Connecticut Senatorial Candidate Warren Mosler Responds to Attorney General's Inflationary China Proposal

Mosler's solution means both low-priced imports and good American jobs

GUILFORD, Conn., April 13 /PRNewswire-USNewswire/ -- Warren Mosler, the Democratic candidate for the US Senate, responds to Attorney General Richard Blumenthal's recent demand for US Treasury Secretary Geithner to take legal action against China to strengthen its currency.  

Blumenthal attacked China's currency policy stating: "By stifling its currency, China is stifling our economy and stealing our jobs. Connecticut manufacturers have bled business and jobs over recent years because of China's unconscionable currency manipulation and unfair market practices."  His proposal to weaken the dollar versus the Chinese currency 'works' by making China's products more expensive for US consumers, who are already struggling to survive.  The theory is that those higher prices (inflation) would cause more American products to be purchased.

With 37 years as an insider in finance, Warren Mosler, the candidate who is "Right on the Money," proposes a far superior alternative that allows US consumers to enjoy the enormous benefits of low-cost imports and also creates millions of American jobs.  

"A failure to understand monetary operations drives well-intentioned Americans like Mr. Blumenthal to propose legal action to force China to revalue its currency. This inflationary, weak-dollar policy is a destructive, misguided effort," said Mosler. "The far superior option is cutting taxes so Americans have enough take-home pay to buy all we can produce at full employment, plus the imports we want to buy at the lowest possible prices.  The mistaken belief that the Federal government must get the dollars it spends through taxes and borrow the rest, leaving the debt to our children, has devastated our economy and standard of living."

For the Federal government, taxation is the thermostat.  It should lower taxes when the economy is too cold to bring it up to operating temperature. As all Fed insiders know, the Federal government (not State and local government, corporations, and households) never has nor doesn't have any US dollars.  It taxes by changing numbers down in our bank accounts and doesn't actually get anything, and spends by changing numbers up in our bank accounts and doesn't actually use anything up.  Tax cuts do NOT mean the Federal government will go broke and run out of money, and there is absolutely no reason to cut Social Security and Medicare payments.  

Tragically, because they don't understand the monetary system, the Democratic Congress cut Medicare in the new health care law, and Atty General Blumenthal is proposing a destructive, inflationary, weak dollar policy of raising import prices for US consumers struggling to survive.  

For more information on Warren Mosler's bold plan to fix the US economy, please visit www.MoslerforSenate.com.

About Warren Mosler - Democrat for Senate

Warren Mosler's 37 years as an insider in banking and finance makes him uniquely qualified to fix the American economy. After receiving his degree in economics from the University of Connecticut (1971) and beginning his career at the Savings Bank of Manchester, Mosler worked at Banker's Trust on Wall Street (1976) and went on to start his own investment firm (1982). He is the founder of what has become know as 'Chartalism' and 'Modern Monetary Theory' (MMT) in finance and in the international academic community. He also visits the Federal Reserve Bank regularly to discuss monetary policy and operations and has appeared on CNBC.

Warren Mosler's proposals will fix the US Economy in 90 days the right way, the Democratic way, from the bottom up. He believes that people working for a living should take home enough pay to be able to buy the goods and services they produce, while business competes for those consumer dollars. It features three core proposals:

• Declare an Immediate 'Payroll Tax Holiday' -- The US Government will stop taking 'payroll taxes' (FICA) from the paychecks of employees and employers, resulting in an immediate increase in take-home pay of roughly $650 per month for a couple with a combined income of $100,000 per year.
• Give US States Revenue Share Money Based on Population -- Give each State government an immediate $500 per capita of revenue to spend where they decide they need it most. For Connecticut this means approximately $1.75 billion to help fill the fiscal hole created by the recession.
• Fund an $8/Hour National Service Job for Anyone Willing and Able to Work -- This will facilitate the transition from unemployment to private sector Employment, as businesses look to add the millions of new hires they will quickly need to meet the rising demand for their products that will come from the Increased take-home pay and revenue sharing from his first two proposals.

The Truth about Federal Spending

Warren Mosler knows, as do all 'insiders' in Fed monetary operations, that the role of taxes for the Federal government, unlike State and local government, is to regulate the economy, and not to raise revenue per se. This means Mosler's payroll tax holiday, for example, doesn't not diminish the ability of the US Government to meet all Social Security and Medicare obligations. In fact, Mosler believes Social Security and Medicare should be sustained at levels that make all Americans proud of how we treat our elders.      

SOURCE Mosler for Senate