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•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.
•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.
•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..
Though a former Republican voter, I now am of the opinion that the Republicans do not offer a single candidate who has the honesty, knowledge, courage or intelligence to be President of the United States.
This is the party for which Donald Trump is the perfect symbol, and for which a significant number of candidates:
– –believe money is speech and that the rich should be able to buy elections. (Aside: If money simply is speech, then bribery simply is conversation.)
– –believe climate change science is a myth.
– –believe County Clerk Katie Lang is right to refuse marriage licenses to gays, because her religion is more important than anyone else’s.
– –believe vaccination causes autism, despite what doctors say.
– –believe deporting 11 million people and building a longer, higher wall is an efficient way to protect America.
– –believe Evolution science is a myth, while the bible is scientifically correct.
– –believe austerity works.
– –lie about their job experience.
– –lie about abortion and about Planned Parenthood’s role.
– –believe the words, “A well regulated militia being necessary to the security of a free state,” have absolutely no meaning.
– –believe the poor, the elderly and the unemployed are lazy, and helping them only encourages their laziness.
– –believe children born here to undocumented immigrants should have their citizenship taken away.
– –believe Barack Obama is a foreigner and a Muslim.
– –despise all who are not straight, white, Christian and male.
Which brings us to the Democrats, who sometimes equal Republicans in foolishness and perfidy.
You already have heard way too much about Hillary Clinton’s Benghazi and Emails, two politically overblown “scandals” that remind one of evaluating a restaurant based on the quality of its flatware. (Not that I support Hillary. I don’t. I favor Bernie Sanders.)
So let’s skip the political nonsense, and go to the real nonsense:
Senior Democrat Has A New Plan To Trim Unemployment
Rep. John Conyers wants to force the Federal Reserve to focus more on job growth.
Rep. John Conyers (D-Mich.), a senior House progressive, introduced a bill that same day that would make a future rate increase dependent on much lower unemployment than the U.S. is likely to achieve anytime soon.
Conyers’ proposed Full Employment Federal Reserve Act would obligate the Fed to define full employment as a maximum unemployment rate of 4 percent and “a labor market in which median wages are rising with worker productivity, job seekers can find work, and involuntary part-time work is at a minimum.”
Short of meeting those criteria, the Fed would be unable to raise its influential interest rates.
The Fed has a dual mandate to enact monetary policy that promotes both full employment and stable prices. The two-pronged mission, established by Congress in 1977, does not specify how the central bank should define those goals.
Critics of the Fed, mostly liberal, have said top Fed officials have used this discretion in recent decades to prioritize concerns about excessive inflation over maximizing employment.
The choice is essentially zero sum: When the Fed increases interest rates to limit inflation, it does so by deliberately reducing economic demand, which reduces potential job growth.
Enough! Enough! I can’t handle any more BS.
First, the “dual mandate” is utter idiocy. The Fed does not control employment. Congress controls employment via its taxing and spending policies.
Increase business taxes and hiring goes down. Increase personal taxes and buying goes down, which impacts business, forcing employment down.
Decrease federal spending and businesses sell less to the government, so hiring goes down. Increase federal spending and more money flows into the economy, which stimulates hiring.
The “dual mandate” is Congress’s way of avoiding its own responsibility for anything negative, while taking credit when times are good.
Second, when the Fed increases interest rates two main things happen:
–The dollar strengthens, which reduces the cost of imports (i.e. anti-inflation)
–The federal government pays more interest on T-securities, which adds stimulus dollars to the economy.
The Fed does not “deliberately reduce economic demand” in order to cut interest rates. It controls rates by fiat and by its open market operations.
Further, despite myths to the contrary, raising interest rates does not negatively impact Gross Domestic Product (See: The low interest rate/GDP growth fallacy )
So we have the spectacle of economically ignorant Democrats (John Conyers, Frederica S. Wilson, Marcy Kaptur, Keith Ellison, Sheila Jackson Lee, Henry C. “Hank” Johnson, Jr., and Donald Payne, Jr.), trying to tie the hands of the Fed in the execution of its primary economic task: Controlling inflation.
Visualize the hospital cleaning crew telling the surgeon what he is and is not allowed to do, and you have a reasonable analogy.
It would be far better for the cleaning crew to do a better job cleaning and let the surgeon operate to the best of his ability.
In short, it would be far better for Congress to do a better job growing our economy and reducing unemployment, and let the Fed control inflation to the best of its ability.
To Congress: A plague o’ both your houses. Just do your job.
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 Click here
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
Recessions come after the blue line drops below zero.
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.