Donald Trump does not have a monopoly on stupidity. The Dems plan to contribute.
I submit as evidence, excerpts from an article that appeared in today’s Chicago Tribune:
Liberal revolt may greet House Dems
Some high-profile members oppose fiscal rule measure
By Mike DeBonis The Washington Post
WASHINGTON — House Democratic leaders faced the prospect of a liberal rebellion on their first day in charge after prominent Democrats said they would oppose a package of rules changes endorsed by incoming speaker Rep. Nancy Pelosi.
Reps. Ro Khanna, D-Calif., and Rep.-elect Alexandria Ocasio-Cortez, D-N.Y., said they would vote against the rules changes Thursday — in the second vote Democrats will take in the majority, after electing Pelosi, D-Calif., because of the inclusion of a fiscal measure known as “pay as you go,” or PAYGO.
That rule, echoing a provision in federal law and in the Senate rules, would require the House to offset any spending so as not to increase the budget deficit.
That any politician, especially a left-wing politician, should endorse PAYGO, demonstrates the depths to which our political leaders have fallen.
PAYGO, the insistence on a balanced budget, is a good idea for cities. It is a good idea for counties. It is a good idea for states.
PAYGO is a good idea for businesses. It is a good idea for you and for me.
But it is an incredibly boneheaded, damaging, harmful idea for the Monetarily Sovereign federal government.
PAYGO guarantees endless recessions and depressions, and zero economic growth.
Gross Domestic Product (GDP), the most common measure of a nation’s economic growth, is based on spending.
GPD = Federal Spending + Non-federal Spending + Net Exports
And spending is based on the supply of money. But PAYGO limits the supply of dollars in the economy. With PAYGO, both federal and non-federal spending are limited. The only source of money would be from Net Exports, which the U.S. seldom has.
Economic growth requires federal deficit spending, which adds growth dollars to the economy.
Cities, counties, states, businesses, you, and I are monetarily non-sovereign. Unlike the federal government, we do not have the unlimited ability to create dollars. To survive long-term, we must have income from the outside.
Cities, counties, and states require income from other government bodies (i.e from the federal government.) Businesses require income from customers. You and I require salaries or other forms of income.
Only the federal government requires zero income. In fact, when the federal government receives income dollars, for instance, tax dollars, it destroys those dollars and creates new dollars, ad hoc, by paying creditors.
It remains to be seen whether the liberals will have the votes to torpedo the rules package, which sets the parameters for the new House.
Defeat of the rules package would be an embarrassing setback for Pelosi that could herald further divides in the Democratic caucus.
Liberals such as Khanna and Ocasio-Cortez — and a number of activists on the political left — argue that PAYGO amounts to a legislative straitjacketthat could impede their efforts to pass new social programs.
And they are especially dubious of its necessity after congressional Republicans waived the law in 2017 to pass a tax bill that added more than $1.5 trillion to the federal deficit over its first decade.
“This is in no way a vote against the leadership; this is a vote against austerity economics that has caused great harm to middle class and working families,” Khanna said Wednesday.
It’s worse than a legislative straitjacket. It’s a financial disaster, that absolutely, positively will cause merely recessions if we are lucky, but more likely, depressions.
Depressions are caused by reductions in federal debt:
1804-1812: U. S. Federal Debt reduced 48%. Depression began 1807.
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.
1997-2001: U. S. Federal Debt reduced 15%. Recession began 2001.
Ocasio-Cortez announced her opposition in a tweet: “PAYGO isn’t only bad economics … it’s also a dark political maneuver designed to hamstring progress” on health care and other legislation.
Is Ocasio-Cortez the only intelligent/honest Democrat? Seems so, because she not only sees the idiocy of PAYGO, but the reasons the Republicans especially love it.
PAYGO is designed to be a seemingly prudent way to cut Social Security, Medicare, Medicaid, and other social benefits. But it is all a lie.
PAYGO is a fraud, designed to widen the Gap between the rich and the rest.
And now we transition from mere ignorance to cowardice:
Beyond Khanna and Ocasio-Cortez, however, opposition to the proposal appeared muted Wednesday. Several high-profile freshmen Democrats — Reps.-elect Rashida Tlaib of Michigan, Ilhan Omar of Minnesota and Ayanna Pressley of Massachussets — have not taken public positions.
Reps. Tim Ryan, D-Ohio, said PAYGO “is a no go for me” and said that the rule could obstruct “critical investments in education, infrastructure, and health care,” but he stopped short of saying he would vote against the rules changes.
The co-chairpersons of the Congressional Progressive Caucus, Reps. Mark Pocan, D-Wis., and Pramila Jayapal, D-Wash., said they would support the overall rules package despite their opposition to PAYGO, citing a commitment from House leaders that the provision “will not be an impediment to advancing key progressive priorities” in the new Congress.
What? PAYGO “will not be an impediment to advancing key progressive priorities”? That is beyond ignorant. It is downright deceitful. How could a law limiting federal spending not be an impediment. Makes no sense, whatsoever.
“We all agree that the real problem with PAYGO exists in the statute that requires it,” they said in a statement. “That is why we will be introducing legislation in the 116th Congress to end PAYGO.”
Huh? The real problem with PAYGO is PAYGO. Period. No amount of double-talk will change that.
Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”
Alan Greenspan: “Central banks can issue currency, a non-interest-bearing claim on the government, effectively without limit. A government cannot become insolvent with respect to obligations in its own currency.”
St. Louis Federal Reserve: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e.,unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.
And now for the ultimate stupidity:
“We all believe we need to ultimately bring our budget into balance, but these investments are too important right now to pass up and will yield significant returns for the U.S. Treasury,” he said, though it was unclear how he would vote.
You all believe it??? Why must the federal budget be brought into balance? No one knows. It just has a nice sound to it, but of course, it is totally illogical.
It’s like saying, “We all believe we need to draw blood from anemic patients.” Completely bass-ackwards.
Perhaps that is why politicians keep repeating it.
The PAYGO rules date back nearly 30 years, to Congress’ initial attempts to rein in the budget deficits of the 1980s. But the rules fell by the wayside amid the budget surpluses of the 1990s.
The (Clinton) budget surpluses of the late 1990s predictably “cured” eighteen years of economic growth and caused the recession of 2001.
When Democrats took control of Congress in 2007, they included PAYGO provisions in their rules, and in 2010, they wrote it into federal law. But Republicans never included the measure in House rules, and the law has been repeatedly waived over the years — making the practical impact of the law questionable.
Drew Hammill, a spokesman for Pelosi, responded to Khanna on Twitter by pointing out that the federal law remains in place regardless of what rules House Democrats adopt — and including the measure in the rules would allow Democrats to “designate appropriate offsets” rather than allow the Trump administration to make the across-the-board cuts mandated in law.
“A vote AGAINST the Democratic Rules package is a vote to let Mick Mulvaney make across the board cuts, unilaterally reversing Democratic initiatives and funding increases,” he said, referring to the budget director and acting White House chief of staff.
Oh, what a terrible mess our politicians have caused, and all because the populace doesn’t understand the differences between Monetary Sovereignty and monetary non-sovereignty.
Ignorance has its penalties, and the most ignorant pay the most penalties.
Rodger Malcolm Mitchell
Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: 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
3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)
The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.