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.
How do you empty a lake? One drop at a time:
Chicago Tribune: Mass transit commuters’ tax breaks falling
Next year, federal rules will shield only $125 a month from taxes
By Jon Hilkevitch and Richard Wronski, December 23, 2011
The amount of income that commuters who use mass transit will be eligible to shelter from taxes to pay their fares drops on Jan. 1 to $125 a month from the current $230 a month, while the tax-free parking benefit for drivers will increase from $230 to $240 a month, officials said Thursday.
The steep reduction in the transit provision is due to Congress’ failure to renew the higher limit in the Commuter Benefits Equity Act</strong, officials said, adding that they are hopeful lawmakers will approve a higher limit sometime in 2012.
Regional Transportation Authority Executive Director Joseph Costello called the pending cut in pre-tax transit benefit dollars “a clear inequity that is not good for our cities.”
The cut in benefits will have a similar effect as a fare increase because riders whose employers participate in the transit benefits program will only be able to shield a maximum of $1,500 in income from taxes in 2012, down from $2,760 this year.
Actually – a worse effect. A fare increase would circulate dollars within the economy. But reducing tax breaks sends more dollars to the federal government, where they are destroyed.
Drip, drip drip. Remember (it happened only yesterday) how Congress “saved” salaried taxpayers an average of $1,000 per year by renewing the 4.2% level for FICA tax collections. Notice, this highly publicized action did nothing. It wasn’t a tax cut. It merely continued the current tax level for another (whoopie!) two months. Nothing really changed.
What did change is, now they take about $225 a year from commuters’ pockets, and hardly anyone notices. So on balance, after all the smoke has settled, commuters will be a drop poorer.
The transit benefit is intended to serve as an incentive to ride trains and buses instead of driving.
But who cares about energy saving and the ecology, when the real debt-hawk concern is the inflation that federal deficit spending (aka “money printing”) supposedly causes? I refer to the currently “outrageous” 2% inflation caused by the massive federal spending of the past few years.
Listen to the politicians and the media, and you’ll be convinced not just inflation, but hyperinflation, is just around the corner, if we don’t become “financially prudent,” meaning, cut benefits to the less affluent 99%. And pay no attention to the man behind the curtain, who denies the undeniable fact that for 40 years, there has been no relationship between federal deficit spending and inflation.
Each day, drip, drip, drip, the federal government empties the lake, urged on by the Tea/Republicans, the media and even by some Democrats. And whose lake does it empty? The poor- and middle-classes’s, who already live on parched land.
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
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports