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●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.
Most people think of morality as an inherent personal quality by which people can be measured. But morality simply is a code of conduct for group well-being. Each group invents its own morality.
Even necro-cannibalism might be considered moral by a group on a life raft, where such cannibalism can save lives. Outsiders may view it differently, but morality is case and group specific.
Murder is considered immoral in most societies, except when committed by soldiers in battle, or by police in defense of the law, in which case it not only can be moral, but heroic.
Religious and civil laws define and document morality. The most moral people are those whose actions and beliefs best follow those laws, the purpose of which is to contribute to group well-being.
While the Golden Rule – “Do to others as you would have them to do to you” – may be the epitome of moral expression, it merely is a simplification and guideline for the impossible-to-know “well-being of the group.” By narrowing the group to “you,” the Golden Rule removes many layers of doubt about what is the well-being of the entire group. “You” are the group and “you” are the judge.
But it is a weak and contradictory rule, repeatedly broken by every judge who ever has sentenced a criminal. (Doing to the criminal as you would have the criminal do to you, doesn’t work for judges.)
By its very nature, economics is a study of morality – a study of the actions that contribute to, or detract from, group well-being. So, while religious leaders seek to be our moral guides, economists have equal claim to that title.
Now, as for the question of minimum wage: On the surface, the moral issue is quite simple. In most American locations, people cannot survive financially, earning the federal minimum wage of $7.25 per hour. Even allowing for food stamps and other government stipends, adequate housing, clothing, health care and education are beyond reach.
These minimum wage workers are not the lazy, shiftless, unmotivated, “rather-be-on-the-dole-than-work” slugs the rich make them out to be. They generally are hard workers, often taking two or even three jobs, just to get by.
Meanwhile, the executives of companies paying minimum wage — the Macdonalds, the Walmarts et al — may make as much as a thousand times more than their lowest paid workers, while receiving comforts and benefits the poor cannot even dream of.
Isn’t there a moral question here?
New York Times
Democrats Turn to Minimum Wage as 2014 Strategy
By Jonathan Martin and Michael D. Shear
Published: December 29, 2013
Democratic Party leaders have focused on an effort to raise the federal minimum wage, which will be pushed by President Obama and congressional leaders, and a campaign to place state-level minimum wage proposals on the ballot in states with hotly contested congressional races.
Nicely populist. There are more minimum wage voters than rich voters, so this seems like a sure winner. But, hold on. Rich donors give more to the politicians than do poor donors.
Republicans assert that a wage increase would dampen the economic recovery and indicated they had no intention of bringing a minimum-wage increase to a vote in the House, which they control. “Why would we want to make it harder for small employers to hire people?” Speaker John A. Boehner of Ohio said.
So both sides want to claim the moral high ground. They both want to help the little guy, but can’t agree on how.
Mr. Obama and congressional Democrats are supporting legislation that would raise the federal minimum wage to $10.10 an hour by 2015. But some moderate Democrats are uneasy about inflaming their local business communities; the imperiled Democratic Senate incumbents in Alaska and Arkansas, Mark Begich and Mark Pryor, have yet to embrace the ballot measures.
The Republicans want to please the rich, without angering the poor. The Democrats want to please the poor, without angering the rich.
Personally, though I tend to lean more toward the liberal side, I am conflicted. I believe the minimum wage is unconscionably low, even at the $10.10 level requested for 2015.
Because economics is a study of morality, what is the economic/moral answer?
I suggest the answer is not a Robin Hood, “take-from-the-rich-to-give-to-the-poor approach.” Yes, asking rich corporations to pay poor people more may seem to be a moral approach, but is it economically moral? Will it benefit American society as a whole for our businesses to be “penalized” for employing American workers?
Rather, the solution may be to give the poor more, while taking nothing from the rich. That would provide the most benefit to the entire American group.
How shall we do it? The federal government could institute a reverse income tax. The less you earn, the more the government will pay you.
Since taxes do not pay for federal spending, no one would be punished. The poor would be lifted, and even the rich would be lifted, because the entire economy would be lifted.
The reverse income tax would operate like the current federal tax, except that below a certain income level (say $50,000 per year?), the federal government would pay Americans rather than Americans paying the federal government.
The logistics are in place. The IRS already is set up to accomplish this. It would cost nothing, not for you, nor for me, not for anyone.
All that would be required is the admission that federal taxes don’t pay for federal spending, and federal deficits are necessary for a growing economy.
That would be true economic morality.
Rodger Malcolm Mitchell
Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
9. Federal ownership of all banks (Click here)
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
THE RECESSION CLOCK
As the federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise.