Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
•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..
It is difficult to argue with faith. Facts won’t do it. Faith is supported by authority, intuition , desire and simplicity.
Facts cannot undo faith.
People want guidance from authority. People are programmed to believe their own intuition. People want simple answers to complex questions.
Faith, presented by authority, gives them simple, intuitive answers. Faith cannot be undone by complexity.
And that has been the problem. The populace has been programmed by authority — politicians, the rich, economists, the media — programmed to believe that federal financing is like state, local and personal financing.
The notion that something so valuable as money can be created from thin air, is not simple. It violates the “no free lunch” mantra. The denial is reinforced by people in authority.
So you are told the Big Lie, that “the federal government is just like you and your state and local governments.” Simple.
And you are told, “printing money causes inflation. Remember Zimbabwe.” Simple.
And you are told, “if the government could create dollars out of thin air, it wouldn’t collect taxes.” Simple.
All lies. But oh, so simple.
Here is faith: God rules everything. Yet, if you act badly, God will punish you. The fact that those two ideas are in opposition bothers no one. Faith wins; facts lose.
Here is faith: The federal government can print money. Yet, the government needs tax dollars. The fact that those two ideas are in opposition bothers no one. Faith wins; reason and facts lose.
Faith wants no reason or facts. Simplicity and authority are enough.
Readers of this blog are familiar with the “Ten Steps to Prosperity” shown at the end of each post.
‘Ten Steps’? That’s not simple. It’s not intuitive. It’s not what the politicians and media and economists tell you. It’s not what the rich tell you.
The people believe what they always have believed. They believe printing money causes inflation. They believe the federal government needs taxes to pay for spending. And they believe if you give people money, they will become needier and refuse to work, because only the rich have ambition.
If we want to overcome intuition and faith, perhaps Ten Steps are too many. Perhaps we need to follow the “KISS” principle: Keep It Simple, Stupid.”
The first step in the Ten Steps is: “Eliminate FICA.”
It is first because it is the most powerful step.
Every year, the federal government collects more than a trillion FICA dollars from employees and employers. That’s about 1/3 of all the dollars the federal government takes in taxes.
Source: Office of Management and Budget
A trillion dollars taken from business and the middle classes! A trillion dollars taken from the economy! Every year!
So here is a simple path to economic growth and to narrowing the Gap between the rich and the rest: STOP COLLECTING FICA TAXES.
What could be simpler?
The government would continue paying Social Security and Medicare benefits as it always has. No change. But simply stop collecting FICA dollars.
Stop taking a trillion dollars a year out of the economy.
Stop impoverishing the middle classes by picking dollars out of their pockets. Stop increasing American business employment costs. Stop making American business less competitive vs. foreign employers.
Stop pretending that Social Security and Medicare will run short of dollars. Stop pretending that Social Security lends dollars to other agencies in the government, which then supposedly pays the dollars back so Social Security can pay its bills. It’s a complex, Byzantine, Rube Goldbergian shell game.
The American people would be more self-sufficient. They would have more money to spend on goods and services, on housing and health and education.
U.S. business payroll costs would go down, the better to compete with foreign, low-wage businesses.
The entire nation would prosper.
And all that would be needed is for the federal government to stop collecting FICA.
It’s that simple.
Perhaps the Ten Steps are too difficult for the populace to absorb. Perhaps we should focus on just one simple step.
STOP COLLECTING FICA.
Rodger Malcolm Mitchell
Grow America; End FICA
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
Vertical gray bars mark recessions. Recessions come after the blue line drops below zero and when deficit growth declines.
As the federal deficit growth lines drop, we approach recessions, each of which has been cured only when the growth lines rose.
Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.