Time Magazine and the Big Lie in economics Sunday, Jul 24 2016 

The Big Lie in economics, very simply, is: “Federal taxes fund federal spending.”

Nearly all the popular misunderstandings in economics devolve from that five-word statement, or rather, misstatement.

While state taxes fund state spending, and city taxes fund city spending and euro-nation taxes fund euro-nation spending, U.S. federal taxes most assuredly do not fund federal spending.

In fact, even if all federal tax collections ceased, and not one tax dollar was sent by the private sector to the federal government, the government still could continue spending, forever.

The reason: The U.S. federal government, unlike the states, cities, and euro nations, uniquely is Monetarily Sovereign.

It has the unlimited ability to create any amount of its own sovereign currency, the U.S. dollar. It never can run short of dollars.

Faced with an invoice of a trillion dollars or even a trillion, trillion, trillion dollars, the U.S. government could pay it today, simply by creating dollars, ad hoc.

Because tax collections have zero effect on the federal government’s ability to pay, we taxpayers are not liable for federal debts.

Even if the government were faced with that above-mentioned, theoretical bill of a trillion, trillion, trillion dollars, we U.S. taxpayers would not owe one cent. Nor would our children and grandchildren have any liability whatsoever.

Yes, you and your kin, and all your neighbors and friends, and everyone in your state, and in the entire country could cease paying federal taxes today, and that would have no effect on the federal government’s ability to pay its bills. (You’d have to keep paying state, county and city taxes, however. They are monetarily non-sovereign.)

Those are the facts, the absolute facts of economics. How then can you explain the persistence of such misleading articles as this one by James Grant and Time Magazine:

The Big Lie Time Magazine

The United States of Insolvency
James Grant, the editor of Grant’s Interest Rate Observer
$13,903,107,629,266. Can the nation afford this much debt? James Grant offers his view

This much I have learned about debt after 40 years of writing and study: It is better not to incur it. Once it is incurred, it is better to pay it off. America, we have a problem.

We owe more than we can easily repay. We spend too much and borrow too much. Worse, we promise too much. We conjure dollar bills by the trillions–pull them right out of thin air. I won’t insist that this can’t go on, because it has. I only say that it will eventually stop.

I don’t know the date, but I believe that I know the reason. It will stop when the world loses confidence in the dollars we owe.

Come that moment of truth, the nation will resemble Chicago, a once prosperous polity now trying to persuade its once trusting creditors that it is actually solvent.

There, in a couple of short paragraphs, you see the commonly promulgated Big Lie about our economy — some half truths leavened with a giant dollop of lies.

Begin with the misleading title of the article: “The United States of Insolvency.” Grant and Time immediately tell you a lie.

The United States never can become insolvent — i.e. unable to pay its bills — unless Congress and the President want it (via the misleading “debt limit” game they play to confuse you).

Grant/Time said, “It is better to pay (the debt) off.” They lied to you.

The debt is nothing more than the total of T-security accounts at the Federal Reserve Bank. In short, bank deposits. There is no reason to pay off these bank deposits, though the federal government could do it tomorrow, if it wished.

The purpose of the so-called “debt,” i.e. T-securities, is to twofold: To help the Fed control interest rates and the money supply, and to provide a safe investment for the private sector.

Grant/Time said, “. . . more than we can easily repay.” They lied to you. We could repay those deposits today, simply by transferring them back to the owners’ checking accounts. No new dollars needed.

Grant/Time said, “We conjure dollar bills by the trillions–pull them right out of thin air,” which is absolutely true. It’s what we always have done, for the past 240 years of our existence. It is what all Monetarily Sovereign nations, like Canada, China, Australia, Japan, the UK, et al do. Creating money from thin air is what grows our economy.

In the past, whenever we stopped “conjuring” dollars, the economy stopped growing and we went into recessions and depressions.

Grant/Time said, “It (growing debt) will stop when the world loses confidence in the dollars we owe.”

This is a more subtle form of the Big Lie. The world simultaneously would have to lose confidence in China’s, Australia’s, Canada’s, the UK’s, and Japan’s money, as well as the euro and the money of all other governments for the U.S., the wealthiest nation on earth, to have difficulty issuing dollars.

Grant/Time said, “. . . the nation will resemble Chicago . . . ” They lied to you.

The U.S. government is Monetarily Sovereign. Chicago’s government is monetarily non-sovereign. The former has the unlimited ability to create dollars. The latter does not.

It’s as though Grant/Time don’t understand the difference between butter and a butterfly. The false comparison between federal financing and personal financing is an often-used lie.

Through wars, recessions, depressions, and inflations the U.S. government never has run short of dollars, and indeed, cannot run short of dollars.

You have been lied to for years and years. President Obama lied to you back in 2011, by making the same false comparison between federal financing and personal financing. He said:

“It comes down to this: We have to prioritize. Both parties agree that we need to reduce the deficit by the same amount — by $4 trillion.

“So what choices are we going to make to reach that goal? Either we ask the wealthiest Americans to pay their fair share in taxes, or we’re going to have to ask seniors to pay more for Medicare. We can’t afford to do both.

“Either we gut education and medical research, or we’ve got to reform the tax code so that the most profitable corporations have to give up tax loopholes that other companies don’t get. We can’t afford to do both.

“This is not class warfare. It’s math. The money is going to have to come from someplace.

He lied to you then, and he continues to lie to you now, boldface, absolute lies.

Yes, the money has to come from someplace. The federal government creates dollars, ad hoc, every time it pays a bill. Obama knows it. His advisors know it. Stephanie Kelton, the chief Democratic economist on the Senate Budget Committee knows it (though she is prevented from revealing it).

Why did Obama lie to you in 2011? Why did Grant and Time Magazine lie to you last April? Why have the media, the politicians and the university economists lied to you for decades?

Because they are paid by and controlled by the very rich, and the very rich want to control you by levying unnecessary taxes, and by restricting your benefits.

Obama is paid by rich contributors who will support him and his family after he leaves office. Grant was paid by Time which is owned and controlled by the very rich.

The rich control America. The Gap between the rich and the rest is what makes them rich (without the Gap, no one would be rich, and the wider the Gap, the richer they are.)

The rich widen the Gap by limiting the amount of healthcare you receive — refusing the free healthcare the government easily could provide.

They widen the Gap by limiting your Social Security — taxing it and by starting it later and later.

They widen the Gap by limiting your educational possibilities (via via the disgraceful student loan program).

They steal your money to impoverish you so you will need to beg them for help, and then you will send them contributions in hopes of getting that help.

You, the people of America are the victims of The Big Lie. You have been so brainwashed by our thought-leaders, that you angrily will defend The Big Lie. Consider the irony of the victims defending the victimizers.

WHAT ABOUT INFLATION?
If you understand Monetary Sovereignty, and try to explain it, eventually you will encounter this retort: “Yes the government always can print money, but that will cause inflation; look at Zimbabwe and the Weimar Republic.”

The people, who tell you that, seldom understand they tacitly have admitted the federal government never can run short of money (“. . . always can print money. . . “), so they have dissolved their entire argument about taxes being necessary, and all they have left is their argument about hyperinflation.

They base their concern on the false belief that Dollar Value = 1/Supply, that is, the greater the Supply of dollars, the less their Value (i.e inflation). That is what the rich want you to believe

However, the real formula is Dollar Value = Demand/Supply. The greater the Demand for dollars, the greater the Value of dollars.

And Demand is based on Reward/Risk. And Reward is interest. That is why, for the past century, the Fed has controlled inflation at close to its target rate of 2%, by controlling interest rates.

And as for the bogeyman of Zimbabwe/Weimar hyperinflation:

  1. The U.S. never has had a hyperinflation, despite two centuries of “debt” growth — even today, while Time publishes scare articles, inflation is quite low, and
  2. Hyperinflations are not caused by money creation. They are caused by specific economic factors. Zimbabwe’s was caused by Robert Mugabe’s stealing of farm land from farmers and giving to people who didn’t know how to farm. The resultant food shortage caused hyperinflation. Weimar’s hyperinflation was caused by onerous repayment requirements put on Germany by the Allies.

Excessive money creation is a common response to hyperinflation. In short, hyperinflations cause excessive money creation and not the other way around.

The Big Lie — Federal taxes fund federal spending — has been used for centuries to control you.

So long as you continue to believe the Big Lie, the very rich and powerful will continue to control every aspect of your and your family’s lives, their health, their education, and their finances — from birth to death.

The rich want you to believe resistance is futile, but it’s not. You merely first must understand you are being lied to by The Big Lie.

Then demand the truth and close the Gap.

Begin with the Ten Steps to Prosperity.

Rodger Malcolm Mitchell
Monetary Sovereignty

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
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 afford better health care than 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 AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) 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 EVERYONEFive 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 benefiting 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 CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from 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 corporate taxes would be an 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

Why the cashless society? To track and control your life Thursday, Jul 21 2016 

Here are some excerpts from an interesting article in Bloomberg:

Could India Be the First to Get Rid of Cash?
JULY 20, 2016 By Mihir Sharma

“Black money” — the colloquial name for a vast network of off-the-book cash transactions and unbanked savings — is one of India’s biggest scourges.

Amounting to as much as $460 billion a year, bigger than the GDP of Argentina, all that money lies beyond the reach of the tax authorities, creditors, and anti-corruption investigators.

Half the country’s output comes from the small, informal sector, where cash transactions are the norm.

Meanwhile, taxes are cumbersome to pay and easy to avoid.

To collect revenue, India’s government has to rely on indirect levies such as sales and excise taxes, which are distortionary and regressive, rather than on income tax.

Direct taxes contribute only 35 percent of the take in India.

Tax evasion has been a hot-button political issue in India for at least a decade. The anti-corruption crusader Arvind Kejriwal — now chief minister of the Indian capital Delhi — made headlines when he accused top politicians and businessmen of having illegal offshore accounts.

Belgium, for example, which has the highest proportion of cashless transactions in the world — 93 percent, according to MasterCard — has banned cash payments of over 3,000 euros.

India’s many poor people and migrants still struggle to access its chronically inefficient banking system, despite the government’s efforts at reform.

If presented with an easy and frictionless way of transferring cash, there’s no reason to think consumers wouldn’t embrace it quickly.

As cash gets used for fewer and fewer transactions, it will become easier for authorities to crack down on tax evasion.

The “cashless society” is proposed as an innocent, money-saving convenience, especially for poor people, and as a way to reduce corrupt tax avoidance. Thus, the “cashless society” is described as a morally and economically good program.

But its real purpose, its insidious purpose, is control.

Consider that India is Monetarily Sovereign. Its currency is the rupee (worth about $.15).

Being Monetarily Sovereign, India has the unlimited ability to pay any bill denominated in rupees.

Even if India stopped taxing altogether, it could continue spending forever. It never would run short of rupees.

Monetarily Sovereign entities do not need income so long as their currency is widely accepted for payment and/or exchange. The rupee is such a currency.

The article gave the example of Belgium, as a nation where few bills are paid with cash. But because Belgium uses the euro, it monetarily non-sovereign. It does not have its own sovereign currency, so it does not have the unlimited ability to pay its bills. It needs income.

Similarly, our states, counties and cities are monetarily non-sovereign.  They too, need taxes to fund spending.

By contrast, India (like the U.S., Canada, Australia, China, Japan, and other Monetarily Sovereign nations) does not need to collect taxes for bill payment.

Yet all these nations collect taxes, not because they need the currency (They don’t), but for economic control.

Tax collection, together with harsh laws about tax evasion, provide a means by which a government can track and control the finances of every citizen. Tracking and controlling finances allows governments to track and control the lives of their citizens.

When you use credit cards or checks to pay your bills, you create a “paper” trail, easily followed by the government. Similarly, if you are a business that accepts credit cards or checks in payment, your finances can be tracked.

More importantly, if you fall into either of the above categories, your finances not only can be tracked, but controlled.

Having the power to levy taxes on various forms of income or purchase, allows the government to control much of your life. For instance, a simple gasoline tax can affect such decisions as: Will you drive to work, take a train, or decide to work nearby? Where will you vacation? Where will you live? What kind of vehicle will you own? Import taxes affect what you buy. Luxury taxes affect what you own. Inheritance taxes affect what you leave behind.

