The Republican cure for poverty. Punish the poor for being poor.

Bottom line: The Republican solution to all problems is the stick. The carrot is reserved for the rich.

The poor are to be punished because they are “lazy,” “socialist,” and takers who need to be whipped like oxen to get them to work.

That is the bigoted nonsense continually pedaled by the GOP.

Excerpts from the following article demonstrate the right-wing bent.

Mississippi will send back fed’s rental aid, even as housing needs remain high, Aug. 13, 2022, By By Phil McCausland

In mere days, Mississippi will end its participation in the federal pandemic rental assistance program that has kept people facing eviction in their homes during the past two years of economic turbulence.

The state still has $130 million in federal cash to run the program, but Gov. Tate Reeves, a Republican, said early this month that next Monday would be the last day to apply for assistance.

Once Mississippi finishes processing the remaining claims, they will be returning the leftover money to the U.S. Treasury, which maintains oversight of the spending.

The program’s end comes as rental prices in Mississippi have skyrocketed and a large percentage of those behind on their rent or mortgage said they are at risk of losing their home in the next two months, according to U.S. Census data.

If all these Mississippi men, women, and children become homeless, what will the GOP solution be? Just let them die out there?

The Rental Assistance for Mississippians Program, or RAMP, offered up to 15 months of rental and utility bill assistance for those in need.

It was funded by two Covid-19 economic bills passed by Congress in 2020 and 2021, which provided billions of dollars of rental relief to states to administer to people economically disadvantaged by the pandemic.

This is a net financial benefit to the states.

It adds money that passes through the hands of the populace into the hands of Mississippi’s businesses.

Those businesses can use the money to hire Mississippians.

But, for the GOP, any poor person receiving federal help is a “socialist.” (Rich people who receive federal benefits by taking advantage of tax breaks are fine.)

Though unemployment continues to decline in Mississippi and the majority of participants in the program are employed, Reeves said RAMP disincentivized work.

In Reeve’s right-wing opinion, poor blacks are not like you and me. They would rather live on the meager scraps life serves them than work to improve their lives.

“This program has essentially become: If for whatever reason you can’t pay your rent or utility bill, taxpayers will pay them for you,” Reeves said in a statement earlier this month. “Mississippi will continue to say no to these types of liberal handouts that encourage people to stay out of the workforce. Instead, we’re going to say yes to conservative principles and policies that result in more people working.”

Classic bigoted misinformation. Mississippi taxpayers don’t pay for the program. The federal government does. And federal taxpayers don’t pay, either. Federal taxes do not fund federal spending. Even if all federal tax collections ended, the federal government could continue spending forever.

Reeves’s decision is pure GOP meanness, a holdover from Mississippi’s days of whipping slaves to make them work harder.

Reeves’ decision hits Mississippi as the country experiences rising housing costs and fewer economic protections. Nationwide, median listing prices for houses were up 16.6% in July from the previous year, and rent grew by 14.1% in June 2020 over June 2021, according to Realtor.com reports.

Jacob Leibenluft, the U.S. Treasury’s chief recovery officer, said programs such as RAMP, which fall under the federal Emergency Rental Assistance Program, have helped to keep evictions below historical averages.

The program is a perfect example of how the carrot works better than the stick, not only from a moral standpoint but also from an economic standpoint.

He said the Treasury Department has continued to strongly urge states to use the funding to serve tenants and noted that more than 6.5 million payments have been made to renters facing eviction as of June. Even if the money is returned by states, he said it will continue to go toward housing.

“As we have done elsewhere in cases where funds are not used by the original recipient,” Leibenluft said, “we will continue to reallocate available funds where possible with a priority on keeping funds in state where there is outstanding need.”

Under Reeves’s brand of leadership, poor, impoverished Mississippi will send their unused money to other states.

Housing rights advocates and participants in the Mississippi program said the issue in their state isn’t finding work, like Reeves said, it’s finding wages that can pay for growing living costs. RAMP has been a huge aid to fill the gap, even though it often took months to arrive.

Teresa Walker, 45, a hairdresser in Jackson, said the pandemic caused her to lose numerous customers. While business has picked up, it’s still difficult to meet her rent of $935. She’s applied for the program, as well as for jobs at Target and Walmart to help her pay the approximately $4,000 she owes her landlord.

Because the process is so slow-moving, she hasn’t heard back since applying three months ago, and her bills are stacking up.

“They don’t care. They just don’t care,” Walker said. “The amount of applications they’re getting shows there is a need, and for them to suggest people like me aren’t working? It’s a slap in the face. It’s very insulting and degrading. You’re just not being sensitive to people’s needs and understanding it.”

Sensitivity is not a GOP strongpoint. Cruelty is. 

The typical applicant in Mississippi was Black and female, Home Corps data shows. Less than a third of applicants were unemployed, but nearly 70% earned less than thearea median income where they lived.

Paheadra Robinson, who runs the Southern Rural Black Women’s Initiative in Jackson, said her group traveled across the state to operate clinics for those who needed help applying for the program.

She said they would have to bring computers and help people sign up for email accounts for the first time. More clinics were planned over the next month, but they will have to be canceled because of Reeve’s decision, she said.

“A lot of these people were able to afford where they were living prior to this explosion of rental increases, and now this spike is causing major financial issues for families,” Robinson said. “It’s just unaffordable for a lot of people, and I don’t think that was given proper consideration by the leadership of this state.”

Other states with Republican governors, such as Nebraska and Arkansas, have previously declined the federal funding that would help residents pay for housing and utilities.

This is not an aberration. Republican-run administrations have a history of not serving their states. They are the governors who have declined billions of ACA (Obamacare) dollars — dollars that would have benefitted the entire state, not just the poor.

Govs. Pete Ricketts of Nebraska and Asa Hutchinson of Arkansas rejected hundreds of millions of dollars that would have been directed to their states, claiming they were shielding residents from socialist programs they didn’t need.

We assume the residents are grateful for being “shielded” from receiving help in paying their rent, buying food, and paying for medical services.

“We must guard against big government socialism where people are incentivized not to work but are instead encouraged to rely on government handouts well after an emergency is over,” Ricketts said in March. 

“We cannot justify asking for federal relief when Nebraska has the lowest unemployment rate in the nation and we are no longer in a state of emergency.”

But Gov. Ricketts, if Nebraska has “the lowest unemployment rate in the nation,” exactly what are you trying to get your working poor to do? Get two or three jobs? What is your solution to poverty? Just let them starve and freeze to death?

Or is your goal to force the poor to move to another state?

But nonprofits in those states have told a different story since the governors rejected the federal aid in the spring.

Together Omaha, which operated the rental assistance application process for the state, has had to scramble to provide rental assistance since then, said CEO Mike Hornacek.

“Across the board, we’re all experiencing the perfect storm that we were all worried about in the nonprofit sector, which is the need is continuing at the level that it did during the pandemic and the funding is going away,” he said.

“Unfortunately, in certain cases like ours in Nebraska, some of the leadership just doesn’t seem to understand that it’s not as simple as people need to get back to work.”

SUMMARY

The Republican solution to all problems (in those rare circumstances when they even offer a solution) is cruelty to the unfortunate.

Too much street crime? The solution is longer jail sentences (i.e., “tough on crime”) rather than treating the fundamental cause of street crime: Poverty.

Illegal drugs? The GOP solution is harsher drug laws (which are proven not to work) rather than aid for rehabilitation.

Sickness? Take away health care insurance.

Homelessness? Take away financial support.

Poverty? Take away what little the poor have to “incentivize” them to work harder.

Illegal border crossings? Build walls and take children from their parents rather than helping people immigrate legally and integrate with American society. Every day we lose the opportunity for thousands of people to become productive Americans, as our ancestors did.

