Self-immolation by the Dems Thursday, Nov 15 2018 

Image result for bernanke and greenspan

The rich don’t want us to let the rest know that federal taxes don’t fund federal spending.

Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

Alan Greenspan: “Central banks can issue currency, a non-interest-bearing claim on the government, effectively without limit. A government cannot become insolvent with respect to obligations in its own currency.”

St. Louis Federal Reserve: “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.

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To understand liars you must listen to (or read) liars, which is why I read Breitbart, the ultimate in prevarication and exaggeration. In Breitbart, you sometimes can uncover a tiny nugget of truth from the vast supplies of bovine excrement, or at least acquire a better understanding of fool’s thinking.

Here is a Breitbart story which I found both fascinating and disturbing, because amazingly, it contained what appears to be the abovementioned nugget:

WATCH — DNC CEO Seema Nanda: I Do Not Know How to Pay for ‘Medicare for All’
14 Nov 2018

Democratic National Committee (DNC) chief executive officer Seema Nanda admitted on Tuesday she does not know how to pay for the socialized medicine scheme known as Medicare for All, estimates of which are somewhere between $32 and $38 trillion.

Nanda, during Yahoo Finance’s “All Markets Summit: America’s Financial Future” event in Washington, DC, on Tuesday, the interviewer asked:

It would be very expensive, so, if this is going to be a winning issue for Democrats in 2020, how do you answer the question of how are you going to pay for this? Because there have been studies, credible studies that say it would cost three trillion dollars a year, you would have to double everybody’s taxes or maybe triple everybody’s taxes.

How do you answer the cost question?

“So, you know, your answer is I don’t know how we’re going to get there, but these are all big conversations that we need to be engaged in,” Nanda added.

Perhaps Nanda does know but doesn’t wish to give away the Democrat’s plans just yet. Or, more likely, she is as clueless as Sen. Bernie Sanders was when he first proposed Medicare for All.

Virtually everyone, left and right, believes that having medical insurance is important. Today’s medicine simply is so expensive that only the richest among us could risk not having a backup plan to pay.

So, the question becomes a simple one: Who should pay for medical insurance, the public or the federal government?

“The public,” which consists of people, businesses and local governments, is financially constrained. It does not have unlimited funds. The public can, and often does, run short of dollars. It is what is known as monetarily non-sovereign.

By contrast, the federal government is not financially constrained. It has the unlimited ability to create its own sovereign currency, the U.S. dollar. It is Monetarily Sovereign.

The U.S. government never can run short of dollars. Even if all federal taxing totaled $0, the federal government could continue spending, forever.

In fact, the federal government’s method for creating dollars and adding them to the economy, is to pay creditors.

So, before we continue with the Breitbart article, think about the answer to this basic question:

Who should pay for healthcare, the public which does not have unlimited money or the federal government which does have unlimited money?

Paying for Medicare for All remains a daunting task for Democrats. Multiple studies have estimated that the plan would cost between $32 and $38 trillion over the next ten years, contrary to Sen. Bernie Sanders’ (I-VT) claim that the plan would save America money.

In the unlikely event that the $38 trillion over ten years turns out to be correct, what does the seemingly simple term “save America money” mean?

If the federal government were to fund for Medicare for All, that indeed would save the American people money.

And the federal government has no need to save money, because it has the unlimited ability to create dollars.

So yes, Medicare for All would save America money.

The Associated Press (AP) even noted that the socialized medicine proposal would require “historic” tax increases to pay for the single-payer healthcare proposal.

Note the pejorative and incorrect term “socialized medicine.” In socialized medicine, the government would own all the medical facilities and employ all the medical workers.

I know of no one who suggests that. It’s a fake objection by Breitbart, the home of fake objections to anything that benefits the middle classes and the poor.

In Medicare for All, as with today’s Medicare, the federal government merely takes the place of private insurance carriers.

It does not own the hospital and clinics and pharmaceutical companies.e It does not employ the doctors, nurses and other personnel. It merely writes checks, which it can do endlessly.

Sen. Bill Cassidy (R-LA) said that Medicare will soon become bankrupt and that adding half of the country to the government health care program will not improve anyone’s health care.

Because the U.S. federal government has the unlimited ability to create U.S. dollars, it cannot unintentionally go bankrupt.

And because the federal government cannot go bankrupt, no agency of the federal government unintentionally can go bankrupt.

Even if all FICA taxes disappeared, the federal government could support Medicare for All forever, and I suspect Cassidy knows this.

“My point is Medicare for All is Medicare for none,” Cassidy told Breitbart News in October.

“Medicare is actually going bankrupt in eight years, and now Bernie Sanders wants to put 150 million more people into a system going bankrupt in eight years?”

No, Medicare will not go bankrupt in eight years or in eighty years, unless Congress wishes it.

Many in Congress do not understand the differences between federal financing and personal financing. They think federal debt is like personal debt, and is a burden on the government or on taxpayers.

It is neither.

Many others in Congress are well aware that the federal government has the unlimited ability to fund Medicare for All, and in fact, adding trillions of dollars would provide a dramatic stimulus to the overall economy.

These members of Congress do not want you to know this for fear you will make “unreasonable” demands on the government.

What is an “unreasonable” demand? Anything that narrows the Gap between the rich and the rest. (See: Gap Psychology)

In summary: Every person in America should be able to afford health care, and not to be financially devastated by illness. But someone has to pay for such insurance.

The public’s funds are limited, but the federal government’s funds are unlimited. The only logical solution is for the federal government to pay for Medicare for every man, woman, and child in America — which the federal government easily can do.

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

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

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

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

Ten Steps To Prosperity:
1. Eliminate FICA

2. Federally funded medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to 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 you.

MONETARY SOVEREIGNTY

The debt lies just keep on coming. Wednesday, Nov 14 2018 

Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

Alan Greenspan: “Central banks can issue currency, a non-interest-bearing claim on the government, effectively without limit. A government cannot become insolvent with respect to obligations in its own currency.”

St. Louis Federal Reserve: “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.

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There is a website known as “Reason” (the libertarian magazine of “Free Minds and Free Markets.”) and its editor, Nick Gillespie, who can be depended upon to display incredible ignorance about federal financing.

Fundamentally, Gillespie seems to believe that federal financing resembles personal financing.

He does not understand, or refuses to acknowledge, that the federal government is Monetarily Sovereign, while you and I, and the state and local governments, and businesses all are monetarily non-sovereign.

The U.K. created and distributes the British pound. Japan created and distributes the Japanese yen. The U.S. government created and distributes the U.S. dollar.

That little prefix “non” should have given him a clue, but for those who are unfamiliar with the terms, a Monetarily Sovereign entity is the creator and distributor of a type of money.  A monetarily non-sovereign entity uses money, but did not create that money. 

By contrast, the State of Illinois, the City of Chicago, you and I, did not create the dollar. We are users of the dollar. France and Germany did not create the euro they use. All are monetarily non-sovereign.

One functional advantage of a Monetarily Sovereign government is that it cannot unintentionally run short of its own sovereign currency. By contrast, a monetarily non-sovereign entity can, and often may, run short of the currency it uses.

Here are excerpts from one of Reason’s recent articles:

The National Debt Is Coming Due, Just Like We Told You

By 2020, interest on the debt will cost more than Medicaid. By 2025, it will cost more than defense spending. And that’s just the start.

Right away, Gillespie tosses in a scare headline. You are supposed to be frightened that the national debt is “coming due” whatever that means.

To be clear, Gillespie isn’t really talking about “national” debt (which would include all of a nation’s debt, public and private); he is talking about the federal debt.

And, the fact that, in the future, interest will exceed the cost of Medicaid and defense spending, is a good thing, not a problem:

  1. The federal government, being Monetarily Sovereign, has the unlimited ability to pay any amount of interest, so interest payments are no burden on the government. 
  2. Because the Federal government is Monetarily Sovereign, federal taxes do not fund federal spending.
  3. The federal government (unlike the monetarily no-sovereign state and local governments) creates brand new dollars each time it pays a bill. Federal spending on interest adds growth dollars to the economy.

In short, the more interest the federal government pays into the economy, the richer is the economy.

Returning to the article:

In 2017, interest costs on federal debt of $263 billion accounted for 6.6% of all government spending and 1.4% of gross domestic product, well below averages of the previous 50 years.

The Congressional Budget Office estimates interest spending will rise to $915 billion by 2028, or 13% of all outlays and 3.1% of gross domestic product.

The above figures are meant to be alarming. But, interest as a percentage of all spending is an irrelevant ratio.

And interest as a percentage of GDP is similarly irrelevant. Neither ratio has any effect on the economy.

A quick recap of our dismal national fiances: The U.S. economy generates about $21 trillion in annual activity. Debt owed to the public comes to about $15.5 trillion, but when you add intra-governmental debt (which you should, because it represents actual commitments to pay), the figure is…about $21 trillion.

This is not good, both for obvious and and for less obvious reasons. Among the obvious problems: When you have to pay more in interest, it crowds out your ability to spend on other things.

If you’re a government, it also might mean that you raise taxes or inflate your money. (You could also cut spending, but politicians tend to resist that for as long as possible.)

The “crowds out” statement demonstrates Mr. Gillespie’s ignorance about the differences between Monetary Sovereignty and monetary non-sovereignty.

He is absolutely correct with regard to a monetarily non-sovereign entity, and is absolutely wrong with regard to a Monetarily Sovereign government like the U.S. government.

If you have the unlimited ability to create your own sovereign currency, how can your spending for some things crowd out your spending for anything? It can’t.

Absent significant changes in current law, what the government spends on will be more and more limited.

From a libertarian perspective, less government spending is a good thing, but we’re not really going to get that, even with a gridlocked Congress.

The only change in current law, that would be necessary, is the elimination of the ridiculous, useless “debt ceiling, a law that tells the government it cannot pay for things already purchased and received.

In short, it is a law that asks the federal government to be a deadbeat — a law that has no redeeming characteristics.

Other than that useless law, what the government spends cannot be limited. Having the unlimited ability to create U.S.dollars, the government can pay any bills of any size, instantly.

In 1940, the federal “debt” was 40 Billion. Today, 78 years later, it is 16 Trillion, a 40,000% increase.

Yet, federal spending is not limited, because federal money creation is not limited.

Libertarians wrongly believe “less government spending is a good thing.” That belief is utter nonsense. Reductions in federal spending lead to recessions and depressions, simply because a growing nation requires a growing supply of money.

Do you think less spending for roads, bridges, and dams is a “good thing”? Should less be spent for Social Security, Medicare, education, research & development, the military, and the myriad other activities that improve our lives?

GDP = Federal Spending + Non-federal Spending + Net Exports.

 Money growth is stimulative; money shrinkage is recessive. Period. 

We cannot help but wonder what Mr. Gillespie would say about this:

U.S. depressions tend to come on the heels of federal surpluses.

1804-1812: U. S. Federal Debt reduced 48%. Depression began 1807.
1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929

And this:

When federal debt growth declines, we have recessions (vertical gray bars), which are cured by increases in federal debt growth.

Finally, the cut-federal-spending libertarians resort to the laughable, the already discredited team of Carmen Reinhart and Kenneth Rogoff. 

These preachers of austerity who spent years creating a massive document that was based on erroneous arithmetic. They claimed to have discovered that high levels of government debt are associated with weak economic growth.

It was total nonsense on many levels, including bad math and selective examples, but perhaps the biggest problem was that they lumped the results from dozens of countries, some of which were Monetarily Sovereign and some of which were monetarily non-sovereign. 

It was absurd.

Greece, France, Italy and the other euro nations struggle with high debt. So do many American states, businesses and citizens. Why? They all are monetarily non-sovereign. They can run short of money with which to pay their bills.

By contrast, the U.S. has unlimited access to dollars. It can pay any financial obligation denominated in dollars.

So lumping Monetarily Sovereign nations with monetarily non-sovereign nations, is like lumping pigs and giraffes to get average height.

This foolishness did not deter Mr. Gillespie, whose article continued:

More importantly and less obviously, high levels of national debt exert a downward pressure on long-term economic growth.

In a 2012 paper, economists Carmen Reinhart and Kenneth Rogoff define a “debt overhang” as a situation in which the debt-to-GDP ratio exceeds 90 percent for five or more consecutive years.

After looking at 26 debt overhangs in 22 advanced economies since 1800, they conclude that “on average, debt levels above 90 percent are associated with growth that is 1.2 percent lower than in other periods (2.3 percent versus 3.5 percent).”

Whether or not there is anything magical about 90 percent, there’s every reason to be concerned when the government is spending far more than it can ever collect in taxes.

We’re essentially entering an era where “debt overhang” is the new normal and there’s no sign that’s going to change any time soon.

There is zero reason to be concerned when a Monetarily Sovereign government spends more than it taxes. The reverse is true.

Spending less than taxes (i.e. running a federal surplus) causes recessions if we are lucky and depressions if we are not, by taking money from the economy.

And as it turned out, there is nothing magical about 90% at all. In fact, the whole thing is a bunch of hooey, as this article from 2013 points out. Read it for yourself:

The Reinhart and Rogoff Controversy: A Summing Up
By John CassidyApril 26, 2013

As the euro nations now have learned, austerity kills. By formula, GDP growth requires money growth, and money growth comes from deficit spending. There simply is no way around it.

Gillespie concludes his libertarian screed with yet one more misstatement: 

We’re already poorer for lower economic growth, even as the government spends more (and borrows more to cover those costs).

The Congressional Budget Office (CBO) says the economy grew by 3.1 percent in 2018, but it estimates that annual growth is going to slow to 1.7 percent annually between 2023 and 2028.

The federal government does not borrow to cover anything. Its finances are not like yours and mine. It does not even borrow. It merely accepts deposits, not to gain spending money, but rather to:

  1. Provide a safe place to park dollars, which stabilizes the dollar, and
  2. To assist the Fed’s ability to control interest rates and inflation.

Federal tax dollars are destroyed upon receipt. The federal government creates brand new dollars every time it pays a creditor. 

Yes, that’s right. Those tax dollars you send to the federal government instantly disappear from any money measure. Doesn’t that make you feel good?

(State and local taxes, by contrast, are not destroyed. They are used to pay bills — another difference between Monetary Sovereignty and monetary non-sovereignty.)

I suspect Mr. Gillespie knows all this (After all these years, how can he not?) and if so, it truly is a shame that he keeps fooling the public by writing such tripe.

Image result for bernanke and greenspan

It’s our little secret. Don’t tell the people we don’t use their tax dollars.

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

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

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

2. Federally funded medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to 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 you.

MONETARY SOVEREIGNTY

Are your children important enough to you? Saturday, Nov 10 2018 

Are your children important enough to you?

You sobbing mothers who have guns in your homes
Shriek to heaven and cry me your bitter tears.
You killed your own children.
You knew it would happen.
And will happen, again.

You angry fathers who have guns in your homes
Rage your rage and tell the microphone, “Something must be done.”
You killed your own children.
You knew it would happen.
And will happen, again.

You politicians, bribed to mouth disingenuous thoughts and prayers,
and to preen and smirk, leading ironic marches in the streets.
Spew your fabricated outrage.
You killed our children.
You knew it would happen.
And will happen, again.

You Justices, twisting plain English
to deny the obvious
You killed our children.
You knew it would happen.
And will happen, again.

So fly the tattered flag at half-staff to display your false compassion
And leave the flag down for the next time.
And sob your tears,
and mouth your anger,
and offer your thoughts and prayers,
and march in the streets,
and vote for your rights.
So it all can happen again
As you know damn well it will.

Yes, you know what must be done.
But is it important enough to you?

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

Image result for white house flag at half mast

Do you own a gun? Are you innocent? Saturday, Nov 10 2018 

Your children’s blood

If you own a gun,
you believe you have the Constitutional right to own a gun.
You believe everyone has that right.
So you vote to allow every angry, ignorant, stupid, bigoted, immature, criminal, bullying, mean-spirited, unstable, erratic, volatile, lying, crazed, vindictive, explosive, senseless fool to own a gun
And with your vote, you put guns into the hands of murderers
. . . just so you can own a gun.
Parents, relatives, and friends of the dead,
you who own guns,
spare us your crocodile tears.
You helped murder those children just as if you held the murder weapon
in your own hands.
You insisted on your “rights,” knowing full well this would happen again
and again and again.
But you made excuses. Hunting, protection, training.
Excuses.
Your children’s blood is on your hands.

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

Vigil

Do you own a gun?

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