Evaluating lies: Harm vs. benefits Monday, Aug 21 2017 

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

Lies have many advantages. The so-called “white lie” is a social method that is welcome and considered courteous. On many occasions, it would be rude to tell someone the truth. (“Your plastic surgery makes you look ugly.” “Your child is stupid.”)

Lying can build relationships, and even when the recipient of a lie knows it’s a lie, the lie and the liar are appreciated. The harm of a social lie is minimal compared to the benefit.

Lying, in of itself, is part of the normal human experience. Humans tend to accept and believe lies. Otherwise, humans wouldn’t lie, as acceptance and belief are the purpose.

Some political lies are valuable to humanity.

Ozone in the atmosphere helps protect us from solar radiation.  You’ve heard of the “ozone hole.”  It’s a hole in the air above the north and south pole, that lets in dangerous radiation — except, there is no “hole.” There is some depletion, much of it natural and cyclical, but the notion of a “hole” is a lie.

The value of the ozone “hole,” or more specifically the value of calling it a “hole,” is that it creates a picture in our minds.

This picture makes us amenable to paying the cost and suffering inconvenience of eliminating chlorofluorocarbons(CFCs), halons, and other ozone-depleting chemicals, which are used in air conditioning and spray propellants.

So the hole is a lie, but it’s a “good lie.” The harm is minimal compared to the benefit.

Image result for pacific garbage patch

The Pacific Garbage Patch

In the same vein, you may have heard of the “Great Pacific Garbage Patch.” It’s an area of the Pacific Ocean where the natural currents create a swirl that entraps all floating trash, which builds up into piles of plastic, wood, bottles, sludge, chemicals, and other floatables.

It is a disgusting example of how mankind is polluting even our largest ocean, and is a good reason why we should exert every effort to reduce pollution — except the Great Pacific Garbage Patch is a lie. It doesn’t exist, at least not the way you might visualize it.

The words probably draw to your mind a picture of a huge floating island of garbage, but in fact, the “Great Pacific Garbage Patch” is invisible. It merely is an area of the ocean that has a slightly higher concentration of particulate matter, especially plastic particles. You could boat or even swim right through it and not realize it.

The problem is that when fish swim through it, a few of those tiny plastic particles might be ingested and enter their flesh, and when we eat those fish, the plastic enters our bodies, with potentially harmful physical effects.

The value of the “Great Pacific Garbage Patch” lie is that by drawing a vivid pollution picture, it might encourage stricter anti-pollution laws (except under the current American political administration, which seems not to worry about pollution).

So it’s a lie, but a “good” lie. The harm is minimal compared to the benefit.

Because lying is such a common part of our daily experience, we have evolved ways to deal with lies. To survive in our society, we must know which lies to accept as courteousness, which to believe as fact, and which to disbelieve.

And it isn’t easy.

There are several aspects to lies that help make them seem believable, among which are:.

  1. Source: Do we trust the source delivering the lie?
  2. Logic: Does the lie sound reasonable?
  3. Desire: Do we have a personal motive to believe the lie?
  4. Repetition: Does the lie square with what we previously have heard?

On this site, we often discuss “The Big Lie, a group of lies that deny Monetary Sovereignty.  Within that group of lie are such statements as:

*Federal finances are like your personal finances (They aren’t.)
*Federal taxes fund federal spending. (They don’t.)
*The federal deficit and debt are unsustainable (They aren’t.)
*Federal spending causes inflation (It doesn’t.)
*And the federal government can run short of its own sovereign dollars. (It can’t.)

Though this blog discusses, in detail, why each of these statements is false, many people resist the facts. That is, despite proof showing otherwise, they continue to believe the lie, because.

  1. Trusted sources like the media, the politicians, and many economists promulgate The Big Lie.
  2. Because The Big Lie equates federal financing with people’s own personal financial experience, the lie sounds reasonable.
  3. People want to believe The Big Lie because it justifies their desire to cut benefits to those who are poorer.
  4. The incessant, unrelenting repetition of the lie.

The Big Lie is harmful because it vindicates widening the Gap between the rich and the poor. It justifies reductions in federal spending for such social programs as Medicare, Medicaid, Social Security, poverty aids, education aids and other benefits for the “not-rich.”

It condones the easing of federal regulations meant to stop criminal bankers. It rationalizes the reduction in budgets for food, drug, and environmental protections. It reduces federal spending that grows the economy.

The Big Lie clearly is harmful, but does it have any redeeming qualities?

Some would say, “Yes.” They would say The Big Lie discourages Americans from constantly asking the federal government for benefits and it lessens the likelihood Congress will provide an endless succession of those benefits.

They would say that without The Big Lie, federal politicians, hoping to please constituents with gifts and tax cuts, would be helpless to prevent the massive growth of federal spending.

Said as briefly as possible, The Big Lie prevents “excessive” deficit spending. And that leaves us with a question: What is “excessive” deficit spending?

There are those of a Libertarian bent, who believe the federal government is too big and powerful (to use their favorite word a “Leviathan”), and most or even any deficit spending is too much.

That belief cannot be argued. There is no proof possible that the federal government is “too big.” It is an emotional, not a factual, judgment.

We can observe however that in 1940, the federal “debt” was $40 billion, and some called it a “ticking time bomb. Today, it is $14 trillion, and that time bomb still is ticking.

We also can observe that every recession and depression has been introduced by reduced deficit growth, and every recession and depression has been cured by increased deficit growth.

Then, there are those who believe “excessive” federal deficit spending causes inflations, even Zimbabwe-style hyperinflations.

However, we can observe that despite periods of massive deficit spending, the U.S. never in its history has had a hyperinflation.

And we can observe that even with the massive deficit spending that brought us out of the “Great Recession” of 2008, and which has continued to this day, our rate of inflation is somewhat lower than the Fed’s target of about 2.5%.  The reasons:

  1. World inflation is caused by oil prices.
  2. The Fed controls U.S. inflation by increasing the Demand for the dollar, via interest rate control.

Finally, what about the theoretical helplessness of politicians to resist demands for deficit spending, if the public realized the federal government cannot run short of dollars, and does not use tax dollars?

  1. Politicians already yield to demands for gifts and tax cuts — but from their biggest contributors, the rich. Public understanding of Monetary Sovereignty would put the 99.9% on a par with the richest .1%.
  2. Deficit spending and tax cuts stimulate economic growth and enrich the populace, especially the 99.9% who benefit from social spending, the largest part of the federal budget. Cuts to regressive taxes — FICA, sales taxes, and remarkably even net income taxes (after special deductions for the rich) also would benefit the 99.9%.

And would the politicians really be  “helpless”? Today’s politicians already resist deficit spending. They do it by telling a lie, The Big Lie: “Taxpayers and the government can’t afford it.”

They just as well could resist deficit spending by telling the truth:

Deficit spending is limited only by an inflation the Fed cannot control via interest rates.

The Fed already determines current and future inflation. It adjusts interest rates upward when it believes inflation will rise above its target rate of about 2.5%. It lowers rates when it believes inflation will fall below its target rate.

The Fed already acts not only as a control but as a barometer.

If the Fed ever merely were to announce, “We predict inflation will be too high and we will not be able to control it reasonably close to our 2.5% target,” the politicians could use that announcement, not The Big Lie, as their excuse to resist further federal spending, or even to cut federal spending.

In summary, there are no excuses for The Big Lie. There is no value to The Big Lie. The harm is enormous compared to the non-existent benefit.

How about telling The Big Truth: Monetary Sovereignty.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

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

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

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

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

MONETARY SOVEREIGNTY

The great lie in the 1st Amendment Wednesday, Aug 16 2017 

Governments don’t just happen. They laboriously are created. So, what is the purpose of a government?

The Declaration of Independence offers one opinion:

“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men.”

The purpose of government, according to our founders, is to protect our rights. Many of these rights are enumerated in the Constitution, and specifically in the Amendments.

The very first Amendment reads in part:

“Congress shall make no law . . . abridging the freedom of speech, or of the press; or of the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

The 1st Amendment exists because Americans fear government dictatorship. We abhor the thought police of China, Russia, North Korea, Cuba, et al. We feel the “slippery slope” of government intervention in our precious freedoms.

And yet, it simply is not true, and logically cannot ever be true. Congress makes all sorts of laws that break those Constitutional promises of freedom.

Begin with secrecy laws. Classified information is that which a government or agency deems sensitive enough to national security that access to it must be controlled and restricted.

The words, “a government or agency” immediately tell you that a great many people have the power to restrict your, or the press’s, freedom of speech. Want to know who all these people are? Go to Executive Order 13526 of December 29, 2009, Section 1.3.

Ask Chelsea Manning, Julian Assange, et al what happened to their “free speech” when they “leaked” classified information. I would tell you to ask Julius and Ethel Rosenberg, but they are dead, having been executed for exercising mythical “free speech” rights.

There literally are thousands of people in the federal government who can deprive you of your free-speech, free-press rights, at will, just by deeming something “classified.”

And, it’s not just classified information. Oliver Wendell Holmes’s analogy about shouting fire in a theater has been the psychological background for dozens, if not hundreds, of court decisions limiting speech that a judge felt was harmful.

For example, if one were to write, or even publicly say, the President should be assassinated, the Secret Service is likely to come down on him like a sledgehammer on a pat of butter. Your free-speech rights will not protect you if you encourage any sort of illegal violence.

Current law says that speech also can be prohibited if it “is directed to inciting or producing imminent lawless action and is likely to incite or produce such action.”

And that brings us to the Nazi/White Supremacy/alt right march on the University of Virginia campus in Charlottesville.Image result for nazi march in university of virginia

Does a combination of: Marching at night by hundreds of people, carrying torches and waving Nazi flags, while chanting such slogans as “Sieg heil” and “blood and soil,” and “Jew will not replace us,” and giving the Nazi salute — is that likely to incite or produce lawless action?

Is the existence of a statue glorifying the enslavement of black Americans likely to incite lawless action? What about a statue designed to insult and belittle Jesus? Does that qualify?

Then, there is the much misunderstood (by the public and by the Supreme Court itself) “fighting words” exception to free speech. The Court has effectively limited the exception to include only abusive language, exchanged face to face, which would likely provoke a violent reaction.

If hundreds of angry men carrying swastikas, chanting “Jew will not replace us,” pass in front of a group of Jews, while as background noise, Nazi websites encouraged the burning of synagogs and the killing of Jews — is that totality likely to “provoke a violent reaction”?

If you merely touch someone with your fist, you won’t be jailed, but if you hit someone with your fist, you can be jailed for the hurt you have caused. It is the hurt that is punishable.

Does shouting Nazi slogans at someone who has lost relatives to a Nazi furnace also cause deep, unrelenting hurt?

In the recent past, Germany allowed millions of immigrants, yet even this liberal and accepting nation has set limits.

Soon after the end of World War II, the Germans banned swastikas and other Nazi emblems, and the German people, not to mention the police, do not tend to react well when the symbols of that era are put on display.

Hours before the clashing demonstrations started in Charlottesville on Saturday, an American tourist in the German city of Dresden got punched in the face by a local for drunkenly throwing the Hitler salute.

Less than two weeks earlier, two Chinese tourists in Berlin made the same gesture while taking a photo in front of the Reichstag; they were promptly arrested and could face a fine or up to three years in prison.

In law, there always is a line between lawful and unlawful and that line generally is arbitrary and narrow. If the speed limit arbitrarily has been set at 30mph, only a judge having a bad day will punish you for going 32mph.

What is the “real” law? 35mph? 40mph? The judge probably will consider several factors: Your driving record. The weather and road conditions. Whether you were driving in a “reckless” manner (weaving, tailgating, etc.) Even whether you were cooperative and respectful to the police officer and to the judge.

