GOP: Cut spending? Add spending? Cut deficits? Add deficits? Increase debt? Cut debt? All of the above. None of the above. Saturday, Sep 16 2017 

Image result for the truth will set you free
It takes only two things to keep people in chains:
The ignorance of the oppressed and the treachery of their leaders.

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Which of the following do you believe the federal government should do? Think carefully before you answer.Image result for many choices

  1. Reduce federal spending?
  2. Increase federal spending?
  3. Reduce federal deficits?
  4. Increase federal deficits?
  5. Increase the federal debt?
  6. Reduce the federal debt?
  7. All of the above?
  8. None of the above?

Members of the GOP seem to believe very strongly in all of these options. Many individuals actually believe in two or more opposing directions.

No kidding:

Tax cuts quiet once-deafening GOP call for fiscal discipline
ANDREW TAYLOR, Associated Press, September 16, 2017

When Democrat Barack Obama was president, conservatives demanded financial discipline and deep spending cuts in the face of the country’s fast-growing debt.

With Republican President Donald Trump pressing for politically popular tax cuts and billions more for the military, few in the GOP are complaining about the nation’s soaring debt.

Tax cuts in the works could add hundreds of billions of dollars to the debt while bipartisan pressure for more money for defense, infrastructure and domestic agencies could mean almost $100 billion in additional spending next year alone.

The bottom line: The $20 trillion national debt promises to spiral ever higher with Republicans controlling both Congress and the White House.

In short, the GOP has become fiscally (though not socially) more progressive than was Barack Obama.  And that is a good thing for America. Here is why:

Gross Domestic Product = Federal Spending + Non-federal Spending + Net Exports.

All three terms, Federal Spending, Non-federal Spending, and Net Exports show that a growing GDP, i.e. a growing economy, requires a growing supply of money.

    • Federal Spending grows the money supply because the federal government creates dollars, ad hoc, every time it pays a bill.
    • Tax cuts, which allow more dollars to remain in the economy, increase Non-federal Spending.
    • Finally, Net Exports increase the money supply by bring dollars into the U.S. economy.

“Republicans gave up on caring about deficits long ago,” bemoaned Republican Sen. Rand Paul of Kentucky, who was elected in the 2010 tea party class.

One might say the Republicans finally have recognized the fact that a growing economy requires a growing money supply.

By formula, it mathematically is impossible for GDP to grow, unless Federal Spending, and/or Non-federal Spending, and/or Net Exports grow.

And since Federal Deficit Spending stimulates Non-federal Spending, by adding net dollars to consumers’ pockets, the fundamental stimulus for economic growth is federal deficit spending, i.e spending increases and tax decreases.

But if “Republicans gave up on caring about deficits long ago,” as Rand Paul claims, why all the discussion of the debt ceiling?

It’s a far cry from the Newt Gingrich-led GOP revolution that stormed Washington two decades ago with a mandate to balance the budget and cut taxes at the same time.

To balance the budget and cut taxes requires cutting the military (which the GOP always opposes) and/or cutting social benefits (which the Democrats and the American voters oppose).

Further, because the U.S. federal government (unlike state and local governments) is Monetarily Sovereign, it never can run short of its own sovereign currency. It can pay any bill of any size, instantly, simply by creating dollars.

The federal government’s method for creating new dollars is to spend dollars. In that sense, the federal government always spends dollars it doesn’t have. If you did that, you would be reckless, but the federal government’s finances are different from yours.

Even if federal taxes were $0 and spending tripled, the federal government could pay its bills, endlessly. So there is no purpose to a “balanced” federal budget.

Or even from Republicans of 2001, who enthusiastically cut taxes under President George W. Bush, but only at a moment when the government was flush with money.

The federal government never is short of dollars, nor is it ever “flush with money.”  The federal government has the unlimited power to create brand new dollars from thin air, every time it pays a creditor.

Now, Medicare and Social Security are drawing closer to insolvency.

Fiscal hawks and watchdogs like the Congressional Budget Office warn that the debt is eventually going to drag the economy down.