The arbitrary tax rates on various forms of income dramatically affect your investing and your saving. Taxes affect your charity giving and your healthcare.

The requirements to declare your income and much of your spending allow the government to trace what you do and where you go.

The operations of any business are controlled in part, by what forms of income are taxed and what expenses are tax-deductible.

Today, computerized “big data” collection, gives the government a permanent record of your life and the lives of every business. Tax laws run the world.

The tracking and control afforded by tax collections is why the federal government does not want you to understand Monetary Sovereignty.

It is why the government wants you to believe the “Big Lie” (i.e. “Federal taxes fund federal spending”). It is why you repeatedly have been told wrongly that federal obligations are taxpayer obligations, and that when the government spends, its spends “taxpayer dollars” — all part of The Big Lie.

In summary, the real effect of the “cashless society” is to ease tax collection. The real purpose of federal tax collection is to track and to control your life.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================

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 afford better health care than 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 AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) 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 EVERYONEFive 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 benefiting 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 CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from 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 corporate taxes would be an 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

 

The buck stops there —> Wednesday, Jul 20 2016 

The hopeful leader of the free world, the man who through his brilliance and courage, will force Mexico, China and NATO to bend to his will, takes full responsibility.

“Melania is a college graduate. ” (Actually, she isn’t)

“She wrote the speech.”

“She didn’t write the speech.”

“There was no plagiarism.”

“It was only a little plagiarism.”

“They’re just common words.”

“It’s all Hillary’s fault.”

“It was all the writer’s fault.”

The buck stops there. Way, way over there.

 

Hotter? Which risk do you prefer Wednesday, Jul 20 2016 

“Global warming” or if you wish, “climate change” has become a contentious question, when it really shouldn’t be. There are but two risks, and all we need do is choose the one we prefer. Simple enough.

If you accept the idea that it is a scientific question, and that scientific questions are best answered by scientists, the consensus of scientists is that the earth is warming due to an increase in CO2, and humans are responsible for much of this increase.

True, scientific consensus isn’t always right. In fact, scientific progress relies on the consensus being proved wrong. Every scientific development proves a previous scientific belief wrong.

Yet, at any given time, time has shown we are wiser to rely on the scientific consensus rather than on business consensus, religious consensus, or political consensus. Businesses, religions, and politicians are highly partisan observers.

Consider the words of Donald Trump, noted non-scientist and the leader of the Republican party:

“The concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive.”

“This very expensive GLOBAL WARMING bullshit has got to stop. Our planet is freezing, record low temps, and our GW scientists are stuck in ice”

These statements are at odds with scientific consensus:

The increased volumes of carbon dioxide and other greenhouse gases released by the burning of fossil fuels, land clearing, agriculture, and other human activities, are believed to be the primary sources of the global warming that has occurred over the past 50 years.

Scientists from the Intergovernmental Panel on Climate carrying out global warming research have recently predicted that average global temperatures could increase between 1.4 and 5.8 °C by the year 2100.

Changes resulting from global warming may include rising sea levels due to the melting of the polar ice caps, as well as an increase in occurrence and severity of storms and other severe weather events.

There are three fundamental questions regarding global warming:

  1. Is it real?
  2. Is it being caused by the burning of fossil fuels?
  3. Is it less harmful than efforts to prevent it?

1. Donald Trump and the Republican party notwithstanding, there is zero doubt the world is growing warmer.

Record Breaking Temperatures Again in First Half of 2016

For the first six months of the year, the Earth has had its ‘warmest half-year on record,’ according to NASA’s Goddard Spaceflight Center. The planet has also seen record Arctic Sea ice shrink.

2. While many hypotheses about the causes of global warming have been put forward, CO2 definitely wis a “greenhouse” gas and that the amount of this greenhouse gas in our atmosphere is growing.

The relentless rise of carbon dioxide

monetary sovereignty

During ice ages, CO2 levels were around 200 parts per million (ppm), and during the warmer interglacial periods, they hovered around 280 ppm (see fluctuations in the graph).

In 2013, CO2 levels surpassed 400 ppm for the first time in recorded history.