He will consider the entire background of the incident.

What then is the “entire background” of hundreds of angry torch bearers, shouting threats to Jews and blacks? Does a history of slavery and lynchings count as part of the background? Does the Holocaust count?

Consider these articles:

CROFTON, Md. – Two men who were arrested in connection to a noose found hanging at Crofton Middle School have been charged with a hate crime.

and

Seattle Times: Cases of hangman’s noose are a part of uptick in hate crimes

and

KKK warns of more ‘commie’ deaths after Charlottesville
Heather Heyer was killed when James Fields allegedly rammed car into crowd protesting “Unite the Right” rally.

If simply hanging a noose, the purpose of which is to cause fear and hurt, can be considered a hate crime, what is the Nazi/White Supremacy march in Charlottesville, if not a hate crime?

A terrorist organization is defined as one that promotes the calculated use of violence (or the threat of violence) against civilians in order to attain goals that are political or religious or ideological in nature; this is done through intimidation or coercion or instilling fear.

Image result for nazis at university of virginia

White Nationalists surround and intimidate Students Against White Supremacy

President Trump, terrorism fighter, has been so concerned about terrorism, he even has banned Muslims who have no history of terrorism. Yet, don’t the Nazis and the White Supremacy groups fit the definition of terrorist groups?

Haven’t domestic terrorists done far more damage to America than have foreign terrorists?

After being indoctrinated online into the world of white supremacy and inspired by a racist hate group, Dylann Roof told friends he wanted to start a “race war.” Someone had to take “drastic action” to take back America from “stupid and violent” African Americans, he wrote.

Then, on June 17, 2015, he attended a Bible study meeting at the historic Emanuel A.M.E. Church in Charleston and murdered nine people, all of them black.

Finally, President Trump said, “What about the ‘alt-left’ that came charging at the, as you say, the ‘alt-right’? Do they have any semblance of guilt?”

The “alt-right” is a racist, far right movement based on an ideology of white nationalism and anti-Semitism. Many news organizations do not use the term, preferring terms like “white nationalism” and “far right.”

Researchers who study extremist groups in the United States say there is no such thing as the “alt-left.” Mark Pitcavage, an analyst at the Anti-Defamation League, said the word had been made up to create a false equivalence between the far right and “anything vaguely left-seeming that they didn’t like.”

To summarize: In law, there always is a “slippery slope” of government intervention. Yet, we create laws based on our best understanding of reality.

Naziism and white nationalism are not political parties like the GOP, the Democrats, and the Libertarians. These are hate-mongering organizations devoted to demeaning and injuring people whose color, religion, sexual orientation, citizenship, etc. they don’t like.

Naziism and white nationalism have no place in America. They are anti-America. They hurt Americans.It simply is illogical to provide such organizations with freedom-of-speech, freedom-of-assembly protections, while denying the same protections to a whistleblower who discloses a classified document.

It simply is illogical to provide such organizations with freedom-of-speech, freedom-of-assembly protections, while denying the same protections to a whistleblower who discloses a classified document.

We never have blindly followed the words “no law . . . abridging the freedom of speech.” We always have made exceptions when our citizens’ welfare was at risk.

There is a difference between right and wrong. It’s not a mystery in this case. Naziism and white nationalism are wrong. They do not incorporate sufficient redeeming qualities to entitle them to 1st Amendment protections.  They are terrorist organizations.

We should take a lesson from Germany, and use common sense. Ban these terrorist organizations, ban their symbols, and ban their marches, just as we have outlawed other terror.

Rodger Malcolm Mitchell

What controls inflation? What stimulates the economy? Wednesday, Aug 16 2017 

It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders.
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One simple definition of inflation is the loss in Value of Dollars (Inflation  = 1/Value of Dollars).

Increasing the Supply of dollars is inflationary; increasing the Demand for dollars is deflationary. Put the two together and you get:

Value of Dollars = Demand for Dollars/ Supply of Dollars.