Neither the U.S. federal government, nor any of the thousand agencies of the federal government, ever can be insolvent. Such federal agencies as Congress, the White House, the Supreme Court, the CIA, the FBI, the NSA, Social Security, and Medicare, etc., etc, cannot go insolvent unless the Congress and the President want them to be insolvent.

Have you ever heard of the Navy being “insolvent”?  The Army? Name a single federal agency that ever has been insolvent.

The notion that Medicare or Social Security can become “insolvent,” ironically is based on a special tax, FICA, being collected supposedly to support them.

But FICA supports nothing and no, there is no “Social Security Trust Fund.” It is an accounting fiction designed to make you believe your Medicare and Social Security benefits must be limited.  It’s all a great big fat lie.

And as far as federal debt “eventually dragging the economy down,” this too is a lie, promulgated for the same purpose — to make you believe the federal government is unable to help you.

The so-called debt actually is the total of deposits in T-security accounts.

If the federal government wished, it easily could pay off the entire “debt” today, simply by transferring existing dollars from those T-security accounts, back to the checking accounts of T-security holders. No new dollars needed.

There is no mechanism by which deposits in T-security accounts (aka “savings”) can drag down the U.S. economy.  Anyone who says otherwise is a great, big, fat liar.

But like Obama and Bush before him, Trump isn’t talking about deficits. Neither much are voters.

“Voters, frankly, after these huge deficits, are saying, ‘Well, how much do deficits really matter?’” said former Sen. Rick Santorum, R-Pa., a two-time presidential candidate. “We’re not Greece yet, right?”

Deficits do matter, but not in the way most people think.

Deficit growth reductions have led to recessions, and deficit growth increases have cured recessions.

Far from being a problem, federal deficits are absolutely necessary for economic growth.

And as for the U.S. ever being “Greece,” that unfortunate nation surrendered its most valuable asset, its Monetary Sovereignty, when it gave up the drachma and adopted the euro.

Chicago, Florida, General Motors, you, and me and Greece do not have a sovereign currency. None of the aforementioned has the unlimited ability to pay bills. All can become insolvent.

By contrast, the U.S. government has the unlimited ability to pay any bill, of any size, at any time, simply by creating dollars. There is no economic reason to cut deficits or debt.

Top Capitol Hill Republicans such as House Speaker Paul Ryan of Wisconsin and Senate Majority Leader Mitch McConnell of Kentucky had promised for months that a tax overhaul would not add to the deficit, with rate cuts financed by closing loopholes and other steps.

Instead, Republicans are talking about tax cuts whose costs to the debt — still under negotiation — would be justified by assumptions of greater economic growth.

Yes, tax cuts are justified by greater economic growth, but not in the way the GOP once has claimed.

Under President Reagan’s bogus “trickle-down” economic plan, tax rate reductions for the rich were supposed to “pay for themselves” by expanding the economy so much, tax collections actually would rise.

Not only didn’t this happen, but it wasn’t necessary. Tax cuts do stimulate the economy — especially tax cuts for consumers, i.e. the 99% (not tax cuts for the rich), because federal taxes (unlike state and local taxes) destroy dollars. And the federal government neither needs nor uses tax dollars.

Federal taxes no longer are part of any money supply measure, i.e. they effectively are destroyed upon receipt.

“We want pro-growth tax reform that will get the economy going, that will get people back to work, that will give middle-income taxpayers a tax cut and that will put American businesses in a better competitive playing field so that we keep American businesses in America,” Ryan said in an AP Newsmakers interview this past week. “That’s more important than anything else.”

He backed off months of promises that the Republicans’ tax plan won’t add to the nation’s ballooning deficit.

Ryan, the “new liberal Democrat,” is absolutely correct in what he says. Tax cuts for the middle- and lower-income groups, and for businesses, will grow the economy.

What the GOP does may be a different story, as their leaning always has been tax cuts for the rich and for “broadening the tax base” (tax increases for the poor).

Among the few deficit hawk holdouts is Sen. Bob Corker, R-Tenn., a key vote on the Senate Budget Committee, who says he doesn’t want to “let this just be party time that just takes us no place but massive deficits down the road.”

The real danger to America is that Corker, who has so much power on the Senate Budget Committee, completely misstates federal financial reality.

Image result for time bomb

Since 1940, the “time bomb” of federal debt has been ticking. Still ticking.

This deficit hawk cannot explain the simple fact that the federal debt in 1940 was $40 billion, and deficit hawks then were calling it a “ticking time bomb.

Today, after 77 years, the debt $14 Trillion debt has risen 35,000%  (yes, that’s 35 thousand percent), and here we are:

The federal government is not insolvent; no federal agency is insolvent; the “time bomb has not exploded, the sky has not fallen; and we are discussing tax reductions.

Trump’s election has GOP military hawks pressing to shovel enormous amounts of money into the Pentagon — about $90 billion over the stringent spending limits set by the hard-won 2011 deficit control effort.

Don’t call it “hard won.” Call it the “foolish, counter-productive, based-on-the-Big-Lie, deficit control effort. Call it “hard lost,” as it reduced GDP growth to its lowest level in many years.

Deficit growth cured every recession, but the “hard-won” deficit control effort of 2011, resulted in the lowest GDP growth we’ve had in many years. 

The unpopular leftover from the 2011 agreement are those spending limits, which if violated would be enforced by across-the-board spending cuts. Republicans want to scrap them, at least for military money.

“There’s so much pressure on our side for additional defense spending,” said Rep. Tom Cole, R-Okla. “Believe me there’s more defense hawks than budget hawks in the Republican conference right now.”

Republicans believe in spending reductions unless there’s something on which they want to spend. Then suddenly, spending reductions aren’t important any more.

Conservatives demanding that spending cuts accompany any extension of the government’s borrowing ability were undercut by Trump, who agreed last week to add temporary borrowing approval to a must-pass Harvey relief bill.

See, it’s like this. Spending cuts help the economy except when spending increases help the Texas economy, which then helps the U.S. economy.  Got it?

Anger over Trump’s debt bargain, though, has conservatives vowing that issues of spending and deficits won’t be kicked to the curb for long.

“It’s not going to be shoved aside much longer because this (debt limit) deal last week … has got people all riled up, and justifiably so,” said longtime GOP Rep. Joe Barton of Texas. “We’ll be ready next time.”

Translation:

“O.K., we’ll agree to increase the debt this time, because Texas needs the money, and I’m a Texan, and the government can afford anything. But next time, if it’s just the poor or the middle classes who need the money, we won’t give it to them, because the government can’t afford it.

“What? Oh, you say that Florida and Puerto also were hit by a hurricane, and they too need the money.  O.K., I guess we have to give it to them, but we’ll be ready to screw America NEXT time, because as you know, the government is running short of dollars it creates every day, from thin air.

Huh? There is another hurricane, this time threatening the northeastern states, a couple of which are ‘red’ states, so FEMA will have to help them, too? Well, so long as they’re red states, we’ll give them money, even though the federal government is totally destitute, although in the entire history of this nation, the government never has run out of dollars.

“Huh? The military also needs more money. Well, of course we can’t be without a military, and we might want to bomb North Korea, so give the military more money, too, even though the federal government doesn’t have any money at all. Not a penny, even though the government creates dollars by spending dollars.

“Oh, the President needs more money to build a wall that will protect us against drugs, even though drug dealers know how to avoid walls and don’t bring drugs across areas where we don’t have a wall. But if the President wants more money, we have to give more money, even though the government is so broke the sky is falling and Congress must live in poverty, which it never has.

But aside from that, the debt has been a ticking time bomb for 75 years, and even though we’ve had all kinds of wars, recessions, inflations, terrorism, and natural disasters, that time bomb hasn’t exploded. But it could. Soon. Any second now. The end is nigh. Here it comes. Hang on. Almost here. 

“And yes, there is zero evidence that the debt is “unsustainable” and that cutting the debt will grow GDP, but hey we’ve been telling the same lie for so many years, we can’t go back how, or we’ll look really stupid.

