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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.
I just had a “discussion” with advocates for MMT (Modern Monetary Theory). The “discussion” consisted of me questioning their JG (Jobs Guarantee) and them telling me I’m wrong.
As regular readers know, I agree with MMT on just about everything regarding their descriptions of economic reality, but disagree with some of their recommendations.
Past posts on this blog describe why I believe JG is unworkable, a Rube Goldberian partial solution to unintentional unemployment.
MMT is so wedded to JG that for many years they have had a “Center for Full Employment and Price Stability.”
Clearly, MMT advocates (of which, on most things, I am one), are somewhat averse to eliminating JG as a prime goal. More than “somewhat.”
Among the many, many problems I have with JG is that it seems like a great deal of bureaucratic effort to solve a tiny problem.
You see, when I suggested to the adherents of MMT, that a better economic approach would be to focus on the adoption of the “Ten Steps to Prosperity” (See below) they said that MMT already is mostly in favor of the Ten Steps, but JG would take care of those people who still are unemployed, even after the Ten Steps are adopted.
But, nearly all economists favor some measure of unemployment — anywhere from 1% to 5%, as a safeguard against inflation.
So, MMT’s focus is on the relatively tiny fraction of the American populace, who are unable to find work, even after the Ten Steps are instituted, and also are not part of the 1%-5% economically desirable unemployed.
That made JG sound like “The Mountain Labored and Brought Forth a Mouse,” wherein MMT is the mountain and JG is the mouse.
A far better focus would be on narrowing the Gap — the distance between the rich and the rest — which affects the vast majority of Americans and of people in the world. MMT should consider something like a “Center for Economic Growth and Equality.”
Of course this suggestion has two chances: Fat chance and slim chance. But I thought I’d plant the seed.
Anyway, in regard to the Gap, you might find the following article of interest. The rich always love to portray themselves as the over-taxed minority, supporting the U.S. on their backs.
Well . . .
British bank HSBC Holdings Plc admitted failings by its Swiss subsidiary in response to media reports it helped wealthy customers dodge taxes and conceal millions of dollars of assets.
The client list included royalty such as Morocco’s King Mohammed, politicians, corporate executives including former Santander chairman Emilio Botin, who died last year, and wealthy families, the ICIJ said.
A spokesman for the Moroccan royal palace declined to comment.
Yes, the income tax rates are higher for the rich than for the rest of us, but the amount left over, after taxes actually are paid, is monumentally higher for the rich.
In short, when talking about taxes, the rich come out “like” bandits.
And that doesn’t even include the ridiculously regressive FICA and sales taxes, that punish the 99% and leave the rich unscathed.
Bottom line, a group like MMT, with its broad following, and Stephanie Kelton working on the “inside” of government, should not focus on minutia.
The real problem is the Gap. And the MMT focus should be on the Ten Steps to Prosperity, not on the “mouse” of JG.
Rodger Malcolm Mitchell
The 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. Federally funded, 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)
Initiating The Ten Steps sequentially 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.