Please see update below. — selise

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The Honorable James P. McGovern
438 Cannon House Office Building
United States House of Representatives
Washington, DC 20515

Dear Representative McGovern,

My name is xxxx xxxx. I am writing to ask you to take a leadership role in resolving the unnecessary federal budget debt limit crisis.

Thank you for your statement, “any cuts to Social Security, Medicare and Medicaid should be taken off the table” and also for recognizing the grave risk an unnecessary default poses for our Country.(1)

However, it is past time for you to do more. An unnecessary crisis has been allowed to develop that threatens not only Social Security, Medicare and Medicaid, but also the economic well being of our entire Nation.

The current debt limit crisis is unnecessary because the Administration has the power to prevent a default. There are at least two mechanisms by which the debt limit deadline can be circumvented: President Obama can invoke the 14th Amendment, a method former President Bill Clinton has endorsed(2), or President Obama can instruct the Treasury to mint a $1 Trillion dollar platinum coin to be deposited at the Federal Reserve.(3)

The current debt limit crisis is based upon false premises about the nature of Federal Government deficits. Many innocently false statements have been made and these statements must immediately be corrected in order to properly and accurately inform both your Colleagues in Congress and the American People of the basic economic facts.

For example, “a responsible deficit reduction plan is vital to our nation’s sustainability,”(4) is a false statement when applied to the Federal Budget. The Federal Government’s deficits are not something bad — they are savings for the rest of us. We don’t need increased tax revenue or less Federal Government spending; on the contrary, we need tax cuts and/or increased spending.(5)

For more information on these issues, please see the enclosed:

1. Online references notes.
2. A copy of Warren Mosler’s book, The 7 Deadly Innocent Frauds of Economic Policy (forward by James K. Galbraith)

I urge you to contact James K. Galbraith, Warren Mosler and L. Randall Wray for expert advice. Conventional wisdom is profoundly and dangerously wrong.

Please use all possible means at your disposal to educate yourself and your staff and then to communicate to your Colleagues and to the American People how unnecessary the debt limit crisis is and what must be done to end it.

Representative McGovern, this may very well be a once in a lifetime, “whose side are you on” moment. Don’t let your Country down.

Sincerely,

xxxx xxxx

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1. U.S. Rep. McGovern, Progress Caucus members issue letter to President Obama demanding for Social Security, Medicare and Medicaid to be off the table in debt ceiling talks.
http://mcgovern.house.gov/index.cfm?sectionid=15&parentid=168&sectiontree=168,15&itemid=529

2. Exclusive Bill Clinton Interview: I Would Use Constitutional Option To Raise Debt Ceiling And “Force The Courts To Stop Me”
http://www.nationalmemo.com/article/exclusive-former-president-bill-clinton-says-he-would-use-constitutional-option-raise-debt

3. Why Matt Yglesias and Felix Salmon are Wrong About A Legal Way to Circumvent the Debt Ceiling Impasse
http://www.nakedcapitalism.com/2011/07/why-matt-yglesias-and-felix-salmon-are-wrong-about-a-legal-way-to-circumvent-the-debt-ceiling-impasse.html

QE3, Treasury Style—Go Around, Not Over the Debt Ceiling Limit
http://neweconomicperspectives.blogspot.com/2011/07/qe3-treasury-stylego-around-not-over.html

Obama’s Top Secret Plan to Solve the Debt Crisis
http://balkin.blogspot.com/2011/07/obamas-top-secret-plan-to-solve-debt.html

4. U.S. Rep. McGovern, 69 other House Democrats send letter to President Obama urging no cuts to social safety net
http://mcgovern.house.gov/index.cfm?sectionid=15&parentid=168&sectiontree=168,15&itemid=530

5. Hawk Nation: A Guide to the Catastrophic Debt Ceiling Debate
http://www.newdeal20.org/2011/07/11/hawk-nation-a-guide-to-the-catastrophic-debt-ceiling-debate-51211/

A Progressive Approach To Federal Budgeting
http://my.firedoglake.com/lrwray/2011/07/06/a-progressive-approach-to-federal-budgeting-or-can-one-take-billionaire-pete-peterson’s-money-and-remain-progressive/

The 7 Deadly Innocent Frauds of Economic Policy
http://moslereconomics.com/2009/12/10/7-deadly-innocent-frauds/

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UPDATE: Message and Warren Mosler’s book delivered this morning (Wednesday, 7/20/11).

I spoke with a very nice Legislative Aide who works on issues involving Medicare and Medicaid.

On the issue of ways to avoid the debt limit ceiling, she already knew about the 14th Amendment and that Bill Clinton had endorsed it. I explained the alternative work around of the $1 Trillion dollar coin.

We also talked about how wrong it was to hold Social Security, Medicare and Medicaid hostage to cuts in other parts of the budget. We discussed the counter intuitive issue that our government sector deficit is the non-government sector savings and that the only responsible deficit reduction plan is the one that addresses private sector debt.

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NOTE: x-posted from my blog — selise