Right?”

Right. Really stupid.

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

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY

 

Who put the “con” in Wisconsin? Foxconn, that’s who. Friday, Sep 15 2017 

Image result for breaking chains

It takes only two things to keep people in chains:
The ignorance of the oppressed and the treachery of their leaders.

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Who put the “con” in Wisconsin? Foxconn, that’s who.

Today, I read an article that I find rather mysterious.  Here are a few excerpts:

Wisconsin Legislature passes $3 billion Foxconn incentive package, sends to Walker
September 14, 2017

The Wisconsin Assembly sent a $3 billion incentive package for Taiwan-based Foxconn to Gov. Scott Walker on Thursday, signing off on a deal to lure the electronics giant to the state with the biggest subsidy to a foreign company in U.S. history.

Democrats have raised alarms about exemptions under the bill that waive requirements for Foxconn to first develop an environmental impact statement before constructing what could be a 20-million-square-foot campus.

Foxconn would also be allowed to build in wetland and waterways.

Opponents objected to a provision that would allow the Wisconsin Supreme Court to take appeals of certain lawsuits related to Foxconn, skipping the appeals court. No other business in the state is provided such an expedited route to the Supreme Court.

Unlike the federal government, which is Monetarily Sovereign, Wisconsin is monetarily non-sovereign. Unlike federal spending, which is funded by federal money creation, not by taxes, Wisconsin spending is funded by taxpayers.

That is a fundamental difference between the finances of a Monetarily Sovereign government and the finances of a state or of people like you and me.

Image result for wisconsin sends money to illinois

Wisconson to welcome workers who live and pay taxes in Illinois?

There are 2.3 million households in Wisconsin. So a $3 billion incentive package requires each household in Wisconsin to send $1,300 to Foxconn.

Warm up your checkbooks, folks.

What do Wisconsin households get for their $1,300, their potential loss of wetlands, waterways and overall environmental degradation, plus special legal immunities?

Foxconn has said it hopes to open the plant in 2020 with 3,000 workers, but that the workforce could grow to 13,000.

IF the plant opens with only 3,000 workers, taxpayers would have paid $1 million for each worker.

In the theoretical, best-case scenario (“best case” = “highly unlikely”) scenario of 13,000 new workers, Wisconsin taxpayers would have paid each worker $230,000.

One wonders whether Wisconsin taxpayers merely should have given 13,000 workers $230,000 each and eliminated the Foxconn middleman.

Assembly Democrats slammed the proposal Thursday as being unfairly rigged to benefit Foxconn at the expense of taxpayers.

Rigged? You think?

But Republican Assembly Speaker Robin Vos (said) “What’s rigged is the deal for the taxpayer, the workers, the families and ultimately those of us who have the good foresight to realize when a good deal is put in front of you,” Vos said.

The total incentive package is 10 times larger than anything ever approved in Wisconsin and would be the biggest state subsidy to a foreign company in the United States.

The Assembly passed the bill with all Republicans and four Democrats in support. Two Republicans joined all other Democrats against.

Doesn’t it seem odd, that the Republican Party, the anti-tax party, should be so willing to raise taxes by $3 billion dollars, with so few guarantees about the results?

Any wonder why the Democrats, who traditionally support factory workers, are so suspicious of a deal that only purports to add factory workers?

Critics have warned that there aren’t enough protections for taxpayers to recover payments to Foxconn if it automates production and fires workers.

Image result for foxconnFoxconn is a high-tech company.

Can there be any doubt that this high-company absolutely will automate to the best of its high-tech ability?

That long line of Chinese women doing tedious, boring, mind-numbing hands-on labor at ridiculously low wages, will not be duplicated in Wisconsin.

Instead, I predict you will see a long line of robots working for zero wages.

In short, without having any inside knowledge, I predict there never will be 13,000 workers and that Wisconsin taxpayers never will see a return on their investment.

So what is going on here?

