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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.
There are many arguments, pro and con, regarding an increase in the minimum wage — so many arguments that ’till now, I’ve been reluctant to engage.
Those in favor of raising the minimum wage believe: It’s only logical. If you raise the minimum wage, the Gap between the rich and the rest will narrow; fewer people will require poverty aids, people will spend more, and the entire economy will benefit.
Those opposed to raising the minimum wage believe: It’s only logical. If you raise the minimum wage, employers will be encouraged to find ways to reduce the number of low-wage jobs. These tend to be low-skill jobs, the easiest jobs to replace with automation or by combining multiple jobs. So, raising the minimum wage will cause more unemployment.
There may be no convincing answer — at least no answer that can convince both sides — but here is some interesting data:
Bottom line: Employment decreases may result from many factors, but raising the minimum wage does not seem to be one of them. On balance the states that raised the minimum wage had a higher employment increase than those that did not.
That said, raising the minimum wage may not be the best way to help the lowest-paid group.
Employment decreases generally are associated with a bad economy. But, raising the minimum wage adds no dollars to the economy, so does little to stimulate economic growth.
The best way to help the low-wage worker is to institute the “10 Steps to Prosperity.”
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. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here)
10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
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 growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.