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The Demand for dollars is: Demand = Risk/Reward

The Risk of owning dollars is Inflation. The Reward for owning dollars is Interest. Thus, the Fed limits inflation by increasing interest rates, i.e. increasing the Reward for owning dollars.

Although the Fed can increase the inflation-limiting Reward (interest) endlessly, there are serious functional and political consequences for reducing interest rates below zero. In short, the Fed has more power to reduce inflation than to increase it.

But there is more to inflation than just the Demand and Supply of dollars. Also to be considered are the Demand and Supply of Goods and Services (G&S).

When goods and services are in high Demand or in low Supply, more dollars are needed to buy them. When the price goes up the Value of the dollar is decreased. (Value of the dollar = 1/Price)

This brings the formula for inflation to:

Value of Dollars = (Demand for Dollars/Supply of Dollars) / (Demand for G&S/Supply of G&S)

In plain English, with interest rates held even, we will have inflation (dollar Value declines) if Demand for G&S exceeds Supply.  That is called a “shortage,” and a shortage of G&S, not an excess of money, is the usual path to inflations and to hyperinflations.

(Weimar hyperinflation was precipitated by a shortage of gold which caused a shortage of Goods & Services. Zimbabwe’s hyperinflation was precipitated by a shortage of food.)

Consider this excerpt from an article that appeared in Bloomberg:

The Fed can switch gears and see if looser monetary policy can boost productivity growth. The persistently weak inflationary environment offers the perfect opportunity for such an experiment.

Low inflation already vexes the Fed. Core inflation tumbled early in the year and remains well below the Fed’s target.

This alone gives the Fed reason to allow a slower path on rate hikes in an experimental effort to boost productivity growth.

Said another way: The Fed wants to raise inflation to its 2% target rate, so it should cut interest rates to boost productivity growth.

This idea is based on an implied and related set of popular myths:

Myth I. An inflation rate above zero is necessary to encourage consumption, today. If inflation falls below zero, or even close to zero, the public will defer consumption, waiting for lower prices.
Myth II. High interest rates inhibit economic growth because they discourage consumer and business borrowing.
Myth III. The Fed can create and control economic growth by carefully managing interest rates and the money supply.

Let’s examine these myths:

Myth I. Inflation is necessary to encourage consumption, today.

No one accurately can measure inflation, which is defined as a “general increase in prices.” Investopedia says, “As a result of inflation, the purchasing power of a unit of currency falls. For example, if the inflation rate is 2%, then a pack of gum that costs $1 in a given year will cost $1.02 the next year.”

Think about it. Is that what really happens? Each commodity goes up 2%? Gum goes up 2 cents?

Realistically, in any given year, some prices go up, some go down, and most don’t change. I buy gum, and I haven’t seen those annual, fractional price increases. Have you?

To attempt any measurement of inflation, the government uses averages as described in Investopedia:

  • (CPI) – A measure of price changes in consumer goods and services such as gasoline, food, clothing, and automobiles. The CPI measures price change from the perspective of the purchaser. 
  • Producer Price Indexes (PPI) – A family of indexes that measure the average change over time in selling prices by domestic producers of goods and services. PPIs measure price change from the perspective of the seller.

But not only do CPI and PPI prices change over time, but products change. How does the government account for the prices of product improvements — a “better” car, TV, clothing, washing machine, smart phone, paint?

For instance, today’s 60″ TVs cost less than yesterday’s 36″ TVs. Would you consider that to be inflation, deflation or “none-of-the-above”?

Further, the rich use different products and services than do the poor. In fact, different products and services are used by each of many economic, geographic, age, and ethnic groups. There are no “average” purchasers or “average” sellers.

And as for the theory that inflation encourages consumption, did fear of inflation encourage you to buy a car today, a TV, clothing, a washing machine, a smart phone, paint today?

Aside from (maybe) a house, the threat of inflation doesn’t encourage you to buy anything today, does it?

The whole notion of inflation encouraging consumption, today, is based on textbook economic hypotheses and on what happens during hyperinflations, but not on human daily reality.

