Tag: reduce the nation’s red ink

–Democrat says budget should be cut more than $2 trillion. As always, no proof offered.

Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Note to Lori Montgomery, financial reporter for the Washington Post:

Hi Lori,

You reported,

“Sen. Kent Conrad (D-N.D.) said the goal of slicing more than $2 trillion from the federal budget by 2021 falls far short of the savings needed to stabilize borrowing, re-energize the economy and avert the threat of a debt crisis.”

Hmmm . . . Let’s see. Federal purchases of goods and services increase business sales, therefore are stimulative. But a $2 trillion reduction in federal spending – money that otherwise would have paid to businesses – will “re-energize the economy.” I’d love to see the math on that.

It also would be interesting to hear Sen. Conrad explain how a $2 trillion reduction in federal spending will “stabilize borrowing” (whatever the heck that means).

By the way, did you ever avail yourself of the opportunity to understand Monetary Sovereignty? Do you have any questions?

Previously she had written to me, saying she would review my summary of Monetary Sovereignty. I’ll let you know what she says in response to this letter, if anything.

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


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No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it ruined my future.”

MONETARY SOVEREIGNTY

–Debt hawks, nose cutters and suicide bombers – How deficit cutting assaults the middle and the poor

Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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The “no pain, no gain” crowd believes someone – preferably the poor – must suffer for us all to reach happiness. Here is a sampling of how they suggest achieving economic nirvana through economic agony:

1. Cut Social Security
2. Cut Medicare
3. Cut Medicaid
4. Cut the Supplemental Nutrition Assistance Program (SNAP) aka “food stamps”
5. Cut support for community health centers
6. Cut support for job re-training
7. Cut support for affordable housing programs
8. Cut funding for the Administration for Children and Families
9. Reduce the number, pay and retirement benefits of federal employees
10. Eliminate subsidies of student loans
11. Cut all inflation-based program benefits by changing the definition of inflation

See a pattern there? They all would impact low- to middle-income families most. See anything missing? Yes, we also could raise the income tax rates to cut the deficit, but that might impact upper-income families a tad. Republicans have declared income tax rate increases “off the table.” In fact, some Tea (formerly Republican) presidential candidates want to cut the highest tax rates (on the wealthy) further.

The Democrats, which own the Presidency and the Senate, hide in corners and wring their hands helplessly, hoping not to be seen. Though they portray themselves as the champions of the underclass, they have paid the wealthy bankers, then caved in to Republican threats to destroy the American economy (by refusing to raise the debt ceiling.) Instead, the Dems, the cowardly lions of politics, have agreed that benefits for the poor should be cut. Hey, could it be because they themselves are rich?

Understand, there is no financial difference between raising taxes and cutting federal spending. Both reduce the deficit equally. Nevertheless, I am a proponent of cutting federal taxes; they serve no useful purpose. Our Monetarily Sovereign government neither needs nor even uses tax money. It’s destroyed upon receipt.

Though followers of MMT (Modern Monetary Theory) claim taxes create demand for the dollar, there are plenty of state and local taxes to accomplish that purpose. Federal taxes not only are useless, but harmful, in that they remove money from the economy. So I am with the Republicans on the tax issue.

Unfortunately, the mutual desire to reduce federal spending is so wrongheadedly destructive, I say a pox on both parties; neither has even one member who understands Monetary Sovereignty.

Then we have FICA, that tax that doesn’t pay for Medicare, doesn’t pay for Social Security, and in fact, doesn’t pay for anything. It is the most useless, destructive, ignorant, regressive tax ever invented – a masterpiece of screw-the-poor.

For salaried folks, it usually is the biggest tax they pay. For the rich, it barely is noticeable, since it cuts off at $107K, and who needs salary, when you have capital gains at the lowest tax rate? Though the pretense is that business pays half, FICA functionally is a 15% payroll tax on the great unwashed.

The point of this rant is not to tell you how the wealthy minority (aided by the media barons and the clueless, old-line economists) again stick it to the “unwealthy” majority. You already know that. The point is to demonstrate how the “unwealthy” stick it to themselves.

Go into any middle- or lower-class neighborhood and ask a thousand people, “Should the federal deficit and debt be reduced?” and I predict 999 people will say “Yes,” and the other one will say, “Maybe.” These sad, brainwashed souls hardly can wait to cut off their own noses, by reducing the federal assistance they so desperately need.

Read though this blog, and you will see page after page of comments, most presumably by middle- and lower-class people, demanding the deficit and debt be cut because these measures are “unsustainable” and “ticking time bombs,” exactly the myths that have been spread since at least 1940, probably longer. (See: Unsustainable).

And these folks are determined masochists. I have been called every four-letter name essentially for not wanting to apply leeches to anemics, or for saying phrenology is quack science. The idea that the federal deficit needs to be cut is worse than quack science; it’s quack mythology.

The wealthy priests have beat the drums, convincing the lowly savages that asking for less and suffering more, will take them to heaven. The savages wholeheartedly agree, and God help anyone who tries to save them from themselves.

Lower-to-middle income debt-hawks have the same mind-set as those who volunteer to be suicide bombers. They hope to find their happiness in the afterlife.

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


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No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it ruined my future.”

MONETARY SOVEREIGNTY

–Still clueless in Chicago. The Chicago Tribune emulates the Cubs

Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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With each game played, the Chicago Cubs continue to set world records for incompetence. It has been over a century since this team has won the championship of its sport, surely an unmatched record in all of athletics. And the beat goes on.

The Chicago Tribune of “Dewey Defeats Truman” headline fame, continues in the same tradition of incompetence. Consider how much wrong information is crammed into these four sentences from June 18th Tribune editorial titled, “Lo and behold,” just the latest in a long, long string of utterly wrongheaded pieces.

The national debt threatens to crush our economic future . . . The members of the House and Senate have to curb every part of government including entitlements such as Medicare and Medicaid. They have to make much more painful cuts than ethanol subsidies. And they have to stop such claptrap as the argument that ending the ethanol subsidy would be a “tax increase.”

Lets examine each sentence:

“The national debt threatens to crush our economic future.”
Forget that the Tribune never has explained how this crushing will occur. Instead focus on the fact that the so-called “debt” is not functionally related to federal spending. It merely is an artifact of the gold standard, when the government was not Monetarily Sovereign and needed to borrow its own dollars.

Contrary to popular myth, the federal government could spend $100 trillion tomorrow and not incur even one penny’s worth of “debt.” The “debt” merely is a legal requirement that the federal government create T-securities from thin air, then exchange them for dollars it previously created from thin air – in the amount of dollars it newly creates from thin air. The U.S. could end the debt today, merely by changing the law, and not creating any T-securities. No T-securities = no debt. And no “crushing.”

“The members of the House and Senate have to curb every part of government, including entitlements such as Medicare and Medicaid.”
Again, as always, no reason is given for the destruction of programs designed specifically to help the middle and lower classes. How does it benefit America for people, who cannot afford private health insurance, to be denied health care? Presumably, this editorial was written by someone in the upper 1% income category. How about, “Let them eat cake,” Chicago Tribune?

“They have to make much more painful cuts than ethanol subsidies.”
While I hold no special brief for ethanol subsidies, and there are good arguments against them, one thing they do accomplish is adding money to the economy, which is stimulative. But what are these other “painful cuts,” and why do we want to inflict pain on the American public? What is the benefit of the agony the Tribune favors? How do federal spending cuts benefit us? The Tribune never has said.

“And they have to stop such claptrap as the argument that ending the ethanol subsidy would be a ‘tax increase.’”
Ah, does their incompetence never cease? Ending the ethanol subsidy would reduce the federal deficit, which functionally is identical with a tax increase. Whether the government spends less or takes in more, the arithmetic is the same: The economy winds up with less money.

Yes, the Chicago Tribune editors and the Chicago Cubs both are incompetent, and have been for a long time. There is one important difference, however. I believe the Cubs actually try to get it right, despite the difficulty of defeating all the other teams. The Tribune editors seem not to care less, despite the ease with which they could publish the truth. It’s just less work to parrot the popular myths than to endure the pain of actually learning something. Or is this a reflection of cowardice, the fear of coming out against common opinion?

Either way, the beat goes on.

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


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No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it ruined my future.”

MONETARY SOVEREIGNTY

A Debt Parable. How ignorance and superstition destroyed our wonderful land

Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Ignoring all facts and evidence to the contrary, America’s Congress, our President, our media, and most of our old-line economists intuitively knew the earth is flat, and if an American boat sailed far enough it would fall off the edge.

So to protect our shipping from this never-seen edge, Congress installed a barrier, preventing our boats from sailing too far.

Every few years, Congress moved the barrier farther out to sea, and while no American boat ever had fallen off the edge, nor had any American even experienced an edge, many wise men predicted this would happen “eventually,” and the repeated movement of the barrier was “unsustainable.” The media termed the edge of the world a “ticking time bomb.” They derided those who wanted to end the barrier with invective and such sarcasms as: “Are you saying ships can sail forever?”

Some foreign boats that were not seaworthy – rowboats, rafts and the like – had sailed out beyond the horizon, and never seen again. Proponents of the American barrier offered this as absolute proof the barrier was needed, and the edge actually existed.

Though the barrier prevented American boats from circling the earth, which limited our trade, and hurt our nation’s economy, and though we already were in a recession, Congress decreed the barrier would be moved no more. No American boats were allowed to sail beyond it. Our economy was not allowed to grow.

Meanwhile, other nations discovered the edge of the world was a myth. They did not limit their ships. Their trade expanded and these nations grew wealthy, as America slipped steadily into a deepening depression, until we were no more.

And that is how ignorance and superstition destroyed our wonderful land.

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


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No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it ruined my future.”

MONETARY SOVEREIGNTY