Why the Senate will convict Donald Trump Thursday, Jan 21 2021 

Yogi Berra, the great Yankee philosopher, said in essence, “Predicting is hard, especially the future.”

But I am going do it because, as President John Kennedy said, ” . . . not because (it’s) easy, but because (it’s) hard.”

I predict the Senate will convict Donald Trump.

Follow my logic:

Too many to ignore, do trust him

The greatest danger to the Republican party comes not from the Democrats, but from Trump.

He controls a vast bloc of ignorant cult followers, who have proven they will vote for him even, as he himself claimed, he were to “shoot someone on 5th Avenue.”

The danger to the GOP is that Trump will run for President four years hence, and split the party as he already has, only even more so, when all his high crimes and misdemeanors come into bright light. That party split will lose to the Dems.

The more imminent danger is that two years hence, he will interfere with the midterm elections, and essentially take over the party.

So, just on the face of it, the GOP part of the Senate would be wise to convict him, just to prevent him from running and destroying the GOP.

But why would Trump even want to run in four years or to interfere with the midterms? He hates to work, and would much rather spend his years playing golf.

Answer: Because he is the classic AFAB (Anything For A Buck) guy, and he has some serious financial issues coming up.

Trump doesn’t give a hoot about the Presidency and he doesn’t give a fig about conservatism.

He’s not even a conservative. Never was. He was a Dem most of his life. He has no political philosophy to pass down through the ages. He strictly is a me-first, me-last and me-in-between psychopath.

But, as the slimy Republican Senator, Lindsey Graham said five years ago, “I’m thinking about running for president. You get a house and a car and a plane. It’s a pretty good gig,”

The financially needy/greedy Trump already has seen how good a gig it is.

Consider this:

  1. He is one of the worst business leaders imaginable — nobody but Trump goes broke running casinos — three of them — plus other bankruptcies. He doesn’t know how to run anything, as the past four years have taught us.
  2. Everything he touches fails — Trump steaks, Trump water, Trump airline, Trump vodka, Trump winery, Trump Magazine — or is crooked, like Trump University and Trump Foundation. The list of failures is endless.
  3. He has survived, not by running anything, but by renting his name, which now has fallen apart. No one wants to touch him.
  4. And another lucrative TV show is unlikely, because, being exposed as a crooked loser, he has nothing to offer.
  5. He owes banks and other lenders hundreds of millions of dollars.
  6. His Trumpers have given him hundreds of millions of dollars to do with as he chooses, and that money will keep flowing in, so long as he can keep running for President. When he no longer a candidate or prospective candidate, his leverage disappears.

Clever Mitch McConnell knows all this, which is why suddenly he has “not determined whether Trump should be convicted in the Senate’s upcoming proceedings.”

And if clever Mitch McConnell knows this, then he is telling it to the other Senate Republicans. And though the GOP seems to have a near-monopoly on stupid Senators, enough of them will get the message to swing the vote — so long as Democrats don’t let their usual high-and-mighty, faux morality pull defeat from the jaws of victory.

The sole problem for the GOPers is how to get rid of Trump without looking like they want to get rid of Trump, and that will require piling on the evidence, i.e working with the Dems, rather than against them in the hearings.

So you are going to see a ton sh*t hit the Trump fan, so much that even the Hannityesque FOXy phonies “reluctantly” will opt to convict because “the Constitution and the good of the nation require it.” (As though these pols FOXies even care about the Constitution and the good of the nation.)

Having no electoral future, Trump will abandon the GOP like it was a poor, drunk uncle asking for a loan, and will try to work something out with Putin and the Saudis.

Good luck with that, Donald. They need you like a duck needs a raincoat.

Bottom line: Trump and his good-for-nothing-kids are finished, while the GOP moves on — perhaps with a good-looking, female (white, of course) Presidential candidate.

So that is what I predict. The Senate will convict Donald Trump, and he even may become “Convict Donald Trump,” and wear an orange jumpsuit to match his face.

But predicting is hard, especially the future.

