–Absolute proof you will not rise up in anger, no matter how much the rich steal from you. Tuesday, Sep 2 2014 

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
●The more federal 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 ultimately 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.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive,
and the motive is the gap.
===================================================================================

One of our readers — tetrahedron720 — wrote:

“The 1% fear loss of control and power over the minions. In the final analysis it may take continued austerity to elevate our problems to such a degree that we induce failure and collapse. Then, faced with no other choice, society will be forced to have to find functional finance as the only solution. Emerge by means of emergency.

The solution MAY be the elevation of the problem.

My response was:

“Look around you at all the bad economies, from North Korea, to Gaza to Haiti to many of the African nations. There, the economies are in shambles, but the rich lead luxurious lives and maintain power, while the rest lead lives of misery.

“It can take generations or even centuries, for the poor to acquire enough willpower to rise up against the rich. Meanwhile the poor suffer. Much better to narrow the Gap via the ’10 Steps to Prosperity.’

“I do not subscribe to the philosophy, ‘Things have to get worse before they get better.’”

And here is a bit of evidence to back that up:

Big Banks Fined Mega-Billions; CEOs Remain Untouched, Above the Law
By Michael Payne

Get arrested for robbing a bank or shoplifting and you will go to prison. Get caught selling cocaine or steal a car and you will do jail time. But if you are a CEO of one of the biggest banks in America and that bank is fined mega-billions for fraudulent practices you need not worry because the U.S. Justice Department will give you a free pass; you are, in effect, above the law.

That is a clear travesty of justice, but it has become commonplace in America. Just look at the following list of U.S. and some foreign banks that have been fined billions of dollars. Not one of their top executives has been prosecuted in connection with the violations of the law that led to these fines:

$25 billion – Wells Fargo, J.P. Morgan Chase, Citigroup, Bank of America, BAC, and Ally Financial – 2012
$13 billion – J.P. Morgan Chase & Co. — 2013:
$9.3 billion – Bank of America, Wells Fargo, J.P. Morgan and 10 others — 2013:
$8.5 billion – Bank of America — June 2011:
$2.6 billion – Credit Suisse AG — May 2014:
$1.9 billion – HSBC Holdings, HSBA – 2012
$1.5 billion — UBS, AGUBSN – 2012
$1.4 billion – 10 Wall Street firms including Goldman Sachs, Morgan Stanley, and J.P. Morgan — 2003

The above criminal enterprises were only too happy to pay fines. To them, these are akin to jaywalking tickets — paid by their employers.

The leaders of these criminal enterprises paid nothing — not money, not jail — nothing. In fact, most of them received bonuses from their companies and from the Obama administration.

That is how crime is discouraged: By rewarding it.

And how big an issue is this for you, the voting public? How many of you are so outraged, you have marched the streets, to protest? How many of your have bothered to write the President or your Congressperson, to express your anger?

How many of you even care that wealthy criminals have been, and continue, raping you and your children, while going unpunished?

Now compare that with how angry you feel about foreign children coming across our border. And how you are incensed that you might not be able to carry a big, loaded gun in public. And you are so-o-o-o-o enraged that the poor receive food stamps. And you are foaming at the mouth that gay people are allowed to marry.

Yes, those are the things you care about and vote about. Those are the things that take bread out of your mouth, and impoverish your children. Right? Oh, sure.

Those are the things you’ll go into the street and protest-march against. But, rampant criminality by the rich? You don’t even notice, much less care.

Why?

Like magicians, the rich have misdirected you with phony issues — guns, immigrants, foodstamps, so that you don’t even see their slight-of-hand (in your pocket).

You don’t even see the Gap between the rich and you growing wider and wider, and if you see, you don’t really care enough to protest that.

No, you care that the unemployed might get too much compensation. That’s your big issue, because that is what the rich have told you to care about.

So you go stand in the road holding stupid signs, to stop a bus filled with child immigrants. You go demand to carry your military grade weapons into every store on main street. You’re so angry, you want to shoot an abortion doctor and intimidate a girl who visits one. You demand that the poor be made to starve, because it’s “their own fault.”

But you don’t demand that Congress and the President enforce the law. You don’t demand that rich criminals go to jail. No marches for you. You’ll vote as you’re told.

