Slum: a thickly populated, run-down, squalid part of a city, inhabited by poor people.

Few slums were built as slums. Most slums began as ordinary, middle-class housing and evolved to be slums.

The exceptions might be the high-rise, no-rent, warehouses-for-the-poor, erected by city leaders who needed some place to segregate the lowest (and darkest skin) end of the riff-raff.

But even they began new, and were converted to slums by tenants without the means to preserve the buildings, and owners who don’t care.

And that is the formula for creating a slum: Residents with insufficient financial means to pay rent, to repair, or even to clean, plus owners with insufficient financial motivation to repair or clean.

If we don’t want to create slums, we need either to improve residents’ financial means and/or to improve owners’ financial motivation.  It’s that simple, but if one doesn’t want a simple solution, he will make it complex.

I thought of this when I read an article in the Chicago Tribune:

Renting a Chicago apartment becoming less affordable, study says

The average renter in the Chicago area does not earn enough to comfortably afford a modest apartment, a study by the National Low Income Housing Coalition reported Wednesday.

Higher housing costs are forcing people to skimp on other necessities such as food, child care and transportation, said Andrew Aurand, vice president of research for the coalition.

The average hourly pay for the 1.1 million renters in the Chicago area is just $17.03 an hour, or about $35,422 annually. To afford the typical two-bedroom at $1,176, a renter in the Chicago area would need to be earning $22.62 an hour, or $47,040 annually.

The lowest-income households are especially squeezed, the report said. While there are subsidies for low-income people, only 1 in 4 of those eligible for aid actually receive it because there are waiting lists.

The affordability issue extends throughout the country.

A family depending on a minimum wage of $7.25 per hour would need a single worker to take on 2.8 full-time jobs to afford the average U.S. two-bedroom apartment, said Diane Yentel, president of the housing coalition.

That’s 112 hours per week for all 52 weeks of the year, leaving no time for anything except working and sleeping eight hours a night, she said.

The coalition is urging local and national governments to provide incentives for constructing more affordable housing, and Yentel suggested that some funding would be available if the government cut back the mortgage interest deduction for affluent homeowners.

Let’s return to the formula for a slum: Residents with insufficient financial means + owners with insufficient financial motivation.

Clearly, the long term solution to that problem is to increase residents’ financial means and increase owners’ financial motivation.

Chicago’s high rise “gold coast” has both. The residents are well able to afford the rents and the owners receive enough rents for beautiful upkeep, preventing the buildings from turning into slums.

So these tall buildings, some of which are quite old, are in excellent repair, and the people live very nicely, thank you. Contrast them with the high-rise slums common to American cities.

In Chicago, Bob Palmer, policy director of Housing Action Illinois, said the state should pass an emergency spending bill and provide $9.3 million for homeless shelters and $65 million for building affordable housing through the Illinois Housing Development Authority. Shelters are needed, he said, because “we are a long way from having enough affordable housing.”

Forcing people into shelters or into the street, is disgraceful for our wealthy nation.

The solution to the problem: Make sure no one would have so low an income as to be unable to afford well-maintained housing.

But Illinois, being monetarily non-sovereign, is broke, so the representatives for the working poor must beg for homeless shelters and so-called “affordable housing.”

Since monetarily non-sovereign Illinois can’t do it, then Monetarily Sovereign USA could and should.

During the last couple of decades, the number of affordable units has declined while demand has grown, Aurand said.

Fewer people own homes now than they did before the housing crash.

Millions lost homes and suffered job setbacks, so millions now require rentals at the same time that there has been a population boom of people in their 20s and early 30s — a group that typically rents.

In addition, baby boomers are retiring, and a significant number are interested in renting.

So lets put it all together:

  1. Many people have difficulty finding jobs.
  2. Even many working people make too little to afford apartments in well-maintained buildings and neighborhoods.
  3. Landlords are not motivated to maintain their buildings unless rents are sufficient.
  4. Therefore, forcing landlords to provide so-called “affordable” housing leads to poorly maintained housing.
  5. Poorly maintained housing is contagious, in that one dilapidated building in a neighborhood causes immediate neighbors to flee, nearby surrounding rents to drop, and those lower rent buildings to be less cared for — the beginnings of a slum. This is what happens in previously well-kept neighborhoods, that have turned bad.
  6. Cities, counties and states, all of which are monetarily non-sovereign, and so cannot create dollars at will, cannot afford to provide income to the poor. To provide subsistence, they must levy taxes — sales and property — which invariably are regressive, thereby punishing the poor even more.
  7. The federal government, being Monetarily Sovereign, has the unlimited ability to improve the incomes of the poor.

However, the populace has been trained by the rich to resent the poor receiving money. The resentment is based on two myths:

A. Giving the poor money makes them lazy and satisfied to do nothing
B. *Federal spending is paid for by federal taxes.

These myths are promulgated by the rich, who want:
a. A ready supply of desperate, low-paid servants.
b. To widen the Gap between the rich and the rest

  1. The poor need income and education. Landlords need rent and educated tenants.

The solution is a combination of direct, modest, financial support for the poor, together with the elimination of factors that keep the poor from lifting themselves through work and education.

The solution is the Ten Steps to Prosperity. (See below.)

Returning to the title question, “Who wants to create a slum?” the answer is: The rich.

Nothing happens in America without the urging and complicity of the rich.
The rich run America.

The rich bribe the politicians via campaign contributions, even more effectively now that the right wing Supreme Court has decided money is constitutionally protected “free speech.” Thus we have the regressive FICA and sales taxes along with income tax loopholes that benefit only the rich.

The rich bribe the media via ownership, so that media writers indoctrinate the populace into believing falsely that the poor are sloths who deserve their poverty, and that deficit spending is paid for by taxpayers.

The rich bribe the economists, via benefits to universities and “think tanks,” to claim there is a “deficit problem,” which prevents helping the poor.

Slums are no accident. They exist by design. The rich create slums and slum buildings to perpetuate and house the servant class.

Rodger Malcolm Mitchell
Monetary Sovereignty

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Ten Steps to Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich afford better health care than the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefiting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.)
Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be an good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.
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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

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.

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.

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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..

MONETARY SOVEREIGNTY