Do you accept our Constitution as the law of our land? Thursday, Apr 27 2017 

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

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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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America is special.

We are special because every 4-8 years, we peacefully change our leadership.  We do not suffer coups or other forms of violent resistance.Image result for constitution

Even when a majority votes for one candidate, but our Constitution dictates that the other candidate has won, we accept the decision.

That is why Donald Trump, and not Hillary Clinton, is our President.

Many feel this violates the spirit of a democratic government, but we respect our Constitution. We respect it even above the word of any of our gods, which is why we accept the separation of Church from State.

On specific issues, many of us may not like what it tells us, but our mutual acceptance of those words makes America special.

We are a diverse, multiethnic nation, but our Constitution gives us the strength of unity. We are strong because we are one.

We are one because of our Constitution.

Our government is divided into three branches, and one branch — the judiciary — is tasked with the responsibility to defend our Constitution. Sometimes it must stand alone and strong against the other two branches, that often feel free to ignore Constitutional restraints.

If the judiciary ever were to yield that strength to the Congress or to the Presidency, America would cease to exist as we know it.

If Congress ruled, America would be a system of feifdoms.

If the President ruled, America would be a dictatorship.

That is why it always is disturbing when a President displays contempt for the Judicial branch.

Donald Trump’s racial comments about Hispanic judge in Trump University case
By Tom Kertscher on Wednesday, June 8th, 2016, Politfact

This was the exchange about the judge between Trump and host John Dickerson on CBS’ Face the Nation. The interview was recorded on June 3, 2016.

Dickerson: Let me ask you about, what does the Mexican heritage of the judge in the Trump University case have to do with anything?

Trump: First of all, I’ve had terrible rulings, forever.

I had a judge previous to him and it would have been a very quick case. This is a case I should’ve won on summary judgment. This is a case — the plaintiff in the case was a woman.  She was so bad that under deposition it was over. I mean, she couldn’t have been the — it was a disaster.

Dickerson: But Mr. Trump, what does this have to do with his parents being from Mexico, how does that —

Trump: Excuse me, excuse me, I’m just saying. We’re getting terrible rulings. We go to the judge, we say to the judge, “Hey, you can’t let her out of the case.” He let her out of the case. We said, “Well, if you’re going to let her out of the case, she’s the plaintiff. If you’re going to let her out of the case, the case is over.” No, the case isn’t over. OK? Now —

He is a member of a club or society, very strongly pro-Mexican, which is all fine. But I say he’s got bias. I want to build a wall. I’m going to build a wall. But just so you understand, this judge has treated me very unfairly, he’s treated me in a hostile manner. And there’s something going on.

Dickerson: And you think it’s not because — you think it’s because of where his parents came from?

Trump: Look, I have a case where thousands of people have said it was a great school. They’ve written reviews where they say it’s a great school. Not a good school, like great. They gave it the highest marks.

I have thousands of these papers. It should’ve been a summary judgment case, meaning the case should’ve been dismissed.

Dickerson: Yeah, I guess I’m just still confused how — what his Mexican parents have to do with that. Let me —

Trump: Excuse me. I want to build a wall. I mean, I don’t think it’s very confusing. Has nothing to do with anything except common sense. You know, we have to stop being so politically correct in this country. And we need a little more common sense, John. And I’m not blaming. I’m proud of my heritage, we’re all proud of our heritage. But I want to build a wall.

Now, the Hispanics, many of them like what I’m saying. They’re here legally. They don’t want people coming and taking their jobs and taking their house and everything else. They don’t want that.

Trump’s position: Because he wants to build a border wall, a judge who was born in America, but whose parents came from Mexico, can’t be fair with regard to Trump University.

Get it?

(Trump University was so “great,” Trump paid a gigantic $25,000,000 penalty for the scam.)  But the real point is not that Trump is a crook, but that he repeatedly disparages the foundation of our American government — the protector of our Constitution, the judiciary — whenever he doesn’t get his way.

Trump is like the petulant child who is angry at the parents who feed, clothe, and send him to college but they won’t let him misbehave.

Chicago Tribune
Federal judge in Hawaii extends order halting Trump’s travel ban

U.S. District Judge Derrick Watson: “The entirety of (Trump’s) Executive Order runs afoul of the Establishment Clause, where ‘openly available data support a commonsense conclusion that a religious objective permeated the government’s action.”

Trump called Watson’s ruling an example of “unprecedented judicial overreach.”

And then, after Trump had lashed out at the judiciary about his Trump University scam, and his Muslim ban, apparently he wasn’t finished, when he tried for a third, unconstitutional Executive Order:

Judge cites Trump’s comment in ‘sanctuary city’ ruling
By SUDHIN THANAWALA, Associated Press
Published: April 26, 2017, 11:33 AM

In a ruling on Tuesday, U.S. District Judge William Orrick quoted Trump to support his decision to block the president’s order to withhold funding from “sanctuary cities” that do not cooperate with U.S. immigration officials.

Trump called the sanctuary cities order a “weapon” against communities that disagree with his preferred immigration policy, Orrick said. The judge also cited a February interview in which he said the president threatened to cut off funding to California, saying the state “in many ways is out of control.”

The first comment was evidence that the administration intended the executive order to apply broadly to all sorts of federal funding, and not a relatively small pot of grant money as the Department of Justice had argued, the judge said.

The second statement showed the two California governments that sued to block the order — San Francisco and Santa Clara County — had good reason to believe they would be targeted, Orrick said.

Trump reacted to the decision on Twitter on Wednesday morning, calling the decision “ridiculous” and saying he would take his fight to the highest court, tweeting: “See you in the Supreme Court.”

Trump tweeted: “First the Ninth Circuit rules against the ban & now it hits again on sanctuary cities-both ridiculous rulings.” Trump tweeted that the 9th circuit has “a terrible record of being overturned (close to 80 percent).” He said, “They used to call this ‘judge shopping!’ Messy system.” 

Among the many, many things Trump doesn’t understand is that the Supreme Court generally takes certain types of appeals — those where there is a high probability of an overturn. It doesn’t take appeals of decisions with which it agrees.

Thus all Circuit Courts experience a high percentage of overturns — 80% is near average  — and the Ninth has not been the highest.

Among Trump’s comments was this one: “(The ruling is) an “egregious overreach by a single, unelected district judge.” Does it get any worse than that? District judges, appeals judges and Supreme Court judges are appointed, not elected. Trump seemingly is ignorant of that fact.

Orrick wrote that the jurisdictions successfully showed they “are currently suffering irreparable harm” because the order violates rights granted to states by the Constitution . . . ”

Presidents are Constitutionally precluded from coercing cities, counties,  and states in that way.

Bottom line: Every time Trump doesn’t get a favorable court ruling, he stomps his feet and criticizes the judge.

This is his long-standing pattern, which demonstrates the importance of an independent judiciary.  For instance, there was this tweet with regard to Judge James Robart, “The opinion of this so-called judge, which essentially takes law-enforcement away from our country, is ridiculous and will be overturned!” (The next day, White House spokesman Sean Spicer said Trump had “no regrets” about his criticism of judges.)

Trump’s own Supreme Court nominee, Neil Gorsuch, described Trump’s criticism of the judiciary as “demoralizing and disheartening.” But Trump has “no regrets.”

He wishes to learn nothing about our Constitution and indeed has learned nothing.

Imagine the arbitrary havoc this Congress and Trump could cause without the leash held by our judges and our Constitution. 

This is why America even can survive President Donald Trump. We have a judiciary and a Constitution, and we are people who believe in both.

Rodger Malcolm Mitchell
Monetary Sovereignty

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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

Robert Reich’s “fake news” on Trump’s tax plan. Wednesday, Apr 26 2017 

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

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

Let’s begin with three facts:

  1. I am no fan of Robert Reich. (See: What next? Kristallnacht?)
  2. I am no fan of Donald Trump. (See: The secret GOP checklist of Presidential requirements.)
  3. Whatever Trump’s tax plan turns out to be, it will benefit him far more than it will benefit you. For “Trumpayola”, the White House is a gigantic piggy bank. Related image

So when a man, whom I believe lacks knowledge of economics, criticizes a President whom I know lacks honesty and also lacks knowledge of economics, how shall I focus my criticism of Reich’s article, 5 Reasons Why Trump’s Corporate Tax Cut is Appallingly Dumb, April 25, 2017?

Reich’s career is impressive. As he himself says:

ROBERT B. REICH is Chancellor’s Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies. He served as Secretary of Labor in the Clinton administration, for which Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written fourteen books, including the best sellers “Aftershock”, “The Work of Nations,” and”Beyond Outrage,” and, his most recent, “Saving Capitalism.” He is also a founding editor of the American Prospect magazine, chairman of Common Cause, a member of the American Academy of Arts and Sciences, and co-creator of the award-winning documentary, INEQUALITY FOR ALL.

Trump’s career also is impressive: By lying, stealing and relying on daddy to fund him with millions of dollars and then save him from disaster, Trump has amassed a fortune and become President.

Given that background, here are Reich’s “5 Reasons Why Trump’s Tax Cuts Are Appallingly Dumb.”

1. The White House says the United States has one of the highest corporate tax rates in the world. Baloney. After corporate deductions and tax credits, the typical corporation pays an effective tax rate of 27.9%, only a tad higher than the average of 27.7 percent among advanced nations.

Whether or not America’s corporate tax rates are higher or lower than the average of other nations, does not in any way address the wisdom of corporate tax cuts.

Federal taxes reduce corporate profits. Tax cuts increase profits. Is Reich saying that increasing corporate profits would be bad for America?

2. Trump’s corporate tax cut will will bust the federal budget. According to the Congress’s own Joint Committee on Taxation, it will reduce federal revenue by $2 trillion over 10 years. This will either require huge cuts in programs for the poor, or additional tax revenues from the rest of us. 

Here, Reich demonstrates shocking ignorance of Monetary Sovereignty. Unlike state and local governments, the federal government has the unlimited ability to create its own sovereign currency, the dollar. It never can run short of dollars.

Reducing tax revenue does not require the federal government to make “huge cuts in programs for the poor, or additional tax revenues from the rest of us.” 

Even if all federal tax collections fell to $0, the federal government could continue spending forever.

It would be astounding if a former Secretary of Labor and the author of fourteen books, including one titled, “Saving Capitalism,” did not understand the fundament truths of federal finance and of Monetary Sovereignty.

One only can wonder, is it ignorance or intent?

3. The White House says the tax cuts will create a jump in economic growth that will generate enough new revenue to wipe out any increase in the budget deficit. This is supply-side nonsense.

The Congressional Research Service (CRS) reviewed tax cuts since 1945 and found no evidence they generate economic growth. Ronald Reagan and George W. Bush both cut taxes, and both ended their presidencies with huge budget deficits. Bill Clinton raised taxes, and the economy created more jobs than it did under Bush or Reagan.

This is wrong in so many ways, one scarcely knows where to begin. Well, let’s begin with this: The formula for Gross Domestic Product, the most common measure of the economy is: GDP = Federal Spending + Non-federal Spending + Net Exports.

It is clear that cutting taxes will, by formula, increase GDP.  Every dollar paid in federal taxes is a dollar lost to the economy and causes a reduction in GDP.

There is, however, a distinct difference between a reduction in tax rates, and a reduction in tax collections.  As the CRS said, “Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%.” But virtually no one paid that 90% rate.

Bottom line: Trump is correct that cuts in federal tax collections will increase economic growth.

But Reich says Trump also claims, tax cuts will bring in enough new revenue to wipe out any increase in the budget deficit. Reich calls this “supply-side nonsense.”

Reich is correct when he calls this “supply-side nonsense.” Cutting tax rates does not increase tax collections.

But Reich is horribly wrong when he implies that reducing the federal deficit should be a government goal. Dollars are created in two ways and destroyed in two ways:

Dollars are created by federal deficit spending and by most forms of lending. Dollars are destroyed by federal taxes and by loan payoffs.

Deficit reduction (aka austerity) always is recessionary.  When Reich uses the words, “Appallingly Dumb” those words should be applied to any deficit reduction scheme.

Further, when Reich says, “The Congressional Research Service (CRS) reviewed tax cuts since 1945 and found no evidence they generate economic growth,” that simply is not true.

Here is what the CRS report actually said:

“There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth.”

The CRS was talking not about “tax cuts” (meaning cuts in tax collections) but rather about cuts in top tax rates. Huge difference, which Reich surely must know.

Since virtually no one was paying those top tax rates, of course there was no “conclusive evidence” of a relationship to economic growth. If any taxes at all were collected, the amounts would have been too minuscule to make any conclusive difference in GDP.

Finally, when Clinton raised taxes and reduced deficits (he actually ran a surplus), he caused a recession, as federal surpluses always do.

4. American corporations don’t need a tax cut. They’re already hugely competitive as measured by their profits – which are at near record highs.

Reich is saying, American corporations don’t “need” higher profits. What can one say about such an idea other than it is, to use Reich’s own words, “appallingly dumb.”

What next? We don’t “need” economic growth?

5. The White House says corporations will use the extra profits they get from the tax cut to invest in more capacity and jobs. Rubbish. They’re now using a large portion of their profits to buy back their shares of stock and to buy other companies, in order to raise their stock prices. There’s no reason to suppose they’ll do any different with even more profits.

Ah, yes, one last bit of silliness from Reich.

If corporations are using a “large portion” of their profits to buy back shares, to whom are those dollars going. Answer: To shareholders, just as dividends do. Buybacks are another form of dividends.