This recent relentless rise in CO2 shows a remarkably constant relationship with fossil-fuel burning, and can be well accounted for based on the simple premise that about 60 percent of fossil-fuel emissions stay in the air.

While the science seems clear, people believe what they want to believe, and the Trump/Republicans want you to believe:

–The world is not growing warmer,
and anyway,
–The increased warmth is not caused by fossil-burning,
and anyway,
The cost to reduce fossil burning is not worth the benefits.

We bolded the final belief, because it is the real belief, and it is based on a very short-term view. The political right-wing, anti-science, pro-business view is that spending money today to reduce CO2 emissions is unprofitable.

And they are correct. Spending millions or billions of dollars this year to reduce CO2 emissions, will have minimal effect on global warming next year or perhaps for dozens of years.

Businesses are short-term efforts. Businesses are run by businessmen, who are far more interested in this quarter’s profits and their own personal compensation this year, than about the long-term effects of global warming on polar bears.

3. But even taking a longer view, say a few decades, is global warming less harmful than efforts to prevent it?

Too hot to work: global warming may cause loss of 20% of annual work hours in Southeast Asia alone

Rising temperatures caused by climate change may cost the world economy over $2 trillion in lost productivity by 2030 as hot weather makes it unbearable to work in some parts of the world, according to U.N. research published on Tuesday.

Across the globe, 43 countries will see a fall in their gross domestic product (GDP) due to reduced productivity, the majority of them in Asia including Indonesia, Malaysia, China, India and Bangladesh, researcher Tord Kjellstrom said.

In Southeast Asia alone, up to 20 percent of annual work hours may already be lost in jobs with exposure to extreme heat with the figures set to double by 2050 as the effects of climate change deepen.

Apparently, we are not “just” talking about polar bears, melting ice, rising seas or tropical diseases coming to the temperate zones. We are talking about lost business, today.

In discussing business, we always must return to risk/reward analysis. For any individual business, is the reward of CO2 reduction worth the spending risk?

The answer is “No.”

Any business that spends money to prevent global warming will see no return on that investment. Such an investment should be included in the “Charity” section of the balance sheet — an effort to “do the right thing” and not in anticipation of profits. While businesses may give to charity, the business purpose is good will.

From a short-term standpoint, most businesses would profit more from investments in marketing and product development than in greenhouse gas reduction.

The one entity that can and should take the long view on greenhouse gas reduction is a Monetarily Sovereign government — a government that has the unlimited capacity for financial risk, does not need profits, and whose investments in of themselves would stimulate its economy.

In evaluating risk, we should look at the risk of doing something vs. the risk of doing nothing.

For a Monetarily Sovereign nation, the primary risk of doing something (CO2 prevention and removal) is time: The research and development time necessary to create systems that do not produce CO2, or to invent CO2 storage systems — a minimal “risk.”

There will be many failures, which in the world of science are known as “learning.” The information gleaned from these efforts becomes part of the world’s scientific knowledge — the positive result of scientific failure.

But for a Monetarily Sovereign nation, the risk of doing nothing is monumental — at worst, the decline and end of life as we know it.

In summary, the “reward” from doing nothing is that Monetarily Sovereign nations will not stimulate their economies by adding their sovereign currency to their nation’s money supply, a dubious “reward” indeed.

The worst risk is that life on earth will become so stressed as to cause a massive extinction of species, impacting all life, including human life.

It is vital that Monetarily Sovereign governments absorb the costs of CO2 amelioration. If we want clean-running cars, clean electrical generation, clean heating and air conditioning, thriving ecologies, etc. governments should pay the R&D costs,rather than simply demanding that private industry pay.

Fundamentally, the global warming question boils down to our selecting which risk we prefer:

  1. The non-risk that a government will add dollars to its economy, thereby stimulating the economy, but failing to develop good solutions, or

  2. The real risk of doing nothing, and thus creating an unlivable world for our children and grandchildren.

Take your pick.

Rodger Malcolm Mitchell
Monetary Sovereignty

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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 afford better health care than 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 AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) 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 EVERYONEFive 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 benefiting 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 CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from 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 corporate taxes would be an 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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