Trump is right — for the wrong reason

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


Exchange between CNN host Erin Burnett and Donald Trump:

Trump: “Let me just explain something. Illegal immigration each year costs us between 200 and 300 billion dollars. I don’t know if anybody gives you those numbers — probably not. But, and when you include crime and other problems it’s more than that. So you are talking about 200 and 300 billion, the way it is now.”

Burnett: “But they pay in taxes, they pay 24 billion dollars in taxes,” she said.

Trump: “Who pays in taxes? You really believe they pay in taxes?”

Burnett: “They pay Social Security, state and local,” Burnett replied.

Trump: “What percentage of them? 10 percent?” Trump asked.

Burnett: “It’s 24 billion a year this economy wouldn’t have if they weren’t here,” Burnett pressed.

Trump: “Excuse me, excuse me. Do you know how few pay in taxes. Don’t be naive. Do you think an illegal immigrant getting money is going to be paying taxes? OK, sure. Some probably do. But only because the employers are insisting on it. But, percentage wise, there is very little. Probably five percent, 10 percent. It’s a very small amount that pay taxes. Look, they are here illegally. They are not paying taxes. I’ve heard this one before too. I hear them all.”

This is what bigots love to hear — undocumented immigrants should be deported, because they cost us money.

It provides a “reasonable” rationale for bigotry. (“See, I’m not a bigot. I just don’t like criminals stealing our precious dollars.”)

But, like virtually everything the Donald says, it’s a lie, designed to appeal to his “poorly educated” bigots among us.

New Study Shows Just How Much Undocumented Immigrants Actually Contribute

One of the main reasons that Donald Trump has been able to (become the) dominant Republican presidential frontrunner is his unrivaled ability to vilify undocumented immigrants.

One of the ways he does this is by referring to how much unauthorized immigrants cost, repeatedly charging that they don’t pay taxes and benefit from “free tax credits.”

Undocumented immigrants pay an estimated $12 billion in taxes to the federal government annually. But that’s just for Uncle Sam. A new report by the Institute on Taxation and Economic Policy shows that undocumented immigrants also pay quite a lot in state and local taxes — $11.6 billion a year.

And that amount would increase significantly if the U.S. was to undertake serious immigration reform.

So Trump is right, for the wrong reason. He’s wrong about undocumented immigrants not paying taxes, but he’s right about them being a drag on the economy’s dollar supply.

Why? Because every dollar they pay in federal taxes reduces the federal deficit. Those dollars disappear from the economy. And as we repeatedly have shown, reducing the deficit, which reduces the money supply, is recessive. (See The Recession Clock, below.)

By paying federal taxes, immigrants (and you, too) reduce the money supply, and thus reduce economic growth.

There are a number of studies that estimate at least half of undocumented immigrants pay income taxes using false Social Security numbers or individual taxpayer identification numbers (a code for tracking tax payments for people ineligible for Social Security numbers, like foreign nationals).

Some of them file income tax returns, and some don’t — either way, both income tax and payroll tax are withheld from their paychecks, and become a source of government revenue.

But while undocumented immigrants who pay income tax pitch in for funds for government services, they’re not getting anything out of it.

“The main difference between undocumented workers and citizens is that both are paying in, but undocumented workers are likely not going to be able to get that back in the form of Social Security benefits when they retire,” Matt Gardner, executive director of ITEP (The Institute on Taxation and Economic Policy).

Trump opposes giving immigrants a pathway to citizenship. He does not want those brown-skinned “rapists and criminals” to come into our white nation and steal our money.

And he’s right . . . in a way:

Immigration reform would only improve the flow of money to the government.

With legal status, undocumented workers’ wages would increase, and all of them would begin to comply with income tax protocols.

Both of those would mean more money for the government, and exceed the increased spending on refundable tax credits and other federal benefits that would accompany legalization.

The more tax money that goes to the federal government, the less that remains in the economy. So from the standpoint of taxes, immigrants who pay more federal taxes than they receive in benefits, impoverish our economy.

Trump’s argument is that undocumented immigrants are bad for the economy because their federal tax payments don’t cover their federal benefits. But the opposite is true.

While state and local taxes merely recirculate dollars, federal taxes destroy dollars.

(Unlike you and me, the federal government does not maintain a supply of dollars to pay its bills. It creates new dollars, every time it pays a bill, and destroys dollars every time it receives them via taxes. At any given moment, the federal government has no dollars.)

This may seem counter-intuitive, but the most economically stimulative people are those who receive federal benefits and pay no federal taxes.

Yet, all of this is beside the point: Immigrants should have a reasonable path to citizenship, not because of money issues, but because it is the right thing to do. It is the American, compassionate thing to do.

This is America. We are the melting pot. That has been our strength and our pride for more than 200 years.

We look at ourselves as the world’s moral leaders. We criticize other nations for their crushing of human rights. We criticize Muslim nations when they oppress Christians, yet Trump wants America to oppress Muslims and immigrants.

It would be unAmerian, unpatriotic and irreligious, too, if we were to follow leaders who claim the title: “World’s mean-spirited bastards.”

If we lose our moral standing, what would it mean to be an American?

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


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..

•No nation can tax itself into prosperity, nor grow without money growth.
•Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
•A growing economy requires a growing supply of money (GDP = Federal Spending + Non-federal Spending + Net Exports)
•Deficit spending grows the supply of money
•The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
•The limit to non-federal deficit spending is the ability to borrow.

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..



2 thoughts on “Trump is right — for the wrong reason

  1. “using false using false Social Security numbers or individual taxpayer identification numbers

    It should read “using somebody else’s stolen identity and Social Security numbers or individual taxpayer identification numbers”

    An invalid number would “out” them immediately, as the Social Security Administration would not be able to identify a real account, and the computer would detect an error.

    So, a real person is getting “credit” for having paid those taxes, and is receiving or will receive the associated Social Security benefits.

    With Social Security in deficit, the net result is an increase in the money supply, not a decrease.

    There may be harm done to the people whose identities were stolen, but their spending to fix that problem is also beneficial to the economy.


  2. Is Trump any more of a con artist than the “hope and change”, “change you can believe in”, and “the audacity of hope” candidate?


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