Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Here is how our Monetarily Sovereign government, which has the unlimited ability to create dollars simply by touching a computer key, plans to remove dollars from our economy. As the economy suffers the death of a thousand cuts, everyone cheers.

The Federal Eye, Posted 10/19/2011
Georgetown landmark to be sold by federal government
By Ed O’Keefe and Jonathan O’Connell
A government-owned landmark with a choice Georgetown address is expected to be put up for sale in the next year as part of the Obama administration’s plans to sell excess federal property across the country.

The facility, a largely abandoned art deco-style heating plant owned by the General Services Administration, is situated on a two-acre site amid townhouses and the Four Seasons Hotel at the corner of 29th and K Streets NW. On Thursday, it will be added to a list of 12,000 properties the federal government says it no longer needs, as part of a review ordered by President Obama to save at least $3 billion in government building costs.

Jeffrey Zients, deputy director of the Office of Management and Budget, said the administration will save more than $3.5 billion in building costs by the end of fiscal 2012. The federal government owns 1.2 million properties costing taxpayers more than $20 billion to operate and maintain, Zients said. In addition to the 12,000 excess properties, he said another 50,000 are considered underused.

More accurately, the federal government plans to stop sending $20 billion into the economy annually. This has the same effect as a $20 billion tax increase.

Built in the 1940s, the GSA plant once burned coal and natural gas, but has sat dormant and racked up $3.5 million in maintenance costs in the last decade, Zients said.

. . . Dollars that have been going to maintenance personnel.

Some agencies, including the departments of Homeland Security and Justice, are studying how best to consolidate workers. At Justice, dozens of career attorneys this week threatened to quit if the department goes through with plans to close four regional offices located in southern and midwestern cities.

. . . Thereby exacerbating unemployment.

Even though the White House is set to meet its goal, officials are pushing Congress to pass a bill that would establish a civilian buildings commission to review other sites for closure or consolidation. If the legislation passes, the panel would issue recommendations to Congress for an up or down vote and generate at least $15 billion in savings over there years, Zients said.

That’s $15 billion fewer dollars entering the economy. Removing dollars from the economy is anti-stimulative. Remember: Federal Deficit Spending – Net Imports = Net Private Savings, so reduced federal spending = reduced private savings.

Yes, it could be said the private sector may lose dollars, but it will gain wealth, a nebulous entity that cannot be measured or accurately defined. People use “wealth” to mean all sorts of things. Are educated children part of America’s “wealth”? Is happiness “wealth”? What about a newly written song or poem? Do they contribute to our “wealth”? The Grand Canyon, which has minimal intrinsic value, but immeasurable value in terms of beauty and symbolism – is that “wealth” and if so, how much? No one knows how much wealth there is in America, whether it has grown or declined, and whether one kind of wealth is more economically stimulative than another. “Wealth” is an uncertain word, meaning different things to different people, and so is not a scientifically meaningful term.

But, we do know for certain:

1. Our Monetarily Sovereign government, upon receiving dollars for sales or for taxes, has no use for these dollars. It can create unlimited dollars, ad hoc, by spending. Dollars sent to the U.S. government, simply disappear on arrival. (This is not the case with dollars sent to state and local governments, which are monetarily non-sovereign.)
2. Federal asset sales to the private sector reduce the domestic supply of dollars.
3. Dollar supply reductions lead to recessions.

All of the above relates to The Biggest Economic Question of the Day: “How does a tax increase or spending decrease reduce unemployment or grow the economy?”

The far better alternative would be for the government to give (not sell) unneeded property to the private sector, and not remove dollars from the economy.

I award the Obama administration one dunce cap for believing the federal government needs dollars more than does the private sector.

(If you are one of those who has received a dunce cap from me, don’t bother sending it back. I create dunce caps ad hoc, by awarding them, so I have no use for yours. I now am running a dunce cap deficit of 45 caps. What is my limit?)

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

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No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY

Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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This surely is the funniest headline of the month, perhaps even since the beginning of the recession.

France’s AAA Credit Rating At Risk, Moody’s Warns
From Before Its News, Tue Oct 18 2011

France is at risk of losing its coveted AAA credit rating, according to Moody’s Investors Service.

The rating agency published a report noting that it may issue a negative outlook on the French sovereign debt rating in the next three months if the costs of providing financial assistance to other euro zone nations and/or banks places France’s budget in a precarious position. A negative outlook would indicate that France’s credit rating is at risk of a downgrade in the coming years.

In a statement, Moody’s warned that “The deterioration in debt metrics and the potential for further contingent liabilities to emerge are exerting pressure on the stable outlook of the government’s Aaa debt rating.”

