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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.
●The single most important problem in economics is the gap between rich and poor.
●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.
You never can win an argument.
If it’s a contest, to be won or lost, the other guy will refuse to lose. So all the logic and facts in the world will not dent his faith and brainwashed head.
Despite every economic fact showing that federal deficit spending is not “unsustainable,” as the rich would have you believe — and despite the basic simplicity of Federal Deficits = Economy’s Surplus — the man-in-the-street can’t/won’t get it.
His faith and belief, that federal finances are like personal finances, is too strong.
But on at least one occasion, I may have found a way. I asked a friend four questions. The dialog went like this (somewhat edited):
1. Question: Which is better for the U.S. economy, a trade surplus or a trade deficit?
His answer: A trade surplus.
2. Question: Why?
His answer: Because a trade surplus brings dollars into the economy, which helps grow the economy.
3. Question: So, which is better for the U.S. economy, a federal surplus or a federal deficit?
His answer (after a long pause): I’d say, a federal surplus.
4. Question: When the government runs a surplus, where do the dollars come from?
His answer (after an even longer pause): I see what you’ve been telling me.
Because the word “surplus” generally is good and the word “deficit” generally is bad, people tend to think that ALL surpluses are good and ALL deficits are bad. So they immediately accept the notion that a federal surplus must be good.
But when put into context of money into and out of the economy, a light can go on.
In retrospect, I might have done as well with just two questions:
Why is a trade surplus better than a trade deficit?
When the federal government runs a surplus, where does the money come from?
And those are the two questions I plan to ask of my Senators and Representative.
You might want to do the same. I’d be interested to learn what they tell you.
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.