Non-transitive dice and where your intuition fails you

The universe has an infinite number of facts. We can’t learn and process them all, so we compensate. We learn about the universe by analogy, and by inference, and by reference:

Analogy: A comparison of two otherwise unlike things based on the resemblance of a particular aspect.
Inference: If two or more things agree with one another in some respects they will probably agree in others
Reference: The words of trusted people.

Think of the factual statement: Dogs have four legs and teeth. Spot is my dog. Therefore Spot has four legs and teeth.

Knowing that Spot is a dog, you infer a picture of him.

You visualize details about Spot without ever having to see or hear him.

Often though, what we think of as analogy and inference can deceive us:

Dogs have four legs and teeth. Spot has four legs and teeth. Therefore Spot is a dog.

Wrong.

Your inference threw you off because it wasn’t a true analogy. It was a misleading “intuition.”

Because the universe is so big, the vast majority of what you “know” is based on your intuition.

Here is another example of where your intuition fails you. As you “know,” when

“A” is bigger than “B” and
“B” is bigger than “C” and
“C” is bigger than “D” then
“A” must be bigger than “D”

Right? Do you know any exceptions to this? Actually, there are many exceptions.

Here is one example. It’s called “non-transitive dice.”

Non-Transitive Dice by MathArtFun

These are not ordinary dice. As you can see that they are numbered differently.

The numbers are:

A. Blue Die: 6 6 6 6 5 5

B. Black Die: 4 4 4 4 12 12

C. Red Die: 10 10 3 3 2 2

D. Green Die: 7 7 7 7 1 0

When rolled, die “A” will beat die “B” 2/3 of the time. “B” will beat “C” 2/3 of the time. “C” will beat “D” 2/3 of the time.

And counter-intuitively, “D” will beat “A” 2/3 of the time. No one die is the greatest.

We often see non-transitiveness in sports, where the winningest teams do not always have winning records against the poorest teams. Your favorite team may win the World Series in the same season as they have a losing record against a last-place team.

Politicians repeatedly create false analogies and false inferences. President Barack Obama, in his weekly radio address, July 2, 2011, said, “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on a sounder footing.”

This is misleading on multiple levels.

The federal government is Monetarily Sovereign. It has a sovereign currency, the U.S. dollar, of which it can create an infinite supply. By contrast, you and your family are monetarily non-sovereign. You do not have a sovereign currency nor can you create an infinite supply of dollars.

The federal government can pay any debt denominated in dollars. You cannot. The federal government never unintentionally can run short of dollars. You can. The federal government needs no income to pay its bills. You need income to pay your bills.

Although you have a “means,” within which you must live, the federal government does not. And, unlike you, the federal government does not need to cut spending so it can afford to spend. Even if the federal government collected zero taxes, it could continue spending, forever.

And finally, it is federal spending, not spending cuts, that grow the U.S. economy and “put it on a sounder footing.”

Obama’s two short sentences were 100% wrong, and the inferences they were meant to draw were 100% misleading.

But to the average person, they sound logical, reasonable and prudent.

Because so much of what you know is based on what seems logical, reasonable, and prudent, you have learned to trust your intuition. You will fight mightily against anything that violates your intuition, despite powerful facts supporting the opposition.

You will believe your intuition especially if it supported by comments from a leader. You might more readily believe that vaccination causes autism, and immigrants cause disproportionate crime, and global warming is a Chinese hoax, if these ideas are supported by the President of the United States.

You have been primed for these beliefs by the knowledge that many medicines cause unpublicized problems, strangers are more responsible for crime than are friends, and China is an economic foe.

Nearly every politician, economist, and media writer tells you that federal financing is just like your personal financing (so debt is a danger and living within one’s means is prudent). The brainwashing comes at you from all sides.

Add such retorts as, “There’s no such thing as a free lunch,” and “Why are you the only one who knows this,” and you have created a powerful belief system that cannot be shaken by facts.

The federal government has increased its debt almost every year for the past 80 years, yet still, you are told that federal debt is a “ticking time bomb.”

Belief is less logical than emotional. You believe what you feel comfortable believing.

If, to help you visualize Monetary Sovereignty, I show you why federal finances are very much like those of the Bank in the game of Monopoly, you may dismiss that as being unrealistic, and “just a game.”

But by rule, the financial parallels between the Monopoly Bank and the federal government nearly are perfect. In the Monopoly rules, you will find this:

“The Bank never goes ‘broke.’ If the Bank runs out of money, the Banker may issue as much more as may be needed by merely writing on any ordinary paper.”

You didn’t question that rule in Monopoly, yet the vast majority of people’s intuition questions exactly the same rule for our Monetarily Sovereign federal government.

Finally, we come to inflation and the brainwashed belief that federal money “printing” causes inflation.

Let’s say you go to the store, and you find that the price of apples has gone up. Do you immediately think, “The government is printing more money,” or more likely do you think, “There must be a shortage of apples”?

In any capitalist economy, supply responds to demand, and prices result from an imbalance between supply and demand.

If supply is less than demand, there will be shortages and price increases, upon which producers will respond by creating more product, alleviating the shortages and lowering prices.

Here is the normal sequence leading to low amounts of inflation, and then inflation moderating:

Shortages develop —>
Prices rise —>
Production increases to meet demand —>
Shortages are eliminated —>
Prices fall.

This process creates the average low inflation that has been the norm for decades.

Here is the process leading to large inflations and hyperinflations:

Shortages develop —>
Prices rise —>
Production is unable to increase sufficiently to meet demand—>
Shortages continue to grow —>
Prices continue to rise into hyperinflation —>

All inflations and hyperinflations are caused by shortages, usually shortages of food or energy, never by federal money “printing.”

In the following graph, note how peaks and valleys of inflation do not match peaks and valleys of federal money “printing.”

In summary, the universe contains more facts than you can absorb. You are forced to develop shortcuts that allow you to bypass the vast majority of facts and to come to conclusions about the reality around you.

These shortcuts include analogy, inference, and reference, the guidance of other people.

Despite common belief, the federal government cannot run short of dollars with which to pay its debts, and federal money creation does not cause excessive inflation (which is caused by shortages.)

And yes, the federal government easily can pay for the Ten Steps to Prosperity (below), without causing inflation.

So why not?

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

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

2. Federally funded Medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually.

8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9%

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY

Democrats’ political suicide

There were times when I thought Donald Trump was politically suicidal with his public philandering, his easily disproved lies, his blatant ignorance, his financial profiting from the Presidency, his nepotism, his sucking up to communists, and on and on.

But apparently, his “religious” followers admire philandering, lying, ignorance, criminal profiting, nepotism, communism, etc. So Trump survives.

Lately, I have realized that it is the Democrats who are politically suicidal. The Democrats have the marvelous ability to take a good idea, a popular idea — health care for everyone — and muck it up into a barely recognizable mess, until they now are on the defensive about something that should be a lay-down winner for them.

As readers of this blog well know: The federal government’s finances are not like state and local governments’ finances.

Image result for bernanke and greenspan — *It’s our little secret. Don’t tell the people we don’t use their tax dollars.*

Ben Bernanke: “The U.S. government (can) produce as many U.S. dollars as it wishes at essentially no cost.”

Alan Greenspan: “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 (borrowing) to remain operational.”

Unlike state and local governments:

The federal government has a sovereign currency, the U.S. dollar, over which it has total control.
The federal government cannot unintentionally run short of its own sovereign currency.
The federal government neither needs nor uses tax dollars.
The federal government does not borrow.

Those four, simple truths are absolutely basic to economics. Yet they seem not to be understood by the vast majority of Americans, even including media writers and university economists — and especially not understood by the legions of Democrats chasing glory via the Presidency.

The following article demonstrates the Democrats’ suicidal ignorance:

Sanders admits he would raise taxes on the middle class to pay for programs
Kadia TubmanReporter,Yahoo News•June 27, 2019

Sen. Bernie Sanders, challenged at Thursday night’s Democratic presidential debate on how he would pay for universal health care and his other proposed programs, admitted income taxes on the middle class would have to go up — but maintained that the savings in medical expenses would more than offset the tax hike.

Sanders, who took the first question from NBC correspondent Savannah Guthrie, talked about his Medicare for All proposal for his allotted minute.

But when Guthrie followed up and pressed him about taxes on the middle class, he conceded, “Yes, they will pay more in taxes.”

If Sanders’s version (or any other candidate’s version) of Medicare for All were proposed by a state governor or a city mayor, the above answer would be correct. Additional taxes would be needed to pay the cost of the medical services.

