It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders.
Think of Congress as being a fast food joint that serves moldy slices of BS. As long as suckers are willing to slurp down moldy BS, Congress will continue to serve it.
Why serve the truth, when the public not only accepts, but demands, lies?
‘Clean’ debt ceiling bill unlikely to pass House of Representatives : lawmaker
Reuters, August 8, 2017 (Writing by Susan Heavey; Editing by Frances Kerry and David Gregorio)
WASHINGTON (Reuters) – The U.S. House of Representatives is unlikely to raise the country’s debt ceiling without conditions to rein in spending, a Republican lawmaker said on Tuesday, raising the specter of another potential clash even as Republicans control both Congress and the White House.
Each party wishes to hold America’s credit hostage, in order to cut economic growth.
Reductions in deficit growth lead to recessions and depressions, because spending cuts deprive the economy of dollars.
(Gross Domestic Product = Federal Spending + Non-federal Spending + Net Exports) By formula, cuts to Federal Spending reduce GDP growth.)
Cutting deficits to grow the economy is like applying leeches to cure anemia.
Year to year percentage change:
Red line = Growth in Federal Debt Held by the Public; Blue line = Growth in GDP
The close parallels between debt growth and GDP growth
1. Q1 ’74 Debt & GDP growth turn up
2. Q4 ’75 Debt growth turns down; two years later GDP growth turns down.
3. Q1 ’80 Debt & GDP growth turn up.
4. Q1 ’81 Debt & GDP growth turn down.
5. Q1 ’81 Debt & GDP growth turn up.
6. Q2 ’83 Debt growth turns down; 9 months later, GDP turns down.
7. Q3 ’89 Debt growth turns up; 1 year later, GDP turns up.
8. Q4 ’90-’92 Debt growth levels then falls; ’92-’00 GDP levels then falls.
9. Q4 ’00 Debt growth turns up; ’02 GDP turns up.
10. Q1 ’04 Debt & GDP growth turn down.
11. Q2 ’07 Debt growth turns up; ’09 GDP turns up.
12. Q2 ’09 Debt growth turns down; GDP growth trends slightly down.
GDP = Federal Spending + Non-federal Spending + Net Exports.
Because Federal spending (G) is only a small fraction of total GDP, the parallels between Federal Spending and GDP are especially impressive.
These parallels indicate that not just Federal Spending, but increases in Federal Spending are necessary for economic growth.
Why does Congress want to cut economic growth? Because most federal spending benefits the 99% far more than it helps the 1%, and the rich don’t like it.
The rich want the rest of us to beg them for money and for jobs. They want a desperate servant class who will work for low wages.
If the government provides such benefits as are shown in the Ten Steps to Prosperity (below), we won’t have to beg, and the rich will lose their desperate servant class.
So the rich bribe the politicians (via campaign contributions and promises of lucrative employment later) to vote against deficit spending that would narrow the Gap between the rich and the rest.
“Most Republicans want to do something to lower the trajectory of the debt,” said U.S. Representative Tom Cole, a GOP member of the House Appropriations and Budget committees.
Being more the “party of the rich,” the GOP works harder to widen the Gap between the rich and the rest.
Disagreements over the country’s borrowing capacity have prompted skirmishes for years.
- The federal government, being Monetarily Sovereign, and having the unlimited ability to create its own sovereign currency, has no need to borrow, and in fact, it does not borrow. The federal government never can run short of dollars. It creates brand new dollars, every time it pays a bill.
- Because there is no federal borrowing, there is no federal “borrowing capacity.”
- What erroneously is termed “borrowing,” actually is deposits in Treasury security accounts at the Federal Reserve bank, similar to savings accounts at your local bank.
- The FRB has the unlimited ability to accept and pay back deposits.
The Treasury is expected to fully exhaust its remaining borrowing capacity in October.
Since the Treasury has no need to borrow, and in fact does not borrow, it cannot exhaust its “borrowing capacity.” However, Congress has the power to limit the FRB’s ability to accept deposits in Treasury security accounts, and by obsolete law, the total of such deposits must equal or exceed the total of deficits.
(The law was applicable to gold standards, which were eliminated by President Nixon on August 15, 1971. Today, the law serves no purpose, but remains on the books.)
Representative Mark Walker, who chairs the conservative Republican Study Committee, recommended two conservative measures.
Both measures would require the government to issue new bonds to pay principal and interest on debt held by the public and by two Social Security trusts.
The “principal and interest on debt” is the amount of money deposited in all T-security accounts at any given moment.
The government pays off the principal and interest simply by transferring existing dollars from those T-security accounts back the the checking accounts of the T-security holders. No new dollars required.
The transfer is similar to your bank transferring your savings account deposit back to your checking account deposit — a simple money transfer of existing dollars.
Rep. Waller has been bribed to pretend that this simple money transfer is a burden on the federal government or on federal taxpayers. It is no burden on anyone, and the entire debt — principal and interest — could be paid off tomorrow, if the government wished.
One would also allow the president to rescind budget authority over unobligated funds and to order the sale of government assets.
For reasons already discussed, Rep. Waller, apparently a tool of the rich, wants the President arbitrarily to cut federal spending that would benefit the economy.
Because the federal government has the unlimited ability to create dollars, it has no need to sell assets. So why does Rep. Waller want this? The rich want it.
It is known a “privatizing” which the rich claim benefits the public because for-profit private industry “”always is more efficient than the government.
Never mind that the federal government invented the Internet, created the federal highway system, built the Hoover dam, created atomic energy, flew men to the moon, runs the military, funds most pharmaceutical discoveries, and created the best health-care insurance program in America, Medicare, which would be even better if not for the phony debt ceiling BS.
Privatizing invariably gives the rich a lucrative monopoly business that provides poorer service while taking profits from the pockets of the public. It is a gigantic scam, the sole purpose of which is to make the rich richer and you poorer.
Republican leader Mitch McConnell has said debate over the issue could stretch into September, when lawmakers must also pass separate legislation to fund day-to-day government activities before the fiscal year ends later that month.
Watch for your Representative and your Senators to engage in crocodile-teared hand-wringing about how difficult it is to spread a “limited” budget over federal spending needs.
There are lies. There are rotten lies. And then, there is the debt ceiling.
Anyone who tells you the deficit or the debt are too high is feeding you a huge portion of moldy BS.
Are you willing to keep eating at that moldy BS restaurant? If not, tell your Representative and Senators.
Rodger Malcolm Mitchell
The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.
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 A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) 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 EVERYONE Five 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 benefitting 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 FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce 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 business 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.
2 thoughts on “If you accept your daily serving of BS, you will continue to be fed BS.”
Warren Mosler put it very succinctly, federal deficits (in excess of the trade deficit) are neither good nor bad but simply represent the savings preference of the private sector. If people want to save more, the government has to increase deficit spending to keep the economy going. Cutting deficits cuts private savings, increases private sector debt, and reduces GDP, which as history has taught us, leads to recessions. As you have pointed out many times, this is not theory, it is math. Out biggest problems is not debt or deficits but the stupidity and duplicity of our elected leaders on both sides of the aisle. Keep up the good work.
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Why can people not wrap their heads around the simple fact that the currency issuer does not abide by the same rules as the currency user? It’s a simple accounting fact: one entity’s liability is another’s asset.