After all, the rich are entitled to do whatever they want, including bribe Congress and the President..

Your Congressperson doesn’t care about rich criminality. Why should he? You never contacted him. You never marched.

For the same reasons, Obama doesn’t care, either.

Why should you?

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)

9. Federal ownership of all banks (Click here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

—–

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

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:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

–More “Who’da thunk?” Europe’s austerity doesn’t work, either. Saturday, Aug 30 2014 

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
●The more federal 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 ultimately 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.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive,
and the motive is the gap.
===================================================================================

Quoting from the previous post:

Austerity, aka deficit reduction, stems from the belief that a government’s income pays for government spending. This is belief is correct for monetarily non-sovereign entities: Cities, counties, states, businesses and people.

You and I need outside sources of income in order to spend. So do our local governments. We all are monetarily non-sovereign.

By contrast, Monetarily Sovereign entities, such as: U.S., UK, Canada, China, Japan et al, do not need outside sources of income.

A Monetarily Sovereign entity is sovereign over its own sovereign currency, and so, has the unlimited ability to create its currency. A Monetarily Sovereign entity never can run short of its own currency, and never needs to ask anyone for its own currency.

So, a Monetarily Sovereign entity never needs to tax or borrow, in order to obtain its own sovereign currency. It is sovereign.

That is a fundamental economic truth, though all our politicians, most notably the Tea Republicians, refuse to acknowledge it. Debt and deficit limitation is the set of actions responsible for our unnecessarily slow recovery.

And now we come to poor, euro-smashed Europe, with its twin problems: The euro and austerity:

Divisions Grow as a Downturn Rocks Europe
NY Times, By LIZ ALDERMAN and ALISON SMALEAUG. 29, 2014

Germany, the Continent’s economic engine, contracted in the second three months of the year, while the bloc of 18 European Union nations that use the euro failed to grow at all.

While the per capita Gross Domestic Product of the U.S. has risen following the Great Recession, the euro nation’s recovery not only has stalled, but has declined for the past two years.

The eurozone is in the midst of what is known as “a recession” — headed toward a full-fledged depression.

united-states-gdp-per-capita (1)
United States = Solid Line (left); Euro Area = Dotted Line (right)

The decline has not been fairly distributed among nations, of course. But even the mighty Germany now has leveled off and begun its fall.

france-gdp-per-capita
France = Solid Line (left); Germany = Dotted Line (right)

Why has the U.S. grown (albiet too slowly, because of deficit reduction) while the eurozone has faltered? Monetary non-sovereignty.

When the eurozone nations adopted the euro, they surrendered the single most valuable asset any nation can have: Its Monetary Sovereignty, i.e., the unlimited ability to create its own sovereign currency, and thereby pay any debt denominated in that currency.

The monetarily non-sovereign eurozone nations need endless deficit reduction to avoid debt defaults, while the Monetarily Sovereign U.S. does not need deficit reduction and never will default on dollar-denominated debts. Having the unlimited ability to create dollars prevents default (despite John Boehner’s famous lie, “Let’s be honest. We’re broke.”)

One result of less austerity in the U.S.: Our unemployment rate is falling much faster:

united-states-unemployment-rate
The U.S. = Solid Line (left); The Euro Area = Dotted Line (right)

Yet another effect of monetarily non-sovereign austerity: Dreaded deflation. While the inflation rate in the U.S. remains very close to the Fed’s target rate of 2.5%, the eurozone’s lack of money has sent it into a deflationary slump.

united-states-inflation-cpi
The U.S. = Solid Line (left); The Euro Area = Dotted Line (right)

Deflation is felt to be anti growth, because it encourages consumers to delay spending until prices fall further. If you know products will be cheaper tomorrow, you’ll wait until tomorrow before purchasing. This delay evolves to “no-purchase-at-all,” which impacts GDP.

The eurozone provides the perfect test of deficit reduction (austerity). The test demonstrates how deficit reduction leads to recessions and depressions:

U.S. depressions tend to come on the heels of federal surpluses.

1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.

