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●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
●Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
●Austerity is the government’s method for wideningthe gap between rich and poor.
●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.
●Everything in economics devolves to motive, and the motive is the Gap.
In November, 2013, we published “The real reason for Quantitative Easing,” which featured these paragraphs:
What is the single biggest problem facing the American economy? No, it’s not the federal deficit or the debt, not inflation, deflation, recession or depression, not reduced employment or unemployment, not health care or Social Security.
No, the single biggest problem facing the American economy is the growing Gap between the few very rich and the rest of us.
Now, more than a year later, with the economy growing, unemployment down, the stock market exploding and President Obama finally showing some spine, has this single biggest problem eased?
DECEMBER 17, 2014
America’s wealth gap between middle-income and upper-income families is widest on record
BY RICHARD FRY AND RAKESH KOCHHAR
The wealth gap between America’s high income group and everyone else has reached record high levels since the economic recovery from the Great Recession of 2007-09, with a clear trajectory of increasing wealth for the upper-income families and no wealth growth for the middle- and lower-income families.
In 2013, the median wealth of the nation’s upper-income families ($639,400) was nearly seven times the median wealth of middle-income families ($96,500), the widest wealth gap seen in 30 years when the Federal Reserve began collecting these data.
In addition, America’s upper-income families have a median net worth that is nearly 70 times that of the country’s lower-income families, also the widest wealth gap between these families in 30 years.
The Gap, between the rich and the rest, grew following the “Great Recession,” but it also grew during the “Great Recession”:
The wealth gap between upper-income and middle-income families also widened during the Great Recession.
The median wealth of all three income groups declined from 2007 to 2010. But upper-income families were not hit nearly as hard as lower- and middle-income families.
Median wealth declined by 17% from 2007 ($718,000) to 2010 ($595,300) among upper-income families. In contrast, middle-income (-39%) and lower-income (-41%) families had larger declines in wealth.
Keep in mind that the rich don’t care about absolute dollars; they are interested in comparative dollars, i.e. the Gap.
It is the Gap that makes them rich. (Without the Gap, no one would be rich, and the larger the Gap, the richer they are.)
The rich, with help primarily from conservatives in Congress and the conservative Supreme Court, bribe politicians to adopt policies that widen the Gap. A sampling of these policies:
1. Increase FICA and reduce Social Security benefits.
2. Charge for Medicare and include deductibles and “holes” and limits in payments. Attempt to make Medicare and Social Security privately funded.
3. No support for medical insurance below age 65.
4. Very little assistance for college education, and make student loans the only loans not dischargeable in bankruptcy.
5. Cut corporate tax rates and increase the many tax “loopholes” for the rich, not available to lower income taxpayers.
6. Allow wealthy bankers to trade risky futures accounts, then be reimbursed for losses by the government.
7. Opt for “smaller federal government,” especially cutting programs that benefit the 99%.
Since conservatives opt for policies that benefit the rich and widen the Gap, and the vast majority of the people are not rich, one wonders why conservatives seem to be winning the battle for approval by the 99%.
I can think of 4 reasons for this departure from self interest. (Perhaps you can think of more).
–Hatred for a black President
–Obama is a conservative disguised as a liberal, so he preaches the conservative “cut deficits” agenda, thus reducing liberal votes.
–The people don’t understand Monetary Sovereignty, so they believe that federal deficit spending causes inflation and is unsustainable.
–The voters despise those poorer than themselves, especially the black and brown –people who are considered to be lazy “takers.”
The current gap between blacks and whites has reached its highest point since 1989, when whites had 17 times the wealth of black households. The current white-to-Hispanic wealth ratio has reached a level not seen since 2001.
The Gap not only is a Gap in wealth, income and power, but also a Gap in fairness of opportunity. Attending college is a key step toward economic success, but attending college has two, often unaffordable costs: Tuition and the time that otherwise could be spent earning money.
The Impact of Inequality on Growth
By Jared Bernstein | December 4, 2013
The interaction between high levels of wealth concentration and a political system heavily influenced by money threatens to give rise to politics that are more responsive to special interests than, for example, the need for investments in public goods that would boost productivity and growth.
In short, rather than bribing politicians to pass laws that benefit the whole nation, the rich bribe politicians to pass laws that funnel money from the poor to the rich.
The fact that conservative politics benefits the few rich, yet the majority of Americans voted conservative in the past election, gives testimony to the truth of: “Nobody ever went broke underestimating the intelligence of the American public.”
Apparently, visceral hatred of blacks, browns, the poor, immigrants, gays and non-Christians trumps logical self interest, patriotism or compassion.
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. (Refer to this.)
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 and 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.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.
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.