Those few who understand how U.S. federal financing really works, know:
- About 240 years ago, the U.S. government created laws out of thin air. Some of those laws created the U.S. dollar out of thin air, and gave those dollars an arbitrary value. The dollar exists only because of those dollar-enabling laws.
- The U.S. government has the unlimited ability to create laws, to create dollars, and to give those dollars any value it wishes.
- Thus, the U.S. government never will run short of dollars, and has total control over inflation.
- The U.S. government, unlike state and local governments, businesses, and you and me, does not need income. It simply creates the dollars it uses for paying bilIs. It has no need of, nor use for, taxes or borrowing.
- Even if all tax collections fell to $0 and all so-called borrowing fell to $0, the U.S. government could continue spending, forever.
- The Big Lie, most simply stated is, “Federal taxes fund federal spending.”
Those are the absolute facts of federal financing, and are what differentiate U.S. government financing from your personal finances.
Now compare these facts with the October 2, 2016 editorial by the Chicago Tribune titled, “A principled option for U.S. president: Endorsing Gary Johnson, Libertarian,” excerpts from which appear, below:
Clinton’s vision of ever-expanding government is in such denial of our national debt crisis as to be fanciful.
There is no “national debt crisis,” if by “crisis” the Tribune means the U.S. government somehow would be unable to pay its debts. (Those who speak of a “debt crisis” never explain what they really mean.)
The so-called “debt crisis” is part of the Big Lie.
Rather than run as a practical-minded Democrat as in 2008, this year she lurched left, pandering to match the Free Stuff agenda of then-rival Bernie Sanders. Her presidency would extend the political schism that has divided America for some 24 years. Today’s Hillary Clinton renounces freer trade, spending discipline, light regulation and private sector growth to generate jobs and tax revenues.
This truly astounding paragraph is wrong in so many ways, it will require more than a paragraph to correct:
First, the “Free Stuff,” hated by the rich, involves better Social Security, better Medicare, more available and better education, less hunger and homelessness, and more financial support for middle- and lower-income families. Oh, horrors! Who would want that?
The “political schism” is the wide Gap between the rich and the rest. The rich want the Gap. It is what makes them rich. Without the Gap, no one would be rich (We all would be the same) and the wider the Gap, the richer they are. The Tribune asks to cut the programs that narrow that Gap.
“Spending discipline” is right-wing code for “cut Social Security, Medicare, education, etc.”
“Light regulation” means allow the crooked bankers, the crooked pharmaceutical and food companies and all the other crooked businesses to do whatever they please. The “Great Recession,” from which we still have not recovered, was not caused by heavy regulation.
“Private sector growth,” in Tribune-speak, means financial growth for the rich at the expense of the rest.
The nonpartisan Committee for a Responsible Federal Budget calculates that Clinton’s plan would increase spending by $1.65 trillion over a decade, mostly for college education, paid family leave, infrastructure and health-related expenditures.
The word “nonpartisan” is used any time someone wishes to justify nonsense. To call the CRFB “nonpartisan” is like calling FOX News liberal. The CRFB is a radical right organization run by, and for the benefit of, white men.
And look at all those awful things Clinton wishes to support: College education, family leave, infrastructure and health-related expenditures — the “free stuff” the Tribune and the rich hate.
Spending just on debt interest would rise by $50 billion. Personal and business taxation would rise by $1.5 trillion. Sort through all the details and her plan would raise the national debt by $200 billion.
The $50 billion spending on debt interest would add a $50 billion stimulus to the economy. The $200 billion increase in so-called “national debt” would add a $200 billion stimulus to the economy, while reducing poverty, improving America’s health, education, housing, infrastructure, research & development, and growing the economy.
Most important, the federal spending would narrow the Gap between the rich and the rest.
The Tribune is correct about one thing, however: Federal tax increases not only are bad, but they are unnecessary. The U.S. government does not need the income. Clinton has bought into the Big Lie that federal taxes fund federal spending.
With that demand for a principled president paramount, we turn to . . . Libertarians Gary Johnson of New Mexico and running mate William Weld of Massachusetts.
(U)nless the United States tames a national debt that’s rapidly approaching $20 trillion-with-a-T, Americans face ever tighter constrictions on what this country can afford, at home or overseas.
Clinton and Trump are too cowardly even to whisper about entitlement reforms that each of them knows are imperative. Johnson? He wants to raise the retirement age and apply a means test on benefits to the wealthiest.
The national “debt” does NOT restrict — not even by one penny — what this country can afford. The Tribune persists in restating the Big Lie, over and over. The federal government cannot run short of its own sovereign currency, the U.S. dollar. Never has. Never will.
“Entitlement reforms” is another right wing code for cutting your Social Security, cutting your Medicare, cutting any aids to education, etc., and somehow, in some unknown way, this is supposed to grow the economy???
Tellingly, though the Tribune devotes an entire half page to its endorsement, it devotes only one small sentence to what Johnson actually will do — raise your retirement age.
So, I’ll cure this omission, courtesy of a September 30, 2016 article by columnist, Eric Zorn, who also is published in the Tribune. Unlike the Tribune editors, Zorn is not a mouthpiece for the rich.
Here are some excerpts:
What Gary Johnson really stands for, by Eric Zorn
He supports the U.S. Supreme Court’s Citizens United decision.
That is, let the rich bribe as much as the want.
He opposes nearly all forms of gun control.
Because every boob in the street should have a gun. It will make you safer.
He advocates repealing the Affordable Care Act and the Medicare Part D prescription drug benefit. His belief is that deregulated competition among insurance companies, hospitals and other health providers will work its salutary magic for those who are now or will be left uninsured.
You don’t need those programs, so long as you trust the private insurance companies to treat you fairly. Insurance companies are known for fair treatment, aren’t they?
He favors privatizing K-12 education through voucher programs, privatizing prisons and partially privatizing the Veterans Administration.
The rich love privatization. It allows them to rake in the big bucks, while cutting back on services. Chicago tried it big time. It destroyed the city’s finances. And be sure to read about the horrors of privatized jails.
He backs turning Medicare and Medicaid into state-administered programs even though he allowed in an interview with the Los Angeles Times this year that some states would likely be “horrible failures.”
Not just “some” states — all states. When states run short of money — which they all do — they cut anything that benefits the poor and middle.
He’s proposed increasing the Social Security retirement age to as high as 72, subjecting benefits to means testing and at least partially privatizing the program.
Work ’til you drop.
He opposes cap-and-trade measures to reduce carbon emissions and believes that if we allow “the market to function unimpeded, consumers, innovators and personal choices will do more to bring about environmental protection and restoration than will government regulations.”
Uh, excuse me, but what will motivate business to install expensive, profit-reducing, carbon reductions? Ah yes, the magic of an umipeded market.
He favors abolishing the minimum wage.
Slavery worked pretty well, didn’t it? If you can’t survive on your salary, work two jobs. Or three. Or put your little children to work.
He is against “net neutrality.”
Because, the more money you have, the better Internet service you should receive, right?
He exhibits an indecisive weary indifference to climate change: “Is man contributing to that change? Probably so. But the critical question is whether the politicians’ efforts to regulate, tax and manipulate the private sector are cost-effective — or effective at all.”
Hey, why try? Those polar bears are going to die, anyway.
Johnson has said he wants to get rid of all federal corporate, income, inheritance and capital gains taxes and replace the lost revenue with a 28 percent federal consumption tax — think of it as a sales tax on steroids that you’d pay on top of state and local taxes. This radical shift would, like most Republican tax plans, almost certainly be a boon to the rich and place added burdens on low- and middle-income earners.
There are two, gigantically regressive taxes in America: FICA and sales taxes. The rich and Johnson favor both. And nevermind that the federal government neither needs nor uses tax dollars. Taxing the poor and middle is a good way to widen the Gap.
(He) has pledged that his first major act as President will be to submit to Congress a truly balanced budget. Real reductions to bring spending in line with revenues, without tax increases.”
Even ardent deficit hawks know that the sudden and dramatic cuts necessary to balance the federal budget in one year with no tax increases would slash many valued programs, create significant new unemployment and perhaps plunge us into another recession.
Actually, the rich survive recessions quite well. You, on the other hand, may need to sell your home, forego college for your kids and eat less.
In short, Johnson is an ultra-right-wing Republican, who would have you believe federal spending is unnecessary, regressive taxes like sales taxes and FICA should be increased, and state governments (which unlike the federal government, can run out of money) should shoulder the nation’s financial burdens.
The regular Republican party would widen the Gap between the rich and the rest. Johnson would turn that Gap into the Grand Canyon.
Finally, a vote for Johnson either will be wasted, or it will be a vote for Trump. It probably will be wasted, because he has no chance of winning.
But it will be a vote for Trump, if it prevents Clinton from reaching 270 electoral votes, in which case, the Republican Congress, by law, will select the President and the Vice-President.
Bottom line: The Tribune promulgates the Big Lie on behalf of the rich, and wants you either to waste your vote on someone who would widen the Gap, or simply to vote for Trump.
Nice going, Chicago Tribune.
Rodger Malcolm Mitchell
The single most important problems in economics involve the excessive income/wealth/power Gaps between the rich and the rest.
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.
Implementation of The Ten Steps To Prosperity can narrow the Gaps:
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 ANNUAL 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-transferring 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 a 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.