–Why America is ignorant: Laurence Kotlikoff teaches our children Friday, Aug 1 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.
======================================================================================================================================================================================

Laurence J. Kotlikoff is a professor of economics at Boston University and the co-author of “The Clash of Generations: Saving Ourselves, Our Kids, and Our Economy.”

Here are excerpts from an article he published on August 1, 2014:

HOUSEHOLDS can’t spend, on a continuing basis, more than they earn. Countries can’t either, at least not over the long run. But countries can certainly leave the bill for their current spending to the young and to future generations.

In just three short sentences, this economics professor demonstrates everything that is wrong with the teaching of economics in America:

1. His first sentence is correct. Households, being monetarily non-sovereign, can’t spend more than they earn, long-term. They can’t create money at will.

2. His second sentence is wrong for two reasons: First, he doesn’t differentiate between Monetarily Sovereign countries (U.S., Canada, UK, Japan, Australia, China et al), which have their own sovereign currency vs. monetarily non-sovereign entities (all euro nations, cities, counties and states, individuals and businesses) which don’t have their own sovereign currency.

A Monetarily Sovereign nation creates its sovereign currency from thin air, by passing laws that make that currency possible. The laws are under the total control of the nation, which has the unlimited ability to change those laws and to create its currency, at any time it wishes. A Monetarily Sovereign nation cannot run short of its own sovereign currency.

Monetarily non-sovereign entities, like you and me and Kotlikoff, don’t have a sovereign currency and so, cannot create money at will. We can run short of money.

3. His third sentence compounds the ignorance by assuming Monetarily Sovereign governments need to borrow or tax in order to pay their bills. They don’t. Why would they? They have the unlimited ability to create their own sovereign currency.

But the ignorance gets worse:

Official borrowing is the old-fashioned way to do this: Sell Treasury bonds, and other securities, and spend the proceeds. But borrowing in broad daylight has a drawback: The more you do it, the more lenders worry about repayment, and the more interest they charge for their loans.

The federal government sells Treasury bonds but it doesn’t “spend the proceeds.”

When you buy a Treasury bond, dollars are transferred from your personal checking account to your personal T-bond account, at the Federal Reserve Bank, where the money stay nice and safe. To “pay you back,” the Federal Reserve Bank merely transfers those dollars back from your Treasury Bond account to your checking account. No new dollars needed.

So lenders (you and I who buy those T-bonds) don’t worry about being paid back. And we don’t determine how much interest to charge. The Fed does that. Really, look around you. Have you seen T-bond interest rates going up, despite massive sales of T-bonds?

But incredibly, the ignorance gets even worse:

Social Security . . . takes in money, via payroll taxes, while promising hefty retirement benefits in return. Dig deep into the appendix of the most recent Social Security Trustees Report, and you’ll find that the program’s unfunded obligation is $24.9 trillion “through the infinite horizon” (or a mere $10.6 trillion, as calculated through 2088). That’s nearly twice the $12.6 trillion in public debt held by the United States government.

Ooooh! How scary! Two unrelated numbers (Social Security “debt” and federal “debt”) and one is bigger than the other. Oooooh!

A Monetarily Sovereign government, owing its own sovereign currency, has zero “unfunded obligations.” All its obligations are paid for (“funded”), ad hoc. When the U.S. government pays a bill, it sends instructions (not dollars) to the creditor’s bank, telling the bank to increase the numbers in the creditor’s checking account.

At the moment the bank does as it is instructed, dollars are created. Sending instructions is the way the U.S. government funds all its obligations. The government never can run short of instructions, so all federal debt is funded.

Oh, but the ignorance continues:

The prospect of formal default by the United States is remote. Informal default via the inflationary, easy-money policies of the Federal Reserve since 2007, is more likely. (Social Security is pegged to inflation, so while inflation would help with our official debts to creditors, like China, it is far from a panacea.)