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 or a reverse income tax
  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 cost of ignorance Friday, Jan 15 2021 

There is a cost of ignorance, a cost we pay every day as our politicians fumble and jumble their half-baked solutions to our recession.

They seem neither to understand nor care about reality, and the result is more recession, less growth, more pain, and less pleasure, and all politics. They unnecessarily fear federal deficits and debt, wrongly believing that federal finances are like perosonl finac

And, though economics is complex and difficult to predict, the basics are as simple as a game of Monopoly — in reality, very much like a game of Monopoly.

Remember these facts:

  1. The “economy” is the private sector, which includes you and me, businesses, and state/local governments.
  2. The federal government is the public sector.
  3. The phrase, “the economy is growing,” simply means, “The private sector’s supply of money is growing.” The only way for the economy to grow is for the private sector to increase its money supply. The faster the private sector accumulates money, the faster the economy grows.
  4. The public sector, i.e. the federal government, is Monetarily Sovereign. It has infinite money. The federal government never can run short of dollars because, being Monetarily Sovereign, the federal government creates dollars, ad hoc, by paying creditors. The more the federal government spends, the more dollars it creates.
  5. To grow the private sector (i.e. grow the economy), the federal government needs merely to create and pump dollars into the economy. The more dollars the federal government creates and pumps in, the more the economy grows.
  6. While state/local governments spend tax dollars, the federal government does not spend tax dollars. It destroys all the tax dollars it receives. And, even if the federal government received $0 taxes, it could continue spending and creating dollars, forever.
  7. The federal “debt” is the total of deposits into T-security (T-bill, T-note, T-bond) accounts. The dollars in these accounts is not used by the federal government. The government pays the “debt” by returning the dollars in the T-security accounts. Thus, the federal “debt” is not a burden on anyone — not on the federal government and not on the economy. It simply is a savings device.
  8. Federal spending does not cause inflation. Shortages, mostly of food and energy, cause inflation. Federal spending can cure inflation if the government spends to create and distribute scarce goods.

You now know more about the fundamentals of economics than do most politicians, most media writers, and even most economists.

Keep the above 8 facts in mind as you read the following article:

President-elect Joe Biden Unveils $1.9 Trillion Plan To Stem Coronavirus, Steady Economy
Proposal includes $1,400 checks for most Americans
By Ricardo Alonso-Zaldivar and Bill Barrow Associated Press
WILMINGTON, Del. — Saying the nation faces “a crisis of deep human suffering,” President-elect Joe Biden unveiled a $1.9 trillion coronavirus plan Thursday night to turn the tide on the pandemic, speeding up vaccines and pumping out financial help to those struggling with the prolonged economic fallout.

Called the “American Rescue Plan,” the legislative proposal would meet Biden’s goal of administering 100 million vaccines by the 100th day of his administration, while advancing his objective of reopening most schools by the spring.

On a parallel track, he believes it will deliver another round of aid to stabilize the economy while the public health effort seeks the upper hand on the pandemic.

“I know what I just described does not come cheaply, but we simply can’t afford not to do what I’m proposing,” Biden said in a nationwide address. “If we invest now boldly, smartly and with unwavering focus on American workers and families, we will strengthen our economy, reduce inequity and put our nation’s long-term finances on the most sustainable course.”

In a real sense, his plan does come cheaply; it costs nothing. That is, it costs the federal government nothing and it costs taxpayers nothing. The federal government simply will press a few computer keys, and the necessary dollars will be created from thin air.

His plan includes $1,400 checks for most Americans, which on top of $600 provided in the most recent COVID-19 bill would bring the total to the $2,000 that Biden has called for.

It would also extend a temporary boost in unemployment benefits and a moratorium on evictions and foreclosures through September.

That $2,000 is not nearly enough to salvage the economy — $2,000 a month would be better.

And a moratorium on evictions and forecolosures simply punishes landlords, while adding no dollars to the economy. Adding no dollars = adding no growth.

