–Republicans agree on the need to end FICA

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:
•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..

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This post is a followup to the previous post: The KISS approach to narrowing the Gap and growing the American economy.

Headline: Republicans agree on the need to end FICA

Trump, Carson, Rubio: Don’t raise the minimum wage
By: Liz Goodwin, Senior National Affairs Reporter, November 10, 2015

GOP frontrunners Donald Trump, Ben Carson and Marco Rubio agree on at least one thing: The minimum wage should not be raised.

“Wages are too high,” Trump said, while explaining why he did not support hiking the federal minimum wage from $7.25 to $15 an hour.

“We are a country that is being beaten on every front: economically, militarily. There is nothing that we do now to win. We don’t win anymore,” Trump said.

The real estate mogul added that the country should dramatically lower its taxes but keep wages as they are to be more competitive economically with the rest of the world.

The crowd applauded. Ben Carson quickly agreed when the question was tossed to him.

See, the leading Republicans agree that taxes should be reduced and that wages also need to be reduced to make America more competitive — and eliminating FICA would accomplish all those goals.

Yes, we know that when Republicans say they want to reduce taxes, they mean reduce taxes on the rich.

And yes, we know that when Republicans want to reduce wages, they want to cut take-home wages.

And yes, we know that Republicans want to reduce wages so as to enrich corporations, which they phrase as “making America more competitive.”

But eliminating the wholly unnecessary FICA tax would accomplish everything Republicans claim they want:
1. Cutting FICA would reduce taxes
2. Cutting FICA would reduce paid wages (while increasing take-home pay).
3. Cutting FICA would enrich corporations and make America more competitive.

“Every time we raise the minimum wage, the number of jobless people increases. I would not raise it,” Carson said, to applause.

Sen. Marco Rubio joined his two rivals, saying tax reform would be more effective than raising wages.

“If I thought [raising the] minimum wage would be the best way to help increase their pay I would be all for for it, but it isn’t,” Rubio said of lower income people in the country.

“It’s disaster if you raise the minimum wage. You make people more expensive than machines.

That is why Republicans would love the elimination of FICA.
1. It would not increase joblessness
2. It is tax reform.
3. It is the best way to help increase workers’ pay.

Cutting FICA does everything — everything — Republicans say they want, with only a small exception. It doesn’t widen the gap between the rich and the rest. It doesn’t punish the poor, and it isn’t mean-spirited.

But hey, you can’t have everything.

Rodger Malcolm Mitchell
Monetary Sovereignty

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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
Monetary Sovereignty

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.

#MONETARYSOVEREIGNTY

32 thoughts on “–Republicans agree on the need to end FICA

  1. Three of them – Paul, Carson, and Huckabee – have tax plans that eliminate FICA. Cruz would eliminate it for anyone making less than $36K. Christie, Bush, and Rubio would end it for seniors only (Bush would keep the employer portion).

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      1. WHAT IS WRONG WITH “The TRUMP TAX PLAN” ?
        September 29, 2015
        By
        Alan Cole
        FISCAL FACT No. 482: Details and Analysis of Donald Trump’s Tax Plan (PDF)
        Key Findings:
        Mr. Trump’s tax plan would substantially lower individual income taxes and the corporate income tax and eliminate a number of complex features in the current tax code.
        Mr. Trump’s plan would cut taxes by $11.98 trillion over the next decade on a static basis. However, the plan would end up reducing tax revenues by $10.14 trillion over the next decade when accounting for economic growth from increases in the supply of labor and capital.
        The plan would also result in increased outlays due to higher interest on the debt, creating a ten-year deficit somewhat larger than the estimates above.
        According to the Tax Foundation’s Taxes and Growth Model, the plan would significantly reduce marginal tax rates and the cost of capital, which would lead to an 11 percent higher GDP over the long term provided that the tax cut could be appropriately financed.
        The plan would also lead to a 29 percent larger capital stock, 6.5 percent higher wages, and 5.3 million more full-time equivalent jobs.
        The plan would cut taxes and lead to higher after-tax incomes for taxpayers at all levels of income.
        JUST HOW GREAT A PLAN IF WE REMOVE THESE TWO SENTENCES IN ONE SIMPLE MOVE:
        HOW TO PAY FOR IT !!!!

        FIRST; CLOSE ALL LOOPHOLES, any amount they anyone would wish to claim as exempt must be submitted to IRS begging for a refund.

        SECOND; REDUCE DEBT SERVICE TO ZERO !
        However, the plan would end up reducing tax revenues by $10.14 trillion over the next decade when accounting for economic growth from increases in the supply of labor and capital.
        The plan would also result in increased outlays due to higher interest on the debt, creating a ten-year deficit somewhat larger than the estimates above.

        This is a proven method: Call the bonds and replace them with 0.25% interest bonds.
        Then proceed to pay off the entire Federal Debt?

        ***The ease with which the government’s debt could be paid in this way was demonstrated in January 2004****
        As the chairman of the Coinage Subcommittee observed in the 1980s, the entire federal debt could actually be paid in this way. The Federal Reserve has already established that it can issue $4.5 trillion in accounting-entry QE without triggering hyperinflation. In fact, it has not succeeded in triggering the modest inflation the exercise was designed for. As with QE, paying the federal debt in this way would just be an asset swap, replacing an interest-bearing obligation with a non-interest-bearing one. The market for goods and services would not be flooded with “new” money that would inflate the prices of consumer goods, because the bond holders would not consider themselves any richer than before. They presumably had their money in bonds in the first place because they wanted to save it rather than spend it. They would no doubt continue to save it, either as cash or by investing it in some other interest-generating securities.
        The ease with which the government’s debt could be paid in this way was demonstrated in January 2004, when the US Treasury called a 30-year bond issue before its due date. The bonds were redeemed “at par” to avoid a 9-1/8% interest rate, which was then well above market rates. The Treasury’s January 15, 2004 announcement said that payment would be made “in book entry form,” meaning numbers were simply entered into the Treasury’s online money market fund (Treasury Direct). In effect, the money just moved from an online savings account to an online depository account, converting interest-bearing bonds into non-interest-bearing cash.
        Where did the Treasury get the money to refinance this $3 billion bond issue at a lower interest rate? Whether it came from the private banking system or from the Federal Reserve, it was no doubt created out of thin air. As Federal Reserve Board Chairman Marriner Eccles testified before the House Banking and Currency Committee in 1935:
        When the banks buy a billion dollars of Government bonds as they are offered . . . they actually create, by a bookkeeping entry, a billion dollars.
        The US government can just as easily create this money by a bookkeeping entry itself. It can and it should, to avoid the interest charges that compound the national debt and make it unrepayable. Quoting Thomas Edison again:
        If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also. The difference between the bond and the bill is that the bond lets the money broker collect twice the amount of the bond and an additional 20%. Whereas the currency, the honest sort provided by the Constitution pays nobody but those who contribute in some useful way.http://ellenbrown.com/2015/10/27/how-obama-could-beat-the-debt-ceiling-and-go-out-a-hero/

        FROM A GOOD PERSONAL INCOME TAX PLAN TO A
        “AMERICA’S GREATEST PERSONAL INCOME TAX PLAN”.
        (1)eliminate FICA on all income of all earnings less than $102K/year.
        Giving an automatic 15% raise to all without any increase in money supply or any increase in labor cost.
        (Create another 2 million jobs)
        (2). Change tax code to : Federal Income Tax to be 1% for income up to $102,000.
        with higher percentages for $103,000-500,000 then perhaps,30% thereafter.
        Corporate taxes would be a separate item, perhaps based on percentage of profits.
        (3). All taxpayers in the 1% bracket will receive a rebate in an amount equal to 6% of their income.
        This is to balance their income so as not to be penalized by sales taxes.

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        1. Ah, back again, I see, this time with more convoluted “Soddyisms.” How about simply doing away with FICA, and forget about (1) above.

          Anyway, these two sentences make no sense:

          “The US government can just as easily create this money by a bookkeeping entry itself.
          “It can and it should, to avoid the interest charges that compound the national debt and make it un-repayable.”

          The 1st sentence contradicts the 2nd sentence.

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          1. RMM said,”Ah, back again, I see, this time with more convoluted “Soddyisms.” How about simply doing away with FICA, and forget about (1) above.”
            Then one MUST ask, “How would you pay for it” (the loss of revenue)?
            Thank you for the phrase, “SODDYISM”

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        2. @justaluckyfool: Mr. Alan Cole does not understand Monetary Sovereignty.

          Examples…

          ALAN COLE: Trump’s tax plan would end up reducing tax revenues by $10.14 trillion over the next decade when accounting for economic growth from increases in the supply of labor and capital.

          COMMENT: Great! That would be 10.14 trillion fewer dollars sucked out of the economy and destroyed.

          ALAN COLE: Trump’s tax plan would also result in increased outlays due to higher interest on the debt, creating a ten-year deficit somewhat larger than the estimates above.

          COMMENT: Nonsense! The Federal Reserve decides basic interest rates on T-securities. These interest rates are subject (to some extent) to fluctuations in the secondary market, but they have nothing to do with federal government spending or taxation. Federal taxes could be quadrupled, or taxes could be reduced to zero, and still the Fed would continue to independently choose whatever interest rates the Fed thought best.

          ALAN COLE: Trump’s tax plan would significantly reduce marginal tax rates and the cost of capital, which would lead to an 11 percent higher GDP over the long term, provided that the tax cut could be appropriately financed.

          COMMENT: Since the U.S. government has no need or use for tax revenue, it is nonsensical to ask how the U.S. government will “finance a tax plan.”

          After that, the text becomes confusing, but it quotes Ellen Brown, who is hopelessly cement-headed in her support for the “national debt” hoax. I will expose Ellen’s folly in a future comment. She militant resists the facts of Monetary Sovereignty.

          Like

      2. They say growth will pay for it, eventually. One, I forget which one, admitted his plan would raise the deficit initially. In fact, all would raise the deficit considerably, to our great benefit.

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  2. 1. A trivial question Rodger, but how would eliminating the FICA tax reduce gross wages? If the FICA tax were eliminated, then people would be paid the same gross wages as before, while taking home more net wages, yes?

    2. As for Trump saying that “wages are too high,” he has sealed his doom. Hilary or Obama may want to widen the Gap as much as Trump does, but they never blatantly say things like “wages are too high.”

    3. “Every time we raise the minimum wage, the number of jobless people increases. I would not raise it,” Carson said, to applause. I see. So the lower the minimum wage, the lower the number of jobless people, right Mr. Carson? Why not lower it to zero, so we can have full employment, like plantation slaves? Then we would finally be “competitive.”

    3. “Cutting FICA does everything — everything — Republicans say they want, with only a small exception. It doesn’t widen the gap between the rich and the rest. It doesn’t punish the poor, and it isn’t mean-spirited. But hey, you can’t have everything.” ~ RMM

    Ha! Exactly. That’s why we can have single payer health insurance, and why can’t eliminate the FICA tax. Both would boost corporate profits, but they would also narrow the Gap between the rich and the rest. And the Gap is all that matters.

    By the way, note how all of these fools equate “competitiveness” with low wages or cost savings alone. That’s one of the problems with today’s society. When it comes to boosting profits and competitiveness, we no longer care about improving our quality, our innovation, or even our market share. We just want to cut costs, especially labor costs. No society or empire can survive this “race to the bottom” for very long.

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    1. 1. Yes and No.

      At first, it would depend on what individual businesses do, If they continue paying the same gross wages, business costs would not change.