Recessions tend to come on the heels of reductions in federal debt/money growth (See graph, below), while debt/money growth has increased when recessions were resolving. Taxes reduce debt/money growth. No government can tax itself into prosperity, but many government’s tax themselves into recession.

Reductions in federal debt growth lead to inflation

Deficit reduction causes economic destruction. But deficit reduction often is necessary for monetarily non-sovereign governments, which cannot create the money to pay their bills. Long term, such governments can survive only if they have money coming in from outside their borders.

The euro nations need the EU (which, by the way, is Monetarily Sovereign) to give (not lend) them continual infusions of euros. Similarly, the U.S. states (which are monetarily non-sovereign) need continual infusions of dollars.

For a euro nation, the additional euros can come from a positive balance of payments — importing more euros than exporting. But few euro nations can be net exporters. They need help from the EU.

Again similarly, the U.S. states either must be net dollar importers (via tourism or sales of goods and services) or they must receive dollar infusions from the federal government — federal deficit spending.

Counties and cities, also being monetarily non-sovereign, need continual infusions from their states. The obvious implication is that states must run deficits to support their cities and counties, and in turn, states must be supported by federal deficits.

Bottom line: Barring uncontrollable inflation (which the U.S. never has experienced) austerity, i.e. deficit reduction, always is harmful to an economy. Anyone who tells you the U.S. federal deficit and debt are too large either is ignorant of economics or is a liar. Those are the only two options.

As for the euro nations, they either need to re-adopt their own sovereign currencies, or join politically into something resembling a United States of Europe, in which the EU gives (not lends) euros to member nations as needed.

Perhaps things to get much worse, before the euro nations have the willpower and the desire to implement one of these solutions. After all, reductions in government spending negatively affect the lower income people far more than the upper income people. That is why the upper .1% income/wealth/power group loves austerity: Austerity widens the Gap between the rich and the rest.

Being bribed and controlled by the very rich, the EU and the International Monetary Fund consistently advocate for deficit reduction and Gap widening.

In fact, one may safely assume that Gap widening has been the fundamental purpose of the euro, all along.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)

9. Federal ownership of all banks (Click here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

—–

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

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:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

–Japan’s stealth austerity doesn’t work. Who’da thunk? Friday, Aug 29 2014 

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
●The more federal 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 ultimately 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.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive,
and the motive is the gap.
===================================================================================

Austerity, aka deficit reduction, stems from the belief that government income pays for government spending. This is belief is correct for monetarily non-sovereign entities: Cities, counties, states, businesses and people.

You and I need income in order to spend. So do our local governments. We are monetarily non-sovereign.

However, it is not true for Monetarily Sovereign entities: U.S., UK, Canada, China, Japan et al. A Monetarily Sovereign entity is sovereign over its own sovereign currency, and so, has the unlimited ability to create its currency. A Monetarily Sovereign entity never can run short of its own currency, and never needs to ask anyone for its own currency.

So, a Monetarily Sovereign entity never needs to tax or borrow, in order to obtain its own sovereign currency. It is sovereign.

In that regard, I recommend an outstanding article describing Japan’s Prime Minister, Shinzo Abe’s humorous-if-not-so-sad efforts to stimulate Japan’s economy.

Here are a few excerpts:

The Move: (Have the) Bank of Japan double its inflation target to 2% (and) print “unlimited yen” to help achieve its inflation target.

In just three months, from January to April, Mr Abe said that his government would spend an extra $114bn (£75bn).

The Risk: If the measures work and prices start to rise, then eventually interest rates will too. This would see the government’s interest payments go up substantially.

In a worst-case scenario, the government may have to raise more money to meet those payments,

Why this is wrong: Banks don’t simply “print” currency. They create currency by lending, which requires more borrowers. No provision was made to increase borrowing.

Further, forcing government interest rates up is not a “problem”; it’s a benefit, as that does add currency to the economy. The notion that interest payments are a problem indicates a profound confusion about the difference between Monetary Sovereignty and monetary non-sovereignty.

After all, Japan already has said it wants to increase government spending, so how could interest payments be a problem?

The Move: Boosting government spending to help spur growth. In just three months, from January to April, Mr Abe said that his government would spend an extra $114bn (£75bn)

The Risk: Increased spending will further undermine Japan’s finances. Japan’s public debt, which stands close to 240% of its GDP, is already the highest among industrialised nations.