They’ve also said more needs to be done to guarantee that Wisconsin workers and businesses get preference during the construction phase of the plant, and once it’s up and running.

The Walker administration is charged with negotiating minimum hiring numbers to trigger the payments in the contract with Foxconn which has not been finalized.

Foxconn has also not selected the exact location for the plant, but it has focused on property in Racine County in between Milwaukee and Chicago.

The city of Racine, Wisconsin is only a half hour’s drive from Illinois and “greater Chicago,” and only an hour from Chicago’s city limits.

If the plant is built in Racine County, but south of the city of Racine, it will be even closer to Illinois’s rich source of labor.

Not only is there no guarantee that “Wisconsin workers and businesses will get preference during the construction phase,” but there is no guarantee about how many current Wisconson residents will be hired after the plant is built.

The Walker administration, who championed the deal, will negotiate the hiring numbers that trigger payments. That sure seems like a “fox-guarding-the-hen-house” type of arrangement.

In summary, the Republican anti-tax party votes to increase taxes on the citizens of Wisconsin, for a nebulous return that will be overseen by the Republican who sponsored the deal.

So what the heck really is going on?

This is what I predict:

  1. Foxconn never will hire 13,000 people. Not in a year, not in ten years, not ever.
  2. Many of the people it does hire, will come from Illinois, will shop in Illinois, and will pay taxes to Illinois. The Chicago commercial area is a must larger source of qualified workers than is the entire state of Wisconsin, and it is nicely convenient via road and commuter rail.
  3. Republican pols, who will receive advance info about which land Foxconn plans to use, will buy it early, making out like bandits. They probably already have begun to acquire options.
  4. Foxconn, having demanded a direct line to a politically leveraged Wisconsin Supreme Court, easily will fend off any challenges to its sweet deal.
  5. Foxconn will pollute Wisconsin’s land and water, and if sued, will win its case in the highly political, dysfunctional, right-wing, pro-business, anti-environment Supreme Court.
  6. Screwed Wisconsin taxpayers, will pay big, and never will see any net benefit — and here’s the big one:
  7. “Walker  joined President Donald Trump in announcing Foxconn’s plans to build in Wisconsin at a White House event in July, heralding it as a game-changer for American manufacturing.”

So there it is. In addition to being a giveaway to big business and to greedy politicians, and a rip-off of the average taxpayer (the Republican standard operating procedure), the Foxconn deal provides endless bragging rights to Trump and Walker for all the non-existent jobs they will claim they brought to Wisconsin.

Trump and Walker will be long gone from office by the time the Wisconsin taxpayers figure out they are enmeshed in this deal, forever.

Illinois stands to benefit from a plant just across the Wisconsin border, as O’Hare Airport could get more traffic, workers living in Lake County, IL could make the commute and small businesses could step up to cater to workers’ needs.

Most important is the potential for Foxcomm’s suppliers to set up shop in the (Illinois) vicinity.

As a resident of Illinois, I would like to thank our generous neighbors to the north. Illinois taxpayers sure could use the money.

Wisconsin taxpayers will sing a new tune: ♫ “Who put the ‘con‘ in Wisconsin? Foxconn, that’s who” ♫

On Wisconsin!

Rodger Malcolm Mitchell
Monetary Sovereignty

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MONETARY SOVEREIGNTY

The Sign: A bit of black humor in a bleak year. Wednesday, Sep 13 2017 

Image result for breaking chains

It takes only two things to keep people in chains:
The ignorance of the oppressed and the treachery of their leaders.

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Here is a bit of black humor in a bleak year. Sometimes, one doesn’t know whether to laugh or to cry.

Readers of this blog know that since 1940 (at least), fear-mongers have been telling us the U.S. federal debt is “unsustainable” and a “ticking time bomb” ready to explode at any moment.

Image result for the end is nigh

Will you believe him tomorrow, if the world doesn’t end?

Every year, every day, really, the predictions about the “time bomb” and “unsustainability” have been proven wrong.

That’s 77 years, or 28,000 days, the debt hawks have been wrong, wrong, wrong.