And it shoehorns in long-term Democratic policy aims such as increasing the minimum wage to $15 an hour, expanding paid leave for workers, and increasing tax credits for families with children.

The last item would make it easier for women to go back to work, which in turn would help the economy recover.

Increasing the minimum wage does help narrow the income/wealth/power Gap, so it’s a good idea. But keep in mind that it adds no dollars to the private sector, so it doesn’t grow the economy. It merely moves temporary dollars from employers to employees.

Making “it easier for women to go back to work” does not help the economy recover; it doesn’t add dollars to the economy.

Work doesn’t grow the economy; money grows the economy.

“Remember that a bipartisan $900 billion #COVID19 relief bill became law just 18 days ago,” tweeted Sen. John Cornyn, R-Texas.

Cornyn is a conservative, meaning he wants to “conserve” the status quo. By way of reminder, the status quo is recession.

But Biden said that was only a down payment, and he promised another major bill next month, focused on rebuilding the economy.

His relief bill would be paid for with borrowed money, adding to trillions in debt the government has already incurred to confront the pandemic.

Interest rates are low, making debt more manageable.

The above paragraphs demonstrate massive ignorance of economics.

The relief bill will not be paid for “with borrowed money.” The federal government does not borrow money. Why would it borrow while having the unlimited ability to create dollars at no cost?

What erroneously is termed “borrowing” is nothing more than accepting deposits into T-security accounts. “Borrowing” occurs when a borrower has a need to acquire money. The federal government not only has no need to acquire money, but it doesn’t touch the money that is deposited into T-security accounts.

So-called federal “debt” is infinitely “manageable,” no matter whether interest rates are high or low. To pay interest, the federal government simply creates the dollars.

Despite common myth, higher interest rates help the economy grow by allowing the federal government to pump more interest dollars into the economy.

Under Biden’s strategy, about $400 billion would go to combating the pandemic, while the rest is focused on economic relief and aid to states and localities.

About $20 billion would be allocated for a more disciplined focus on vaccination, on top of some $8 billion already approved by Congress. Biden has called for setting up mass vaccination centers and sending mobile units to hard-to-reach areas.

The plan provides $50 billion to expand testing, which is seen as key to reopening most schools by the end of the new administration’s first 100 days. About $130 billion would be allocated to help schools reopen without risking further contagion.

The plan would fund the hiring of 100,000 public health workers, to focus on encouraging people to get vaccinated and on tracing the contacts of those infected with the coronavirus.

These are good directions, though I believe that if Biden acknowledged the realities of Monetary Sovereignty, he would have allocated much more money to saving the economy.

It is politics, not economics, that is slowing the recovery.

(We have) two effective vaccines and more are on the way. Yet a month after the first shots were given, the nation’s vaccination campaign is off to a slow start with about 10.3 million people getting the first of two shots, although more than 29 million doses have been delivered.

Biden believes the key to speeding that up lies not only in delivering more vaccine but also in working closely with states and local communities to get shots into the arms of more people.

The Trump administration set guidelines for who should get priority for shots, but largely left it up to state and local officials to organize their campaigns.

State and local officials lack the money to move faster. The federal government chooses to act as though state/local governments are at financial parity with the federal government. This, of course, is absurd.

While the federal government has infinite dollars, state/local governments have limited dollars. Burdening the state and local governments with the need to create and fund vaccinations, is a recipe for incompetence.

Now go back and refresh your memory about the 8 points listed above.

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 or a reverse income tax
  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

Do numbers make seat-of-pants guesses better? Thursday, Jan 14 2021 

The science of economics is loaded with numbers. Charts, graphs, and formulae abound.

Young Boy Writes Math Equations On Chalkboard High-Res Stock Photo - Getty Images

Yet, despite this pretense at exactitude, economics is unable to tell you what will happen tomorrow let alone a year or a decade from now.

Which brings us to the “fiscal multiplier.”

This bit of mathematical chicanery supposedly indicates how individual types of federal spending will affect the economy.

You can go to the following web page to see a good description of the process. Here are some excerpts.

