Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which ultimately leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive.
The single biggest financial problem facing America’s cities and states is underfunded pension plans.
Almost every U.S. non-federal government has them, and being monetarily non-sovereign, local governments have two very poor payment options: Soak the taxpayers, or first borrow and then soak the taxpayers to pay the loans.
Part of the underfunding comes from retiree health costs, and it is here that salvation may be at hand:
New York Times
Detroit Looks to Health Law to Ease Costs
By Monica Davey and Abby Goodnough, Published: July 28, 2013
As Detroit enters the federal bankruptcy process, the city is proposing a controversial plan for paring some of the $5.7 billion it owes in retiree health costs: pushing many of those too young to qualify for Medicare out of city-run coverage and into the new insurance markets that will soon be operating under the Obama health care law.
Officials say the plan would be part of a broader effort to save Detroit tens of millions of dollars in health costs each year.
It is being watched closely by municipal leaders around the nation, many of whom complain of mounting, unsustainable prices for the health care promised to retired city workers.
Similar proposals that could shift public sector retirees into the new insurance markets, called exchanges, are already being planned or contemplated in places like Chicago; Sheboygan County, Wis.; and Stockton, Calif.
A study issued this year by the Pew Charitable Trusts found 61 of the nation’s major cities wrestling with $126 billion in retiree health costs, all but 6 percent of that unfunded.
All over America, local governments will see Obamacare as a partial solution to otherwise impossible financial problems. Will the Obama administration get on board with this “help-on-a-silver-platter” opportunity?
If large numbers of localities follow that course, it could amount to a significant cost shift to the federal government.
Authors of the health care law expected at least some shifting of retirees into the new insurance exchanges, said Timothy S. Jost, a law professor at Washington and Lee University. “But if a lot of them do, especially big state and local programs that’s going to be a huge cost for the United States government, and it’s mandatory spending.”
And therein lies the problem — the false belief that the federal government can’t afford to pay the bills, and the even more ridiculous beliefs that somehow the cities and states can afford it — or that the retirees should do without.
The Chicago plan would phase some of the city’s 11,800 retirees and their family members not eligible for Medicare out of city coverage by 2017 — (shifting them) to insurance exchanges. The changes are expected to contribute to a larger effort to save Chicago $155 million to $175 million a year in retiree health care costs by 2017.
Now visualize all those Republican-dominated states that have resisted creating Obamacare insurance exchanges. Visualize the billions of dollars in costs that could be shifted from cash-strapped local governments to our Monetarily Sovereign federal government — our government that never can run short of dollars.
Visualize local politicians wanting that money.
The Republicans will howl and moan and scream about the extra costs to the federal government. They will resume the lies that the government is “broke” and “can’t afford” these extra costs, and has to “live within its means.” (John Boehner probably still has those speeches ready for re-use.)
But money to a politician is like raw meat to a starving dog. The local guys will snap up all they can get.
Add these billions to the billions states will receive for Medicaid support, and you have an irresistible force for Obamacare. Obama couldn’t be happier. Right?
Well, not so fast. There is a problem. Obama’s super rich supporters won’t like it. They don’t want the middle- and lower-classes receiving free healthcare. They want those people to spend their last dollars or to do without.
They want the gap between the rich and the rest to widen, not narrow. What’s the good of being super rich, if the “little” people are just as happy as you are, and you can’t make them beg?
No, it’s important to the rich that the underclasses be needy. So this is what I predict:
1. The red states will cave. They’ll say, “Too hell with our phony, austerity ideology; we need that real Obamacare money.”
2. National Republicans will continue lie and complain about “big government,” and the deficit (money supply growth), and continue trying to reinvent themselves as a more compassionate party that really, truly loves minorities — and continue to claim it’s just their message, not their actions, that lose them elections. (Ah, those poor misunderstood Republicans.)
But, being politicians, they’ll lead from the rear, and won’t change until the voters force change.
3. The biggest name to exhibit doubts will be Obama himself — not doubts about his health care plan, but doubts about federal finances. Our “bribed-by-the-rich” President, who supports the fake “need” to balance the federal budget, will find more ways to punish the middle- and lower classes at the behest of the rich.
Yes, he will support his signature accomplishment (for which, by the way, he personally expended little effort), but he will pull more money from middle Americans to “pay for” it.
He again will increase FICA, the most regressive tax in U.S.history. Social Security benefits will be cut, yet again. He will send more federal employees to the unemployment rolls.
Via his notorious “Grand Bargain,” he will ensure that the deficit (money supply growth) will continue to fall. He will cut spending on the myriad projects that benefit the middle- and poor-classes.
4. History will show that Obamacare was a partial success — a complex, convoluted, unnecessarily byzantine partial success, that really should have been a much simpler, much more inclusive, much better Medicare-For-All plan.
Obama will be lauded for insuring more people and for cutting the deficit, just as Clinton was (Never mind that the Clinton surplus caused a recession).
The rich will be happy with Obama. They will give him his big library (as they did, Clinton), and reward him with lucrative speaking engagements (as they do, Clinton) and give the Obama kids great jobs (like Penny Pritzker received).
And for the rest of his life, the Obama’s will enjoy the thrill of hobnobing with rich, famous white people, who privately think he’s a jerk, but love the glory that surrounds him.
The middle- and lower classes will struggle more than ever. The gap between the rich and the rest will widen.
And all will be well with the world.
Rodger Malcolm Mitchell
Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone. Click here
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%
10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
Two key equations in economics:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports