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The following is x-posted from The Center of the Universe, with the kind permission of the author. Please see note below. — selise
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MMT to President Obama and Members of Congress:
Deficit Reduction Takes Away Our Savings
SO PLEASE DON’T TAKE AWAY OUR SAVINGS!
Yes, it’s called the national debt, but US Treasury securities are nothing more than savings accounts at the Federal Reserve Bank.
The Federal debt IS the world’s dollars savings- to the penny!
The US deficit clock is also the world dollar savings clock- to the penny!
And therefore, deficit reduction takes away our savings.
SO PLEASE DON’T TAKE AWAY OUR SAVINGS!
Furthermore:
There is NO SUCH THING as a long term Federal deficit problem.
The US Government CAN’T run out of dollars.
US Government spending is NOT dependent on foreign lenders.
The US Government can’t EVER have a funding crisis like Greece — there is no such thing for ANY issuer of its own currency.
US Government interest rates are under the control of our Federal Reserve Bank, and not market forces.
The risk of too much spending when we get to full employment is higher prices, and NOT insolvency or a funding crisis.
Therefore, given our sky high unemployment, and depressed economy,
An informed Congress would be in heated debate over whether to increase federal spending, or decrease taxes.
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NOTE: Please read Warren Mosler’s book, The 7 Deadly Innocent Frauds of Economic Policy, with forward by James K. Galbraith. — selise
also x-posted at my blog — selise
31 Comments
an informed citizenry would also be in heated debate over whether to increase federal spending and/or decrease taxes.
NOT debating decreasing federal spending and/or increasing taxes.
I agree
Indeed the political push is stronger if that is the only message as folks can’t keep that much in their heads in these days of “reality TV” (now which housewifes rerun do I watch next?).
Ah, you write the key phrase: “an informed citizenry”. Simply stated, an informed citizenry is the LAST thing the PTB want.
When the mass media is corporate controlled, when people are wondering about their economic future or working so much so that the consumerism they have become addicted to precludes them reflecting on what’s really going on, when the governments continually deceive so as to maintain their positions of ‘power’, having informed citizens is a dream awaiting conscious expression.
isn’t that what we are trying to do here? inform ourselves and each other?
:)
Yes, but doesn’t it strike you as often ‘preaching to the choir’?
Just imagine if people here at FDL were writing letters to the newspaper editors-though I can’t seem to get mine published- and ‘news’ stations about coin seigniorage.
Then this http://www.correntewire.com/will_he_say_he_has_no_choice_or_will_he_use_seigniorage
might have gained some ‘traction’.
preaching to the choir? no. not even a little bit.
coin seingoirage is a brilliant idea. but beowulf had to first think it up and then people here and elsewhere have to hear about it and begin to understand it’s significance before there can be a LTE writing campaign.
http://my.firedoglake.com/beowulf/2011/01/03/coin-seigniorage-and-the-irrelevance-of-the-debt-limit/
that doesn’t happen very effectively if most people are still focused on debating how to decrease fed govt spending and increase taxes.
Preaching to the choir? I think not.
Many, dare I say most, pups have never heard of it and their knowledge of the monetary system is rooted in what govt has told us.
I would also recommend folks read “Soft Currency Economics” on Mosler’s website.
Got to change the way we think about monetary systems and theory.
………..and the federal investment clock in Times Square keeps on a ticking. Unfortunately the Fed. invested in the already failed T.B.T.F.
i never heard of it either — until i went looking for explanations.
p.s. SD, you read “Soft Currency Economics!” wow. here’s the link for our fellow readers: #2 under “mandatory readings.”
http://moslereconomics.com/mandatory-readings/
Once I got started reading Mosler I liked what I saw. Haven’t read all his stuff but have watched a couple of short vids of him speaking. Had to get over his bein’ a fund manager an’ all, too. It’s the Marxist in me. *g*
Book recommendation:
The Value of Nothing: How to Reshape Market Society and Redefine Democracy by Raj Patel
http://www.amazon.com/Value-Nothing-Reshape-Redefine-Democracy/dp/031242924X/ref=sr_1_1?s=books&ie=UTF8&qid=1310942934&sr=1-1
I rec’d this and it has more comments than 4 of the 10 diaries on the rec list so I don’t know why it’s not getting boosted up there and,therefore, onto the FDL main page list.