Fiscal Multiplier
A measure of the short-term impact of a fiscal stimulus on the Gross Domestic Product (GDP) of an economy

The fiscal multiplier is extremely difficult to estimate. It is because the economy is complex, with multiple forces affecting its output.

In such a situation, it becomes too hard to pinpoint the change in output that is directly attributable to fiscal policy.

Hmmm . . . “extremely difficult to estimate” and “too hard to pinpoint change.” But does that scare us economists? No. Bravely we dive into the cesspool, hoping to catch a nice fresh fish.

There are two main approaches to estimating the fiscal multiplier. First is the econometric or statistical approach, and the second in the simulation or model-based approach.

1. Econometric Estimation
The econometric estimation of the fiscal multiplier is performed using a statistical model called a Structural Vector Autoregressive model or an SVAR model. The model is a multivariate time series model that measures the relationship between multiple variables through time. The SVAR approach requires a lot of data, which is not always available. Hence, even though the method is based on data, the results may not be stable.

2. Model-Based Estimation
The model-based estimation approach creates a model of the economy and then uses simulation to estimate the required variable. The models that are often used to model the economy are known as Dynamic Stochastic General Equilibrium (DSGE) models.

They model different sectors of the economy and the interaction among them. The simulations from the models are aggregated to measure the required variable, in our case, the fiscal multiplier. Such an approach does not require a lot of data, but it suffers from model risk.

3. Bucket Approach
The bucket approach is a very simple method that estimates the fiscal multiplier depending on how an economy ranks on various factors. It is more of a back of the envelope calculation, which can provide a ballpark figure for the multiplier based on the experience of other economies with similar features.

I suspect the more correct name for all of the above would be Dynamic Stochastic General Hocus Pocus (DSGHP).

Then, the economists stroke their chins and take these “extremely difficult to estimate” and “too hard to pinpoint the change” numbers and use them when . . .

Comparing Fiscal Multipliers

The output gap – the difference between expected economic output under current law and possible economic output if the economy were operating at full potential – is projected to total $1.85 trillion over the next two years according to the Congressional Budget Office (CBO).

Fiscal policy can reduce this output gap over time. How effective a policy will be depends on its “multiplier” – the output produced for each dollar spent. While COVID relief should be designed to achieve a number of different goals – and there is no “right” share or length of the output gap that must necessarily be closed – policymakers should focus on high-multiplier spending and tax cuts where possible.

 

Here we see how the false certitude of WAG (Wild Ass Guesses) is displayed in a Congressional Budget Office (CBO) official table, which proves, for instance, that a “Paycheck Protection Program” (whatever it eventually may be) is less than half as effective as a “Coronavirus Relief Fund for States” (whatever it eventually may turn out to be).

About the best one can say about the CBO estimates is that they are (usually, somewhat) less politically motivated than Congress is.

The real problem not only is that people believe the WAG estimates, but that the estimates are based on a fundament lie:

‘Importantly, these policies may boost economic activity in the short-term, but they will ultimately add to the debt and thus slow long-term economic growth.

‘Policymakers can balance these risks by focusing on the policies that produce the greatest amount of economic activity for a given cost and can mitigate or reverse them by coupling short-term fiscal support with long-term deficit reduction.

There is zero, no, make that ZERO evidence that reducing federal “debt” slows economic growth. Here’s why:

    1. Federal debt is not really “debt” in the usual sense. It is the total of deposits into Treasury Security accounts.
    2. The federal government does not use those deposits to pay its bills. It creates new dollars for that purpose.
    3. The federal government pays off the “debt” simply by returning those deposits.
    4. The way the government keeps its books, reducing the debt requires running surpluses, which always leads to depressions — or if we’re lucky, just to recessions.

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.
1997-2001: U. S. Federal Debt reduced 15%. Recession began 2001.

Today, we are running a serious recession. How are we trying to get out of it? By deficit spending, aka “throwing money at it.” That, in fact, is the only way we ever can cure recessions. Increased deficit spending prevents and cures recessions.

As for “coupling short-term fiscal support with long-term deficit reduction,” this makes no mathematical sense at all unless we are prepared to create massive surpluses (probably via tax increases) in the future. This is known as, “Kicking the can down Depression Road.”

In summary, we are being fed bad data compounded by bad economics.

What’s the solution? Begin with the fact that the federal government has unlimited money. Then consider each economics problem separately, and then throw money at it. Given infinite resources, why try to husband those resources via phony mathematics?

The economy is the private sector. When we enrich the private sector, we grow the economy. 

And finally, no “inflation” protestations, puleeeze!. Inflation is not caused by federal deficit spending. Inflation is caused by shortages — usually shortages of food or energy — and actually is cured by federal deficit spending.

Want economic growth? Implement the “Ten Steps to Prosperity” and forget about Fiscal Multipliers.

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 or a reverse income tax
  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

How I agree and disagree with the same article. Thursday, Jan 14 2021 

Perhaps the greatest Economics problem in the US and indeed, in the world, is the wide and growing income/wealth/power Gaps between the rich and the rest.

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 indeed, virtually every other issue in economics.University of Essex hikes salaries for female professors to eliminate pay  gap | THE News

Ironically, the following article appeared on the Committee For A Responsible Federal Budget (CRFB) web site.

I say “ironically,” because the CRFB continually calls for reductions in federal spending along with increases in federal taxes, all to reduce the dreaded “debt” and deficit.

Such reductions generally are regressive, slashing such social programs as Social Security, Medicare, Medicaid, and other poverty aids, while increasing FICA.

And yet the thrust of the article expresses concern that certain proposed efforts would be regressive, rather than progressive as is popularly assumed.

The concern is legitimate, and I agree with it, while disagreeing with the article in the overall, because of the second greatest economics problem (or is it first?). That problem is the universal misunderstanding of Monetary Sovereignty.

A Monetarily Sovereign government, like that of the United States, has the unlimited ability to create its own sovereign currency. It creates dollars at the touch of a computer key.

You and I, and businesses, and even state and local governments, are monetarily non-sovereign. We all are the “private sector.” financially different from the federal government, which is the true “public sector.”

You can read more about Monetary Sovereignty, here and here.

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

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.”

Here are excerpts from the CRFB article:

CYMI: Debt Cancellation and SALT Cap Repeal Would Benefit Higher Earners
January 11, 2021

In her recent Washington Post column, Catherine Rampell argues progressives should “be more progressive in an old-fashioned sense: by helping the poor more than the rich.”

I agree with the concept, though in actual excution, this is not always possible.

Being progressive is not exclusively devoted to helping the poor. It also means aiding the various middle classes. And therein lies the problem.

Rampell argues against three policies that are “handouts to the wealthy” — the repeal of the limit of the federal deductibility of state and local taxes (the SALT cap), canceling up to $50,000 per borrower of federal student debt, and the proposed $2,000 stimulus checks.

Rampell’s description of the $50,000 in student debt cancellation and SALT cap repeal is apt — the vast majority of the benefits of these policies would go to the highest earning families (we’ve written separately on the distribution of the $2,000 checks here).

Nearly two-thirds of the benefit of canceling $50,000 in student debt per person would go to the top 40 percent of households and over three-tenths would go to the top quintile, according to a recent paper by Sylvain Catherine and Constantine Yannelis. Less than 5 percent would go to the bottom quintile.

They estimate an average net lifetime benefit of $5,775 for someone in the top quintile and only $731 for someone in the bottom.

Assuming the math is correct, then in fact, the rich would benefit directly more than would the poor. But there are several points not considered.

1. Because of the above-mentioned three programs, fewer dollars would leave the private sector and go to the federal government, to be destroyed. This alone would stimulate the overall economy, which would benefit the middle- and lower-income groups.

2. More middle- and lower-income students would begin their working lives with the financial ability to create businesses and jobs, which also would benefit middle- and lower-income groups.