Amazingly, this perfect record of error and incompetence does not seem to bother the debt hawk followers, who continue to believe.

Now anyone can be wrong on occasion. But wrong 28,000 days in a row?  What does it take to convince people?

I ask this question because of an article that appeared on National Public Radio’s web site:

Is The Apocalypse Coming? No, It Isn’t!
September 13, 2017, MARCELO GLEISER

The Sign, a documentary set to air Thursday, addresses whether the end of days is coming this month, as some biblical literalists predict.

The “sign” in the title refers to an alignment of Mercury, Venus, Mars, and Jupiter around the constellations of Virgo and Leo, together with the sun and moon.

According to Revelation 12, some say, this is when the end comes, after much turmoil and destruction.

Michael Shermer, author and editor of Skeptic magazine, Ed Krupp, director of the Griffith Observatory, and Konstantin Batygin, an assistant professor of astronomy at Caltech explain the scientific arguments against such fears.

What I find most striking is the strength of the literalists’ conviction. What will they say on Sept. 23 when the world remains where it is?

Surely, as Shermer mentions, Trump may do something, or North Korea. But isn’t it always the case that there will be turmoil somewhere in the world?

Hasn’t this happened over and over, prophecy of the end after prophecy being debunked by the boring continuity of life as we know it?

Michael Rood, who looks like a benevolent rabbi or a biblical patriarch, has returned to Israel to watch the end unfold. He is convinced that come Sept. 23 something will happen to the sun.

Shermer, Krupp, and Batygin do their best to dispel any potential danger. The strength of The Sign is to expose so openly the extent to which literalists will go to justify their beliefs, some using very complex numerology and coincidences as clues.

The film ends with: “Could this be the year? This could be the year.”

Unfortunately, any year could be the year. To instill fear as an agent of change hasn’t worked for millennia — and it won’t work now.

Actually, it is working now.

Debt fear is the agent that prevents America from eliminating FICA, providing Medicare for All, eliminating poverty, making college available to all who want it, fixing the infrastructure, preventing global warming, and increasing federal deficit spending on the myriad programs that would benefit the populace.

Note the fundamental parallel between the end-of-world claims and the debt hawks’ “ticking time bomb” and “unsustainability” claims.

When the world fails to end, you can be sure all the Michael Roods of the world will claim the world really did “end,” because someone threatened someone, and that threat is what “end” really means.

So believers will claim the prediction was right, and they will believe the next prediction.

Similarly, each day, when the “ticking time bomb” of federal debt fails to explode, and when the government continues to “sustain” a debt that has grown an astounding 35,000 % (from $40 Billion to $14 Trillion) in 77 years, the repeated failures of prediction will not teach believers anything.

The claims will be made that each downturn in the stock market, or each change in interest rates, or even one of the recessions that occur on average, once every five years, is evidence that the debt really is an unsustainable ticking time bomb.

For the ignorant, failure does not disprove hypothesis, partly because with each failure, the fear-mongers change the definition of success.

Oh, the world didn’t end? Well, actually it did end, because there was rain in Hawaii, which is very unusual this time of year, and that is a sign the world is about to end.

And oh, the unsustainable ticking time bomb didn’t explode and still is sustained? Well, actually, it did explode, because Amazon showed lower profits than predicted, and that is a sign the bomb is about to explode and become unsustainable.

Thus are the ignorant led by their noses, endlessly, with no evidence able to change their views.

Hey, a third of Americans still believe Donald Trump is doing a good job. Surely, this must be a bit of black humor in a bleak year.  Sometimes, one doesn’t know whether to laugh or to cry.

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

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY

 

OMG! Another wrong, wrong, wrong message to you about Medicare. Tuesday, Sep 12 2017 

Image result for the truth will set you free
It takes only two things to keep people in chains:
The ignorance of the oppressed and the treachery of their leaders.

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It simply is maddening, the misinformation you have been receiving about Medicare and Medicare for All.

Those of you who are on Medicare, and even those who are not, understand that the program is an insurance program. Let me repeat that: MEDICARE IS AN INSURANCE PROGRAM.