The Republicans have become the party of the rich, the cruel party, the white supremacists, and the neo-nazis, the party of traitors.

Despite all the flag waving, the right-wing has become the antithesis of what America claims to be.

Latent, unAmerican, hate-based cruelty may have begun to flourish with the Tea Party, in 2009, as a reaction to President Barack Obama. Its harsh ideas gradually have grown to full flower under Trump, the exemplar of “me-first, me-only” politics.

  

 

[No rational person would take dollars from the economy and give them to a federal government that has the infinite ability to create dollars.]

Rodger Malcolm Mitchell
Monetary Sovereignty

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

……………………………………………………………………..

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most critical problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

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 Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps: Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all
  4. Free education (including post-grad) for everyone
  5. Salary for attending school
  6. Eliminate federal taxes on business
  7. Increase the standard income tax deduction, annually. 
  8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
  9. Federal ownership of all banks
  10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

GOP, here is an aid for your Trump defense

Dear GOP;

I can’t imagine how difficult it must be to keep track of Donald Trump’s various defenses for his many misdeeds.

You have used multiple excuses in the past. And yes, I know you have created multiple excuses for Trump’s latest picadillo.

But, to help you keep track of all the dozens of exuses you have used to defend a compulsive liar, I have provided you with a concise list of excuses just for the FBI investigation.

Feel free to choose any one or use them all together, and see which one works.

This list applies only to the FBI’s investigation at Mar-a-Lago. Do not use it for other misdeeds like his insurrection, his lack of COVID response, his “stolen election” lies, his cheating on all three wives, his tax cheating, Trump U., Trump Foundation, his attempt to blackmail the president of Ukraine, his fake bone spurs, his crowd sizes, etc., etc., etc.

If you need a list of special excuses to defend any of those, please let me know. I’ll create a whole new set for you.

The Withheld Files Crime

    1. I didn’t do it
    2. It’s no big deal; they aren’t classified documents.
    3. It’s the left-wing media hoax
    4. It’s a Democrat hoax (or witch hunt.)
    5. I didn’t know the boxes were there
    6. Obama did the same thing
    7. The FBI planted those documents
    8. I didn’t know they were classified
    9. I declassified them
    10. I had a standing order to declassify them
    11. Pence (or Meadows, or Stone, etc.) was supposed to declassify them
    12. I took them home to work on them (Try not to laugh when using this one.)
    13. I meant to return them when I left office.
    14. I didn’t know I was supposed to return them (despite 18 months of requests by the National Archive).
    15. I thought those top-secret atomic files already were declassified
    16. On the advice of my lawyers
    17. The GSA mistakenly packed the boxes and moved them to Mar-a-Lago
    18. I offered to give the files back but they didn’t want them.
    19. What about Russiagate?
    20. What about Benghazi?
    21. What about Hillary’s Emails?
    22. What about Hunter?
    23. The FBI wasn’t really looking for those records; it was just a fishing expedition.
    24. The FBI agents went rogue.
    25. The judge was biased against Trump.
    26. Biden sent them.
    27. Garland didn’t know anything about it.
    28. Garland hates Trump
    29. Someone else threw those papers into my toilet.
    30. [TO BE CONTINUED IF YOU CAN THINK OF SOME BETTER ONES]

To aid the GOP in its downward helix of criminality, please send me any additional excuses they can use for the inexcusable.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

……………………………………………………………………..

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

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 Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps: Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all
  4. Free education (including post-grad) for everyone
  5. Salary for attending school
  6. Eliminate federal taxes on business
  7. Increase the standard income tax deduction, annually. 
  8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
  9. Federal ownership of all banks
  10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

The letter Donald Trump may have composed just for me

Here is the text of a letter Donald Trump may have composed just for me.

Dear Rodger,

Many people tell me I love America more than anyone ever has loved America in history, and that is why my billions of patriotic followers believe everything I tell them.

You know we all love America because you’ve seen me hug the flag and you see my followers wave flags.