      But if they increase net wagesonly by the amount of the employee’s portion of FICA, then gross wages would decrease, i.e, business costs would decrease.

      I suspect different companies would have different initial solutions, but over time, as FICA becomes a distant memory, competition would rule — as it does, today.

      Then, the difference merely would be the annual trillion-plus dollar increase in the U.S. money supply, spending and GDP.

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      1. “If they continue paying the same gross wages, business costs would not change.”

        It seems to me that even if businesses paid the same gross wages as before, business costs would go down, since employers would no longer have to match their employees’ FICA contributions.

        If the FICA tax sucks a trillions dollars a year out of the U.S. economy, then it seems to me that abolishing the FICA tax would give a $500 billion boost to consumers, and another $500 billion boost to employers.

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        1. Not exactly.

          If an individual employer considers half of FICA to be a tax on his company, then the company and employees might benefit equally, as you indicated.

          But, if an employer counts all of FICA as part of his employment costs, then the elimination of FICA might entirely benefit employees.

          Employers don’t necessarily give cost savings to employees. Every employer would make his own decision.

          As I said, after a while, FICA will be forgotten, and employee pay will be based on company profits and competitive rates, just as always.

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    2. trump, “wages are too high”….. sealed his doom with whom? you assume the masses are listening and thinking, and, in particular, that the conservatives are listening and thinking. I watched the whole debate, a major feat in itself, to ascertain if there was anyone that had a modicum of sense. a few had moments, but they all eventually devolved into nonsense. trump will continue to do just fine, as well as carson. carson, by the way, has to be one of the dumbest, most successful individuals I have ever had the displeasure to witness on a national stage. it is truly astounding, and speaks to the essence of why this country is, and for the foreseeable future, will stay, unexceptional………

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      1. Q. “Trump, ‘wages are too high’….. sealed his doom with whom?

        A. With voters and Wall Street. If a person wants Wall Street to install him or her in the White House, then that person must perfect the art of telling the peasants what they want to hear while the peasants are fleeced by the rich. Among this year’s candidates, the only one who has honed this ability is Hillary. The rest are bumbling fools.

        Q. “You assume the masses are listening and thinking, and, in particular, that the conservatives are listening and thinking.”

        A. The masses don’t have to listen and think. Trump has given them an atomic-powered sound bite in the form of his insulting comment that, “American wages are too high.” This sound bite can now be repeated whenever anyone says anything positive about Trump.

        The peasants are so full of fear and selfishness that they will cut their own throats in order to maintain the Gap between them and anyone below them. However there is a mathematical limit to this phenomenon. Minimum wage people are already at the bottom of the wage scale. Telling them they are overpaid is a fatal error.

        Politicians traditionally promise heaven, but deliver hell. Trump isn’t even doing that. Trump is a rich (expletive) sneering down on American peasants and scowling, “You scum are not worth what you’re getting paid!”

        Until now I was indifferent to Trump. To me he was just another dancing monkey in silk with a comical haircut. Now I am nauseated by him.

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  3. Perfect example of the kind of person who votes to widen the Gap:

    McDonald’s Worker Axed After Filmed Tossing Water On Homeless Man
    The cruel prank followed the man being offered a free sandwich.

    In case you were wondering why anyone who is not rich would vote Republican (I.e. to widen the Gap), check out this site.

    Here is a guy making McDonald’s wages, who tries to widen the Gap between himself and someone even poorer.

    The rich count on the 99% being just as cruel as they are.

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    1. “The rich count on the 99% being just as cruel as they are.”

      Exactly. When we speak of inequality and the Big Lie, one causative factor is brainwashing, but a more important factor is “Gap dynamics,” which occurs at all levels except the very bottom (since there is no social gap below the bottom)..

      Rodger confirmed this two years ago…

      https://mythfighter.com/2013/11/06/the-gap-the-whole-gap-and-nothing-but-the-gap-so-help-me/

      “Gap dynamics” is what sustains social stratification. It is justified by the Big Lie that money is physical and limited.

      The engine of “Gap dynamics” is selfishness and fear. The selfish part is the delusion that, “I am better than you.” The fear part is, “I don’t want to be inferior like you.”

      Selfishness and fear are justified by the Big Lie. Since most people (not all) play the game of “I am better than you,” most people (not all) worship the Big Lie. They cling to it like a religious faith. And their faith is echoed by politicians, economics professors, and the corporate media outlets.

      Unfortunately, the more this delusion causes people to suffer, the more people cling to this delusion (“I am better than you”). When the middle class falls lower, its members tend to treat the underclass with increased cruelty, in order to maintain the Gap. An example is this incident at McDonald’s.

      The antidote to the Big Lie is charity, compassion, and the willingness to put yourself in another person’s shoes.

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      1. You’ve missed the point.

        No one knows whether the McDonalds employee would vote Republican or Democrat, or whether he even votes at all.

        The original question was why any non-rich person would vote against his/her own best interests. Because the Republicans clearly are the party of the rich, why would any non-rich person vote Republican?

        This McDonald’s employee provides an answer. He is low wage, yet he despises those poorer. He is afraid he is like the poorer man, so does everything to show he is above him.

        That is how the Republicans convince people to vote against social programs. They convince people to hate those below them on the social scale.

        It’s a version of the Indian caste system.

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  4. just to be clear, there is as much “evidence” that raising the minimum wage increases unemployment as there is that giving tax benefits to the privileged will trickle down and help the masses….. additionally, when the esteemed dr carson stated that 80% of black teenagers, who were looking for work, were unemployed, he seems to have had it backwards. 22-23% of said black teenagers are unemployed, still a high number, but obviously it works for him and his base to lie about the facts. but then again, when did facts matter……….

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  5. Perhaps apart from the visceral fear of becoming like the poor themselves I would have thought Republicans could embrace MS/MMT because their mantra of paying less taxes is consistent with MMT/MS. It is a dangerous concept to understand Fed money comes from a bottomless pit, but I’m sure Republicans would embrace it as their businesses would become internationally more competitive and more profitable and businesses that can’t survive now could in future be viable. Would it be a step too far for them to pay living wages to each employee in compensation?

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    1. John your comment is logical, but the Gap is not logical. The Gap is a product of fear and selfishness. Most people (not all) will cut their own throats in order to maintain the Gap between themselves and everyone below them. That’s why people vote for the austerity that impoverishes them.

      Yes, society would prosper spectacularly if everyone embraced the facts of Monetary Sovereignty. However we would not have such wide Gaps between the classes.

      Statistically speaking, the Gap is more important to people than is anything else, including their own survival. People will submit to almost any amount of abuse as long as they know there is a class below them that is being crushed by even more abuse. As a result, most people’s abuse increases. They more they torture those below, the more they are tortured by those above.

      In short, the Gap and the Big Lie are yin and yang. Each supports and depends on the other.

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  6. TO RODGER

    On a side note, racism is another product of the desire to have someone “inferior” to you. That is, racism is a product of Gap dynamics.

    People will submit to almost any abuse from above, as long as they have someone to abuse below. This causes them to become increasingly abused from above, and to increasingly abuse those below. The more the middle class is crushed, the more its members despise the lower class in a desperate attempt to maintain the Gap.

    Average white Americans as a whole do not challenge their rich owners, because average white Americans have poor people to look down on, plus Black, Hispanics, refugees, and so on.

    If there is no bottom class, then the rich are obliged to create one by elevating some of their slaves above the rest of their slaves, thereby creating a middle class. The elevated “trustee” slaves will then devote their energy to maintaining the Gap below them, rather than narrowing the Gap above them.

    This was one of the purposes of black slavery. It kept poor whites in their place, below the rich. “We may be poor,” said white slaves, “but at least we are not black slaves. Therefore we are rich and we are not slaves.”

    Racism has performed this same function ever since, namely to keep the lower classes of all races in their place.

    Average whites abuse the classes below, in order to delude themselves that they are members of the class above. Indeed, average whites identify with rich whites who despise them. For example, average whites tend to think that anyone who is poor deserves to be poor.

    This middle-class hatred of the lower classes (and this fear of joining them) is so intense that it has spawned a hideous form of religion called “prosperity theology,” which says that hatred of the poor is “righteous.”

    QUESTION: given a choice between widening the gap below, and narrowing the gap above, why do most people choose to widen the gap below?

    The answer is that [1] fear of falling is greater than the desire of rising, and [b] it’s easier. Those below have less power to resist abuse. And it is less work. If you are rich, then you must expend some brain power to devise a new Wall Street theft-scam. It is much easier to spout the Big Lie and call for the elimination of “entitlements.” If you are middle class, then you must expend some brain power to understand what’s being done to you. It is much easier to blame everything on some chosen target (Jews, Muslims, Blacks, Latinos, immigrants, homosexuals, “homo-phobes,” or whatever).

    There have been times in the past when the lower classes overcame their “Gap dynamics.” In 1938 the Congress of Industrial Organizations (CIO) broke from the American Federation of Labor over the issue of race. The CIO was open to non-whites, and one of its slogans was “Black and white, unite and fight.”

    However the upper class came back, as always, with its standard trick of elevating a few members of the CIO so that they protected their privileges by crippling the union.

    It seems we will have the Big Lie for as long as we have Gap dynamics.

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    1. @justaluckyfool: Mr. Alan Cole does not understand Monetary Sovereignty.
      Examples…
      ALAN COLE: Trump’s tax plan would end up reducing tax revenues by $10.14 trillion over the next decade when accounting for economic growth from increases in the supply of labor and capital.
      COMMENT: Great! That would be 10.14 trillion fewer dollars sucked out of the economy and destroyed.

      Justaluckyfool: Not so, yes, but reducing tax revenues by $10.14 trillion over TEN years , (Thats at $1 trillion a year) would not, I repeat not suck OUT
      that money from the economy What it would do is Leave IN the economy $10.14 trillion for the PEOPLE to spend. I would rather have the earners spend for a better life style then turn that over to “congress for “appropriations”.

      ALAN COLE: Trump’s tax plan would also result in increased outlays due to higher interest on the debt, creating a ten-year deficit somewhat larger than the estimates above.

      COMMENT: Nonsense! The Federal Reserve decides basic interest rates on T-securities. These interest rates are subject (to some extent) to fluctuations in the secondary market, but they have nothing to do with federal government spending or taxation. Federal taxes could be quadrupled, or taxes could be reduced to zero, and still the Fed would continue to independently choose whatever interest rates the Fed thought best.

      Justaluckyfool: Sorry, but you miss the point. Yes the Feds decide the rate but how stupid is it TO PAY SOMEONE A TAX ON YOUR OWN MONEY ? regardless of what the rate is. Why pay the top 10% over $600 billion in 2015, giving them a PROFIT as an entitlement. Yes, $600 billion not going to SS or Medicare, rather being paid out to the top 10%, or do you know any of the 42% in poverty receiving dividends from the banks or funds that own these “Treasuries” ?

      ALAN COLE: Trump’s tax plan would significantly reduce marginal tax rates and the cost of capital, which would lead to an 11 percent higher GDP over the long term, provided that the tax cut could be appropriately financed.

      COMMENT: Since the U.S. government has no need or use for tax revenue, it is nonsensical to ask how the U.S. government will “finance a tax plan.

      Justaluckyfool: WOW, you really need to explain if there is no use for tax revenue, why do we not have 42% of American OUT of Poverty and all Americans with FREE healthcare.

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  7. Sigh! Brainwashing trumps logic most of the time, as evidenced by the words of a friend of mine who came away with a totally different take on the Republican debate when I told him that none of the candidates spoke the truth about the federal debt. He said:

    “I believe these persons in the debate have more morals, common sense, intelligence, wisdom, business sense, financial sense, patriotism and genuine concern for our country than anyone else in politics that I have seen. They seem to have the right priorities: God, country and family! We are almost financially bankrupt; your financial theory is just that… A theory! Look at any government financial report to find our real DEBT problem we face. Most of these candidates realize the magnitude of this (debt problem) and many other big problems that need to be fixed ASAP.
    Your theory is more fantasy than reality for most politicians; they think they can just print money to solve our financial problems. That would be financial suicide for America because it would devalue the dollars to pennies! It would be nice if it was that simple. The fantasy/theory is not in touch with reality. If that were truly the case, no country would have any debt. We currently have a circus in Washington now! Those clowns need to go and we need to replace them with moral and competent people… No more liars!”

    This guy is a self-employed voter who will be on Social Security about 15 years from now. I suspect he will vote to cut his own throat as will a whole lot of people who have grown up on a steady “Big Lie” diet. I just told him to read this site and Joe Firestone’s new Kindle book “Fiscal Myths of the 2016 Campaign”, but I know he’ll do neither. That’s the American way.

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    1. “I suspect he will vote to cut his own throat” Jim

      Either that, or he’s tired of watching his earnings buy him less and less thatnks to that “debt is not a problem” theory. And don’t get me started on theory, to Rodger – demand and supply don’t apply to MMT/MS and if they do – the demand for dollars is also infinite, which makes the value of dollars infinite in his world.

      The theory looks like a slice of swiss cheese – and appears to taste so good too.

      Like

  8. The following is a comment from Tip Parker, who requested I post it:

    The Problem

    Politicians and the media are guided by polls which show that most Americans believe the government is going broke and want it to get its financial house in order. Politicians can’t get elected and the media can’t make sales by going against what the public wants. Advocates of MS/MMT know how hard it is to change what the public believes. Those who want the government to do more must accept that as a fact of life and deal with it.

    A Solution

    One way is to help leaders of national organizations that are dedicated to public purposes and have large consistencies make their case that more government spending is not only possible but vital. Two examples of the organizations are the American Society of Civil Engineers (infrastructure) and Disabled American Veterans. Organizations that represent the needs of millions of people are listed below and more should be added.
    The leaders of these organizations are busy, pragmatic men and women who must keep showing their constituents that they are making progress. They haven’t time to learn MS/MMT but they need some of its basic teachings in order to make their case for more funds. All of these organizations have contacts in government and public relations arms, so leaders who become convinced can spread the message.

    The Message

    Deficits are the government’s normal mode of operation and unsung heroes of the county’s success. The government ran them during 129 of the past 200 years or nearly two thirds of the time. Conversely, the idea of reducing the debt was tried six times during during the past 200 years. Each time surpluses were run for five or more years led to a major depression. The ideas of balancing the government’s budget and reducing the debt seem to make sense, but history shows that it just doesn’t work, and there is a simple reason.

    The private sector is called a “sector” because it is one part of the American economy. The two other parts are the public or government sector and the foreign sector. Dollar flows among the three sectors always net out to zero. If one has a surplus, one or both of the others must have a corresponding deficit. If I pay you ten dollars, I am down and you are up by that amount, and the total net change is zero.

    Today, the foreign sector is running dollar surpluses because Americans are importing more than they are exporting. The private sector is running corresponding deficits by sending its dollars to other countries to pay for the imports. If too many dollars are drained from the private sector, the economy will slow down and may slip into a recession or depression. The only way to prevent that from happening until the trade deficit is reduced is for the federal government to run budget deficits that offset the private sector payments to other countries.

    America is trapped into running government budget deficits as long as it runs trade deficits. No state, local government, or company creates the national currency or considers how its budget relates to the flows between the private and foreign sectors. Only the federal government does that. Either it runs budget deficits that are at least as large as the trade deficit (ignoring investment flows) or private sector dollars will dwindle. At present, the trade deficit is roughly a half a trillion dollars a year.

    It will take many years to reduce the trade deficit. Until that happens, it makes no sense to even think about reducing the budget deficit and the country should concentrate instead on using the dollars created by the deficit for public purposes like those advocated by the organizations listed below.

    The Organizations (to be expanded)

    AARP
    American Council on Education, ACE (College and university presidents)
    American Medical Association
    American Road & Transportation Builders Association
    American Society of Civil Engineers, ASCE (Infrastructure)
    Association of American Universities AAU (60 leading universities)
    Democratic Governors Association
    Disabled American Veterans, DAV
    Environmental Defense Fund, EDF
    National Committee to Preserve Social Security & Medicare
    United States Student Association

    Questions for Readers of This Post

    1. Does this approach make sense?
    2. What is the minimum amount of knowledge necessary to convince the leaders of these organizations?
    3. How can the message be improved?
    4. What organizations should be added to the list?
    5. How should this be packaged and presented to the leaders of the organizations?
    6. What would be the best way to get the message to the leaders?
    7. Who can help can convey the message?

    Thornton “Tip” Parker
    tipparker@lumos.net

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    1. 1. Tip Parker says, “Advocates of MS/MMT know how hard it is to change what the public believes.”

      Yes, and one reason for the difficulty is that MMT people contradict themselves, thereby causing average Americans to keep believing the Big Lie. MMT people say the “gold standard” was real but it wasn’t. They claim that “taxes drive money,” but they admit that demand for dollars would continue even without taxes. They have their “jobs guarantee,” which is a swamp of infinite regress. They say that politicians are simply “misguided.” And so on. They need to tighten up.

      I will discuss this in more detail if challenged.

      2. AARP should not be expanded. AARP is a lobby for the private insurance industry, masquerading as an advocacy group for seniors. That’s why AARP promotes the lie that Social Security is “insolvent.”

      3. The rest of Tip Parker’s comments are logical, but people are not logical. That’s why they don’t listen. For the average person, nothing is more important than maintaining the Gap beneath him. Not even his own survival is as important. Most people want more austerity (for others) because they want to widen the Gap beneath them. They think that a wider Gap below them will prevent them from falling to a lower income level. Ironically this pushes them down quicker, since rich people above them likewise use austerity to widen the Gap below them. In order to justify our campaign to widen the Gap below us, we ignore reasonable comments like Tip Parker’s (above).

      Sorry folks, but the rich are not the only ones who use gratuitous austerity as a means to widen the Gap below them. Most people (not all) play this game at all levels. Even Americans at the very bottom maintain a Gap by regarding foreign nationals as “inferior.”

      Until there is more compassion and less selfishness (in the aggregate) there will continue to be austerity and “Gap dynamics.” People will continue reject the facts of Monetary Sovereignty.

      Like

    2. One other factor we must deal with is sheer habit. When we spend all our lives being told the Big Lie, and echoing it to others, we create a personal and collective inertia that resists re-direction. Therefore, when someone tells us that the U.S. government creates money out of thin air, our habits and our inertia make us say, in knee-jerk fashion: “If we increase the federal deficit, we will have hyper-inflation!”

      The best way to overcome this phenomenon in ourselves is through repentance. That is, we can break through our habits if we have a deep and sincere concern for the suffering of others, and a genuine desire to understand why suffering happens. Then we will seriously search for solutions. We will be open to the facts of Monetary Sovereignty.

      If we do not have this compassion, then we will remain slaves to our habits, our inertia, and our desire to widen the Gap beneath us. We will reject the facts of Monetary Sovereignty. We will remain poor, miserable, and asleep, not even aware that we have these habits that imprison us.

      Like

  9. Roger, these rat fuckers couldn’t care less about Joe and Jane six pack, not one bit. its astounding to listen to these assholes, shouldn’t they be making life better for us and not worse?

    Like

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