Think about it. France, which is monetarily non-sovereign, and so cannot control its money supply and is in real danger of not being able to pay its bills, has an AAA rating from all three major rating agencies — though the agencies are waiting for “further contingent liabilities to emerge.”

But the United States, which is Monetarily Sovereign, and so has the unlimited ability to pay any bills of any size at any time, and even has the ability to pay off all its “debt” tomorrow, saw its rating reduced to AA+ by S&P. Is that a howler, or what?

But wait, it gets even funnier:

Moody’s also noted that France’s debt metrics are now among the worst of its Aaa peers, although they are still supported by favorable “debt affordability,” or a relatively low interest burden when compared to the level of government revenues.

“Favorable debt affordability”? “Among the worst of its peers”? I suppose their debt is affordable, IF they get bailed out by Germany and/or the EU. Otherwise, France will go down the drain. Meanwhile, the AA+ United States needs no bail out, nor ever will. That is the benefit of Monetary Sovereignty, where all America’s so-called “debts” are denominated in our sovereign currency, which we have the unlimited ability to create.

By contrast, France has no sovereign currency. It’s on a euro standard, and when it runs short of euros, it’s out of luck.

But wait, it gets even funnier, yet:

The warning by Moody’s stands in stark contrast to Standard & Poor’s and Fitch – the world’s other two major ratings agencies – which each reaffirmed France’s’ AAA rating in August and have not since published any additional reports.

These agencies continue to demonstrate to the world their abject ignorance of Monetary Sovereignty. And people actually pay attention to these boobs and believe their ratings. Amazing.

And funny.

And frightening.

I award five dunce caps to the three ratings agencies, not because they are more ignorant than many other groups, but because they have set themselves on a high plateau, from which they clearly have fallen into disgrace.

(Having no dunce cap tax, my dunce cap deficit has reached 44. The media, the old-line economists and the politicians tell me this is “unsustainable” and a “ticking time bomb.” Taking a cue from Congress, I shall appoint a “super committee” to get this political hot potato off my hands.)

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

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No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY

Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Economic austerity causes civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Here is yet another example of how ignorance of Monetary Sovereignty will diminish your life and the lives of your children and grandchildren:

Obama pulls plug on troubled long-term care program in new health law, citing design flaws

By Associated Press, Updated: Friday, October 14, 3:56 PM

WASHINGTON — The Obama administration says it is unable to go forward with a major program in the president’s signature health care overhaul law — a new long-term care insurance plan.

Officials said Friday the long-term care program has critical design flaws that can’t be fixed to make it financially self-sustaining.

“Financially self-sustaining” describes the myth that our Monetarily Sovereign federal government can run out of sovereign dollars.

Health and Human Services Secretary Kathleen Sebelius told Congress in a letter that she does not see a viable path forward at this time. By law, implementation of the program was contingent on Sebelius certifying it financially sound.

Is the Supreme Court “financially sound”? Is Congress “financially sound”? Is the military “financially sound”? What about the Department of Homeland Security? The CIA? The FBI? Are any of the 1,300 federal agencies “financially sound”?

The program was supposed to be a voluntary insurance plan for working adults regardless of age or health. Workers would pay an affordable monthly premium during their careers, and could collect a modest daily cash benefit if they became disabled later in life. The problem all along has been how to ensure enough healthy people would sign up.

This talks about adverse selection, and is based on the belief that healthy people must pay for sick people. It is a real problem for private insurance plans, because insurance companies are not Monetarily Sovereign. It is not a problem if the federal government paid.

CLASS was intended as a voluntary plan, supported by premiums, not taxpayer dollars.

Taxpayers do not pay for federal spending, although they do pay for state and local government spending. That is the difference between Monetary Sovereignty and monetary non-sovereignty.

(The) idea was to give families some financial breathing room. The burden of long-term care is growing. Most families cannot afford to hire a home health aide for a frail elder, let alone pay nursing home bills. Long-term care is usually provided by family members, often a spouse who may also have health problems.

How true. So this unnecessary burden will fall on our spouses or our children. They will be the ones to suffer.

Again and again and again, we find that the ignorance of Monetary Sovereignty diminishes the lives and well being of our children and grandchildren and of us. That is the penalty of ignorance.

I award the President four dunce caps for not understanding the vital need for this easily affordable benefit to American families:

(I now am running a deficit of 39 dunce caps. Dept-hawks would say I “owe” 39 dunce caps, and shouldn’t award any additional, until I levy a dunce cap tax to reduce my deficit. But somehow, I just don’t feel my awarding dunce caps is “unsustainable” or a “ticking time bomb” as the media like to proclaim.)

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

==========================================================================================================================================
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings

MONETARY SOVEREIGNTY