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•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.
•The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
•Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
•The single most important problem in economics is the Gap between rich and poor.
•Austerity is the government’s method for widening the Gap between rich and poor.
•Until the 99% understand the need for federal deficits, the upper 1% will rule.
•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..
The Republicans endlessly wish to privatize Social Security, for one reason and one reason only.
No, it’s not because private investments yield more than Social Security does. That’s the excuse given. The problem with that excuse is it merely restates a simple fact: With greater reward comes greater risk.
If you invest in stocks, you most likely will come out ahead in the long run — the long, long run. Or you could lose. In January 2008, the S&P stock average was above $1,400. By April of 2009, just 16 months later, it had fallen below $800, a drop of 40%.
Is that the kind of risk you think is appropriate for a retirement fund?
Further, if the Republicans were to privatize Social Security, the massive flow of dollars — billions upon billions of dollars — would cause a stock bubble the likes of which we never have experienced, to be followed by a bubble burst of epic proportions.
The Republicans know all this. So why do they keep suggesting privatization? To reward their dear friends, the rich bankers and investment brokers. Imagine the commissions!
The brokers salivate at the thought, and when they finish salivating, they give big campaign contributions.
The Democrats also understand the fallacy of privatization, so they offer other plans, not as ridiculous as the Republicans’ plan, but bad nevertheless.
Former Maryland Gov. Martin O’Malley, one of the more overlooked candidates for the Democratic presidential nomination, emerged Friday with an encouraging endorsement of expanding Social Security to make it even more relevant to the lives of working Americans than it is today.
“The economic pressures on millions of families — from stagnant wages and high housing costs, to a lack of affordable childcare and skyrocketing college tuition — have resulted in meager, if any, retirement savings for tomorrow’s retirees.”
He’s right about that, and right that Social Security is the one pillar of retirement security that has remained strong, while employer pensions and retirees’ personal nest eggs wither.
He calls for expanding benefits and requiring wealthier Americans to shoulder their fair share of the program’s cost.
Expanding benefits is good, even necessary if SS is to have much meaning. But no one, neither the rich, nor the poor, nor the benefit recipients, needs to “shoulder any share of SS costs.
People can run short of dollars. The federal government cannot. It is Monetarily Sovereign. It creates its sovereign currency, the dollar, at will.
So why ask people to shoulder the burden, when paying for SS would be no burden at all for the federal government?
O’Malley joins Sen. Bernie Sanders (I-Vt.), and Sen. Elizabeth Warren (D-Mass.), who also are pushing to expand the program.
O’Malley’s move may increase pressure on Hillary Rodham Clinton to endorse Social Security expansion. She’s been silent on the issue.
O’Malley would impose the payroll tax on all earned income over $250,000. Because the higher figure wouldn’t be indexed to inflation, that window would narrow over time.
Sanders would impose the tax on all income, including unearned income such as capital gains, over $250,000.
Aside from guaranteeing massive pushback from those who would have to pay the new tax (i.e. those who are the big contributors to politicians), these plans are based on, and would fortify, the myth that taxes are needed to pay for Social Security.
Rather than simply telling the truth, that the federal government can spend whatever it wishes to spend, on anything it wishes to buy, the Democrats follow the same fact- twisted notion as the Republicans.
Both parties agree that SS payments are too low, and both pretend that the problem is a lack of income. The only difference is that the Republicans want stock market investors to pay for that income, and the Democrats want the people to pay it.
In short, the people pay everything and the government, which can afford anything, pays nothing. That’s every politicians’ plan.
Remember, neither the people at large, nor the people who invest in stocks, actually create any dollars.
Rising stock prices don’t create dollars. In its essence, the stock market is a gigantic Ponzi scheme, in which the same dollars simply move from hand to hand. The same is true of FICA, which also creates no dollars, but rather takes dollars from one hand, while giving dollars to another hand.
The only time dollars are created is via federal deficit spending, in which the government creates more dollars than are destroyed via taxing.
More than half of all married couples in retirement and about three-quarters of singles get 50% of their income or more from Social Security. For a fifth of married seniors and half of the unmarried, the program accounts for 90% of income.
It is sad for our wealthy nation, when half to three-quarters of retired people must credit 50% of their survival to the pittance provided by SS.
O’Malley explicitly states that he wants to give minimum-wage and lower-income workers an especially enhanced benefit and raise the special minimum Social Security benefit to 125% of the federal poverty level.
That benefit, which applies to workers with long histories of very low wages, is currently $804 a month, which is about 82% of the poverty level; O’Malley would raise it to about $1,226 a month.
Ten years ago, we recommended eliminating FICA and exactly six years ago, we published Ten Reasons to Eliminate FICA
The 10 Reasons remain relevant today, but there is an eleventh reason: The existence of FICA lends false credibility to the Big Lie — the lie that federal spending requires funding from federal taxes.
It is the Big Lie that punishes the poor and widens the Gap between the rich and the rest.
At long last, will the Democrats please stop supporting the Big Lie?
Lord, save us from our friends.
Rodger Malcolm Mitchell
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 and here)
10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
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.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.
THE RECESSION CLOCK
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.