 

Thank you, God': Trump revels in reign as absolute king of CPAC | Donald  Trump | The Guardian

Cassidy Hutchinson, ignored by all the Trump men at their peril

 

 

 

 

 

 

 

Here’s more proof of my love for America: My followers put flags in their tweets like this:

                                                           StickerTalk USA Flag Vinyl Sticker, 5 inches by 3 inchesStickerTalk USA Flag Vinyl Sticker, 5 inches by 3 inchesStickerTalk USA Flag Vinyl Sticker, 5 inches by 3 inchesStickerTalk USA Flag Vinyl Sticker, 5 inches by 3 inchesStickerTalk USA Flag Vinyl Sticker, 5 inches by 3 inches

They even carried flags into Congress when they tried to overturn the stolen election so there could be a peaceful transfer of power to me. That’s true patriotism, and it’s more than those snowflakes would do.

Here is what one of my writers told me to say about America.

MY ODE TO AMERICA

Hey, if I didn’t love America and all it stands for, I would have created a “Family Separation Policy” to rip immigrant children from their parents permanently and essentially to make them orphans. Some Never-Trumpers say that’s cruel, but I wish someone had taken my kids from me, especially DJTJ, and that other one, Brandon, or something. 

If I didn’t love America, I would have said that a soldier who gives his life for his country is a sucker, and I would have insulted a family whose child died in a war. And, for sure, I would have dodged the draft by concocting a phony story about heel spurs, which were very painful, but due to my superior health, miraculously healed.

And speaking of health, if I didn’t love America I would have told my New York doctor to write that I was in the best health of any American President in history. Make that any American in history.

If I didn’t love America and all it stands for, I would have tried to take health care from the poor by eliminating Obamacare. (Instead, I cut taxes on the rich, who don’t receive enough gratitude from the fake news.)

I would have teargassed protesters to take my picture in front of a church I never would enter, just to show people how religious I am. (So what if I held the bible upside down?)

And if I ever said anything stupid, which I never did, ever, I would have claimed I was joking or being sarcastic. You can say anything that way.

I would have lied about COVID and delayed our response, which would have contributed to the deaths of hundreds of thousands of Americans. (Unfortunately, they mostly were my followers, whom I definitely did not tell not to wear masks.)

I would be supported by nutty white supremacists like the Proud Boys. I would be a huge supporter of Vladimir Putin and Kim Jong Un.

If I didn’t love America and all it stands for, I would have cheated on all three of my wives, while denouncing the marriages of gays. 

If I didn’t love America and all it stands for, I would have said, “The concept of global warming was created by and for the Chinese in order to make U.S. manufacturing non-competitive.”

I would have claimed the election was stolen. I would have planned and urged a coup, and sent my naive followers to take over Congress, violently, but I never did, despite what all those RINOs testified.

I would have cheated on my taxes by, for instance, setting up a fake charitable foundation or by rigging the values of my properties.

I would have tried to strongarm state officials into changing votes illegally, so I still could be President.

I would have mimicked and made fun of a man who has a disability.

I would have claimed my inauguration crowd was the biggest ever (which it was).

I would immediately have taken action to stop the perfectly legal armed protests in the halls of Congress, and I would have done nothing to protect Vice President Pence (who is a coward.) I even would have said he deserved to be hung.

I would have lied, endlessly, and if questioned under oath, I would have taken the 5th Amendment, which I said only criminals do. 

If I didn’t love America more than anyone ever has loved anything, I would have claimed Mexico will pay for a wall.

I repeatedly would claim to be the greatest at everything, when in fact, I am the most humble President in history (and the greatest, too.)

Since I didn’t do any of those things, that proves my love for me America. 

Please send me your money so I can fight against everyone I’ve told you to hate.

Sincerely, your leader for life, but only if you send me money or buy my incredibly priced MAGA hats that were not made in China, despite what the label says.

