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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..
Before we describe how poverty is made, we must answer the question, “What is poverty?”
The U.S. Census Bureau counts “only cash income in determining whether a family is poor; cash welfare programs count, but benefits from noncash programs, such as food assistance, medical care, social services, education and training, and housing are not included.
“Taxes paid, such as Social Security payroll taxes, and tax credits received, such as the Earned Income Tax Credit, are also excluded from poverty calculations.
Is “poverty” simply lack of income as the Census Bureau seems to think?
Imagine you and your family are the only people occupying a small island. You have plenty of food, water and clothing, and a tent provides warm shelter. You have zero income, because there is no money on this island. Are you poor?
Imagine you and your family live among several other families on that island. You still have the same amount of food, water, clothing and a tent, but other families have far more and far better food and drink, far more and better clothing and they live in large, centrally heated houses, not in tents. Are you poor?
For years, money had not been necessary on that island. People grew their own food, sewed their own clothing and built their own houses. If any family lacked anything, they traded with a neighbor.
Now, the population of the island has grown, and the lack of money has made commerce more difficult. So, the elders of the island come together and decide to create money to facilitate trade.
The money will consist of a large wooden board, kept at the center of the island, on which is written the names of every resident. After each name is written a number showing how much money each resident has.
The board is called the “Money List,” and the keepers of the list are called “The Money Committee.”
For reasons lost to history, the residents decide to call their money “dollars.”
Initially, “The Money Committee” decides to write the number “1000” after each resident’s name. In essence, each resident now “has” 1,000 dollars, though all this means is that each resident has “1000” written after his/her name.
The Money Committee could have decided to write “10” or “100000,” or any other number. It just arbitrarily decided on “1000.”
If resident “A” sells something to resident “B,” the number after “A” will be increased and the number after “B” will be reduced. Nothing physical will change hands. All that will happen is the numbers on the Money List will change.
This leaves the question, “What is a dollar worth?” which easily is determined.
Each resident, knowing he/she has 1000 dollars, estimates how many of his dollars he is willing to sacrifice to acquire one pound of beef, a loaf of bread, or a candle. Similarly, the butchers, bakers, and candlestick makers decide how many dollars they will ask.
As those decisions are made thousands of times each day, a consensus develops regarding how many dollars should be added after the butcher’s, the baker’s, and the candlestick maker’s names in return for their goods and services.
And this consensus becomes known as “The Consumer Price Index.”
Notice that dollars have no physical existence. They merely are numbers on a list. And the Money Committee is not limited in the size of the numbers on the list. The “1000” was just an arbitrary starting point.
The Money Committee has the power to create more dollars as needed, merely by increasing the numbers on the Money List.
One day, the Money Committee decides it wants to build a large new building in which to house a huge, fancy Money List. This will require the labor of many carpenters, who will demand many dollars. The Money Committee will need to increase the numbers next to the names of those carpenters.
But the Money Committee has no dollars of its own. There is no line on the Money List that says, “Money Committee.”
So where will the Money Committee obtain the dollars to pay the carpenters? It simply can increase the numbers next to the names of the carpenters. Remember, it created the original numbers — the 1000 dollars per person — arbitrarily and from thin air. It can continue to create more numbers, arbitrarily and endlessly.
Some residents object, saying that increasing the carpenters’ numbers will decrease the value of everyone else’s numbers (aka “inflation). Instead, they want the Money Committee to reduce the numbers next to other people’s names, to equal the increase in the carpenter’s numbers.(This is known as “taxation.”)
The Money Committee knows it easily can maintain the value of numbers (dollars), i.e. prevent inflation, by increasing the demand for owning numbers (as opposed to owning goods and services), by awarding the owners of numbers a small stipend (aka “interest.)
Let’s summarize to this point:
1. “Poor,” being the basis of “poverty,” is a comparative, not an absolute. For instance, living in a tent might be considered poor in some societies, but quite normal, even rich, in others. If you live in a tent, and everyone else lives in the open, you might be rich. But if you live in that same tent, while everyone else lives in a house, you might be considered poor.
2. The Money Committee arbitrarily created dollars out of thin air, simply by putting numbers on a list. The Money Committee never can run short of dollars, nor does it ever need to ask anyone for dollars.
The Money Committee neither needs to borrow nor to tax. It can pay all its bills forever, by increasing the numbers on that list.
3. The Money Committee can maintain the value of dollars, i.e. maintain the demand for dollars, by paying interest to owners of dollars.
All of the above is logical and mathematical, but it ignores the sometimes illogical, emotional human desire to win, to grow, and to be superior.
The island residents could be taught that the Money Committee never needs to tax or to borrow dollars — it can change the numbers at will — but that is not the information the few, most influential residents want the rest to have.
No, the influentials want the rest to believe the Money Committee somehow is limited in its number-changing ability. The purpose: To put distance between themselves and the rest (i.e. “the Gap”).
So they disseminate the false information (“The Big Lie“) that the Money Committee must reduce some residents’ numbers before it can increase other resident’s numbers.
By controlling the Money Committee, the influentials control money creation and dispersal. Thus, it is the influentials who create poverty on the island.
Poverty never is necessary or inevitable. It always is created by the influentials.
So when you see poverty, anywhere in the world, know this: Poverty is not caused by the poor. Poverty is not the result of laziness or any other character weaknesses on the part of the impoverished.
Poverty is made — made intentionally — by the rich, to widen the Gap and to create a servant and subservient class.
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 begin an average of 2 years after the blue line first dips below zero. There was a dip in 2015. Recessions are cured by a rising red line.
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.