It takes the place of private insurance.

Like Blue Cross and Blue Shield, and other health care insurance companies, Medicare does not own hospitals, does not employ health care workers and does not own pharmaceutical companies. It is insurance.

You might expect that to be obvious to anyone who has not been living in a cave for the past 50 years, and it especially should be obvious to people who write articles about Medicare.

So, how can we explain the following article that appeared in Reason.com?

Most Americans Want Government-Run Health Care Until They Find Out the Government Will Run Health Care
And when they find out it means higher taxes, support crumbles further.
Eric Boehm|Sep. 12, 2017

Public support for single-payer health care is growing—in fact, a Kaiser Family Foundation poll in July found a majority of Americans support it—but that increase comes with an important caveat.

Most Americans only want government-run health care until they find out that it means the government will run their health care.

Wrong, wrong, wrong, and did I mention, wrong.

Medicare for All is not government run health care. It’s government funded insurance for health care. Is it really possible that the author, Eric Boehm doesn’t understand the difference?

An example of government run health care is the Veterans’ Administration, which is part of the U.S. Department of Veterans’ Affairs.

The United States Department of Veterans Affairs is a benefit system for veterans, their families, and survivors that is run by the federal government. As part of the benefit system, the VA owns and operates many VA hospitals across the country.

See the difference? If so, please contact Mr. Boehm at Eric.Boehm@Reason.com, and educate him.

Here is more nonsense from Mr. Boehm:

I thought about that this morning while reading J.D. Tuccille’s excellent piece asking, “Are You Sure You Want Medicare For All?”

He walks through the various ways government-run health care seems to be appealing—it means families no longer have to bear the cost of heartbreaking medical disasters on their own, for example—and the far greater number of reasons why government-run health care would be a fiscal, political, and medical disaster

Sorry to be redundant, but it isn’t “government run health care.” It is government funded health care.

No one says health care is “insurance company run,” so why do they talk about “government run”? There is a reason. It’s part of the scare tactics funded by the insurance industry.

Anyway, the hospitals still would be privately owned and operated. The doctors and nurses still would be privately employed. The pharmaceutical companies still would be privately operated. In short, health care would continue to be privately run, not government run.

Jumping through bureaucratic hurdles for the privilege of accepting substandard compensation isn’t as attractive as it might seem.

That may be why a growing number of physicians refuse to see Medicare patients, others limit the number they’ll accept, and more balk all the time.

Here, Boehm is onto something. The fact is that Medicare doesn’t pay doctors and hospitals enough. 

There is no financial reason for this. Unlike privately owned insurance companies, the federal government cannot run short of dollars. Medicare easily could pay doctors double, triple, or ten time what it now pays.

Here, the problem is the myth we often have discussed — the myth that the federal debt and deficit are too large, “unsustainable,” and should be reduced.

It’s utter nonsense, but it is the prevailing lie — the Big Lie — emanating from Congress and the insurance industry.

Under a single-payer system, options for medical providers may be more limited than they are now—there probably wouldn’t be any better-paying private insurers to take by preference to the government system.

There is no reason why options for medical providers may be more limited than they are now. Because the federal government is far better able to afford to provide options than are any private insurance companies, options should be greater with Medicare for All.

But there also wouldn’t be any private insurers to effectively subsidize Medicare patients.

In the case of a single-payer transition, doctors who find the terms of Medicare for All unacceptable may switch entirely to private-pay (if that’s still permitted), while some percentage will leave medicine entirely.

There is no reason why anyone needs to “subsidize” Medicare. Even the existence of today’s Medicare Supplement insurance is based on the myth that the federal government can’t afford to pay the entire bill.

A true Medicare for All program would provide free, comprehensive, no-deductible health care insurance for every man, woman, and child in America.

There is not a single financial reason why the federal government cannot provide such a program.

Sadly, Bernie Sanders has been afraid to say it. He proposed a so-called Medicare for All program that is financially limited.

Considering the potential for switching over to single-payer in The Atlantic, Olga Khazan predicts “Hospitals would shut down, and waits for major procedures would extend from a few weeks to several months.”

This is the classic scare tactic funded by the private insurance companies.  Even today, 60% of hospital patients are funded by Medicare, Medicaid, or other government programs:

  • Medicare: 40.9 percent
  • Medicaid: 17.2 percent
  • Blue Cross Blue Shield, other private insurance: 16.5 percent
  • HMO or PPO: 14 percent
  • Self-pay: 4.9 percent
  • Worker’s compensation and other government programs: 2 percent

And even with the unnecessarily stingy payments, most hospitals in America are thriving. (The ones having financial problems generally are the rural, smaller hospitals, and they simply are not receiving enough insurance money.)

Sen. Bernie Sanders (I-Vt.) and Sen. Elizabeth Warren (D-Mass.) are getting ready to unveil a Medicare-for-all scheme.

Expect that issue to feature prominently in the 2018 midterm election as Democrats try to win back control of Congress.

Expect it to be based on the Big Lie that federal deficit spending should be reduced.

Yet despite the Big Lie, that has caused ACA (Obamacare) to be an unnecessarily complex, convoluted Rube Goldbergian plan, still the program covers millions of people the private insurance industry did not cover.

Republicans have botched their efforts to repeal and replace Obamacare so badly that the threat of single-payer is real, and growing.

The “threat” of single payer? Does the use of the word “threat” leave any doubt that this article was written at the behest of the private insurance industry.

Yes, the private insurance companies regard single payer as a “threat,” and with good reason. Their high rates, high deductibles, plan limits, and their refusal to cover sick people and specialized medicines and expensive treatments has made them vulnerable to a plan that offers total, endless coverage for every person, and at zero cost.

That July Kaiser survey suggests that Americans aren’t actually ready to jump on the single-payer train. (The Sanders/Warren “Medicare-for-all” plan would not be a true national single-payer system, but would amount to putting more Americans into government-run health plans. Kaiser’s poll used both “single-payer” and “Medicare-for-all” interchangeably.)

So long as the right-wing debt hawks support the insurance industry rather than the public, and so long as they provide scare (false) information to the public — and so long as Bernie Sanders and Elizabeth Warren don’t have the courage to tell the public the truth —  we will see such poll results.

The public is being misled by the insurance companies and the debt hawks, and as we repeatedly have said (in previous posts):

Image result for breaking chainsIt takes only two things to keep people in chains:
The ignorance of the oppressed and the treachery of their leaders.

While 55 percent of Americans say they want a single-payer/Medicaid-for-all plan, those in favor tend to change their minds when they hear that it means giving the government more control over health care, or that Americans would have to pay more in taxes.

Right. People change their minds when they are told, falsely, that the government would control health care and taxes would go up.  Neither is true.

Doctors, hospitals, and pharmaceutical companies would continue to provide health care, and there is absolutely no reason why taxes would go up.

In fact, FICA could be completely eliminated, and the federal government still could provide Medicare to every man, woman, and child in America.

That tracks with other polling on the issue. A May poll from the nonpartisan Public Policy Institute of California found support for single-payer state healthcare at 65 percent statewide, but that number dropped to 42 percent when respondents were told at least $50 billion in new taxes would be required to pay for it.

That’s a pretty optimistic view of the taxes that would be required to pay for single-payer in California; the actual cost would be well over $100 billion annually.

No, that is the Big Lie. Neither $50 billion nor $100 billion would be necessary to pay for it. No tax dollars at all are necessary.

The federal government, being Monetarily Sovereign, creates brand new dollars, ad hoc, every time it pays a bill.

Are you sure you want government-run health care? Many Americans don’t seem to understand the question. But once they do, the answer is “no.”

Sure, once Americans intentionally are given the wrong information, they answer, “No.”

To repeat: It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders.

In this case, knowledge is easily obtained. Ignorance is a choice.

What choice will the public make?

Rodger Malcolm Mitchell
Monetary Sovereignty

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY

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