Donald J. Trump

P.S. Send me money. It’s the most patriotic thing to do, and I’ll love you as much as I love America and the Proud Boys..

And there it is, exactly how the Donald may have written it.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

……………………………………………………………………..

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

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 Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps: Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all
  4. Free education (including post-grad) for everyone
  5. Salary for attending school
  6. Eliminate federal taxes on business
  7. Increase the standard income tax deduction, annually. 
  8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
  9. Federal ownership of all banks
  10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

What if China dumps its U.S. Treasuries?

BACKGROUND

The number erroneously referred to as Federal “debt” is the total of outstanding Treasuries. When you buy a Treasury (T-bill, T-bond, T-note), you add to the so-called “debt.”

I say “so-called” because Treasuries are not debts of the United States, nor are they debts of taxpayers.

Treasuries are deposits into Treasury Security accounts.

They resemble bank safe deposit boxes in that the depositor, not the bank or U.S. government, owns the deposits, and the bank never touches them.

Similarly, the federal government neither uses nor even touches the dollars that are in Treasury accounts.

The federal government does not use tax dollars to pay off a T-bill, T-note, or T-bond. The dollars do not help fund federal spending. Nor are they owed by future taxpayers.

Upon maturity, the federal government returns the dollars in a T-account as though these dollars were in a safe-deposit box.

Thus the so-called federal “debt” cannot be too high, nor can it be “unsuitable” (another favorite word of debt worriers) any more than a safe deposit box’s contents can be too high or unsustainable.

The federal government pays its bills out of the General Fund, similar to a checking account, and by law, this fund cannot be negative.

As a bookkeeping device, the federal government sells enough T-securities to offset whatever would be a negative General Fund total.

This accounting trick has no practical significance because the Federal Reserve, now Monetarily Sovereign, has the unlimited ability to increase the dollar balance in the General Fund.

Quote from former Fed Chairman Ben Bernanke when he was on 60 Minutes:
Scott Pelley: Is that tax money that the Fed is spending?
Ben Bernanke: It’s not tax money… We simply use the computer to mark up the size of the account.

Statement from the St. Louis Fed:
“As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.”

Treasury securities are not a form of borrowing; they are not owed by the government or taxpayers and do not help the government pay its bills. So what is their purpose:

  1. They provide the world with a safe, convenient, interest-paying place to store unused dollars. This helps stabilize the value of the dollar.
  2. Because the Fed arbitrarily determines the interest at which deposits will accumulate funds, these accounts help the Fed control overall interest rates.

Among those who don’t understand Treasuries (T-bills, T-bonds, T-notes), a persistent refrain is, “What if China dumps or stops buying Treasuries?” What would the federal government do?

That is like asking a bank, what if your big, safe-deposit-box customer started taking money out of his box? The answers are:

  1. Nothing, or
  2. If the government needed to add dollars to the total “debt,” the Monetarily Sovereign Federal Reserve would buy T-securities — as many as it wished, whenever it wanted.

Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”

The U.S. is not unique in its unlimited ability to create dollars. The European Union has the unlimited ability to create euros:

Press Conference: Mario Draghi, President of the ECB
Question: I am wondering: can the ECB ever run out of money?
Mario Draghi: Technically, no. We cannot run out of money.

All of the above brings us to these excerpts from an article that appeared online:

Memo to China: You Look Silly When You Threaten to Dump Treasuries, 

Americans often quote the saying of President Theodore Roosevelt, “Speak softly but carry a big stick.” In other words, it is important to make only realistic threats. 

(In that vein), threatening to dump US Treasuries is silly.

China is the second-largest foreign holder of US treasuries, only after Japan. China’s holdings of US treasury securities dropped to $980.8 billion in May, falling below $1 trillion for the first time in 12 years, according to data released by the US Department of the Treasury.

The further deterioration of China-US relations will likely have a direct impact on China’s risk appetite for holding US treasuries, and reducing holding of US treasuries could become a precautionary option.

