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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 widening the 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.
Most people understand that increasing taxes in not a successful way to grow an economy. Taking dollars from consumers’ pockets depresses an economy.
Similarly, net federal spending adds dollars to consumers’ pockets. And, increased consumer spending stimulates the economy.
Those are basic economic facts.
Yet, amazingly, there are people whose mentality does not allow them to connect those dots. They sneer at all federal spending as “socialism,” and claim that federal deficits (i.e. net federal spending) actually depress the economy.
They claim that taking money out of the economy (aka “austerity”), in some unknown way, is stimulative. They have been brainwashed by the rich.
Those people refuse to understand the differences between a Monetarily Sovereign government (the U.S., Canada, Australia, China et al) and a monetarily non-sovereign entity (Florida, Cook County, Chicago, General Motors, euro nations, you and me).
Seemingly, they cannot visualize why financial prudence for one are acts of financial imprudence for the other. So they fret and fuss about deficits and debts, which can be harmful for monetarily non-sovereign entities, but are necessary for Monetarily Sovereign governments.
Presumably, such people would believe that because vultures thrive on rotted meat, humans too, would thrive on rotted meat. In their world, differences of case are ignored.
Not understanding the simple facts of Monetary Sovereignty, those people vote for political representatives who are paid by the rich is to take money from the pockets of the poor and middle-income groups, thus widening the Gap. between the rich and the rest.
Then, of course, after having voted for criminals, they complain about political criminality.
On Day One, the new Congress launches an attack on Social Security
Michael Hiltzik, LOS ANGELES TIMES
Well, that didn’t take long.
As one of its first orders of business upon convening Tuesday, the Republican House of Representatives approved a rule that will seriously undermine efforts to keep all of Social Security solvent.
(Before we continue, you should understand that the author is ignorant of Monetary Sovereignty, so he discusses Social Security “solvency,” when in fact, it is impossible for an agency of a Monetarily Sovereign government to become insolvent — unless the government wants it. Nevertheless, he understands the harm caused by austerity.)
The procedural rule enacted by the House Republican caucus (requires that) “benefit cuts or tax increases improve the solvency of the combined trust funds.”
In practical terms, it mandates either benefit cuts across the board, which aren’t politically palatable, or a payroll tax increase, which isn’t palatable to the GOP.
“It is hard to believe that there is any purpose to this unprecedented change to House rules other than to cut benefits for Americans who have worked hard all their lives.” – Max Richtman, Committee to Preserve Social Security and Medicare
The rule change reflects the burgeoning demonization of disability recipients, a trend we’ve reported on in the past. it’s been fomented by conservative Republicans and abetted by sloppy reporting by institutions such as NPR and “60 Minutes.”
This obeys the popular Republican meme that anyone (except big corporations) who receives money from the government, is a lazy slacker, trying to game the system. That includes the disabled, the sick, the unemployed and the poor — all lazy, criminals according to the right wing.
Disability recipients are easily caricatured as malingering layabouts by politicians, academics and journalists. They’ll say disability benefits are so lavish they discourage work, and convenient substitutes for welfare payments. None of that is true.
As I reported in 2013, Social Security’s disability standards are stringent. To be eligible you must have worked at least one-fourth of your adult life, and been employed in at least five of the previous 10 years.
Workers younger than 31 have to show employment in half the years since they turned 22.
You have to be too impaired to earn even $1,040 a month on your own. Just over a quarter of all applicants are approved initially, though an additional 13% or so win benefits on appeal. All in all, only 41% of all applicants end up with checks. Sound easy to you?
And here’s where the politicians, on the payroll of the rich and powerful, rely on the ignorance of the voting public:
The new rules drafters say it’s necessary to “protect the Old-Age and Survivors Insurance (OASI) Trust Fund from diversion of its funds to finance a broken Disability Insurance system.”
But, disability isn’t “broken.” Its rolls have grown because of a number of well-understood factors, including the aging of the American population, the entry of more women into the workforce (and thus their eligibility for benefits), and the increase in Social Security’s full retirement age above 65.
In a cynical ploy, direct from the book, “1984,” our “Big Brother” teaches that cutting your benefits “protects” your money — and black is white and war is peace.
Sadly, the author thinks its all a big misunderstanding:
Do House Republicans understand any of that? It’s doubtful. If they did, they’d understand that their actions Tuesday are nothing short of shameful.
It’s no misunderstanding at all. It’s an intentional effort to keep taking money from the 99%, so as to widen the Gap., between the rich and the rest — an effort funded by the rich via campaign contributions (thank you right-wing Supreme Court) and promises of lucrative employment later.
You can read more about this at: ’60 Minutes” shameful attack on the disabled, October 07, 2013|By Michael Hiltzik.
Meanwhile, the Gap-widening efforts continue:
Republicans for Raising the Gas Tax?
Peter Suderman|Jan. 6, 2015
With gas prices around the country at lows not seen for years, America’s political class smells an opportunity: It must be time to raise the gas tax.
Over the weekend, Sen. John Thune (R-SD) was asked about the possibility of raising the federal tax on gasoline. In response, he said, “but I think we have to look at all the options.”
There are two reasons why this issue is coming up now. The first is that there’s a perennial shortfall in the Highway Trust Fund, which funds federal roads projects. The trust is paid for by a fuel tax of 18.4 cents per gallon, which has been level since 1993. Estimates from last summer put the shortfall around $170 billion.
It’s currently being funded via an $11 billion stopgap measure that expires in May. The politicos who manage the fund are looking for ways to fill that pot.
According to the article, “Peter Suderman is a senior editor at Reason magazine and Reason.com, where he writes regularly on health care, the federal budget, tech policy, and pop culture.” He also is a film critic.
So he knows a lot, but the one thing he doesn’t know is economics, because like the “man-in-the-street” he doesn’t understand the difference between Monetary Sovereignty and monetary non-sovereignty.
He thinks federal spending is paid for by federal taxes. And the public, which hears this nonsense day after day after day, has been thoroughly brainwashed.
That’s the policy reason. But as much as anything, this is about low gas prices, which, at least in theory, make it easier to raise federal gas taxes.
It’s a kind of tax hike opportunism: Consumers are saving money at the pump, so some of the savings ought to go to the federal government. Even Republicans, typically the anti-taxers in government, aren’t immune from the lure of easy tax hikes.
The real reason is that tax hikes on purchases affect the 99% far more than they affect the 1%, simply because the 99% uses a greater percentage of their income to buy things, while the 1% uses more of their money to invest.
The rich pay to spread the disinformation about federal taxing and spending, because they want the Gap to increase. It is the Gap that makes them rich, and the wider the Gap, the richer they are.
So by telling you The Big Lie (i.e. the federal government needs your tax dollars) they gain your approval to reduce spending that benefits you and raise taxes on yourself. That’s why FICA was increased, Social Security benefits decreased and Republican governors have refused to accept billions in Medicaid benefits to the poor.
Day after day, you experience yet another sneak attack by the rich on the rest. And the Gap grows wider.
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.