Perfect example of why the very rich are smarter than us

Both political parties are bribed by the very rich, via campaign contributions. The media are owned by the very rich. And the university economists are controlled by university administrations, bribed by contributions.

Even the Supreme Court justices are subject to that subtle form of bribery known as “freebies”: Free meals, free private airplane rides, free hunting trips, free lodging, free gifts, free tickets, etc.

The Supreme Court justices have legalized the bribery of politicians by claiming money is a form of free speech (Buckley v. Valeo), and because free speech cannot be limited, money to influence elections can’t be limited.

The Court essentially ruled rich people are allowed more protected free speech than the rest of us.

Never mind that many forms of “speech” already are limited, including murder threats, terrorist threats, shouts of “fire” in an assemblage, deceptive sales practices, phone calls, etc.

Further, the Court defines “speech” as expressing an opinion, which logically means that shooting someone with whom you disagree also would be a protected form of free speech.

Logic, however is missing for the Supreme Court justices, who claim that unions and corporations are individuals, with all the same bribing rights as individuals (Citizens United v. Federal Election Commission) and in some cases having rights that exceed those of any individual (Burwell v. Hobby Lobby) in which the corporation’s religious rights are more important than the employee’s religious rights.

With all the bribery by the rich, the following should come as no surprise:

WATCH LIVE: CRFB President Maya MacGuineas Testifies Before House Budget Committee
JUN 15, 2016

The House Budget Committee has focused on budget process reform in recent months, hosting multiple hearings covering topics like . . . why Congress must balance the budget.

Most recently we hosted “Fixing the Budget Process” on Capitol Hill featuring remarks from House Budget Committee Chairman Tom Price (R-GA) and a panel of experts, including MacGuineas, that discussed the importance of fiscal responsibility in the budgetary process.

The House Budget Committee long ago had decided the federal budget must be “balanced.”

You might ask why this committee composed of 36 members (22 Republicans and 14 Democrats) needed to spend hours listening to the president of the CRFB, an organization whose existence is devoted to — yes, that same balanced federal budget.

What could the Committee possibly learn from hearing what they already believe?

You can be sure Ms. MacGuineas did not show them this:

U.S. DEPRESSIONS tend to come on the heels of federal budget surpluses.

1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.

Nor did she show them this:

Reductions in federal debt growth lead to inflation

RECESSIONS repeatedly come on the heels of debt growth reductions, and are cured with debt growth increases.

And certainly, she did not show them this:

The graph shows no relationship between federal deficits — even large federal deficits — and inflation. the peaks and valleys of deficit growth do not match the peaks and valleys of inflation growth:

So, if Ms. MacGuineas merely parrots back what the Committee already believes what is the purpose?

The committee members rely upon Ms. MacGuineas to tell them exactly what they want to hear:

–Federal financing is no different from personal financing. (Wrong: The federal government is Monetarily Sovereign; people are monetarily non-sovereign)

–A balanced budget will help the economy grow. (Wrong: Balanced budgets shrink the economy.)

–The federal government can run short of its own dollars to pay its bills. (Wrong: A Monetarily Sovereign government never can run short of its own sovereign currency.)

–The federal debt is “unsustainable.” (Wrong: The federal government could pay off the entire debt tomorrow, if it wished to.)

–Federal deficit spending will cause inflation. (Wrong: Being Monetarily Sovereign means being totally sovereign over the dollar, which includes controlling the dollar’s value.)

Because most of the Committee members probably know Ms. MacGuineas is lying to them, we are left with two questions:

  1. Why do they want a balanced federal budget, knowing it will lead to a recession or a depression?
  2. Why does the Committee want to hear from Ms. MacGuineas if they already know what she will say is a lie?

I. Why do members of the Committee want a balanced budget, knowing it will lead to a recession or a depression?

The push for balanced budget invariably leads to reductions in Social benefits for the 99% and increases in regressive taxes — both of which widen the Gap between the rich and the rest.

By definition, it is the Gap that makes the rich rich. If there were no Gap, no one would be rich, and the wider the Gap the richer the rich are.

II. Why does the Committee want to hear from Ms. MacGuineas if they already know what she will say?

The Committee wishes to lend credibility to their current belief that federal finance is like personal finance. They can say, “We went ot an expert and she confirmed we’re headed in the right direction.

The purpose is to fool you into believing a great deal of thought and independent expertise go into Committee recommendations.

We had a similar situation back in 2010. Right-wing Democrat, Barack Obama appointed The National Commission on Fiscal Responsibility and Reform (co-chairs Alan Simpson and Erskine Bowles) to tell him what he wanted to hear: “Policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run”.

Like the House Budget Committee, the Erskine-Bowles committee was “bipartisan,” which is a code word for “Don’t worry about a thing. It has to be fair and good if all we politicians want it.”

In short, Obama wanted to cut the spending that benefits the 99%.

And surprise, the plan did just that. It cut Social Security and it cut Medicare. Those cuts don’t affect the 1%, but the are disastrous for the 99%, as well as for the economy.

And surprise surprise, the omnipresent Maya MacGuineas said, “the Commission released not only a credible plan, but an excellent plan. Of course, it is filled with things people don’t like—that is the nature of deficit reduction. And yet the plan received bipartisan support from a majority of the Commission at a time where, up until now, fiscal leadership has been in short supply”

Notice the sneering tone about the 99%: “Things that people don’t like,” meaning the lazy, stupid poor and middle classes aren’t smart enough to embrace having the bread taken from their mouths.

And “the nature of deficit reduction,” is to cause recessions and depressions, which always punish the 99% more than the 1%.

And there’s that old “bipartisan” word, as though because all those bribed politicians favor something means we, the public, should favor it, too.

Bottom line. It never changes. In a scenario repeatedly coordinated by the rich, bribed politicians appoint a bipartisan Committee, which holds kangaroo-court style hearings, in which carefully selected, well-paid flacks like Maya MacGuineas are trotted forth to lend credence to nonsense.

Based on the pre-ordained findings, the Committee recommends that the Gap between the rich and the rest be widened.

And we believe — not just believe, but angrily argue against anyone who dares to claim the findings are nonsense and we are being lied to.

As I said, the very rich are smarter than us.

=Rodger Malcolm Mitchell
Monetary Sovereignty
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.
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.
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.
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.
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.
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.


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..


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