●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
A reader (Steveiii) suggested I “enlarge” the “Nine Steps to Prosperity” you can read at the bottom of each recent post and in Nine steps to prosperity; a short message to #Occupy Wall Street Friday, Oct 7 2011
The “Nine Steps” all are based on one simple truth. Our federal government, being Monetarily Sovereign (since August 15, 1971), and having the unlimited ability to create dollars, neither needs nor uses tax dollars. Federal deficit spending is the ultimate free lunch, limited only by inflation (which the Fed controls by increasing the demand for dollars).
That being the case, federal deficit spending costs you nothing, but it benefits you greatly, because it stimulates the economy.
Yet, our politicians and media fight tooth and nail to prevent American prosperity. They repeatedly propose plans to cut federal spending on products and services that benefit you. My belief is they do this intentionally, to widen the gap between the upper 1% income groups and you.
I understand the motive of the 1%, by why do you, as a member of the 99%, agree with them? Here are the “Nine Steps,” with a bit more explanation. I fully expect to receive angry letters, Emails and blog comments, telling me I not only am wrong, but stupidly wrong. So, my only question of the writers will be: Why are you so hostile against a program that will benefit you, while costing you nothing?
Why not have an open mind to the possibility that there is a better way than what the politicians and media have been preaching?
FICA impacts the lower and middle classes. It is the single, most regressive tax in America, and substantially widens the income gap between the 1% and the 99%. For many of you in the lower- and middle-income groups, it is the biggest tax you pay. Part of it is hidden as a tax against your employer, who simply deducts it from your pay. As with all federal taxes, it has no function.
2. Medicare — parts A, B & D — for everyone. A healthier population benefits America. So why not give everyone free medical care?
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capital If the federal government sends the $5,000 directly to citizens, they will spend or save it. Spending directly increases GDP (GDP = Federal Spending + Non-federal Spending – Net Imports). Saving eventually enters the economy as spending.
Or we could give our troubled states the $5,000 per person, which would help them improve state services and/or cut state taxes. Being monetarily-nonsovereign, they cannot create dollars, so rely on taxes or dollars coming in from outside their borders.
4. Long-term nursing care for everyone (See #2)
5. Free education (including post-grad) for everyone. Currently, the states, counties and cities, which have limited funds, are forced to pay for grades 1 – 12. And individuals are forced to pay for grades 13+. Why not have the federal government, which can afford anything, assume the financial responsibility for all grades?
This would remove the burden from taxpayers, and allow every citizen to receive a free education. A more educated America is a stronger America.
6. Salary for attending school. The federal government should pay all students – elementary school, middle school, high school, college and post grad – a salary. There are too many reasons to include in this post. I suggest you read: Salary for attending school and subsequent posts by the same name.
7. Eliminate corporate taxes. Businesses provide goods, services and jobs. We should try to make U.S. businesses as profitable as possible. But taxes reduce business profits, making them less able to provide the aforementioned goods, services and jobs. Taxing corporations is like starving the goose that lays our golden eggs — when goose food is free and available.
8. Increase the standard income tax deduction annually. The standard deduction benefits the lower income 99% far more than the upper 1%. Increasing the deduction would benefit the middle class, and doing it annually, would prevent any inflationary shock from eliminating all income taxes suddenly.
9. Increase federal spending on the myriad initiatives that benefit America’s 99%. Government spending benefits us, particularly the 99%. It builds our roads, dams and bridges. It pays to protect us from our enemies. It defends against criminals and natural disasters. And it pumps dollars into our pockets.
There are more than 600 federal agencies. While some are more needed than others, and some even may be useless, in total they unquestionably perform valuable services to Americans.
Cutting the size of our government has zero benefit to you and me. The government provides for us, what we cannot provide for ourselves.
All of the above is based on one simple fact: Our government, being Monetarily Sovereign, can pay any bill of any size, and does not rely on taxes or on borrowing. Federal deficits are not a burden on the government or on taxpayers.
Federal spending is not “unsustainable.” The federal government is not “spending money we don’t have.” And the federal government cannot “go broke.”
By limiting federal deficit spending, we force our government to fight the war against want and need, with one hand tied behind its back.
Rodger Malcolm Mitchell
Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%
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 Imports