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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 the rest..
•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 my very strong believe that the single most important problem in economics is the Gap between rich and the rest..
It’s so important because it is not just a money Gap. It only begins with money.
Consider The Thirty Million Words Initiative:
Dr. Dana Suskindg grants the gift of sound to children who were born deaf or for any other reason, do not have the ability to hear.
In 2006 she founded the pediatric cochlear implant program at Comer Children’s Hospital at the University of Chicago. If you’ve seen the YouTube videos of toddlers hearing their parents’ voices for the first time, you know it’s nothing short of transcendent.
When these children start to hear, the excitement really begins. The world as they’ve known it their entire lives is altered in an instant.
During follow-up appointments, however, Suskind began to notice disturbing discrepancies in her patients’ progress.
Two of her first patients, Zach and Michelle, received cochlear implants around their first birthdays. “Same potential, same surgery, but very different outcomes.”
Zach immediately soaked up sounds and words. By third grade, he was mainstreamed into a public school classroom and scored at grade level in reading and math.
Michelle, on the other hand, was reading only at a kindergarten level in third grade and used very little spoken or sign language. Her hearing was normal, but she struggled to grasp the meaning of most words and appeared unable to learn them, even with extra help.
(In searching for why), Suskind discovered research by psychologists Betty Hart and Todd Risley who had set out to investigate why lower-income children consistently underperformed at school, compared to their higher-income peers.
They refused to accept the conventional wisdom: “Poor people — It wasn’t in their genes to be smart.
Hart and Risley discovered that kids born into poverty heard, in their first three years of life, 30 million fewer words than those born into more affluent families.
And the words poorer children did hear (were less sophisticated and) consisted of more prohibitions (“Don’t”) and fewer affirmations (“Nice job”).
The article goes on to describe the heartbreak of children being condemned to lower IQ by the accident of their parents’ income — the tragedy of wasted potential.
The brainpower of a nation’s children benefits that nation. The “brain drain” includes not only smart people leaving a country, but the nation cheated out of its children’s intellectual potential.
By cutting benefits to the middle and lower classes — food stamps, Medicaid, unemployment compensation, good schooling — and by working to destroy unions (unionized employees earn more), the politicians cut America’s potential.
The rich may say the poor deserve their poverty, them being lazy (“If you give them anything, they won’t work”) and unmotivated, but that false belief works against America’s future competitiveness.
The single best way to “Make America Great Again” (as Donald Trump bellows), is to eliminate poverty and to lift the lower and middle-income groups. If Trump truly believed his own slogan, he would opt for the Ten Steps to Prosperity (below).
The income/wealth/power Gap translates into an education Gap, a health Gap, a creative Gap, a motivation Gap, an opportunity Gap and many other related Gaps, the narrowing of which would benefit all Americans.
In many respects, America is a team, where the contributions of each member benefit the whole.
The next time you feel resentful that the poor may be “receiving more than they have earned or deserve,” remember that their future contributions benefit you. This is what really makes America great.
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.