Myth II. High interest rates inhibit economic growth because they discourage consumer and business borrowing.

Yes, the stock market drops every time the Fed indicates it plans to raise rates. But, there is a saying in the market, “Buy the rumor; sell the fact.” It means stock prices are based on predictions about what other investors will do, not on reality.

Higher interest rates force the federal government to pay more interest into the economy, which is stimulative. That is why you see a graph like this:

Blue line = Interest rate; Red line = GDP growth

Over the 25-year period, 1955-1980, interest rates averaged higher and trended upward as GDP growth also trended upward. From 1980-2015, interest rates trended lower and while GDP growth also trended downward.

Historically, low interest rates have paralleled slow economic growth.

Myth III: The Fed can create and control economic growth by carefully managing interest rates.

The Fed can reduce and/or prevent unwanted inflation by increasing interest rates, which increases the Demand for dollars.  The Fed has unlimited power to increase interest rates, which gives it unlimited power to reduce inflation growth.

The Fed has much less power to prevent unwanted deflation because of the functional and political limits to how low it can take interest rates. Because the Value of a dollar =Demand for dollars/Supply of dollars, Congress has far more power than does the Fed to increase inflation by increasing Supply.

With all of the above considered, the current reality is: The initial influence on inflation in America today is oil prices. Oil prices affect, to some degree, the price of every product and every service.

The price of oil is embedded in all levels of manufacture, all levels of shipping, and every level of service.

 

Monetary Sovereignty

Red line = Changes in the Consumer Price Index for Energy; Blue line = Changes in the Consumer Price Index for All Items

 

The Fed uses its interest rate tool in a constant battle with oil prices and with Congressional budgeting, to control what it believes to be the nation’s optimum level of inflation for optimum economic growth.

Speaking of economic growth, a typical formula is:

Gross Domestic Product = Federal Spending + Non-federal Spending + Net Exports

Federal Spending not only is a direct factor, but it also affects Non-federal Spending by providing dollars to businesses.

Federal spending is the primary controllable driver of GDP growth, and this control over Federal Spending primarily is in the hands of Congress and the President, not the Fed.

The Senators and Representatives who claim the Fed is “not doing enough” to grow the economy merely are shifting blame from their own mishandling of the budget. Bottom line:

Congress and the President control economic growth, and the Fed controls inflation.

Contrary to what you repeatedly are told, federal “deficits” (economic surpluses) and federal “debt” (deposits in T-security accounts at the Federal Reserve Bank) are stimulative and infinitely sustainable.

Congress and the President, by pretending that federal deficits and debt are a danger to the economy, are the ones most responsible for low economic growth and a widening Gap between the rich and the rest of us.

In summary, the Federal Reserve has a limited mission: To manage banking and to prevent excessive inflation. Economic growth is the mission of Congress and the President.

Get to it, boys.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

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

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

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

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

MONETARY SOVEREIGNTY

Why are you surprised? The moral abomination. Monday, Aug 14 2017 

Image result for trump

Why are you surprised? White supremacists are my base.  Haven’t you been listening to me?

 

O.K., if I have to . . . . do I really have to?  Really? (Sigh) All right:

Amid pressure, Trump says racism is ‘evil’ and condemns KKK and neo-Nazis as ‘thugs’

Under pressure all weekend, President Donald Trump on Monday named and condemned hate groups as “repugnant” and declared “racism is evil” in an updated, more forceful statement on the deadly, race-fueled clashes in Charlottesville, Virginia.

Trump had been under increasing pressure to call out the groups by name after his previous remarks bemoaning violence on “many sides” prompted criticism from fellow Republicans as well as Democrats.

The president described members of the KKK, neo-Nazis and white supremacists who take part in violence as “criminals and thugs” in a prepared statement from the White House.

O.K., I said it. Are you satisfied?

(Pssst: To my base, I still love you, and I still hate people who aren’t white and all immigrants unless they are rich. I just wanted to be sure you to know I was forced to be politically correct. Actually, I didn’t really say it. They wrote it for me to read. Not how I feel.)

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