First, those “easy money policies” have resulted in low inflation rates, below the 2.5% – 3% Fed target rate

monetary sovereignty

And second, and more important, inflation does not help with our official debts to creditors, like China. Two reasons:

First, we “pay off” China’s “debt” (i.e. T-bonds), simply by transferring China’s money, that is in China’s T-bond account at the Federal Reserve Bank, to China’s checking account, also at the Federal Reserve Bank. It’s just a transfer of existing funds.

Second, U.S. debts are paid with dollars. The value of those dollars (i.e. inflation) is irrelevant. If the U.S. owes someone a thousand dollars, it makes no difference whether those thousand dollars can buy a car or a loaf of bread. The U.S. simply sends instructions to the creditor’s bank, telling the bank to increase the number in the creditor’s checking account by one thousand.

And the beat goes on:

The fiscal gap — the difference between our government’s projected financial obligations and the present value of all projected future tax and other receipts — is, effectively, our nation’s credit card bill. Eliminating it, would require an immediate, permanent 59 percent increase in federal tax revenue.

Or, professor, we simply could continue as we have for the past 240 years, and pay our bills by sending instructions to banks. Better yet, we could cut federal taxes, thereby enriching the private sector and assuring we never again would have a recession. (Federal Deficit = Private Sector Income)

And now for the truly scary part:

Even if we do nothing, we should at least be transparent about our insolvency. A bill introduced last year . . . would require the Congressional Budget Office, the Government Accountability Office and the Office of Management and Budget to conduct such “generational accounting.”

Former government officials from both parties, and more than 1,200 economists, including 17 Nobel laureates, have endorsed the legislation, known as the Inform Act. It would keep our government honest, and sound an alarm.

OMG! Is it possible for all these “experts” to be completely ignorant of Monetary Sovereignty? Are they descendants of the people who insisted the earth is the center of the universe?

Or have they been bribed by the rich, to widen the gap between the rich and the rest? (Cutting federal spending hurts the lower income groups more than the upper income groups, thus widening the gap.)

We know the politicians are bribed via campaign contributions and promises of lucrative employment, later. We know the university professors do what the big contributors tell them to do. And of course, the media are owned by the rich.

The nonsense Kotlikoff spreads is what a person who has zero understanding of economics believes. It’s the belief government finances are the same as personal finances.

I seriously doubt Kotlikoff is that ignorant. I believe he knows that what he is saying is a pack of lies (aka the Big Lie).

So really, Professor Kotlikoff, have you no sense of pride?

Why are you doing this to our children?

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

–Pontius Boehner washes his hands, then paddles away. Thursday, Jul 31 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.
======================================================================================================================================================================================

“When Pilate saw that he was getting nowhere, but that instead an uproar was starting, he took water and washed his hands in front of the crowd. ‘I am innocent of this man’s blood,’ he said. ‘It is your responsibility!’”

A conservative rebellion forced House leaders to pull their border bill from consideration on Thursday, leaving the GOP in disarray and putting pressure on President Obama to try to handle the situation without any extra money or powers from Congress.

Mr. President, we are washing our hands of the problem. You solve it.

Of course, you get no money to do the job, and remember, we are suing you, because you take things into your own hands. Gotcha!

Republican leaders in the House vowed to “continue” working on the crisis, and said it was “possible” they could still vote later Thursday, but the prospects appeared dim. Unless they come up with a solution in a few hours, they will go home for a five-week summer vacation leaving Mr. Obama to have to figure solutions out on his own.

We have accomplished so much, we deserve a vacation from our long, arduous efforts. By the way, for you people who actually work (when you can get a job), we are cutting unemployment and Social Security. The federal government can’t afford to pay for laziness.

“This situation shows the intense concern within our conference — and among the American people — about the need to ensure the security of our borders and the president’s refusal to faithfully execute our laws. . .”

Yes, we have to secure our borders, because you know how all those Mexicans and Hondurans are shooting rockets at us and tunneling into our country, to kidnap and kill our citizens and suicide bomb us.

We want the President to execute the laws we don’t want to pass.

“(We want to) ensure these children are returned swiftly and safely to their countries.”

Mr. President, deport them swiftly to where they safely can be raped and murdered, or if they manage to survive, live in hopeless poverty. We are the compassionate party.

The House bill had included only a fifth of the money Mr. Obama requested, and would have made it easier to deport illegal immigrant children. GOP leaders even scheduled a vote on a bill to freeze the president’s non-deportation policy for young adults.

We care about children. We truly do. (We also care about women, gays, the poor, blacks, browns and people whose sincerely held religious beliefs differ from Hobby Lobby’s.) We are the caring party.

Senate Democrats, meanwhile, are having trouble with their own border bill, (that) even some Democrats say are necessary to begin stemming the flow.

We Democrats have to stem that flow, because you know, there is no room on this life raft. You children simply will have to jump back into the ocean and swim for your lives. Please watch out for the sharks.

Democrats said the focus should be on the humanitarian situation facing the children back home in El Salvador, Honduras and Guatemala, rather than on speeding up deportations in the U.S.

We Democrats are the humanitarian party. Pay no attention to that man behind the curtain, you know, President ‘deporter-in-chief,’ who formally has deported more people than any President in our history. He will “stem the flow” of drowning children begging to climb onto our little life raft.

“The American people are fair minded; they are wise; they are practical; they want to help,” said House Minority Leader Nancy Pelosi. “They want to feed the children. There are not enough resources here to do that on the humanitarian side.

Not only is there no room on this raft, but we don’t have enough food, clothing and housing for ourselves, let alone to take care of you children. As John Boehner said, ‘Let’s be honest. We’re broke.’

It’s a lie, but you know . . . wink, wink.

(The President) may have to use even more unilateral action to try to speed up some deportations — a power the White House has said it may have, but which it has been reluctant to tap.

Presumably, the Republicans won’t sue the President for using that unilateral action — unless of course, it isn’t cruel enough to send the kids back to hell.

Perhaps, we can get some National Rifle Association members to shoot the kids — in self-defense, of course.

Is it possible for our leaders to be more disgusting? Or are they just doing what the American voters want?

Where are the protests?

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 AFL-CIO puzzle adds a new piece: The Alliance for Retired Americans Tuesday, Jul 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.
======================================================================================================================================================================================

Once, I’d been puzzled by the AFL-CIO, and lately this puzzle had become more — puzzling. Here are excerpts from an article in the AFL-CIO blog:

Good News for All Americans in Social Security, Medicare Reports

Said AFL-CIO President Richard Trumka: “Social Security and Medicare will be there for us and our families if elected leaders listen to the American people and reject calls to cut benefits. Instead of undermining these crucial programs, we must build on their success and adopt measures to strengthen and expand them.

O.K., good enough. But . . .

Richard Fiesta, executive director of the Alliance for Retired Americans, said the most important lesson from the Social Security report “is that Social Security has a large and growing surplus.

Uh oh. A large and growing “surplus”? Social Security is a federal agency. The federal government is Monetarily Sovereign.

A Monetarily Sovereign government doesn’t need a surplus. In fact, because a federal surplus = a deficit for the economy, a federal surplus always is harmful to the economy.

It gets worse:

The Medicare report, Fiesta said, “reminds us once again that the Affordable Care Act is controlling health care costs.” He said: It is great news that the life of the Medicare Trust Fund has been extended by another four years to 2030.

Yikes! does he actually believe there is a “Medicare Trust Fund” — a fund that pays for Medicare? Is he not aware that all federal “trust funds” — ALL — are accounting fictions that don’t pay for anything?

The U.S. money supply consists only of balances in the private sector. Since the federal government has no money, it pays its bills by sending instructions (not dollars) to creditors’ banks, instructing the banks to increase the balances in the creditors’ checking accounts. These instructions are in the form of checks or wire transfers.

Only at the time the banks obey the instructions, and increase the checking account balances, are dollars created.

Imagine an economy having a total of $1 trillion. On Monday, the federal government mails you a $100 check. On Tuesday, the check has not yet arrived at your bank. The economy still has $1 trillion.

Mail is a bit slow this week, so on Wednesday, the check still has not yet arrived. The economy still has $1 trillion.

By Thursday, the check arrives at your bank, but the bank is closing, so a clerk puts the check in a pile for tomorrow’s processing. The economy still has $1trillion.

On Friday, the clerk opens the mail, sees the check (the instructions) and pushes a computer key, which raises your checking account balance by $100. At that instant, and not before, the total money supply in the economy rises to $1 trillion, one hundred dollars. And this is how the federal government creates dollars.

The fictional “Trust Fund” is not part of this process. No matter what the balance in that trust fund may be, your bank’s clerk will push the button that adds $100 to the nation’s money supply.

That is why there need be no Army “trust fund” to pay for Army expenses, no Congress “trust fund,” no Supreme Court “trust fund,” no CIA, FBI or NSI “trust funds.” For a Monetarily Sovereign nation, a “trust fund” is a non-functional fiction, serving only to deceive.

Clearly the deception is working:

The Social Security Trustees reported once again that the Disability Trust Fund can pay full benefits until 2016, with enough revenue after that time to cover about 80% of promised benefits.

Trumka said: Congress should act soon to ensure disabled workers and their families will continue to receive the benefits they have earned. This can be done by allocating a larger share of current payroll tax contributions to the Disability program.

No, Mr. Trumka, federal taxes do not pay for federal spending. If federal taxes rose to $999 trillion, or fell to $0, neither event would affect by even one penny, the federal government’s ability to pay its bills.

That clerk at the bank doesn’t care about tax collections. He just follows instructions. And the federal government has the unlimited ability to send instructions.

Oh yes, there is a limit, and that limit is inflation. At some level of money creation (deficit spending), it’s possible for there to be an inflation the Federal Reserve can’t control. At that time, but not before, deficit spending would have to end.

Fortunately, such an inflation is quite rare. In fact, in the almost 240 year history of America, through wars, recessions, depressions, stagflations and even “normal” inflations, we never have had an uncontrollable inflation.

So the puzzle is: Why don’t Trumka and Fiesta seem to understand this? Is it ignorance, or is there a motive?

I suspect that in Truma’s case there is a motive: Increased Social Security and Medicare benefits may benefit the union’s members, but they don’t benefit the union’s leaders. So why waste much time, effort and political capital? A few perfunctory statements should be enough to show workers that the union stands behind them.

Far better to press for increased membership and higher salaries. That’s where the union leaders make their money.

As for the Alliance for Retired Americans, it’s mission statement claims:

“A primary objective of the Alliance is to enroll and mobilize retired union members and other senior and community activists into a nationwide grassroots movement advocating a progressive political and social agenda.”

So, they are going after “retired union members” — those people who no longer pay union dues — and ask them for $10 or more membership.

And what are the membership benefits? Apparently, they are the AARP for union people, with the same kinds of insurance business and discounts.

Given its business model, what would be the benefit to its leaders of higher Social Security benefits or reduced FICA?

None.

So, I guess the puzzle isn’t much of a puzzle. The AFL-CIO leaders and the Alliance for Retired Americans leaders and AARP’s leaders, have no real motivation to tell Americans the truth about the federal government’s ability to spend.

In fact, because the Alliance and AARP sell health insurance, they sure as heck are not going to tell anyone how Medicare for every man, woman and child in America, and a more generous Social Security with no FICA, easily are affordable for our government — just as AARP won’t tell.

O.K., puzzle solved. Those three organizations benefit from the ignorance of their members, and no one is going to kill that goose while it’s laying those golden eggs. The members will have to figure things out for themselves.

Lots of luck with that.

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 human cost of lies and ignorance, and what you should do Monday, Jul 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.
======================================================================================================================================================================================

The Big Lie not only costs you money; it can cost you your life.

Here are some excerpts from an editorial in today’s Chicago Tribune, one of the many newspapers spreading the Big Lie:

Patients pay steep price for Hepatitis C cure

There’s a new breakthrough hepatitis C drug treatment that cures — yes, cures — almost everyone who takes it. Unlike previous, far less effective treatments, patients suffer few if any side effects. The entire regimen takes only 12 weeks, much shorter than previous regimens.

The drug, Sovaldi, could save the lives of many of the estimated 80,000 people a year who die from the blood-borne liver disease. Eventually, Sovaldi could save the nation’s health system billions of dollars by preventing liver failure and liver cancer, not to mention curbing the huge costs of liver transplants.

The miracle pill costs $84,000 for a typical 12-week course of treatment.

Sens. Ron Wyden, of Oregon, and Charles Grassley, of Iowa cite a study that says Sovaldi could cost Medicare $6.5 billion over the next year or so, boosting drug premiums by 8 percent.

Wyden is a Democrat and Grassley is a Republican, demonstrating that the Big Lie is neither blue nor red, neither left nor right.

Readers of this blog know that federal taxes do not pay for federal spending. Unlike state and local governments, and unlike you and me, the federal government is Monetarily Sovereign. It neither needs nor uses tax dollars for anything.

Even if FICA were $0, the federal government could (and should) provide free, comprehensive Medicare to every man, woman and child in America.

Some states are planning or starting to restrict access to the drug to mainly the sickest patients. Some private insurers also are imposing treatment limits, urging physicians to treat only patients who absolutely need the therapy now.

See, it’s like this. Treat the sickest patients, but withhold Sovaldi from the others, until they get sicker. This insures that everyone gets really sick.

There’s mounting pressure on Gilead Sciences, the maker of Sovaldi, to cut its price. But if $1,000 a pill is too much, what is the “correct” price?

No, we do not defend price gouging by prescription drug companies. But we strongly defend American pharmaceutical innovation and the wondrous results it yields.

Sovaldi is a prime example of why America’s drug industry is the world’s powerhouse. A company spends years and hundreds of millions of dollars developing a drug, knowing most fail in trial.

The company discovers a blockbuster drug. Company execs price it accordingly, to reward shareholders and investors for the risks taken and for all the money spent chasing miracle drugs that never panned out.

The Tribune’s editors are right — and wrong. They are right that drug development is an extremely costly, extremely dangerous procedure. The vast majority of new drugs prove worthless.

Even those that finally, after years of expensive testing, reach the market, may be found to have serious side effects that can lead to multi-million dollar law suits.

So why do drug companies spend billions trying to develop drugs that usually don’t work, and may cause liability. Why take such huge risks? Only because the rewards can be great.

If not for that risk-taking, no new drugs would enter the market, and we all would suffer and die years earlier.

But the Tribune editors are wrong in spreading the Big Lie that federal taxes pay for federal spending. In fact, federal taxes pay for nothing — NOTHING — and federal deficit spending is necessary for economic growth.

If Sovaldi costs Medicare $6.5 billion a year, and the federal government were to pay for Medicare, that would mean $6.5 billion in growth money added to the economy.

And why all the lies? The richest .1% income/wealth/power group bribes politicians bribes politicians via campaign contributions and promises of lucrative employment later; the newspapers are owned by the rich and the universities are supported by the rich — all to widen the gap between the rich and the rest.

Because every source of information repeats the Big Lie, the populace remains ignorant of the truth, and that ignorance is killing them.

What should you do? Spread the truth.

The ignorant will denounce you and insult you and resist you. But if you keep at it, eventually the truth will out, the gap will narrow, and our lives will be longer and better.

Never surrender.

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

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