This was the only large scale ultimatum the Global Times story presented and it’s bizarre to see that one mentioned. China and Japan have both been reducing their holdings of US Treasuries in recent years, with no adverse impact to the US government funding or the dollar.

Recent US Treasury reports show China’s holdings at $981 billion, down from a peak of $1,316 in November 2013. That current $981 billion represents only 3.2% of total US government debt.

….the real reason China cannot sell off its holdings of U.S. government bonds is because Chinese purchases were not made to accommodate U.S. needs.

Rather, China made these purchases to accommodate a domestic demand deficiency in China: Chinese capital exports are simply the flip side of the country’s current account surplus, and without the former, they could not hold down the currency enough to permit the latter.

To see why any Chinese threat to retaliate against U.S. trade intervention would actually undermine China’s own position in the trade negotiations, consider all the ways in which Beijing can reduce its purchases of U.S. government bonds…

China can buy other U.S. assets, other developed-country assets, other developing-country assets, or domestic assets. No other option is possible.

The first two ways would change nothing for either China or the United States. The second two ways would change nothing for China but would cause the U.S. trade deficit to decline, either in ways that would reduce U.S. unemployment or in ways that would reduce U.S. debt.

Finally, the fifth way would also cause the U.S. trade deficit to decline in ways that would likely either reduce U.S. unemployment or reduce U.S. debt; but this would come at the expense of causing the Chinese trade surplus to decline in ways that would either increase Chinese unemployment or increase Chinese debt.

By purchasing fewer U.S. government bonds, in other words, Beijing would leave the United States either unchanged or better off, while doing so would also leave China either unchanged or worse off.

China remains an export-depended economy (even though it is currently trying to shift its economic model).

Therefore, it needs to run a current account (or trade) surplus. If it does not, China will face either

more unemployment, for reduced exports mean that the Chinese exporters are forced to lay off workers,

or more debt, as Beijing will encourage large fiscal transfers to the households (social security, unemployment benefits, food stamps, etc.) or the creation of new businesses to mitigate the consequences of unemployment.

All this requires more money and, consequently, more debt.

This is why China purchases US Treasuries: to run trade surpluses and avoid higher debt/unemployment — not, as many think, to “help” American consumers so that they can purchase more Chinese imports.

China might make geopolitical waves by buying Japanese government debt. The yen is trading at very low levels and the Japanese central bank has had to buy over half the debt outstanding.

This is one of the steps the Federal Reserve could take and often has taken. The Japanese Central Bank is Monetarily Sovereign like the Fed and the EU.

Even if China wanted to buy Japanese debt to support Japan (as in make a point about the US failure to do much about its long-standing post financial crisis distress), it’s not clear the market is liquid enough for China to procure all that much. 

In other words, this idea of punishing the US by dumping Treasuries may be appealing to a domestic audience, which has long been unhappy about the magnitude of China’s dollar foreign exchange reserves.

But no one knowledgeable in the US will lose sleep over it.

SUMMARY

The so-called federal “debt” is not a debt. lt is the total of deposits into Treasury Security accounts, which are similar to bank safe-deposit boxes. 

Neither the federal government nor future taxpayers owe the “debt.” To pay it off, which is done daily, the Treasury simply returns the contents of these accounts to the account owners.

These accounts serve two purposes: To provide a safe, interest-paying repository for unused dollars (which stabilizes the dollar) and to help the Fed control interest rates.

Thus, there is no danger inherent in a “too-large debt.” Even if China stopped buying T-securities, the U.S. government and U.S. taxpayers would be just fine.

 

Rodger Malcolm Mitchell
Monetary Sovereignty

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

……………………………………………………………………..

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socioeconomic ranking and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

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 Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps: Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all
  4. Free education (including post-grad) for everyone
  5. Salary for attending school
  6. Eliminate federal taxes on business
  7. Increase the standard income tax deduction, annually. 
  8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
  9. Federal ownership of all banks
  10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY