trigger legal and regulatory headaches if it spurs a new wave of medical tourism, for example.

What happens when a dentist in Cuba offers cheaper procedures through teleoperation to people in England? “Where is the service taking place, and who regulates it?” If something goes wrong during a procedure, or if an unqualified doctor practises remotely, for example, it is unclear which court or medical board would be responsible for investigation or punishment.

“If I throw a punch in England and it hits someone in another country, is the offence committed here or there, and which country’s law should take precedence?”

In economics, Gross Domestic Product is a common measure of economic growth or shrinkage. But what if the word “Domestic” loses its meaning?

Modern economics is based on pay-for-work. The faith is that wealth is created by people, and that those who do no work, deserve no wealth.

But what if telepresence machines not only do your job, but almost everyone’s job? What happens to economics when most of the workforce is composed of machines?

The makers of telepresence technology ultimately aim to fully immerse our senses in a location far from our own. And this may inevitably raise the question of how we anchor ourselves in reality. When we can walk, talk and work in a distant land while our body resides at home, where do we exist at that moment in time? In the world that holds your body, or the one that holds your mind?

I ask Devon a similar question: when he uses VGo, does he feel more like he’s at school or at home? He answers with the matter-of-fact simplicity of a 7-year-old. “Oh yeah, I’m definitely at school,” he says, before running off to brush his teeth.

Many people believe reward should be based on work, and that government provided benefits actually reduce the desire to work, as witness the sneering references to “food stamp mother.”

Today, unemployment is seen as a problem for the individual, because it reduces his monetary income, and as a problem for society, because the individual does not contribute work.

The role of government is seen today as encouraging a working society. Tomorrow, unemployment will be acceptable, even normal, as fewer people work. What then will be the role of government?

I believe the government will assume a more socially supportive role. Today, the government punishes work (via income taxes), while it encourages work (via project spending. Can that continue in a world where the implications of work change dramatically?

If you go to the bottom left-hand corner of this blog, you will find a search function. Use it to search “Watson” and you will find seven posts describing the possible futures of economics. All ponder the possible roles of government and of economics, itself.

We are at the proverbial fork in the road. To the right lies a government whose primary purposes are to protecting the haves from the have-nots. To the left, a government whose primary purposes are to protect the have-nots from the haves.

Will the government provide Medicare for everyone, Social Security for everyone, housing and clothing for everyone, justice for everyone – or will these be allocated to the strongest and those judged most valuable?

Today’s governments lean to the right, focusing on productivity. They frets over “dis-employment,” as being deflationary if too high and inflationary if too low.

Governments anguish over money creation (aka “deficits); they war over national borders. Economics lags behind, encouraging needless anguish and excusing needless wars.

The world will change in ways we cannot even imagine. And economics will change with it. But, the economists, the politicians, the media and the public, first must begin understand the reality of today’s economics.

The world is racing at us like a high speed train, as blithely we ride old Dobbin across the tracks.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

#MONETARY SOVEREIGNTY

Share this:

Share this:

Share this:

Share this: