Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
MMT (Modern Monetary Theory) is a close cousin to this blog, MS (Monetary Sovereignty). Both schools recognize the Big Lie, which actually is a composite of several lies, among which are:
- Federal taxes fund federal spending. (They don’t.)
- You and your children owe the federal debt. (You don’t.)
- Federal finances are like state & local government, business, and personal financing. (They aren’t.)
- The federal debt and deficit are too high, “unsustainable,” and should be reduced. (The defict should be increased. The debt is immaterial.)
- The federal government cannot afford to pay for Social Security, Medicare, Medicaid and other social programs. (It can, easily.)
- There can be “debt-free” money. (All money is debt. There never can be “debt-free” money.)
While MMT and MS agree on the fundamentals of economics, they disagree on the actions to be taken.
MS proposes implementation of the Ten Steps to Prosperity (below) to:
- grow the economy and to
- narrow the Gap between the rich and the rest.
MMT proposes a JG (Jobs Guarantee) to:
- create full employment and
- price stability.
Wikipedia: “The JG is based on the buffer stock principle whereby the public sector offers a fixed wage job to anyone willing and able to work.
Buffer stock principle: Commodities are bought when there is a surplus in the economy, stored, and are then sold from these stores when there are economic shortages in the economy.“
This says, when you are part of JG, you are not an employee. You are not even a person. You are buffer stock. Being stock, your likes and dislikes don’t matter. What you want to do doesn’t matter. This is the “beggars can’t be choosers” solution to joblessness.
Previously, we have published reasons why we believe the Jobs Guarantee is naive, unworkable, and not just useless, but harmful:
- The Jobs Guarantee Mouse
- Another word on MMT’s Jobs Guarantee and “The Rise Of Bullshit Jobs”
- Life in a JG World
JG is a non-solution to the wrong problems. It assumes there is a shortage of jobs that the federal government can provide.
MS claims there is no shortage of jobs, but there may be a shortage of the right jobs, and more importantly, for many people there is a shortage of money.
Today, we received the following Email from the website, LinkedIn:
LinkedIn: Explore job openings in Greater Chicago Area
More than 136,000 new jobs are available now.
Top jobs for people like you:
2 Chief Executive Officer
3 Vice President
Get jobs tailored to you! Update your industry. This is an occasional email to help you get the most out of LinkedIn.
© 2016 LinkedIn Corporation, 2029 Stierlin Court, Mountain View CA 94043. LinkedIn and the LinkedIn logo are registered trademarks of LinkedIn.
That is 136,000 executive-type jobs available in Chicago. Additionally, just one website, Employment Crossing, listed the following non-executive jobs available in Chicago and its closest suburbs:
Chicago, IL (21,887)
Downers Grove, IL (748)
Evanston, IL (706)
Oak Brook, IL (672)
Chicago Heights, IL (607)
Deerfield, IL (600)
Bolingbrook, IL (592)
Des Plaines, IL (530)
Arlington Heights, IL (501)
Glen Ellyn, IL (467)
There are thousands upon thousands of jobs available, but visualize that you are looking for a job, and can’t find one. Why?
There are only two reasons:
- You don’t want the jobs that are available to you, or:
- The jobs you want don’t want you.
Which of these problems is a government Jobs Guarantee program likely to solve for you?
Is the federal government going to do better than the websites, local newspapers, and employment agencies at finding the kinds of jobs you want??
Consider jobs the federal government will guarantee. They will be minimum wage jobs, and they will be federal jobs.
If you currently are looking for a job, are you really unable to find a minimum wage job? Is that the job you want? Does offering you a minimum wage, federal job solve your money problems?
If the government provides minimum wage, government jobs to all the people who want, but can’t find, minimum wage jobs, how many people will this program actually help? Precious few.
The Jobs Guarantee is a program only an economist could love — an economist who thinks of the economy, not as composed of human beings, but as numbers on a balance sheet — as buffer stock.
To MMT economists you non-rich are born lazy. You are “takers” who must be prodded to toil as “buffer stock” rather than to receive what you really need: (money, education, healthcare, good food, good housing, a working infrastructure, etc.)
“Free stuff” is only for the rich.
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 can afford better health care than can 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.