Confused myths about the poor and what to do about them.

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


Here is what people (and not just the upper 1%) tend to think about those below them on the income/wealth scale:

Myth 1. The poorer (than us) are lazy, unintelligent, immoral and unmannerly.
Myth 2. Being lazy, they always have their hands out for welfare and other “free stuff.”
Myth 3. If you give them even small amounts of money, they will cease work, and happily live on charity.
Myth 4. They are born criminals, as are their children, and the only way to deal with them is by punishment.

Never mind that the poor generally work harder than do the rich. (One of my acquaintances opined that the poor are lazy, while we relaxed at our country club pool, and watched the gardeners toil and sweat in the heat.)

And never mind that the vast majority of the rich got that way, not by innate superiority, but by fortuitous opportunities, less available to those who are poorer. (My parents had enough money to feed, clothe and house me, and enough left over to send me to college. I didn’t have to leave high school to work full time. That made a big difference.)

And never mind that very few people know anyone who would rather receive the pittances offered by welfare, than to work for real money. Millions of working poor belie the myth, despite the sneering, bigoted comments about “welfare mamas.”

And never mind that there are few, if any, “born criminals,” and despite American locking far more people into jail than any other nation, crime remains rampant. Poverty is the single most important predictor of criminality.

Seemingly, facts will not erase the myths. Humans have an emotional need to demonize others, as a way to enhance their own self-esteem. “They” generally are viewed as less worthy than “us.”

The result is an ever-widening Gap between the “haves” and the “have-nots,” a self-fulfilling circle of poverty begetting poverty. Ultimately, when the Gap becomes wide enough and harsh enough, there comes a revolution, much to the detriment of a nation as a whole.

So what is to be done? Can we find a way to lift the poorer, without threatening the richer?

One way would be to provide services — the same services for everyone. A good model is the federal highway system.

Poor and rich alike benefit from it, and I haven’t seen any sneering that the poor take unfair advantage of a service that is free to all.

If you look at the Ten Steps to Prosperity (below), you’ll see several possibilities:

Step 1: Eliminate FICA. As we have seen in many other posts, our Monetarily Sovereign government neither needs nor uses tax dollars to fund its spending.

Not only is FICA unnecessary, but it is a most regressive and burdensome tax, punishing lower income people far more than the rich.

And it is doubtful anyone could claim the elimination of FICA, while greatly beneficial to the 99%, would in any way contribute to the so-called “laziness” of the poorer.

Step 2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone. Like usage of the federal highway system, rich and poor would benefit equally. Everyone receiving Medicare benefits does not motivate “lazy” people to stay home.

Step 4. Free education (including post-grad) for everyone. We already provide everyone with a free education for grades K-12. This free education is a great benefit to all of America.

No advantage to America exists for ending this free education at grade 8. Free education cannot make the poorer lazy. Quite the opposite. It encourages work by fostering a belief their work will be rewarded.

Step 5. Salary for attending school This would provide dollars to everyone, but would be most meaningful to those who otherwise cannot afford to substitute education for work.

It would accomplish exactly what the richer want: Discourage sloth and create a better workforce.

Step 7. Increase the standard income tax deduction annually Again, this does not encourage laziness, but merely allows the poorer to retain more of their earned income.

Summary: While we probably never will eliminate bigotry, i.e. negative beliefs about people who are members of a different group (from us), we can take steps to narrow the Gap between the 1% and the 99%.

Rather than stigmatize the poor by putting them on the dole, we should provide them with services available to everyone — like the federal highway system — that would encourage and allow them to step up.

And no more sneering from the ignorant, bigoted richer.

Rodger Malcolm Mitchell
Monetary Sovereignty


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.


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.

Monetary Sovereignty

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.


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 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..



One thought on “Confused myths about the poor and what to do about them.

  1. The post above would be outstanding except for one question. “How will you pay for it?” (Just kidding.) 🙂

    [1] Rodger writes, “Humans have an emotional need to demonize others, as a way to enhance their own self-esteem. ‘They’ generally are viewed as less worthy than ‘is.”

    Exactly. And “they” are people who (a) are below us on the ladder of wealth, power and privilege, or else are (b) people that those above us have ordered us to hate (e.g. Russians, Muslims, or whatever).

    It’s all about Gap dynamics; a topic that is ignored by mainstream economists and by MMT people alike.

    Gap dynamics is, in part, the engine behind the MMT “job guarantee” dogma. (“Anyone who isn’t rich, and who doesn’t work for his money, is LAZY!”)

    Gap dynamics is also the engine behind the chant of “There’s no free lunch!” This chant is always aimed at those below us.

    In reality, the higher you are on the ladder of wealth, power and privilege, the more your “lunch” is free at the expense of everyone below you.

    Gap dynamics is also the engine that sustains the Big Lie. Hatred of those below us is what allows us to simultaneously believe that (a) the U.S. government is bankrupt and (b) the U.S. government an create infinite money out of thin air.

    [2] Rodger writes, “Ultimately, when the Gap becomes wide enough and harsh enough, there comes a revolution, much to the detriment of a nation as a whole.”

    I would say that once inequality becomes extreme, such that the top class becomes a deadly parasite on everyone below them, one or more of three things happens…

    (a) There is a revolution, or a civil war
    (b) The nation is easily conquered from the outside
    (c) The nation simply collapses and disappears.

    Why does this happen again and again? Why do humans never learn?

    Answer: Gap dynamics.


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