Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
The “no pain, no gain” crowd believes someone – preferably the poor – must suffer for us all to reach happiness. Here is a sampling of how they suggest achieving economic nirvana through economic agony:
1. Cut Social Security
2. Cut Medicare
3. Cut Medicaid
4. Cut the Supplemental Nutrition Assistance Program (SNAP) aka “food stamps”
5. Cut support for community health centers
6. Cut support for job re-training
7. Cut support for affordable housing programs
8. Cut funding for the Administration for Children and Families
9. Reduce the number, pay and retirement benefits of federal employees
10. Eliminate subsidies of student loans
11. Cut all inflation-based program benefits by changing the definition of inflation
See a pattern there? They all would impact low- to middle-income families most. See anything missing? Yes, we also could raise the income tax rates to cut the deficit, but that might impact upper-income families a tad. Republicans have declared income tax rate increases “off the table.” In fact, some Tea (formerly Republican) presidential candidates want to cut the highest tax rates (on the wealthy) further.
The Democrats, which own the Presidency and the Senate, hide in corners and wring their hands helplessly, hoping not to be seen. Though they portray themselves as the champions of the underclass, they have paid the wealthy bankers, then caved in to Republican threats to destroy the American economy (by refusing to raise the debt ceiling.) Instead, the Dems, the cowardly lions of politics, have agreed that benefits for the poor should be cut. Hey, could it be because they themselves are rich?
Understand, there is no financial difference between raising taxes and cutting federal spending. Both reduce the deficit equally. Nevertheless, I am a proponent of cutting federal taxes; they serve no useful purpose. Our Monetarily Sovereign government neither needs nor even uses tax money. It’s destroyed upon receipt.
Though followers of MMT (Modern Monetary Theory) claim taxes create demand for the dollar, there are plenty of state and local taxes to accomplish that purpose. Federal taxes not only are useless, but harmful, in that they remove money from the economy. So I am with the Republicans on the tax issue.
Unfortunately, the mutual desire to reduce federal spending is so wrongheadedly destructive, I say a pox on both parties; neither has even one member who understands Monetary Sovereignty.
Then we have FICA, that tax that doesn’t pay for Medicare, doesn’t pay for Social Security, and in fact, doesn’t pay for anything. It is the most useless, destructive, ignorant, regressive tax ever invented – a masterpiece of screw-the-poor.
For salaried folks, it usually is the biggest tax they pay. For the rich, it barely is noticeable, since it cuts off at $107K, and who needs salary, when you have capital gains at the lowest tax rate? Though the pretense is that business pays half, FICA functionally is a 15% payroll tax on the great unwashed.
The point of this rant is not to tell you how the wealthy minority (aided by the media barons and the clueless, old-line economists) again stick it to the “unwealthy” majority. You already know that. The point is to demonstrate how the “unwealthy” stick it to themselves.
Go into any middle- or lower-class neighborhood and ask a thousand people, “Should the federal deficit and debt be reduced?” and I predict 999 people will say “Yes,” and the other one will say, “Maybe.” These sad, brainwashed souls hardly can wait to cut off their own noses, by reducing the federal assistance they so desperately need.
Read though this blog, and you will see page after page of comments, most presumably by middle- and lower-class people, demanding the deficit and debt be cut because these measures are “unsustainable” and “ticking time bombs,” exactly the myths that have been spread since at least 1940, probably longer. (See: Unsustainable).
And these folks are determined masochists. I have been called every four-letter name essentially for not wanting to apply leeches to anemics, or for saying phrenology is quack science. The idea that the federal deficit needs to be cut is worse than quack science; it’s quack mythology.
The wealthy priests have beat the drums, convincing the lowly savages that asking for less and suffering more, will take them to heaven. The savages wholeheartedly agree, and God help anyone who tries to save them from themselves.
Lower-to-middle income debt-hawks have the same mind-set as those who volunteer to be suicide bombers. They hope to find their happiness in the afterlife.
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.
Remember that the next time you’re tempted to ask a teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it ruined my future.”