●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.
There is a reason why people who probably know better, pretend to be ignorant about economics. It has to do with widening the Gap between the rich and the rest.
Here are excerpts from an article written by highly paid TV personality, and therefore economics expert, John Stossel.
Government Doesn’t Create Jobs
The real key to job creation is leaving people free to explore, innovate and profit.
John Stossel | April 29, 2015
I took a camera to Times Square this week and asked people, “What creates jobs?” Most had no answer.
One said, “stimulus!” What? Government creates jobs? No!
I suppose it’s natural that people think government creates jobs because politicians always say that.
“We’ve now created more than 10 million,” said President Obama. But that just meant that he took office at the start of the recession, and finally job creation resumed.
He didn’t cause that. In fact, his taxes and complex regulation slowed job creation.
Before we go any further, here’s a spoiler alert. TV expert Stossel is a right-wing libertarian, who claims the federal government just gets in the way of the little guys.
He pretends we all are self-sufficient, no one needs help, and if there were no federal government, we would be better off.
(For some mysterious reason, known only to libertarians, state and local politicians are honest, well-meaning and effective. So all federal functions should be given to the financially troubled states.)
In Stossel-world, when the federal government spends a billion or two building roads and bridges, no jobs are created. The roads and bridges must be built by elves, not people.
And when the federal government saved General Motors from bankruptcy, that saved no jobs (except for the people who work for GM).
And when elderly people receive Social Security and Medicare benefits, so they are able to buy food, clothing and shelter, that creates no jobs in the food, clothing and shelter industries.
And when billions are spent on R&D for drugs and rockets to send probes to the moon, Mars and other planets, that created no jobs in the R&D industries.
And when the federal government helps pay for college educations, that creates no jobs for the educated.
And all those billions paid to soldiers and to military armament manufacturers and for all the logistics of the military — in Stossel-world that creates no jobs.
And when the federal government pays for food inspection and drug inspection, and our federal court system — in Stossel-world that creates no jobs.
And in Stossel-world, when the federal government itself employs more that 2.5 million people, those actually are not jobs for people — just more elves.
Mitt Romney, was a little more free-market-oriented, but he sounded like Obama when he talked about jobs. He had “a plan” to add 12 million. Don’t assume his plan was just to get government out of the way of the private sector—Romney said it’s a bad idea to cut government spending during a recession.
FDR’s New Deal was the dawn of belief that jobs flow from government. FDR didn’t seem to care whether jobs people did were productive or sustainable. He just wanted something done about the “armies” of unemployed. If they weren’t given jobs, they might become a real army and revolt.
Jobs come from government getting out of the way and letting employers produce goods.
In libertarian terms, government “get out of then way” has a magical feeling, like making a rescue boat “get out of the way” and allowing people to swim for their lives.
He wants Medicaid to “get out of the way,” and allow the poor to sicken and die. Or let the military to “get out of the way” and let our enemies invade.
And for certain, let the U.S. Customs and Border Patrol get out of the way and let everyone in. (Oops, strike that. Border Patrol is one bit of government the right wing loves.)
Every new layer of regulations sounds nice — protecting the environment, providing more health care, forbidding discrimination against disabled people — but most rules do more harm than good.
See, these things “sound nice,” but in Stossel-world, protecting the environment, providing more health care and forbidding discrimination against disabled people do more harm than good.
Humans have needs and desires. Entrepreneurs see those needs as opportunity.
They hire people not out of generosity or because government told them to—but because it’s profitable to employ people if they produce valuable goods.
In Stossel-world, entrepreneurs can be relied upon to protect the environment, provide more health care and forbid discrimination. Consider British Petroleum, Wells Fargo and JP Morgan Chase as examples of benevolent providers upon whom we should rely to protect the environment and provide health care.
If it’s not profitable, that means those people would be better employed doing something else. The prices customers are willing to pay and the wages workers accept are the best indication of which jobs can be done profitably and therefore ought to be done.
Yes, in Stossel-world, greed and profitability can be relied upon to protect the environment, provide more health care and forbid discrimination.
But politicians don’t trust business owners to make those decisions.
Gee, I wonder why.
Anyway, the nonsense went on and on and on, with the usual libertarian mantra that private business and its profit motive will take care of us, the same way it has taken care of poverty, slavery, bigotry, civil rights and ignorance, through the years.
Which brings us to the ever-strange Barry Ritholtz, Bloomberg View columnist and founder of Ritholtz Wealth Management. This article appeared in the April 29th Chicago Tribune:
“Higher gas tax needed to restore American highways”
Instantly, you know the article is wrong, simply because in the real world of Monetary Sovereignty, federal taxes do not fund federal spending.”
Unlike state and local governments, the federal government creates dollars, ad hoc, simply by paying bills. It neither needs nor uses tax dollars.
In the U.S., we have allowed a transportation grid that was once the envy of the world to become an embarrassing wreck.
Since 1993, the U.S. federal gasoline tax has been 18.4 cents a gallon. This money finances the Highway Trust Fund.
Ah yes, the mythical Highway Trust Fund, which is like the equally mythical Social Security Trust Fund and Medicare Trust Fund. In the words of the U.S. General Accounting Office:
“In contrast to a private trust fund, the federal government does not have a fiduciary responsibility to the trust beneficiaries, and it can raise or lower future trust fund collections and payments or change the purposes for which the collections are used by changing existing laws.“
Translation: The federal government can do whatever it damn well pleases with its fake “trust funds.” It can increase or decrease the balances at will and change how the money is used.
The federal government is not helpless in the face of reduced tax collections, as Mr. Ritholtz would have you believe.
As costs for (road) repairs have increased, revenue to pay for ordinary maintenance and repairs has failed to keep pace.
There, in one short phrase, is the full statement of the Big Lie — the lie that the federal government needs federal taxes to pay its bills.
In Ritholtz-world, our “impoverished” federal government (the sole entity that has the unlimited ability to create dollars), somehow has run short of dollars, and now cannot fix our roads unless it takes dollars from us drivers.
Ritholtz-world sees three “problems”:
–The tax never has been adjusted for inflation.
–During the recession, Americans drove less.
–The U.S. fleet of cars is more efficient than ever
And Ritholtz-world has a solution:
The solution is as obvious as it is rational: Raise the gas tax so we can start making the improvements to our infrastructure today — and index it to inflation.
As in Stossel-world, the ravings of Ritholtz-world go on and on, but those two worlds have one thing in common:
They both punish the poor and middle-classes far more than the rich. They widen the Gap between the rich and the rest.
The reason may be that Stossel is paid by the 1% and Ritholtz’s clients are the 1%.
The 1% hates government because one primary purpose of government is to protect the weak from the strong. The billionaires, being strong, want freedom to do anything that enslaves the populace. They want the Gap to be widened.
Reductions in federal deficit spending widen the Gap between the rich and the rest, because most deficit spending helps the 99% more than it helps the 1%.
That is why the rich-favoring libertarians always favor deficit reduction.
And as for the gas tax, who is hurt more — the lower or middle-income salaried worker, struggling to pay his bills, or the billionaire, for whom the gas tax is not even a rounding error on his personal balance sheet?
Yes, welcome to Stossel-world and Ritholtz world, where the rich do just fine, thank you.
And the 99%?
Well, who really cares about them (us)? Seemingly, not Stossel and Ritholtz.
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.