LOL!
thank you for the book recommendation. sounds very interesting. and if BOTH you and naomi klein rec it, i guess that means i’m going to have to read it!
p.s. as far as i can tell, mosler is an exceptionally kind person. very generous with his time and natural teacher.
i don’t know what the algorithm is for getting on the rec list. but thank you for the rec and all comments are most appreciated for their own sake.
too big to fail. too big to manage. too big to regulate. too big to investigate.
…. hmmm. i say we do some experimenting and test those hypotheses. :)
Naomi rec’d it? Wow, we’re shittin’ in high cotton now.
You’re on it now.
I am the person farthest away from a clear understanding of economics, but with the claims by Obama that not raising the debt ceiling would cause interest rates to rise and be bad for the banks, is that because the banks would have to actually pay interest on savings for the people like myself who have managed a bit of savings by living a non-wasteful and somewhat frugal lifestyle for the last 25 years?
not sure what interest rates obama was referring to. but as far as i can tell, it’s just something else that obama has wrong. mosler has lots on this at his blog. also, here is a little bit from a recent galbraith piece that scarecrow x-posted here.
http://my.firedoglake.com/scarecrow/2011/07/12/james-k-galbraith-hawk-nation-a-guide-to-the-catastrophic-debt-ceiling-debate/
well, mosler is. and that’s what counts!
thanks, SD.
I’m gonna link to Scarecrow’s post tomorrow at Swim. We all need to be on the same page with this nonsense.
please do! and thank you!!!
Don’t understand yer point Selise @2:17pm but we should be raising taxes on rich and corps while investing money into immediate federally created jobs.
The newly employed and their taxes would alleviate any stress.
Oh, n end military empire abroad, expenses we don’t need for any reason, n certainly NOT for our own security.
there are many reasons (i have some of my own) to raise marginal tax rates, end stupid wars, etc… but decreasing the fed govt deficit is not one of them.
As you, I’m not too concerned with the fed deficit given all I’ve read from you, Krugman et al, Dayen, Walker n FDL n Pups.
It’s clear to me this is a Peterson/Koch gambit to benefit elitist rich ideals . . . most of which are racist, misogynist, homophobic and anti populous.
We agree on this.
For ANY hope for us 50+ boomers, tax rates MUST rise on the elites, their money must be denied to political cause . . . and I see NO WAY for any of this to happen . . . it’s Mama Nature or our own stupidity (attack Iran) or the inevitable collapse of an overextended empire that remain the only likely outcomes.
History proves it.
They’ve been proven Ma’am, them hypotheses . . . we are overwhelmingly fucked as of now . . . just thought I’d point that out.
but that, as with the wars, is a reason not related to the fed govt deficit.
this is an important point because we need to protect deficit spending and we can’t do that very well when we are using the “need to lower the long term deficit” as the faux justification for policies we prefer for reasons, i hope, other than deficit reduction.
Thanks for this post, Selise, we need to keep hammering the truth home! It will take years and many many public postings, LTE’s, questions to our reps, and discussions with our neighbors and fellow activists, but we CAN change the way we run our economy.
amen. and, imo, the first step is to change the way we think about our macroeconomy.
Many of us got a rapid fire education in the transfer of mortgages into the derivatives market by posters on this forum – said education helped mightily in prospective perspectives for the future.
Thank you, selise, for giving us a new source to explore as this subject will impact even more than those who own homes or have lost them. It impacts us all, and I would think the Moody’s question as to why have a debt ceiling adds further to your points. I don’t understand them as yet, I must confess, in fact probably never will – age, education, and torrid temperatures being all aligned against it. But I promise to give it all I can.
Thank you. Recommended.
thank you juliania! the best any of us can do is to never stop learning! (i do suggest warren molser’s book. see the link at the bottom of the post, where it’s available for free via pdf)
If I could I’d change the name to ‘the world dollar savings clock’ as the federal deficit = net world savings of dollar financial assets, to the penny.
That way people would see it as savings going up and maybe not be demanding govt reduce our savings (deficit reduction)!
Warren
http://www.moslereconomics.com