Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
Once again, Congressional ignorance of Monetary Sovereignty rears its ugly head. This is what happens when people, who have zero understanding of economics, vote on our futures.
Payroll tax break: Extension proposals from both parties fail in Senate
WASHINGTON POST: By Lori Montgomery and Felicia Sonmez, Published: December 1
The Senate late Thursday rejected competing partisan visions for extending a temporary tax break that benefits virtually every American worker, clearing the way for more serious negotiations over how to cover the cost of the tax cut.
All but a handful of Democrats voted in favor of their party’s proposal, but in a surprising turn, more Republicans voted against the GOP plan than in favor of it. Senate Minority Leader Mitch McConnell (R-Ky.) predicted this week that a majority of his conference would vote for the party’s plan to extend the payroll tax cut.
Congressional leaders in both parties agree that the tax break should be extended to avoid harming the fragile economic recovery, but they are arguing over how to replace the lost revenue and avoid increasing the federal budget deficit.
Note that phrase “replace lost revenue”? Those who do not wish to understand Monetary Sovereignty tell us the federal government, which has the unlimited ability to create dollars, should instead take dollars out of the economy, i.e. “replace lost revenue.” (Attention, debt hawks: This is where you display your ignorance by warning about a Weimar Republic or Zimbabwe hyper-inflation.)
Democrats proposed a 3.25 percent tax on income over $1 million, which would raise sufficient cash to increase the tax cut to 3.1 percent and expand it to cover employers, as Obama has proposed. But that idea failed late Thursday to muster the 60 votes needed to overcome a GOP filibuster threat, with 51 senators supporting it and 49 opposed.
It should have failed, as it is a stupid idea – something like trying to fill a bath tub by pouring water into the north end with water taken from the south end.
Some Democrats voted against the measure, in part because the tax cut eats into the dedicated financing stream for Social Security, forcing the program to rely on congressional appropriations to cover the cost of benefits.
They wrongly believe FICA pays for Social Security. But if FICA pays for Social Security, what pays for Congress, the White House, the Supreme Court, the military and all other 1000+ agencies and departments in the government, none of which are “supported” by a dedicated tax? Answer that, Congress.
Republicans, for their part, offered a simple extension of the existing tax break paired with a proposal to freeze pay for federal employees through 2015, trim 10 percent from the federal workforce . . . Those provisions would generate enough savings to pay for the tax cut and reduce deficits over the next decade by more than $110 billion.
What a great idea to cure the recession: Increase unemployment while cutting the pay of those who still have jobs. You have to give Congress credit for creativity.
“This extension is yet another example of Washington’s benefit now, pay later mentality, and it moves us further away from solving our long-term spending and deficit problems,” Sen. Bob Corker (R-Tenn.) said in a statement.
He prefers, “Cut benefits now, not only for us but for our children and our grandchildren, then pay later with yet another recession or depression.”
I can’t end this without including a quote from by own Senator, Dick Durbin:
“If they’re nameless and faceless federal employees it’s one thing. But if it happens to be the FBI agent who’s in the midst of a very important investigation to keep this country safe, it’s another,” Sen. Richard J. Durbin (D-Ill.) said. “Those are the people whose jobs they would do away with for the payroll tax cut because they can’t bring themselves to raise taxes on the wealthiest people in America by one penny.”
“Nameless and faceless federal employees.” This perfectly demonstrates the revulsion with which Congress views Americans. We are nothing more than votes, “nameless and faceless,” not actual living human beings. He doesn’t want to fire people only because one might be an FBI agent.
Once again, Congressional and Presidential ignorance of Monetary Sovereignty is not just a theoretical problem. It is a real problem that affects the lives of real people and our descendants. God save us from the ignorant.
If only #OWS understood Monetary Sovereignty. But, like Congress, they too don’t seem to wish to learn.
I award Congress and the President three, very unfunny, clowns.
(This bring us, to a total of 1356 clowns awarded. Tell Sen. Corker I have plenty clowns left for him — exactly as the federal government has plenty dollars left for Social Security.)
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
b>Gross Domestic Product = Federal Spending + Private Investment + Private Consumption + Net exports