Why this is wrong: Actually, increased government spending is exactly what’s needed. But, Japan still believes it is monetarily non-sovereign, and is paranoid about government debt (which for a Monetarily Sovereign government is meaningless).

Japan could pay off that debt tomorrow if it wished, merely by transferring the yen already in debt accounts to checking accounts.

The fact that Japan’s debt is 240% of GDP, and Japan never has difficulty paying this debt, should have been the clue that debt/GDP is a meaningless number.

What the article doesn’t mention may be the most important factor of all:

Japan raises sales tax in an attempt to rein in public debt.
April 1, 2014

From Tuesday, sales tax will increase from 5% to 8%. It will rise again, to 10%, in October 2015. The stepped tax increases are aimed at covering rising social welfare costs linked to Japan’s ageing population.

Japan currently has one of the lowest birth rates in the world. It also has the world’s highest ratio of elderly to young people, raising serious concerns about future economic growth.

Why this is wrong: Taxes do not pay for the spending of a Monetarily Sovereign government. But sales taxes, which are highly regressive, remove money from the economy, especially from the very people whose spending is necessary to grow the economy: Lower- and middle-class buyers.

Japan has adopted the U.S. Big Lie that Social Security, and indeed the entire nation, will go bankrupt unless taxes are increased or benefits decreased. It can be true of a monetarily non-sovereign entity, but not of a Monetarily Sovereign government.

The tax increase is part of a stealth austerity that has as its sole goal and outcome: The widening of the Gap between the rich and the rest.

And now, it has not stimulated Japan’s economy, and it has not worked as advertised.

Gee, tax increases don’t stimulate?

Who’da thunk?

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)

9. Federal ownership of all banks (Click here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

—–

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

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:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

–The “inversion” myth: Why 80,000+ people demand poverty. Thursday, Aug 28 2014 

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
●The more federal 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 ultimately 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.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive,
and the motive is the gap.
===================================================================================

Readers of this blog know that federal taxes do not fund federal spending.

Although state and local taxes do support the spending of the monetarily non-sovereign state and local governments, federal taxes have no effect on the spending ability of our Monetarily Sovereign federal government.

If federal taxes fell to $0 or rose to $999 trillion, neither event would affect the federal government’s ability to spend. But because the populace has been brainwashed into believing federal finance is the same as state and local government and personal finance, we are treated to such lies as:

“Washington has to live within its means . . . Both parties agree that we need to reduce the deficit by the same amount — by $4 trillion. Either we ask the wealthiest Americans to pay their fair share in taxes, or we’re going to have to ask seniors to pay more for Medicare. We can’t afford to do both.” Barach Obama

And:

“Let’s be honest. We’re broke.” John Boehner

Honest?? The belief that federal taxes are necessary to support government spending (aka the Big Lie), now is being expressed regarding that “unpatriotic” tax move known as “inversion.”

Inversion means changing the address of a corporation’s headquarters to a lower-tax location, so as to reduce taxes.

It doesn’t require changing the physical location (though it could), doesn’t require firing American employees, doesn’t really require much except perhaps changing some of the company’s letterheads.

But this simple tax-saving procedure, not much different from the steps every taxpayer takes every tax season, has resulted in the most ridiculous commentary seen since Sarah Palin.

Burger King Dares Obama To Stop It From Fleeing To Canada

“My sense is this is Burger King trying to dodge paying its taxes,” Frank Clemente, executive director of the nonprofit Americans for Tax Fairness, told The Huffington Post. “I can’t say what’s on the company’s mind here, whether they’re trying to beat the clock on this and do something before Congress passes legislation or do something before Obama signs an executive order.”

One company, the drugstore giant Walgreen, considered and then abandoned a planned inversion earlier this month, after it faced significant public backlash. The Walgreen inversion could have allowed the company to slash its tax rate by as much as 15 percent, equating to savings of billions of dollars.

Oh, no! Allowing an American corporation to pay billions of dollars less in wholly unnecessary taxes? Unthinkable! And what would that company do with all those billions? Hire more people? Invest in infrastructure? Buy more goods and services, thereby increasing Gross Domestic Product, and enriching us all?

How awful!

And then, here come the politicians:

Durbin urges Hospira not to flee U.S.

Sen. Dick Durbin has a new target as he tries to halt American firms from moving corporate headquarters overseas to cut their tax bills: Hospira, a Lake Forest-based company that makes injectable drugs and infusion products.

The Democrat from Illinois on Thursday wrote a letter to the CEO of Hospira urging him not to take the firm’s tax dollars overseas.

“I strongly urge you and the Board of Directors not to duck your corporate responsibility by moving overseas to dodge paying U.S. taxes,” he wrote in the letter to F. Michael Ball. The deal, reportedly valued at about $5 billion, would allow Hospira to move its corporate tax base to France, which has a lower tax rate than the United States.

Durbin also noted that Hospira’s products are bought by the taxpayer-supported Veterans Health Administration and Medicare. Further, he said, Hospira relies on the Food and Drug Administration to “ensure its products are safe for consumers.”

The Durbin article tells every lie about inversion:

Hospira is not planning to “flee” the U.S. It merely is changing the mailing address of its headquarters. No one will move. Nothing will change — except the company will pay less taxes.

The Board of Directors would “duck its corporate responsibility” if it paid more taxes than necessary.

The VHA, Medicare and FDA are not “taxpayer supported.” Federal taxes don’t support anything.

Then, I received this petition:

Burger King: Don’t Try This Whopper of a Tax Dodge

Burger King benefits enormously from being an American company and should pay its fair share of taxes here in America. Don’t even attempt this whopper tax dodge or we will boycott Burger King.

There are currently 80,836 signatures.

How very clever: “Whopper” tax dodge. Sadly, more than 80 thousand people have no clue about federal financing. They actually believe they will benefit if companies pay more taxes. Ask them how they will benefit, and they will look at you like addled, drooling cows.

And finally, there is Gregory (famous economist) Mankiw’s article, which includes these lies:

“Tax inversions mean less money for the United States Treasury.”

“If tax inversions are a problem, as arguably they are . . . “

Wrong and wrong. The United States Treasury has the infinite ability to create money, and tax inversions most assuredly are not a problem. If anything, they are a solution to the corporate tax problem.

Then, when you think that maybe Mankiw is beginning to see the light:

” . . . corporations are more like tax collectors than taxpayers. The burden of the corporate tax is ultimately borne by people . . .”

“Let’s repeal the corporate income tax entirely, and scale back the personal income tax as well.”

Absolutely correct. I think he’s got it. I think he’s got it. The corporate tax, by removing dollars from the U.S. economy, impoverishes us all, especially the middle and lower classes.

But no. He doesn’t have it:

“We can replace (corporate and personal income taxes) with a broad-based tax on consumption.

“Some may worry that a flat consumption tax is too easy on the rich or too hard on the poor. But, one possibility is to maintain a personal income tax for those with especially high incomes. Another is to use some revenue from the consumption tax to fund universal fixed rebates — sometimes called demogrants.”

Sorry Greg, but federal taxes do not fund federal spending. So yes, a flat tax would be a big problem, because by impacting the poor more than the rich, it widens the Gap between the rich and the rest.

Bottom line, inversions are a partial solution (not a problem) to the real problem: Corporate taxes. They are paid by corporate employees and customers, not by the corporations themselves, though these taxes do make our corporations less competitive, internationally.

Why do the politicians hate inversions? Because massive inversions would demonstrate that the federal government doesn’t need taxes, and once the public understands that, all the excuses for federal austerity disappear.

(This was demonstrated before, when FICA was reduced, and SS payments were continued out of the government’s general fund. But Obama raised FICA soon enough that the public didn’t catch on. It also was demonstrated when the federal government, in an effort to stimulate the economy, sent checks to taxpayers — checks that were not backed by FICA or any other tax. But again the public didn’t get it.)

The rich political contributors love austerity. Austerity is what pushes the poor down and the rich up.

And the sound of 80,000+ mooing people demanding poverty, is heard in our land.

Rodger Malcolm Mitchell
Monetary Sovereignty

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Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)

9. Federal ownership of all banks (Click here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

—–

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

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:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

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