Monetary Sovereignty - the Flat Earthism of economics?

Stumbled upon this website couple of days back, did a quick Google search and didn't find earlier JREF threads on the topic. I'd like your thoughts on whether the author's claims make any sense whatsoever. Specifically I mean this article, "Monetary Sovereignty: The key to understanding economics". Some of my choice quotes below (emphasis by author), please read the whole thing if you have the time.

Quote:

A Monetarily Sovereign government has the exclusively unlimited power to create its sovereign currency. Monetary Sovereignty is the foundation of economics. The United States is Monetarily Sovereign. It has the exclusively unlimited power to create the dollar. China, Canada, Australia, the UK and Japan are Monetarily Sovereign. They have the exclusively unlimited power to create their sovereign currencies.

Quote:

Because our Monetarily Sovereign nation has the unlimited power to create its sovereign currency, the dollar, it never needs to ask anyone for dollars. It doesn’t need to tax or borrow, and it never can be forced into bankruptcy. It can pay any bill of any size at any time. In fact, the federal government creates money by paying its bills. The U.S. has created many trillions of dollars, simply by pressing computer keys, and will continue to do so. It does not “owe” anyone for creating these dollars. The government cannot live beyond its means; it has no means to live beyond.

Quote:

If you go to those sites you will see federal debt described in the same terms as personal debt – as an unsustainable obligation. While debt can be unsustainable for you, me, businesses, states, cities, counties and the monetarily non-sovereign EU nations, no debt is unsustainable for the U.S. government. Debt hawks suffer from Anthropomorphic economics disease — the false belief that federal finances are like yours and mine.

Quote:

Because a Monetarily Sovereign nation has the unlimited ability to create its sovereign currency, that nation needs neither to tax nor to borrow. Why would it? Further, that nation does not use tax money or borrowed money to pay for spending. Federal income has no relationship to federal spending and so, taxes and borrowing are unnecessary.

Quote:

If U.S. federal taxes and borrowing fell to $0, or rose to $100 trillion, neither event would reduce by even one penny, the federal government’s ability to create the money to pay any size bills. Although Monetarily Sovereign nations need neither to tax nor to borrow, they may choose to do so for reasons unrelated to financial need. The spending by Monetarily Sovereign nations is constrained only by inflation.

Quote:

Because taxes do not pay for federal spending, FICA does not pay for Social Security benefits. FICA could (and should) be reduced to zero, and benefits could be tripled, and this would not affect by even one penny the federal government’s ability to pay Social Security benefits.

I trust that's enough. Every additional quote makes my head ache slightly more. My layman's understanding of state spending is that the government can print money to pay its debts, but this cannot be done to any (presumably effective) degree without causing a reaction in the money market that would offset any utility gained from the increase in fiat currency.



Obviously the first instinctive counter-argument against the author's claims is the threat of initial inflation and eventual hyperinflation. The author attempts to counter this in another article, "What causes hyper-inflation? Weimar Republic, Zimbabwe, Argentina, Venezuela", of which I quote:

Quote:

Whenever you hear of a nation experiencing hyper-inflation, remember that the problem was not caused by excessive spending, but by a reduction in that nation’s full faith and credit.

Which reminds me of the quote attributed to Dan Quayle:

Quote:

It isn't pollution that's harming the environment. It's the impurities in our air and water that are doing it.

Please, help me out. Is there any method to this madness, or is this the economical side of the Time Cube? :boxedin:

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