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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.
Why do we require our children to be educated? Why do we send them off to approximately 12 years of schooling, most of which is paid for by a local government (i.e. by local taxpayers)?
What is the purpose? Why not just have the kids go to work and earn a living rather than spending valuable years in classrooms?
By 1900, 34 states had compulsory schooling laws. 30 states with compulsory schooling laws required attendance until age 14 (or higher). As a result, by 1910, 72 percent of American children attended school.
Even more than 100 years ago, when science and industry were much simpler than today, Americans understood that a successfully competitive nation required educated people.
It was, and remains, to the entire nation’s benefit, that it educate all its youngsters, not just the rich children, but all children.
So, America decided that local taxpayers, not the federal government, would pay for education, up through the 12th grade.
And there it has remained.
As all the sciences have required ever more specialization and education, America still is committed to educating just through 12th grade.
And even as the U.S. federal government has become Monetarily Sovereign, and thus able to pay any bill of any amount, without collecting taxes, still the onus is on the monetarily non-sovereign state and local governments to pay for education.
Consider the case of monetarily non-sovereign Germany, a nation that like our state and local governments, does not have the unlimited ability to create its sovereign currency (it having no sovereign currency, but rather using the euro):
There Is No Such Thing As A Free College Education
By: Christopher Denhart
Following Wednesday’s decision to overturn tuition and fees in Lower Saxony, Germany, all universities will now be tuition free. According to The Times, Germany will now be 100% free of charge to students, national and international, as political figures call tuition fees “socially unjust.”
Of course, college tuition fees are “socially unjust.” Even a fool realizes that charging for education leads to a widening of the Gap between the rich and the rest.
Even a fool realizes that education is as important as medical services, and should not be reserved for those who can afford it.
Of course, not everyone agrees
There Is No Such Thing As A Free Lunch. And there is also No Such Thing As A Free Higher Education. Higher education, especially in science-heavy Germany, is incredibly costly to run and maintain.
In a typical economic model for financing higher education, the consumer (student) would pay for the good that it consumes (education) and the research that researchers do would lead to innovations that have positive economic impact on society, therefore paying for themselves.
We have departed from this free market, “sustainable,” model globally, and rely heavily on federal subsidies to keep universities afloat.
CCAP has argued that these federal monies have largely led to increases in the cost of higher education, which has over time compounded, translating into higher tuition fees.
Remember that Germany is monetarily non-sovereign, just like our state and local governments, so taxpayers do indeed, pay for all government spending. So concern for budgets is understandable.
It is clear in the United States, with annual tuition fees in the $40,000s or $50,000s and millionaire university presidents, that federal subsidies have led to outrageous increases in university spending, as universities, administrators, and faculty enjoy the benefits of captured student loan and grant moneys.
Sooner or later this “free” higher education will feel less and less free as increasing taxes will likely drive the most educated, highest earning, most able Germans away from Germany and into societies where they can take home a greater percentage of their pay.
This will then reduce the tax cache and start to decrease the deficit more than the added tax revenues from a more professional society will add to them.
The author, Christopher Denhart, who though clearly not understanding Monetary Sovereignty, makes this point: In a monetarily non-sovereign community, social services — health care, poverty aids, road building, indeed all government initiatives — are unfair to the taxpayers who don’t use them.
If your city pays for elementary school, the point could be made that such payment is unfair to you, a taxpayer who has no children in elementary school.
Never mind that educating children rewards the nation that educates them. The rewards to any individual city are hard to measure. Sure, good schools increase property values, but by how much? And is a higher property value a benefit if it comes with a higher property tax?
What is the U.S. government’s solution to the unaffordable cost of college? STUDENT LOANS — you know those rare loans that cannot even be discharged in bankruptcy (because that’s not what the big lending banks want).
That is our solution: Put middle- and lower-income families deeply into an unsustainable debt, from which they never can emerge. Conservatives love it.
As the rich folk say, “Let them go to community colleges (paid for by the monetarily non-sovereign states), if that’s all they can afford. Our kids will go to the best universities. That is exactly the way the world should work.”
Activists Stop Paying Their Student Loans
MARCH 31, 2015
Latonya Suggs says she borrowed thousands of dollars in student loans to attend the for-profit Corinthian Colleges but has nothing to show for it. Most employers don’t recognize her criminal justice degree.
Suggs and 106 other borrowers now saddled with Corinthian loan debt say their refusal to repay the loans is a form of political protest. And Tuesday, the U.S. government gave them an audience.
Representatives of the “Corinthian 100” met with officials from the Department of Education and the Consumer Financial Protection Bureau. Rohit Chopra, the CFPB’s student loan ombudsman, said in a letter to the strikers that the CFPB would like to “discuss further” potential “ways to address the burden of their student loans.”
In September, the CFPB sued Corinthian, accusing it of predatory lending practices. Weeks later, roughly half of its campuses were sold to the Educational Credit Management Corp., a financial company with no prior experience operating colleges.
Finally, in February, the CFPB and the Department of Education announced the forgiveness of $480 million in private student loans held by former Corinthian students.
But those are just the private loans. Borrowers are still on the hook for hundreds of millions of dollars in federal student loans — money that the Department of Education expects to be paid back.
That’s true even for students who never earned their degrees, on campuses that are being shut down.
Refusing to pay back a student loan can have serious consequences. Wages and tax refunds can be garnisheed. It can also sink a credit score; limit access to a credit card, auto or home loan; and hurt your chances of getting a job.
Yes, that is our Monetarily Sovereign government’s solution to unaffordable education: Indentured servitude courtesy of rapacious lenders — the student loan scandal.
Or, the federal government simply could pay for a college education, far more easily than state and local governments pay for grades K-12.
Lending money to students and their parents is ridiculous, particularly since the federal government has zero need to receive dollars — its sovereign currency — from anyone. Why send people to loan sharks when dollars are freely available to the federal government?
There is one, and only one, purpose for college student loans — and its not to make college more affordable.
The sole purpose of our student loan program is to benefit rich lenders by enslaving families of modest means — luring them with something they know they need but cannot afford.
In this sense, the federal government is no better than the street corner drug dealer, sucking victims into a life that will lead to their destruction.
The solution: Follow Step #4 in the “Ten Steps to Prosperity,” below.
Do it now!
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.