Unless you oppose corporations paying dividends, you shouldn’t oppose corporations buying back stock.  The dollars go to exactly the same hands.

The sole objection (and it is an important one) is that the dollars would be better spent on increased salaries that go to lower-paid workers (the “99%”) than to the 1%.  Buybacks increase the Gap between the rich and the rest.

But, in no case are dollars better directed to the federal government in the form of taxes. Federal taxes take dollars from GDP.

[Aside: State and local taxes do not reduce GDP. Those tax dollars remain in the money supply.]

In summary, it’s difficult to say what hurts the economy more: Trump’s preference for the rich over the rest, or Reich’s promulgation of “The Big Lie,” that federal taxes are necessary to fund federal spending.

Take your pick.

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

Why do you need an EB (Economic Bonus)? Tuesday, Apr 25 2017 

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

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

The previous post discussed Step #3 in the Ten Steps to Prosperity (below), Provide a monthly economic bonus (EB) to every man, woman, and child in America (similar to Social Security for All)

Today, we’ll discuss one of the many reasons why EB not only is important today but will become less avoidable each passing day.

That reason, in a word: Technology.

The Cato Institute, an ultra-right-wing “think tank,” published a paper titled: “Cato Institute Policy Analysis No. 68: Does More Technology Create Unemployment?”  the thrust of which can be summarized in one sentence on the paper’s page 4:

“It is only technological improvement that enables employment to take place at higher-than subsistence levels of output.”

First, when technical change lowers costs in a given industry, the competitive firms comprising that industry must lower their prices, generating larger sales and an even greater need for employment.

In this case, employment goes up, not down, and with the increased competition for workers, wages rise in all industries capturing some of the value of the technological change for workers.

Second, when technical change in a given industry is labor saving, but its downward effect on product prices does not result in larger quantities sold sufficient to provide the same amount of employment in the industry as before the change, then temporary unemployment occurs.

However, jobs are available elsewhere in competitive markets.

If nothing else, wages are bid down enough in other industries to absorb the released labor.

Cato’s idea is that unemployment breeds lower wages in other industries, which encourages those other industries to hire more people.

Only a right-wing writer could look upon lower wages as an effective and worthwhile cure for unemployment. Taken to its logical extreme, universal slavery would be a wonderful way to prevent all unemployment.

It is an idea that has appeal for the “haves” of the world.

But the savings in the industry where the advancement occurs must also be taken into account.

Either more money goes to remaining workers in that industry, so that they raise the demand for other products, thus enabling the released labor to be employed in other industries without lower wages; or product prices are lower in the automated industry, so that consumers can buy the same amount and have income left over to demand more products from other industries, again enabling the released labor to be employed in those expanding industries without lower wages.

In summary: Though technology creates short-term unemployment, it lowers prices, which increases demand, which over the longer term, cures the unemployment.

And, in fact, that is the way things have worked in the past: Technology has cost jobs in the short term and created jobs in the long term.

This may be uncomfortable for those of us — all of us, really — who live our lives in short term segments, but from a long economic standpoint,  it has proven to be efficient.

Thus, while some unemployment may occur when there is technological advancement in competitive markets, it is both temporary and a natural consequence of the ability to change jobs freely.

It is certainly not a social problem requiring any sort of government action.

That last sentence, “It is certainly not a social problem requiring any sort of government action,” summarizes the right-wing attitude about virtually every social program. 

The idea is that government assistance to the poor, the unemployed or low waged worker, the homeless, the uneducated, etc. is not needed. Things will just work themselves out, naturally.

Can President Trump keep his promises to coal country? PBS Newshour

From 2011 to 2015, the coal mining industry lost more than 26,000 jobs, with 87 percent of those losses coming in the Appalachian region. In the last two years alone, several major coal companies filed for bankruptcy protection.

“We’re going to get those miners back to work,” Trump said in May 2016. “The miners of West Virginia and Pennsylvania … Ohio and all over are going to start to work again, believe me. They are going to be proud again to be miners.”

Many economists and energy experts say the current decline, at least in Appalachia, is here to stay.

Increased automation is one of several factors that they point to. Even as the production of coal was peaking in 2008, machines were replacing whole teams of miners, reducing the number of jobs in the industry.

These employment losses are very heavily concentrated. Southern West Virginia now contains five counties — the heart of the coal fields — that are in a deep depression.

Coal miners lose their jobs or move to another county or state in search of work. The subsequent loss in tax revenue, in turn, forces counties with shrinking budgets to cut jobs in government, some of the most stable employment available in these areas.

“It’s just this ripple effect that keeps rippling out to impact all these other layers, so you have less support for county projects, infrastructure development, for anything that supports the county budget,” said Stephanie Tyree, the executive director of the West Virginia Community Development Hub.

“It starts to go at such a rapid pace that it becomes very difficult to step in to mitigate it.”

From a cold, economic perspective, this is the way it long has been. Technology has destroyed some products and some industries, along with the jobs in those industries, and along with the cities, counties and states that rely on those industries.

But it creates new products and new jobs in other industries, cities, counties, and states.

While older workers suffer, younger workers seek employment in the new industries in other locations. A short-term cost with a long-term benefit.

But what do we do in the short term, about the suffering older workers and the job-seeking younger workers, and the suffering locations whose infrastructures have decayed?

Meanwhile, something altogether new has emerged on the scene. We no longer are talking only about a digging machine operated by one man, replacing a dozen pick-and-shovel workers.

Now, we are beginning to discuss AI (Artificial Intelligence) replacing every conceivable type of job: CEOs, CFOs. line managers, doctors, lawyers, baseball managers. One scarcely can imagine a job that hasn’t been, or won’t be, impacted by AI.

One scarcely can imagine a job that hasn’t been, or won’t be, impacted by AI.

The Chicago Cubs, the perennial losers, won in part because of Sabermetrics. Rather than making strictly intuitive decisions, Cubs management evaluates advanced statistics.

But why do we need humans to evaluate statistics, when AI can do it better and faster. Baseball managers, sitting on the bench, soon may be replaced by a computer sitting in another city, altogether.

Fortune Magazine
Mark Cuban: Robots Are ‘Going to Cause Unemployment’

Mark Cuban reiterated his warning that total robot takeover of blue-collar manufacturing jobs could come sooner than people may expect.

“Automation is going to cause unemployment and we need to prepare for it.” Similar warnings (have been made) by Bill Gates, Elon Musk, and Stephen Hawking.

In December, Cuban called on Donald Trump to make America a world leader in robotics, otherwise, “if nothing in the States changes, we will find ourselves dependent on other countries for almost everything that can and will be manufactured in a quickly approaching future.”

That is the “solution” advocated by a very, rich man: Because automation will take over blue collar jobs, the U.S. should invest in automation, so the U.S. can compete with other nations.

While the advice is good for the rich, it leaves out consideration of those unemployed people. What is to become of them?

And, lest you feel safe because you are in an “intellectual” job, it’s not just blue-collar jobs that are at risk.

The Guardian

Machines could put more than half the world’s population out of a job in the next 30 years, according to a computer scientist who said on Saturday that artificial intelligence’s threat to the economy should not be understated.

Expert Moshe Vardi told the American Association for the Advancement of Science (AAAS): “We are approaching a time when machines will be able to outperform humans at almost any task.

Unlike the industrial revolution, Vardi said, “the AI revolution” will not be a matter of physically powerful machines that outperform human laborers, but rather a contest between human wit and mechanical intelligence and strength.

How has human wit done in such machine vs. human contests as chess, Go, and Jeopardy? Not too well, recently.

And unlike people, machines don’t tire, don’t demand raises or vacations, don’t fight or argue.

They not only are physically stronger, but every year become mentally stronger and stronger — and stronger.

Bart Selman , a professor at Cornell University, said: “Computers are basically starting to hear and see the way humans do,” thanks to advances in big data and “deep learning”.

Citing research from MIT, he noted that although Americans continue to drive GDP with increasing productivity, employment peaked around 1980 and average wages for families have gone down. “It’s automation,” Vardi said.

The consultant company McKinsey concluded that 20% of a CEO’s working time could be automated with existing technologies, and nearly 80% of a file clerk’s job could be automated. About 45% of the work people are paid to do could be automated by existing technology.

See those two little words, “existing technology”?

If 45% of the work could be automated by existing technology, how much will be automated by future technologies?

We humans aren’t getting smarter, but our machines are.In 2013, two Oxford professors predicted that as much as 47% of the US workforce, from telemarketers to legal secretaries and cooks, were vulnerable to automation.

In 2013, two Oxford professors predicted that as much as 47% of the US workforce, from telemarketers to legal secretaries and cooks, were vulnerable to automation.

And the professors needn’t feel safe.

What about a professor who knows everything about his subject and all related subjects — a sort of “super-Jeopardy” contestant, who can answer any question. Wouldn’t it be better equipped to teach?

But then again, who would such a professor teach? An AI machine “student” promises to be more apt than a human student — instantly learning and no cheating on exams.

And then there are truck drivers:

MIT Technology Review
Self-Driving TrucksTractor-trailers without a human at the wheel will soon barrel onto highways near you.
What will this mean for the nation’s 1.7 million truck drivers? Multiple companies are now testing self-driving trucks.

Although many technical problems are still unresolved, proponents claim that self-driving trucks will be safer and less costly.

Driver fatigue is a factor in roughly one of seven fatal truck accidents.

“This system often drives better than I do,” says Greg Murphy, who’s been a professional truck driver for 40 years. He now serves as a safety backup driver during tests of self-driving trucks by Otto, a San Francisco company that outfits trucks with the equipment needed to drive themselves.

Last October an Otto-outfitted self-driving truck carried 2,000 cases of Budweiser beer 200 kilometers down Interstate 25 in Colorado from Fort Collins to Colorado Springs—while the truck’s only human driver sat in the sleeper berth at the back of the cab without touching the vehicle’s controls.

O.K., truck drivers and baseball managers.  But, what about doctors? We always will need human doctors, right?

MIT Technology Review: The Artificially Intelligent Doctor Will Hear You Now
March 9, 2016

U.K.-based startup Babylon will launch an app later this year that will listen to your symptoms and provide medical advice.

There are about 10,000 known human diseases, yet human doctors are only able to recall a fraction of them at any given moment. As many as 40,500 patients die annually in an ICU in the U.S. as a result of misdiagnosis, according to a 2012 Johns Hopkins study.

What does your primary care doctor do for you? He/she listens to your symptoms and provides medical advice.

So wouldn’t you rather have a doctor conversant with every known human disease, and every known treatment, a doctor whose knowledge increases every minute of every day, a doctor who is available to you for advice 24/7/365?

Clearly, the days of the primary care doctor are numbered.

Well, are surgeons safe?

Autonomous Robot Surgeon Bests Humans in World First
By Eliza Strickland, Posted 4 May 2016

In a robotic surgery breakthrough, a bot stitched up a pig’s small intestines using its own vision, tools, and intelligence to carry out the procedure.

What’s more, the Smart Tissue Autonomous Robot (STAR) did a better job on the operation than human surgeons who were given the same task.

Moving up the business ladder . . .

Could the CEO be replaced by a robot?
This article is part of the World Economic Forum Annual Meeting 2017

With the automation of many everyday activities, could a robot be a more productive addition to boardrooms of the future than a CEO?

In an era defined by the exponential evolution of technology, robotics and artificial intelligence (AI) have come a long way in a short space of time.

Robots can perform surgical operations, build cars, move stock in warehouses, check you into your hotel and serve you drinks. And they can do it quickly and efficiently.

AI is expected to evolve significantly beyond today’s relatively simple machine learning to better understand human behaviour. That means robots making decisions on their own in more complicated situations. And as they get cleverer, they would be able to take on increasingly challenging jobs.

But could they take on as challenging a role as the CEO?

If I’ve had a bad meeting, am suffering jet lag or simply have other things on my mind, my decisions could suffer. Robots don’t face the unpredictability we humans face, so their decisions are more likely to be consistent, based on facts.

Secondly, robots can work all day, every day. They don’t need sleep, weekends or holidays. No mere humans can say the same.

As technology improves, no job is safe for humans. If you believe “robots can’t do this,” or “robots don’t do that,” you may be wrong about today’s robots, and you surely are wrong about tomorrow’s robots.

There is nothing you can think of that robots one day, won’t be able to do better, faster, and cheaper than you can.  And that “one day” may come sooner than you can imagine.

So the world should prepare.

The fundamental purpose of robots is the same as the fundamental purpose of government: To help make our lives better.

Fortunately, we have all the tools we need, for we control the algorithms, i.e. the laws. As robots do more and more jobs, we can make those jobs less necessary for humans to do.

Humans have no innate need to dig for coal, drive trucks, or run companies. The prime motivation for the vast majority of jobs is money.  And we have the unlimited ability to create money.

Yes, some jobs give us satisfaction and pride. But we don’t need to have an employer for us to feel satisfaction and pride.

This all comes together with the Ten Steps to Prosperity.

The step we discussed in the previous post, Step #3, Social Security for All, provides income not dependent on work.  Importantly, it allows us to obtain goods and services, eventually without the need for a job.

Unquestionably, AI will make human labor less necessary. But, until robots are able to provide all of our goods and services, as in the mythical Star Trek “replicator,” we must find another mechanism.

And I believe that interim mechanism must be the distribution of money by Monetarily Sovereign governments via social programs.

Historically, people have toiled more, lived less comfortable lives, and died earlier than they do, today. “Work ’til you drop” was the human blueprint, just as it remains today for all other animals.

Today, our massive brains have given us less demanding work, more comfort, and longer lives — and have created even more massive brains, but of an electronic nature.

In America, Social Security, Medicare and other social programs evolved as small, interim steps on the long path toward a society requiring work only for pleasure.

We have taken those interim steps, those baby steps, and we must continue marching. No creation of Man exists in a vacuum. Every invention demands supporting inventions.

We invented trains, which made railroad tracks necessary. The auto made strong streets and highways necessary. Airplanes made massive airports necessary. The one cannot function properly without the other.

Similarly, AI makes strong social programs necessary. Neither can function properly without the other.

We have opened a Pandora’s box of Artificial Intelligence. We have the tools to control it, improve it, and to make it function properly. But we had better use those tools by expanding our social programs — our Social Security, our Medicare, et al.

To our advantage, we must use AI properly.

Or  AI will use us.

Rodger Malcolm Mitchell
Monetary Sovereignty

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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

Is the UBI (aka EB) even possible in today’s world? Monday, Apr 24 2017 

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

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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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Today, any effort to grow the economy is confronted by the high walls of conflicting claims and biases:

  1. The Big Lie, which falsely avers that federal taxes are necessary to fund federal spending (sadly, believed by the vast majority).
  2. The Libertarians, who claim the federal government should be “smaller” (though no one knows why, or what “smaller” functionally means).
  3. The liberals who claim the federal government should spend more on social programs and tax the rich more to pay for the spending (though federal taxes do not fund federal spending).
  4. The neoliberals, who subscribe to privatization and austerity (though both privatization and austerity always widen the gap between the rich and the rest).
  5. The university and “think tank” economists, who are paid to claim federal deficits and debt are “unsustainable” and lead to slower economic growth (though this counters all evidence).
  6. The conservatives, who tell you that social benefits breed sloth (a false belief that relies on Gap Psychology).
  7. And of course, the socialists, communists, fascists, capitalists and innumerable other “ists,” whose membership often is more the result of blind desire than logical thoughtfulness.

This all comes down to the question: “What is the purpose of government?”

We claim:

Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful.

Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

But the fundamental purpose of government is to improve the lives of the governed.

Improving the lives of the governed also is the goal of the Ten Steps to Prosperity (below). The specific subject of this post is discussed at: “Ten Steps to Prosperity, Monthly Bonuses for All” and earlier at “The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)

Here are a few excerpts from an article in the April 24, issue of Time Magazine:

Universal Basic Income: A Utopian Idea Whose Time May Finally Have Arrived
Matt Vellar

Recently economists and policymakers began seriously re-examining the 500-year-old concept of a universal basic income (UBI).

We refer to Universal Basic Income (UBI) as an Economic Bonus (EB), only because the term “basic income” seems inappropriate when dollars go to millionaires and billionaires. Also, the amount paid would not serve as a “basic income” as it probably would fall below most people’s idea of basic.

Instead, it would be a bonus.

The government would pay every adult citizen a salary, regardless of wealth, employment income or if they worked at all.

That is primary — one, simple flat benefit to each person, regardless of need, income, or wealth. It is progressive in that the same amount means much more to the rich than to the poor.

But, lest you believe EB is a liberal notion . . .

The idea can be found in Utopia, Thomas More’s 1516 book. A version had proponents in the likes of Thomas Paine, John Stuart Mill and Bertrand Russell, Martin Luther King Jr. ,and conservative economists, Milton Friedman and Friedrich Hayek.

Starting in the late 1960s, the Nixon Administration studied the idea and tried unsuccessfully to get a basic-income benefit through Congress.

Today, thinkers on the left see the UBI as a way to combat poverty and inequality as well as a potential palliative to the disruptions to workers caused by technology.

To the right, the idea is an attractively simple alternative to bloated social-welfare regimes.

EB, as presented in Step #3 of the Ten Steps to Prosperity, is an alternative to Social Security, but not to all social programs. Monetary Sovereignty views it as coming after the elimination of FICA and the establishment of a federally funded Medicare for All.

Critics come from all sides too: they say the UBI is just a decoy to starve government assistance that boosts universal child care or free college tuition.

EB would be a “decoy” only if one believes the federal government can exhaust its supply of dollars, and that federal taxes fund federal spending.

The federal government, unlike state and local governments, is Monetarily Sovereign. It has the unlimited ability to create dollars, which it does, ad hoc, by spending. The federal government needs no income for spending.

Or it’s one more misguided program bound to result in eliminating work incentives, rendering large numbers of people dependent on the government.

This is the largely discredited notion, promulgated by the rich, that poor people are lazy, and if given any support at all, they will refuse to work. In the past, that propaganda has been used to fight Social Security, Medicare, Medicaid, aids to education, poverty aids — virtually every social program.

The irony:  The poor, on average, toil much harder than do the rich. Think of the maids who clean Bill Gates’s offices.  Who works harder, the poor for whom life is a daily struggle, or the rich for whom life is served on a silver platter?

Most UBI skeptics, and some proponents, sooner or later come to the conclusion that the costs would be absurdly prohibitive in any case. One critic puts the figure in the U.S. at $3 trillion annually.

We aren’t sure who that “one critic” is, or how he came up with his figure, or whether the author means $3 trillion is “absurdly prohibitive” politically or financially.

Politically, any figure is prohibitive in the view of anti-deficit, pro-small-government, people. Financially, any figure is affordable for a Monetarily Sovereign government, with the only limit being an inflation that cannot be controlled via interest rate controls.

With 325 million people in America, that $3 trillion figure comes to about $9,000 per person, annually, or $36,000 for a family of four — a bonus of about $9 thousand per person, annually, or $36 thousand for a family of four — perhaps overly large for a bonus.

U.S. GDP is about $20 trillion. Annual spending for total Social Security is about $1 trillion a year.

About 73% of federal spending is for social benefits. That is why Federal spending cuts invariably punish the lower and middle income recipients, not the rich.

In 2017, about 40 million adult retired Americans will receive approximately $670 billion in Social Security benefits, an individual average of about $17 thousand annually. That should continue.

That should continue.

Step #3 of The Ten Steps to Prosperity, suggests paying adults and children different amounts. If our estimated 245 million adults each received $9,000 annually, and the 75 million children each received $2,000, the total expenditure would be about $2.2 trillion, totaling about $22,000 annually for a family of four. about $22 thousand annually for a family of four. 

This would add about $1.2 trillion to overall SS spending, adding 6% of GDP.

Depending on the Multiplier Effect, changes in government spending create much larger changes in Gross Domestic Product. This is one reason why much larger increase in Gross Domestic Product.

This is one reason why federal deficits are stimulative and federal surpluses are recessive. 

Whatever the spending figures may be, they are affordable for a Monetarily Sovereign nation. The the sole question is inflation, which is why we recommend that the Ten Steps be implemented sequentially.

The inflationary effects of each step can be evaluated before the next step is taken.

Early this year, Finland became the first European country to pay unemployed citizens an unconditional monthly sum. The two-year national pilot program, gives 2,000 unemployed Finns ages 25 to 58 a guaranteed €560 (around $590), money that would keep coming even if they find work.

The country’s social-security agency says the test is intended to cut red tape, alleviate poverty and, especially, reduce unemployment.

Its existing system can disincentivize taking work because even low earnings prompt a cut in benefits.

EB does not advocate benefits substantial enough to discourage employment. Benefits should be considered a bonus rather than as a substitute for earnings and savings.

Similar experiments are moving forward in Canada, the Netherlands and Italy. The Indian government appears to be mulling a small UBI as a strategy to cut the country’s most extreme poverty.

Y Combinator, a startup incubator, is trying it with 100 families in Oakland, Calif., this year, paying each between $1,000 and $2,000 a month.

Big difference: Y Combinator is monetarily non-sovereign, so is much less able to afford EB than is the federal government.

The Monetarily Sovereign federal government should conduct the test, though with the current political makeup, that would be difficult to effect. The anti-big-government, anti-spending, anti-deficit beliefs result in anti-middle and anti-poor legislation.

Tech’s big thinkers, like Bill Gates and Elon Musk, have concluded a UBI is likely inevitable. They see a great wave of job-destroying robots and artificial intelligence on the horizon.

Today, despising the poor as indolent, criminal and aimless has become de rigueur in America’s current politics. This attitude provides the excuse to press the poor down. Read: Gap Psychology and the Big Lie.

But, the poor not only are today’s and tomorrow’s valuable consumers, but they can be tomorrow’s “makers.” Brainpower is not limited to the rich, and if current events are any measure, brainpower often is absent in the coddled rich.

Thus, by Ebeneezer Scrooge standards, government-provided benefits are revulsive, but if government doesn’t provide social benefits, of what value is it?

As the above graph indicates, social benefits plus military and interest account for 94% of federal spending. Social spending and defense, for the welfare of the people, is the primary purpose of the federal government.

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.

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