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Today is Super Tuesday, so fearlessly, before the results are in, I will tell you why Bernie Sanders will lose.
First, let me tell you that I prefer Bernie to Hillary. She is a right-wing, establishment Democrat in the Obama mold, though thankfully she is tougher than him.
While Hillary cares little to nothing about the middle- and lower-income groups, she ironically will get the black vote. (Yes, there is a black vote, a white vote, an Hispanic vote and a religious-racist vote.) Bernie will get none of those, and there is a reason.
Bernie’s “Medicare for All” and free college for all are great ideas, not only for the poor and middle, but for all America. If implemented, they would “make America great again” much faster than Donald’s self-proclaimed greatness.
But, Bernie has fallen into the trap of accepting the enemy’s starting position.
The enemy is the GOP, the Party of the Rich, whose every thought, every waking moment, is devoted to widening the gap between the 1% and the 99%.
It began with the Tea Party, whose “cut taxes” raison d’etre meant, “Cut the taxes on the rich,” but also meant “Cut spending on social programs that benefit the 99%.
That was the sneaky part, because according to the Tea Party, once you cut taxes, you also have to cut spending, and where is the big spending? Social programs.
Which brings us to the trap, otherwise known as “The Big Lie.”
I can express “The Big Lie.” in just five words: “Federal taxes fund federal spending.”
Those five little words have done more damage to the American economy, especially to the 99% of us who are not rich, than any phrase in the English language.
They are a lie. Even if the federal government didn’t collect a penny in taxes, it could fund all of the “Ten Steps To Prosperity” (See below), with no difficulty.
Unlike state and local taxes, which are used for state and local spending, there is no fiscal relationship between federal taxes and federal spending. The state and local governments are monetarily non-sovereign; the federal government is Monetarily Sovereign. And that makes all the difference.
When you pay federal taxes, the dollars go to the U.S. Treasury, where they are destroyed. Destroyed?? Yes, destroyed. And here is the proof:
Throughout the year, the U.S. Treasury will receive about $3.3 trillion tax dollars. But, if ever you wish to know how many dollars the Treasury has, you never will be able to find the answer. The U.S. Treasury has no dollars.
How is that possible? How does the Treasury pay its bills?
To pay a bill, the Treasury sends instructions (not dollars) to the creditor’s bank, instructing the bank to increase the balance in the creditor’s checking account.
At the instant the bank obeys those instructions (and not before), dollars are created and the U.S. money supply increases.
The bank then sends the instructions to the Federal Reserve, which in turn, asks the Treasury whether those instructions are valid. The Treasury says, “Yes,” and the instructions “clear.”
And all that time, the Treasury doesn’t own a dime, not a penny. Even those thousand of sheets of dollar bills the Treasury prints every day aren’t money.
The money supply does not include tax dollars received by the Treasury. Not “M1,” not “M2,” not “M3,” not L, not “total debt.” No measure of America’s money supply includes federal tax dollars received. They cease to exist, once they are received.
Why does the government levy taxes? There are several reasons for this, mostly having to do with history, but none of these reasons has to do with today’s federal spending.
The sole result of federal taxation is to reduce the money supply. (By contrast, state and local taxes do not reduce the money supply)
And this brings us back to Bernie. He hired Professor Stephanie Kelton to head up his economics advisory. She is an expert in Monetary Sovereignty. She knows federal taxes don’t fund federal spending.
Despite the advice she must be giving him, Bernie has tied himself into knots, trying to explain how taxpayers won’t pay for his Medicare for All, and college for all, and other social programs — because he will raise taxes on the rich.
And no one believes his explanations, because he begins with “The Big Lie.”, that federal spending is funded by federal taxes. He should have explained the real reason why no tax increases will be needed — also in five little words: Federal taxes don’t fund federal spending.
Bernie will lose because he is playing the political game. He doesn’t believe Americans are smart enough to understand the truth.
Here is what he should have said: The speech. (Click the link to read it)
Early on, had he told America the truth, and given voters time to absorb and to discuss and debate the truth, he not only would have won the election, but more importantly, he would have built America faster and more powerfully than any President in history.
The truth would have set Bernie free, but he missed his chance, and now we all will pay for it.
Next November, hold your nose and vote for Hillary. She’s not much, but she still is better than anything the Republicans offer.
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 grow the economy, and narrow the income/wealth/power Gap between the rich and you.
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. A common phenomenon is for the line briefly to dip below zero, then rise above zero, before falling dramatically below zero. There was a brief dip below zero in 2015, followed by another dip – the familiar pre-recession pattern.
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.
•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..