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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, and the motive is the gap.
The BIG LIE is alive and well in the Fiscal Times, as excerpts from today’s article demonstrate.
The fate of a multi-billion dollar emergency package to avert a nationwide shutdown of highway and bridge projects this summer may hinge on the outcome of a political tug of war over how to pay for it.
Whenever you read the words “how to pay for it” associated with federal spending, you know you are about to be treated to the BIG LIE, the lie that federal finances are like personal finances — the lie that the federal government can run short of its own sovereign currency.
Senate Democrats are seeking creative ways to raise additional tax revenue without boosting rates while Republicans are pressing to reduce spending – including funds for Social Security disability payments and unemployment insurance.
In the classic “good-cop, bad-cop” scenario, neither cop is your friend. They just use different methods to get you to confess to the same crime.
Here, the Democrats want to collect more unnecessary taxes from you, while the Republicans want to make unnecessary cuts in your benefits. Neither party is your friend. Both want to screw you, but by different methods.
Both parties have been bribed by the upper .1% income/wealth/power group (via campaign contributions and promises of lucrative employment) to widen the gap between rich and the rest.
House and Senate leaders have abandoned hope of passing comprehensive legislation this summer that would extend highway and transit spending for the next six years roughly along the lines of current spending levels.
You are supposed to believe the BIG LIE that even current spending levels are too much for a Monetarily Sovereign nation that has the unlimited ability to pay for everything.
There is widespread agreement that Congress must pass a short-term, six month extension of spending authority to prevent the Highway Trust fund from going bankrupt.
Pinocchio’s nose must be a mile long.
Ask your Senator and Representative, “How can any agency of a Monetarily Sovereign nation go bankrupt?” Answer: It can’t — unless Congress wishes it to go bankrupt.
Any time you hear about a federal “Trust Fund,” you know you are being conned. There are no federal “Trust Funds.” They are a myth.
Notice that there is no “White House Trust Fund” to pay for Air Force One or the President’s other expenses. Nor is there a “Congress Trust Fund” to pay for Congress’s winter junkets to sunny destinations.
Nor is there a “Supreme Court Trust Fund” to pay for trips to New Orleans, Montana, Italy, Peru, Austria, the Czech Republic, Scandinavia, and Poland. (Don’t ask me why a Supreme Court justice benefits America by going to Poland.)
But when it comes to anything that might benefit the people of America, like Social Security, Medicare and gasoline, the leaders of our Monetarily Sovereign nation claim they can’t find enough dollars, and need more taxes.
The trust fund faces annual shortfalls of roughly $20 billion as owners of more fuel-efficient vehicles pay less into the fund while construction costs rise.
Gotcha! You thought you would save money and the environment by driving a fuel efficient car. No, you will be punished, by having to pay more useless taxes, and receiving less Social Security benefits.
And though construction costs are rising, Congress can’t even agree to maintain current budgets.
(According to) Senate Environment and Public Works Committee Chair Barbara Boxer (D-CA), 26 states have reported that “critical transportation projects” will either be delayed or scrapped in anticipation that federal funds will be cut off.
About 700,000 highway construction-related jobs could be lost or jeopardized if the trust fund goes belly-up next month.
Trying to raise the estimated $8 billion to $10 billion needed to replenish the near bankrupt federal fund and keeping federal dollars flowing to the states for highway, bridge and transit projects this summer will not be easy.
No, it will be oh-so-difficult. It will require one finger to press one computer key, that will deposit $8 billion to $10 billion in that fictional trust fund’s account.
(A gathering of the) Senate Finance Committee highlighted the major fiscal fault-line between Democrats and Republicans over what should be the proper mix of fresh tax revenues and spending cuts to underwrite critical government policy.
If you are a politician, who has been bribed to widen the GAP between the rich and the rest, what do you do? You raise taxes and you cut spending. And you convince the voters that this is necessary. How? The BIG LIE.
Committee Chairman Ron Wyden (D-OR) said, “I did everything I could to come up with the most benign [cost] offsets possible,” including transferring $750 million from a fund for detecting and cleaning up leaks from underground petroleum storage tanks to the highway trust fund.
Translation: Trust me. I’m struggling on your behalf. I even transferred dollars from one non-existent trust fund to another non-existent trust fund. What more could I do?
Sen. John Thune of South Dakota – a member of the Senate GOP leadership – laid down a tough marker of his own requiring that virtually all of the new highway and infrastructure spending be offset by reductions in other federal programs.
Translation: If you want roads, you’ll have to give up on Social Security, Medicare, Medicaid, aids to education and all poverty aids. (But don’t you dare touch anything that benefits the rich, like those lower investment taxes.)
Thune and other Republicans plan to push for an amendment that would strike out Wyden’s tax revenue increases and replace them primarily with cutbacks in spending on disability and unemployment insurance.
Translation: Even though the Monetarily Sovereign U.S. government has the unlimited ability to pay any bills of any size, we need more ways to widen the GAP between our rich friends and you other people. So we’ll keep on cutting anything that benefits you commoners. And we know, you’ll agree.
Thune’s main target would be the roughly 117,000 Americans who double-dipped by cashing unemployment and Social Security disability checks during the worst of the economic crisis.
That practice cost taxpayers a combined $856 million in fiscal 2010 alone, according to a Government Accountability Office report issued in September 2012. According to one projection, the additional strain on the system will make the SSDI trust fund insolvent by 2016.
Translation: We want you to resent people who supposedly got “rich” by cashing those puny Social Security and disability checks (so you’ll forget about the bankers who actually did get rich, caused the recession, received bailouts which became bonuses and never have been prosecuted).
The average double-dipper collected $7,316 in fiscal 2010.
Wow! That much!??
And of course, we would be remiss if we didn’t mention one of the BIG LIE’s favorite phrases: “Cost taxpayers.” Never mind that in a Monetarily Sovereign nation, federal taxes do not pay for federal spending.
Never mind that there are only two things that cost taxpayers: More taxes and reduced benefits, both of which will be instituted.
By contrast, the Obama administration approach – which is far less rigid — would save only $1.2 billion over ten years.
Obama must be the “good cop.” He wants to widen the GAP between the rich and the rest by “only” $1.2 billion. He calls it “savings,” to make you happy.
All of the above leads to the simple question: How much money does the federal government have? How much is in the federal government’s savings account? How much is in the federal government’s checking account?
The answer is, and always has been either, $0 or infinite. Because a Monetarily Sovereign government creates dollars ad hoc to pay all its bills, it has no need for “savings.”
If you do a bit of research, you can learn how much money your state, your county or your city has. They are monetarily non-sovereign. They can’t create their sovereign currency, simply because they have no sovereign currency.
Asking how many dollars the federal government owns is like asking how many points a scoreboard owns.
So, cut your Social Security and unemployment comp and raise your taxes? Sure, why not?
You’ll vote for it.
Rodger Malcolm Mitchell
Ten 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. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (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. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (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
Vertical gray bars mark recessions.
As the federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise. Federal deficit growth is absolutely, positively necessary for economic growth. Period.