3. More middle- and lower income young people would be encouraged to attend college, which would benefit all of America, as more doctors, scientists and other professional talent entered the economy.

4. More middle- and lower-income people would be able to pay their rent and feed their families.

SALT cap repeal is even more regressive. The Tax Policy Center estimates that 96 percent of the benefit of repealing the $10,000 cap on the state and local tax deduction would go to the top quintile.

57 percent would go to the richest one percent of taxpayers. Those at the top would enjoy an average tax cut of $31,000 — while the average taxpayer would see no tax cut at all (the average cut in the middle quintile would be $10).

Even efforts to better target these policies don’t appear to fundamentally change their regressive nature. Catherine and Yannelis find that capping debt cancellation at $10,000 per household would still distribute 28 percent of the benefits to the top quintile and only 5 percent to the bottom.

Similarly, doubling the SALT cap to $20,000 rather than repealing it still delivers over 95 percent of the benefit to the top quintile and almost none to the bottom half of earners, based on estimates using Tax Brain.

This type of targeting can reduce the benefit of these policies for the very wealthiest Americans, but still offers little benefit to the vast majority of lower-earning and middle-class borrowers and taxpayers.

5. Again, I agree with the premise, while disagreeing with the implied solutions, i.e the status quo.

Those implied solutions would maintain or even increase the number of dollars taken from the private sector and delivered to the federal government for destruction. 

In her piece, Rampell argues that “in the new year, under a new president, Democrats should remember their obligation to aim their fiscal firepower at those who need it most.”

There are many effective ways to boost the economy and support struggling households during the current crisis.

Repealing the SALT cap or offering blanket debt cancellation are expensive, regressive polices, offer little bang for the buck, and most certainly do not qualify.

I disagree that encouraging and enabling college attendance offers “little bang for the buck.”

I especially disagree, because the federal government creates “the buck” from thin air, at no cost to anyone. So any “bang” that reduces the number of dollars taken from the private sector has overall benefit.

Still, there lingers the legitimate concern about benefitting the rich more than the middle and the poor, and I suggest that this concern can be mitigated in several ways:

A. The federal government can and should give significant per-capita stimulus dollars to each state, enough to reduce each state’s need for taxes. State taxes generally are regressive.

B. The federal government can and should provide significant financial support for grades pre-K-12, which currently receive massive amounts of regressive state tax dollars.

C. The federal government can and should begin to fund other state financial initiatives such as local roads, sewage, garbage, police, fire, parks, etc. The goal would be to substitute free Monetarily Sovereign, federal dollars for expensive monetarily non-sovereign, state and local tax dollars.

D. The federal government can and should offer financial aid to renters, not only to home owners.

E. The federal government can and should implement Step #8 of the Ten Steps to Prosperity: Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.

Of course, all of the above-mentioned programs could be scaled according to income, which instantly would eliminate Rampell’s objections. A problem with so much scaling is that it, like our income tax, effectively becomes rescaled by the rich and the devious.

Ultimately, the CRFB cannot resist inserting the Big Lie into its article:

“Importantly, these policies may boost economic activity in the short-term, but they will ultimately add to the debt and thus slow long-term economic growth.” 

How is it possible that policies can boost growth in the short term, but slow growth in the long term? Actually, it isn’t possible — not mathematically, not economically, not no way, and not no how — at least it isn’t possible unless the federal government forces it to be possible by unnecessarily raising taxes or cutting benefits.

Since 1940, the fear-mongers have been claiming that the federal debt is a “ticking time bomb.” Meanwhile, the economy has grown from $40 billion to over $20 trillion, and the fake “time bomb” still awaits its detonation.

In Summary:

Some programs for aiding the poor also aid the middle- and upper middle-classes, thus actually widening some of the Gaps between the various income/wealth/power groups. There are several ways to mitigate this effect, including the use of income as a determinant for receipt of benefits.

Better, would be the implementation of the Ten Steps to Prosperity (below) which would stimulate the economy while narrowing the Gaps

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 or a reverse income tax
  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

Next Page »

%d bloggers like this: