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Coin Seigniorage and the Irrelevance of the Debt Limit

Coin Seigniorage and the Irrelevance of the Debt Limit | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
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Beowulf and Joe Firestone's insight:

 

“But here is the point:  If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good...  If the Government issues bonds, the brokers will sell them. The bonds will be negotiable; they will be considered as gilt edged paper.  Why? Because the government is behind them, but who is behind the Government? The people. Therefore it is the people who constitute the basis of Government credit. Why then cannot the people have the benefit of their own gilt-edged credit by receiving non-interest bearing currency… instead of the bankers receiving the benefit of the people’s credit in interest-bearing bonds?”
Thomas Edison, quoted in NY Times, Dec. 6, 1921
http://prosperityuk.com/2000/09/thomas-edison-on-government-created-debt-free-money/

If you think about it, it does seem odd that the US Government is the monopoly supplier of US dollars and yet our politicians go through life thinking the government will run out of money unless it can borrow more.  Of course that’s not true, the coins in your pocket are legal tender and yet were not issued against debt.  They’re minted by the US Government, backed only by the gilt-edged credit of the American people, no one is paid interest on it and they don’t add a penny to the statutory debt.  What’s more, the use of coins as legal tender is scalable, they could replace the use of Tsy debt sales.  No, you wouldn’t have to carry more coins in your pocket.  Nothing would change except Tsy would be credited by the Federal Reserve for the sale of interest-free Treasury coins (presumably of large denominations) instead of interest-bearing Treasury bonds.

The two great powers of a sovereign state are the monopoly of violence and seigniorage, the profits from the creation of money.  If the federal deficit (that is, expenditures in excess of tax receipts) were funded by seigniorage revenue, not only would there be no debt service owed on the money, there’d actually be no deficit.  Seigniorage (whether generated by the Federal Reserve or by the US Mint) is supposed to be booked by Treasury as “miscellaneous receipts”, since the funds can appropriated for other govt uses, it actually reduces the deficit dollar for dollar.  Looking into it, I found that while Federal Reserve profits are counted as a revenue source (larger than estate taxes and customs duties combined), US Mint profits are not.  I sent a couple of emails to the Tsy Inspector General’s office to point this out, but have’t heard anything back.  I’ve copied below what I sent Tsy (changing the formatting a bit to merge the two emails). I go WAY into the weeds legally (“presumably in USSGL account, Acct Title: Seigniorage; Acct No 5795″), so I apologize for that in advance.  Feel free to ask me to translate anything below into the English language.  The bottom line is, the Secretary of Treasury already has the authority to create money without debt so there’s no fiscal reason to raise the debt limit.  What’s more, since the Federal Reserve began paying interest on reserves in 2008, there’s no longer a monetary reason to raise the debt limit either.


Circulating Coinage

Circulating coins are shipped to the Federal Reserve Banks (FRB) as needed to replenish inventory and fulfill commercial demand… Seigniorage is the difference between the face value and the gross costs of coins shipped. Seigniorage adds to the Federal Government’s cash balance, but unlike the payment of taxes or other receipts, seigniorage does not involve a transfer of financial assets from the public. Instead, it arises from the exercise of the Federal Government’s sovereign power to create money and the public’s desire to hold financial assets in the form of coins. The President’s Budget excludes seigniorage from receipts and treats it as a means of financing the national debt… p. 28, US Mint, 2009 Annual Report

My question is whether its accurate, under current law, to state that coin seignorage does not involved the transfer of financial assets from the public and whether the President’s Budget should be excluding  seigniorage from receipts when Congress directed the Secretary to sweep the “receipts… from the sale of circulating coins”  into “miscellaneous receipts” (which is where Federal Reserve seigniorage revenue has long been placed).  I understand that Tsy adopted the “other financing source” definition of coin seigniorage years ago, at least since the time of  President Johnson’s 1967 Commission on Budget Concepts.   Since the time of the Commission (and currently reflected in FASAB SFFAS No. 7) , the US Mint has been on-budget with its seigniorage off-budget while the Federal Reserve System has been off-budget and its seigniorage (reflected in the net earnings refunded to Tsy) on-budget as part of miscellaneous receipts.  Indeed, according to the CBO, in 2009 miscellaneous receipts (which are mostly but not solely Fed profits) were a larger source of federal revenue– that is, reduced the federal deficit by a larger amount– than estate/gift taxes and customs duties combined. (Table T-3).  To put it another way, if the Federal Reserve sends money directly to the Tsy General Fund, it is counted on the budget.  If the Federal Reserve sends money to the Tsy General Fund that stops in the US Mint Public Enterprise Fund first, it is not counted on the budget.  That seems anomalous.
Leaving aside whether the nature of budget concepts changed after President Nixon took us off the gold standard (I’ll outsource that issue to the estimable Warren Mosler), neither he US Mint Annual Report nor the President’s Budget appear to reflect the statutory language in 31 USC 5136 (which in the mid 90s created the United States Mint Public Enterprise Fund).  To backtrack a moment, transactions with the Federal Reserve are not considered intergovernmental transfers by Tsy since the Fed’s deposit of earnings at Tsy are booked as nonexchange revenue received from “the public” and are deposited in miscellaneous receipts.  Analogously, proceeds from the sale of govt property– that is, an exchange of, say, Federal Reserve notes for a govt asset– received by the Mint from the Federal Reserve (or from the public at large, since they too buy coins from the Mint), should be booked in the Mint PEF as exchange revenue received from “the public”.

The point is, in section 5136, Congress  characterizes the exchange of coinage produced ex nihilo by the US Mint for the face value equivalent in Federal Reserve notes (or more typically, by marking up the balance in Tsy’s reserve account) as a “sale”–  “Provided further, That the Fund may retain receipts from the Federal Reserve System from the sale of circulating coins at face value for deposit into the Fund“.  What’s more,  the statute also says, “at such times as the Secretary of the Treasury determines appropriate, but not less than annually, any amount in the Fund that is determined to be in excess of the amount required by the Fund shall be transferred to the Treasury for deposit as miscellaneous receipts“.  Unless Congress  intended “receipts… from the sale” to not mean exchange revenue and for “the public”, “miscellaneous receipts” and ultimately “seigniorage” to have each have two different meanings depending on whether we’re referring to the US Mint or to the Federal Reserve System, my suspicion is that Mint seigniorage and Fed seignoirage were intended to be treated the same for budgetary purposes.

If, in fact, Mint seigniorage is legally indistinguishable from Fed seigniorage as miscellaneous receipts revenue, it does offer an escape hatch (or more like a subway tunnel really) if Congress refuses to increase the statutory debt limit this spring. The Secretary has rather broad authority to mint coins, Congress was apparently feeling generous when it authorized platinum coins in 31 USC 5112(k) (“with such specifications, designs, varieties, quantities, denominations, and inscriptions and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe…”).  If deficit spending was paid for (eliminated actually) with miscellaneous receipts revenue generated by selling the Fed jumbo denomination coins, and since the Federal Fund Rate can now be pegged with Interest on Reserve payments in lieu selling Treasuries to drain excess reserves, Tsy could fund govt operations indefinitely without ever raising the statutory debt limit.  

Coin sale proceeds received by the Mint Public Enterprise Fund seem to fall squarely into the category of  “exchange revenue received from public”.  To quote from FASAB FSSAB No. 7:

“Exchange transactions with the public: revenue 270. Sales of goods and services.–The cost of production for goods and services such as electricity, mail delivery, and maps is defrayed in whole or in part by revenue from selling the goods or services provided. The sales may be made by a public enterprise revolving fund (such as the Bonneville Power Administration)…”

Like the Bonneville Power Administration, the Mint Public Enterprise Fund is a “public enterprise revolving fund”. I’d note that The President’s FY 11 Budget, Sect. 11 Budget Concepts defines “seigniorage” as:

“The profit from coining money. It is the difference between the value of coins as money and their cost of production. Seigniorage reduces the Government’s need to borrow. Unlike the payment of taxes or other receipts, it does not involve a transfer of financial assets from the public. Instead, it arises from the exercise of the Government’s power to create money and the public’s desire to hold financial assets in the form of coins. Therefore, the budget excludes seigniorage from receipts and treats it as a means of financing other than borrowing from the public.”

However Sect. 11 also defines “public enterprise funds” as:

“revolving funds used for programs authorized by law to conduct a cycle of business-type operations, primarily with the public, in which outlays generate collections.”

Presumably these “business-type operations” involve the collection of “financial assets from the public”.  Where this discrepancy arose , I think, was when in 1995, Congress passed (and the President signed) the Mint Public Enterprise Fund statute.  Under that statute, the funds generated by coin sales to the Federal Reserve and public can be in one of two places, 1. The coin sale earnings can stay in the Enterprise Fund where it will be apart from the Treasury General Fund (presumably in USSGL account, Acct Title: Seigniorage; Acct No 5795) ; or later, 2. The  Secretary can sweep the revenue ex costs out of the Mint PEF into miscellaneous receipts (presumably FAS Account Title: Receipt from Monetary Power; Acct No 0600);  where it becomes part off the General Fund.  There is a FAS Acct No 0610 also titled “Seigniorage”.  But it is for “other financing” deposits which, at least since the PEF Statute, would not apply to Mint earnings since sales proceeds that go into a public enterprise revolving fund are, in fact, exchange revenue.

I’d add that it is to the same destination, General Fund as miscellaneous receipts  (Acct No 0600), that the Federal Reserve transfers its earnings (which as noted above, make “miscellaneous receipts” one of Tsy’s largest sources of revenue on the federal budget).  Since the courts have held both the the Fed and the Mint to be nonappropriated fund instrumentalities, transferring the earnings from either of their separate and distinct funds into Treasury general receipts would presumably be nonexchange transactions from the public.

In AINS, Inc. v. United States, 56 Fed. Cl. 522 (2003); affm’d. 365 F.d 1333 Fed Cir. (2004),  the Court, in the course of finding the Mint was a “nonappropriated fund instrumentality”, noted that the revenue was generated (Bonneville Power Administration-like) from sales by a public enterprise revolving fund, and identified the destination of both Federal Reserve earnings and Mint earnings. 
“Congress has clearly expressed this intent through its authorization of the Mint’s Public Enterprise Fund. By directing that all receipts from the Federal Reserve System and the public from the sale of circulating coins at face value must be deposited into a special fund, Congress has made clear that the Mint’s funds are to be kept separate and distinct from the general Treasury fund…

“The Board of Governors of the Federal Reserve Board, established as a NAFI in Denkler, has since 1947 established a policy to transfer excess earnings to the Treasury. See 33 Fed. Res. Bull. supp. app. 1-2 (May 1947). Congress in 2002 expressly required the Federal Reserve Board to transfer any surplus for fiscal year 2000 to the secretary of the Treasury for “deposit in the general fund of the Treasury.” 12 U.S.C. § 289(b)(1) (2000)….Therefore, that excess funds are to be deposited in the Treasury as miscellaneous receipts has no bearing on whether the Mint, or any other agency, is a NAFI.”

What’s more, two years ago the Mint, in the course of issuing a federal regulation authorizing civil fines for infringement of the Mint’s trademark, stated that Mint “seigniorage and profits” are deposited in the General Fund as miscellaneous receipts: “Pursuant to the United States Mint Public Enterprise Fund (PEF) statute, 31 U.S.C. 5136, all receipts from fines assessed under the regulation would be deposited in the PEF and the Secretary of the Treasury would transfer these amounts, along with regular United States Mint seigniorage and profits, to the General Fund as miscellaneous receipts. As miscellaneous receipts in the Treasury—the drawing of funds from which are subject to appropriation by Congress—neither the Secretary of the Treasury, nor the Director of the Mint could be subject to “possible temptation * * * when [their] executive responsibilities * * * may make [them] partisan to maintain the high level of contribution” from the assessment process provided for under the regulation. Cf. Ward v. Village of Monroeville, 409 U.S. 57, 60 (1972). Moreover, the amounts involved would nonetheless render any ostensible temptation inconsequential because the relatively small amounts that the United States Mint could be expected to receive in fines payable under 31 U.S.C. 333 would be de minimis when compared to the recent amounts ($600-800 million) that the United States Mint annually has transferred to the General Fund.“  72 FR 60771 (2007) (emphasis added).

Seeing as the Mint stated in the Federal Register that 31 USC 5136 allows the Secretary to deposit Mint seigniorage  “as miscellaneous receipts in the Treasury, the drawing of funds from which are subject to appropriation by Congress”, I would argued that it should be counted on the federal budget as revenue in like manner as Federal Reserve seigniorage, which as you know, is deposited as miscellaneous receipts in the Treasury, the drawing of funds from which are subject to appropriation by Congress.

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Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong
Its about time that we take care of our own! On Nov 6 2012 Americans rejected the Conservative "Fend For Yourself" religion. In a Monetarily Sovereign Nation there is no need for a balanced budget. Actually Government does not need revenue to spend, it can collect it later as a way to give value to the currency it creates. Spending > Revenue expands the economy, Spending < Revenue contracts the economy, Spending = Revenue is irrelevant and unnecessary. Fiscal Monetary reform is an important agenda for ethical, economic, and political reasons and to undo the privatized franchise by which our economy has been based upon a debt based currency. The deficit terrorism by Fiscal Conservatives threatening austerity and even deeper privatization is based upon the Gold Standard model when dollar was backed by gold and limited, thanks to Nixon, this is no longer the case since 1971, and is thereby false, fraudulent and clearly a fear tactic based upon disinformation. When we align the nature of our economics and the capacities of modern money with the policies of governance as a socializing agenda significant changes will be possible. Based on understanding how sovereign fiat money actually is used can impact Fiscal Policy allowing the Federal government to extend funding for the construction of roads, mass transit, bridges and other "hard" infrastructure to put people back to work which would increase demand for products. This same process can be applied to social infrastructure such as national health care, education, and pensions. Further, an employer of last resort (ELR) process could be established, whereby individuals who wanted to work could be provided a living wage for advancing any number of needed projects toward building communities. Modern Monetary Theory > MMT AND A GOVERNMENT FOR THE PEOPLE | <a href="http://sco.lt/8zdEO1" rel="nofollow">http://sco.lt/8zdEO1</a>; government is not a wealth taker. It is a wealth maker. What’s more, the wealth it makes is not just its own. Generally speaking, people create much more wealth with the aid of government than they do without it. We don’t first become rich and then decide to form a government. First we form governments.  Then and only then can we become rich. Without a strong government that works for all, it is not possible to have a strong economy that works for all. They go together. This important insight is actually inscribed in the preamble of the US Constitution, where “to promote the general welfare” is listed as one of the principal purposes of our federal government, along with establishing justice, insuring domestic tranquility, defending the nation and securing the blessings of liberty."
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Article 1 section 8 Taxing for the General Welfare >NOT SUBJECT TO OTHER ENUMERATED POWERS

Article 1 section 8 Taxing for the General Welfare >NOT SUBJECT TO OTHER ENUMERATED POWERS | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it

Conservatives falsely attack the central tenet of Liberals General Welfare clause (given their cruelty of course) but problem is that they are wrong: Jefferson said and Madison affirmed that “Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated." Jefferson was wrong since this is not how it was written or ratified, i.e., Jefferson and Madison were appeasing the anti-federalist of their time, i.e., politicizing... in sum, Jefferson and Madison were entitled to their opinion not to the facts of the ratified constitution ...FOR EXAMPLE check this conservative's article http://ncrenegade.com/editorial/the-general-welfare-clause-justification-for-obamacare-krisanne-hall/#comment-31653

 

then read the article I propose here so you see the difference ,

 

by the way promote and provide are two sides of the same coin, since promote means "enhance" not as conservatives think promote as in a sale's promotion

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Nobody Understands Debt

Nobody Understands Debt | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
The obsession with deficit reduction is wrongheaded and ill-informed.
Mahilena Dianz's insight:

Deficit-worriers portray a future in which we’re impoverished by the need to pay back money we’ve been borrowing. They see America as being like a family that took out too large a mortgage, and will have a hard time making the monthly payments.

This is, however, a really bad analogy in at least two ways.

First, families have to pay back their debt. Governments don’t — all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.

Second — and this is the point almost nobody seems to get — an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.

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Fiscal Rectitude and Rectum are intimately related

Fiscal Rectitude and Rectum are intimately related | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
Yes, the campaign to Fix the Debt has its share of self-serving plutocrats. But their demands and their campaign's traction with some in the lower tax brackets cannot be explained by vulgar Marxism...
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A Fiscal Hawk With Expensive Taste

A Fiscal Hawk With Expensive Taste | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
In an 14-count indictment, prosecutors tell the tale of the bizarre, years-long relationship that former Virginia governor Bob McDonnell and his wife Maureen had with Jonnie Williams, the CEO of a ...
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Founding Fathers and Wealth

Founding Fathers and Wealth | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
The founding generation of 1776, waged and won a war for independence. But the revolutionaries who led this war effort did not just seek to separate from England. They sought to establish an ...
Mahilena Dianz's insight:

if the people let elites manipulate politics, an aristocracy of wealth would re-emerge in their young republic and eventually destroy it. No republic, the Jeffersonians argued, can tolerate inequality and survive

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Where would you rather live: small-government Somalia or big-government Sweden?

Where would you rather live: small-government Somalia or big-government Sweden? | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
Critics of “big government” talk as if it’s beyond question that the state’s involvement with our lives is a bad thing. But where would you prefer to live, small-government Mogadishu or big-government Stockholm?
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DOES SIZE MATTER ? GOVERNMENT AND CLASS INTREST

DOES SIZE MATTER ? GOVERNMENT AND CLASS INTREST | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
The T-Party reactionaries, as an article of faith, decry the rise of central government and its power. Liberals praise it as a force for good. The radical or l
Mahilena Dianz's insight:

But in the end, the much aligned Machiavelli wins. Its about power in government.

The T-Party reactionaries, as an article of faith, decry the rise of central government and its power. Liberals praise it as a force for good. The radical or liberal should ask whose intrest, the ruling elites, or the people, does it serve ?

Government growth was a by product of a changing economy. Even hide bound reactionaries like failed Supreme Court nominee Robert Bork admit this. He said of the Commerce Clause of the Constitution, "was framed by men who did not forsee the scope,technolgies and intricate interdependence of today's economy."

Their is a mythical time ,circa 1765, a good old days of limited government in the imagination of the T-Party. Of course, this romanticization leaves out details like slavery, voting restricted to property owning whites , women as chattel and Native American people viewed as vermin to be removed for the profit of land speculators like Thomas Jefferson, George Washington, Andrew Jackson all of whom became President.



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What American Conservatives Really Mean When they Say “Small Government”

What American Conservatives Really Mean When they Say “Small Government” | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
© Josh Sager – September 2012 In modern American politics, conservatives across the country near-universally support the ideal of “small” or “limited” government. In invoking the idea of a small go...
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Mike Norman Laughs At Peter Schiff - 'Hey Debt Doomsday Loser, You Got Everything Wrong' - YouTube

Hahahahaha.
Mahilena Dianz's insight:

Watch a Libertarian ‘Economist Peter Schiff’: ‘Mentally Retarded’ Should Work for $2 an Hour, ‘You’re Worth What You’re Worth!’ http://www.occupydemocrats.com/watch-a-libertarian-economist-mentally-retarded-should-work-for-2-an-hour-youre-worth-what-youre-worth/

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Deficits Do Matter, But Not the Way You Think | Credit Writedowns

Deficits Do Matter, But Not the Way You Think | Credit Writedowns | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
By L. Randall Wray, Professor of Economics at the University of Missouri-Kansas City, Research Director with the Center for Full Employment and Price Stabi
Mahilena Dianz's insight:

"As budget deficits rise, this increases income (government spending exceeds tax revenue, thus adds net income to the nongovernment sector) and wealth (nongovernment savings accumulated in the form of government debt) of the nongovernment sector. Eventually, this causes private spending and production to grow. As the economy heats up, tax revenue begins to grow faster than government spending or GDP. (In the US over the past two cycles, in the expansion phase federal tax revenue grew two to three times faster than GDP and government spending.) This reduces the government deficit (remember the Clinton boom and budget surpluses?). Even if the government spending is on interest (in Krugman’s model, the deficit is due to interest payments) that generates nongovernment income and spending. In other words, the cyclical upswing will automatically reduce the budget deficit. The scenario ignores the “automatic stabilizers” that cause the budget deficit to swing counter-cyclically."

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Njean Curl's curator insight, February 10, 3:50 PM

Debt Ceilings and  Hostage Taking 101

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GOPers Oughta Love Obamacare: It Likely Encourages Entrepreneurship - Linkis.com

GOPers Oughta Love Obamacare: It Likely Encourages Entrepreneurship - Linkis.com | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
Republicans have had a field day with the Congressional Budget Office report released this week, claiming it shows Obamacare will destroy the American work ethic and force people to rely on the government.

Never mind that reality is a bit more complicated than that. You could argue that the GOP should actually embrace the law because it could do the opposite: give Americans the freedom to start their own businesses.
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Dependence on Government means more not less freedom

America’s Founders fought for freedom from tyranny and bad government. They aimed to advance those arcs of history that tend toward juster governments. As the Founders made clear in the...
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Capitalism AND Socialism-A Balanced Approach TO OUR COUNTRY

A discussion about the pros and cons of both capitalism and socialism and how both systems, on their own and in their purest form, are doomed to fail. An exp...
Mahilena Dianz's insight:

This video is about balancing our capitalist and socialistic aspects or our nation, it is not about just the failure of both extremes but the value of mixing the best of both. In other words IT IS NOT CAPITALISM OR SOCIALISM IT IS BOTH ....A BALANCE OF BOTH SAME AS THE BALANCING THEME OUR FOUNDERS CEMENTED IN OUR FOUNDING PAPERS

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Conservative Blah Blah Blah, do nothing and austerity breeds nothing and dysfunction

Conservative Blah Blah Blah, do nothing and austerity breeds nothing and dysfunction | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
It's time for the right wing to stop lying about the minimum wage, taxes, global warming and more
Mahilena Dianz's insight:

HAVE YOU HEARD THE LATEST CONSERVATIVE TALKING POINT?

"ONE SIZE FITS ALL DOES NOT WORK?" WELL LET THEM APPLY IT TO THEMSELVES, ONE SOLUTION TO ALL PROBLEMS I.E., DO NOTHING BUT TAX CUTS AND DEREGULATE DOES NOT WORK

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Republicans “fiscally conservative” is when it comes to spending on the poor. Then it’s “money we can’t afford.”

Republicans  “fiscally conservative” is when it comes to spending on the poor. Then  it’s “money we can’t afford.” | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
A line many liberals hear from their conservative counterparts is, “Liberals never use facts.” Which I find ironic because it’s usually said towards something I’ve written that contains not only facts, but the sources to those facts.  It’s also humorous because often the individuals who say this never provide any kind of facts to counter …
Mahilena Dianz's insight:

"The only way Republicans are “fiscally conservative” is when it comes to spending money on the poor. Then suddenly it’s “money we can’t afford.” Of course, that’s only until the next tax break for the wealthy comes up for a vote, or they can increase our already bloated defense budget, then suddenly those deficit increases are “vital for the health of our nation.”

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The CONSERVATIVE Foolish AND DANGEROUS Gold Standard model for government

The CONSERVATIVE Foolish AND DANGEROUS Gold Standard  model for government | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
Having money linked to a Gold Standard is an idea that almost every economist opposes. It is described as the economic equivalent of creationism and a major cause of the Great Depression. It is ign...
Mahilena Dianz's insight:

"The gold standard belongs to another era and it is testament to how backward looking the Republican party is that it supports it. There are good reasons why no economist supports it. The gold standard lead to financial instability and recession. It deprives government of the ability to fight recessions, instead leaving the economy stuck in recession. It would separate the money supply from the fundamentals of the economy."

 

At the moment and since 1971 the  Treasury and the Central bank can create as much money as it wants without limit. "However in a gold standard the central bank can only print as much money as gold it has. For example if the government has one billion dollars in gold, then it can only print one billion dollars. Or the country might not have any paper notes but instead just use coins. From the late 1800s until the 1930s all the developed countries were on a gold standard. Its proponents argue that a gold standard avoids inflation and instead has stable prices. It is claimed it avoids the central bank destroying the economy through hyperinflation. The gold standard is described as a model for fiscal responsibility that prevents trade deficits and budget deficits."

 

 

'The thing about the gold standard is that most of its advocates base their arguments on morality rather than economics. Ron Paul criticises the “debasement” of the dollar which he claims amounts to “theft”. Gold is seen as something real and solid, whereas paper is seen as almost fake or only an illusion. Nostalgic references are made to how much a dollar used to be able to buy. Gold is intrinsically valuable whereas paper is not. Paper money is controlled by the government which many would oppose on principle. Paper money is associated with hyperinflation and chaos (Ron Paul has been predicting imminent hyperinflation for the last 30 years). Gold is “responsible” and the opposite of wasteful government.

However in a survey of economists, zero supported a gold standard. There are many reasons for this. The main advantage or problem (depending on your point of view) of the gold standard is that is severely constrains the actions of the government. It cannot use monetary policy to influence the economy. A common response to recession is to print money which a gold standard prevents a government from doing. This means it must use fiscal measures, but a gold standard limits these as well. This means a government cannot do much to combat a recession no matter how severe it is. Instead it must stand idly by and let the recession take its course. While some hardcore free marketers would agree with this, most economists recognise that if the government doesn’t intervene the recession gets worse.

Interest rates are normally set according to the state of the economy. If the economy is booming and inflation is rising, then interest rates will be raised to stop the economy overheating. If the economy is stagnant and unemployment is high, then interest rates will be lowered to give the economy a boost. Under a gold standard, interest rates would be set according to the supply of gold. This is unrelated to the state of the economy which can cause serious problems. So if gold reserves are low then interest rates will be risen even if the economy is in a recession."

 

GOLD STANDARD  IS PURE CONSERVATIVE GARBAGE AND FRAUDULENT THINKING, ITS THE EQUIVALENT OF THE CONSERVATIVE REACTION TO SCIENCE AND THE BELIEF IN CREATIONISM...it is the conservative obsession with morality even when it is a morality invented by them which leads to the corporatist nation. 

 

This is why it is important to KNOW MODERN MONETARY THEORY AND THE ACTUAL SOCIAL VALUE OF FIAT MONEY ...

 

WHY NOT GIVE GOVERNMENT THE LIBERTY TO CREATE AS MUCH MONEY AS THE SOCIETY NEEDS TO ENSURE THE LIFE LIBERTY AND PROSPERITY OF ALL OF ITS CITIZENS....this can happen if we put the Central Bank as a Public Bank under the control of the Treasury, that way there would not be a national debt or deficit

 

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Socialism (Public Banking) Key to North Dakota's Propspertiy and 3.3% Unemployment Rate - Mahilena's Debunking Libertarianism/Conservatism ...

Socialism (Public Banking) Key to North Dakota's Propspertiy and 3.3% Unemployment Rate - Mahilena's  Debunking Libertarianism/Conservatism ... | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
Socialism Key to North Dakota's Propspertiy and 3.3% Unemployment Rate The Bank Behind the North Dakota Miracle North Dakota is the only state to be in continuous budget surplus since the banking crisis of 2008. Oil is certainly a factor, but it is not what has put North Dakota over the top. Alaska has roughly the same population as North Dakota and produces nearly twice as much oil, yet unemployment...
Mahilena Dianz's insight:

These are the same principles involved in the other articles here regarding modern monetary reform #modernmonetarytheory #mmt

 

Our Federal Government borrows from who? well itself, and it pays interest to other private banks to manage this...if we put the Federal Reserve under the treasury or make it a public bank we would not need to pay interest on the money we borrow from ourselves and we would not have a National Debt

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Government is Good - A Guide to Rebutting Right-Wing Criticisms of Government

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Limited government in 2010 America a conservative crackpot idea

Limited government in 2010 America a conservative crackpot idea | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
From among the the more disturbing expressions of the supposedly unquestionable authority of "the founders" idea, often expressed by conservatives, is this one
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Business Elites Are Waging Brutal Class War in America

Business Elites Are Waging Brutal Class War in America | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
Publicly funded, public interest news, twenty four seven - three sixty five: Reader Supported News.
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Shadow Elite: The Small Government Lie - How Both Parties Stood By as Our Government Burned

Shadow Elite: The Small Government Lie - How Both Parties Stood By as Our Government Burned | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
Our government, on the federal level, has already been upended by small government ideology, beholden to private interests as never before in our memory. But we can't just blame the Tea Party.
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Peter Schiff get Schooled by Mike Norman AGAIN!.flv - YouTube

Peter Schiff is a Clown! http://www.youtube.com/watch?v=RIJlBXh5OPM
Mahilena Dianz's insight:

Watch a Libertarian ‘Economist Peter Schiff’: ‘Mentally Retarded’ Should Work for $2 an Hour, ‘You’re Worth What You’re Worth!’ http://www.occupydemocrats.com/watch-a-libertarian-economist-mentally-retarded-should-work-for-2-an-hour-youre-worth-what-youre-worth/ ;…

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Limited Government is not the same as a non-benevolent "small Government" - Mahilena's Debunking Libertarianism/Conservatism ...

Limited Government is not the same as a non-benevolent "small Government" - Mahilena's  Debunking Libertarianism/Conservatism ... | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
THE SIZE OF GOVERNMENT is not inscribed into the CONSTITUTION.. Limited Government is not the same as small government. Yes Limited Government means decision making is distributed somewhat, but the Founders never talked about "small" or "big" government, yet they INSTITUTED CONSITUTIONAL SOCIALISM which is Article I section 8 THE STAND ALONE power not subjected by the other enumerated powers to TAX FOR THE GENERAL WELFARE AND NATIONAL DEFENSE Americans...
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President Obama: The American people elected their representatives to make their lives easier, not harder

President Obama: The American people elected their representatives to make their lives easier, not harder | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
President Obama: The American people elected their representatives to make their lives easier, not harder

This is what it comes down to.

The GOP hopes that if they can make enough Americans suffer ...
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We're all dependent on government (and what's wrong with that?)

We're all dependent on government (and what's wrong with that?) | Conservative Liberty and Freedom is nothing but an empty box wrapped in the flag that helps no one. The land of the free for only those fit to survive, the rest can and should perish for the benefit of the strong | Scoop.it
Nicholas Eberstadt's "A Nation of Takers" argues that too many Americans have become dependent on government benefits. Over the past half-century, he notes, the share who receive a government cash ...
Mahilena Dianz's insight:

Can anyone tell me what is wrong with receiving benefits from government? cause if they help why not? what freedom is lost by doing so? we all contribute to government why not benefit from it? oh cause we work less? so what? is life all about work?  ah the self - reliance spirit...lets work until we die no matter how it may be adversely with our lives

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Just the Facts- The Emergence of Modern America The Progressive Era - YouTube

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Open Letter to Progressives pic.twitter.com/iPlWgvkqnM

 

CONSERVATIVES losing history, they should be ashamed, conservatism has #failed it is a cancer to our nation pic.twitter.com/QSveW4nHTl

 

This is what happens when you elect conservatives to govern pic.twitter.com/TzdIsOfyXu

 

Conservative Destruction of America pic.twitter.com/AHeTKOQzgX

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