But apparently, neither Sanders nor any other candidate (nor any Republican, for that matter) knows or admits to knowing that federal finances are completely, totally, 180 degrees different from state and city finances.

The federal government uniquely has total control over the U.S. dollar, cannot unintentionally run short of dollars, neither needs nor uses tax dollars, and does not borrow.

The U.S. federal government could finance even the most liberal, generous version of Medicare for All, at the tap of a computer key. No tax dollars involved.

Sanders said, “Health care in my view is a human right and we have got to pass a Medicare for All single-payer system. “Under that system, [the] vast majority of the people in this country will be paying significantly less for health care than they are right now.”

Not only is health care a “human right,” but it is an economic imperative for any nation hoping to compete and grow — certainly as much an imperative as military defense and effective government.

Yet there is Sanders, essentially hat in hand, pleading for universal health care on the basis of cost savings, when in reality cost is not a real issue. It is a fake issue put forth either in ignorance or in malicious intent, depending on one’s politics.

Quite simply, there is no financial reason why any American should be forced to pay one cent for health care insurance — either via taxes or via premium payments.

And if after all these months of researching and developing his Medicare for All plans, Sanders still has not learned this, he is mentally unfit to be left alone with a sharp object.

But it continues. Sanders also said:

“I believe that education is the future for this country and that is why I believe we must make public colleges and universities tuition-free and eliminate student debt, and we do that by placing a tax on Wall Street.”

“Every proposal that I have brought forth is fully paid for.”

Sanders believes (!) education is the future for this county? He believes so? What a relief that he believes something so obvious, that American states, counties, and cities have been funding elementary, high school, and even some college education, for centuries.

Unfortunately, states, counties, and cities are not Monetarily Sovereign, so they must have some form of income (taxes, fees, tourism, borrowing, etc.) in order to spend.

The federal government, being unique, is not similarly constrained. Yet Sanders, a federal politician, doesn’t recognize this difference. Tragic.

Sanders babbled on:

“People who have health care under Medicare for All will have no premiums, no deductibles, no copayments, no out of pocket expenses. Yes, they will pay more in taxes, but less in health care for what they get.”

Then the Yahoo News reporter added her dollop of economic ignorance by quoting the Associated Press:

Still, taxes would significantly increase as “the government takes on trillions of dollars in health care costs now covered by employers and individuals, the Associated Press fact-checked.

“Independent studies estimate the government would be spending an additional $28 trillion to $36 trillion over 10 years, although Medicare for All supporters say that’s overstating it.

How those tax increases would be divvied up remains to be seen, as Sanders has not released a blueprint for how to finance his plan.

Note how the media automatically and wrongly translate “spending an additional $28 trillion to $36 trillion” into “tax increases.”

(Does that also mean federal tax cuts require federal spending cuts?)

There is zero relationship between federal spending and taxes. Again, the pretense is that federal finances are like state and local finances, where spending is funded by taxes.

Sen. Michael Bennet, who was the last candidate to earn a spot on the debate stage, took a shot at Sanders on taxes.

Bennet said he believed in getting to universal health care. “I believe the way to do that is by finishing the work we started with Obamacare and creating a public option that every family and every person in America can make a choice for their family about whether they want a public option which for them would be like having Medicare for All or whether they want to keep their private insurance. I believe we will get there much more quickly if we do that.”

“Bernie mentioned the taxes that we would have to pay, because of those taxes, Vermont rejected Medicare for All,” he added. Sanders shook his head in response.

If by “public option” Bennet means people should be given the choice between free, comprehensive, no deductible Medicare and long-term care vs. paying for private insurance, sure. Why not? That is exactly the choice people should be given.

Of course, the result is a given. Perhaps a dozen people in America would choose to pay for private insurance.

But then, the Democrats’ stupidity continues:

When asked which candidates would abolish private health insurance in favor of a government-run plan, only Sanders and Harris raised their hands.

Since the words “abolish private health care insurance” instantly click the insanity button in America, two Democrats dive right in and say, “Yes, that is what we would do.”

OMG! Why?

“Everybody who says Medicare for All, every person in politics who allows that phrase to escape their lips has a responsibility to explain how you’re actually supposed to get from here to there,” said South Bend, Ind., Mayor Pete Buttigieg.

“I would call it Medicare for All Who Want It.”

Buttigieg said he would take parts of Medicare and give people an option to buy into it, providing “a very natural glide path to the single-payer environment.”

“Parts of Medicare”? Which parts would you leave out? Even Medicare itself is insufficient.

It has deductibles and partial payments, which are why many people pay for Medicare Supplement insurance. And it doesn’t cover pharmaceuticals, which is why people pay for Part D coverage.

And don’t even mention long-term care coverage, which Medicare doesn’t provide, and which even frightfully expensive private insurance covers only partially.

So add Buttigieg to the list of politicians who either don’t know what they are talking about or don’t want to give you the facts.

Bottom line, the federal government has the unlimited power to pay for comprehensive, no deductible health care insurance, including pharmaceuticals and long term care — and it can do so by pressing a computer key.

This whole charade results from the mean-spirited, selfishness of Gap Psychology (see: https://mythfighter.com/2018/04/06/how-does-gap-psychology-affect-you/) combined with flat-out ignorance of federal finances, and you, the public, are the patsies.

Cost is not the issue. Coverage is the issue — the only issue.

Even if you have no background in economics you should realize that federal spending is not funded by taxes. Didn’t the GOP massively cut taxes on the rich while increasing federal spending. That alone should have given you a clue.

Sorry folks, but ignorance has its penalties. Pay up.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell

The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually.

8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9%

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY

Give me my way or I will torture children. MAGA

Visualize a child-hostage situation in which the hostage-taker says, “Give me a billion dollars, or I will begin to kill one child every hour.”

How does that make you feel about the hostage-taker?

Visualize that the hostage-taker is the President of the United States, and the hostages are foreign children at our southern border.

How does that make you feel about America?

White House Threatens To Veto Aid Bill For Migrant Families
BY ALAN FRAM – ASSOCIATED PRESS

WASHINGTON (AP) — The White House is threatening to veto a $4.5 billion House bill aimed at improving the treatment of migrant families detained after crossing the U.S. southern border, saying the measure would hamstring the administration’s border security efforts and raising fresh questions about the legislation’s fate.

The warning came as Hispanic and liberal Democrats press House leaders to add provisions to the legislation strengthening protections for migrant children, changes that might make the measure even less palatable to President Donald Trump.

Is America in such imminent danger from these families that killing children is an appropriate measure?

Many children detained entering the U.S. from Mexico have been held under harsh conditions, and Customs and Border Protection Chief Operating Officer John Sanders told The Associated Press last week that children have died after being in the agency’s care.

He said Border Patrol stations are holding 15,000 people — more than triple their maximum capacity of 4,000.

“Right now, the goal is really to stop — one death is just too much,” said Rep. Adriano Espaillat, D-N.Y., as he left that meeting.

“We’ve got lives at stake,” said Rep. Tony Cardenas, D-Calif.

Federal officials say their agencies have been overwhelmed by the influx of migrants and are running out of funds.

The back-and-forth on the spending measure came as Congress’ top Democrats criticized Trump for threatening coast-to-coast deportations of migrants.

The hostage-taker-in-chief doesn’t only threaten children and families at the border. He also threatens the children and families who, for many years, have lived peaceful, productive lives here in America.

Over the weekend, Trump tweeted that he would give Congress two weeks to solve “the Asylum and Loopholes problems” along the border with Mexico. “If not, Deportations start!” he tweeted.

The president had earlier warned that there would soon be a nationwide sweep aimed at “millions” of people living illegally in the U.S., including families. The sweeps were supposed to begin Sunday, but Trump said he postponed them.

They sent us away. They told us America is”full.” (AP Photo/Julia Le Duc)

Wait a minute. Do those millions constitute such a grave and imminent danger that mass, Gestapo-like roundups are warranted?

If the danger is so grave and imminent, why does the President now decide it’s OK to postpone the deportations?

Could it be there is no danger, but rather an invented, political talking point to appeal to Trump’s xenophobic base?

Does Trump believe the immigrants are not really people, but rather are non-human political pawns, whose lives don’t matter to us white American citizens?

Nancy Pelosi, D-Calif., said the threatened raids were “appalling.”

“It is outside the circle of civilized human behavior, just kicking down doors, splitting up families and the rest of that in addition to the injustices that are happening at the border,” she said.

On the Senate floor, Minority Leader Chuck Schumer, D-N.Y., described Trump’s “chilling, nasty, obnoxious threats” and said the president “seems far more comfortable terrorizing immigrant families” than addressing immigration problems.

“I mean, my God, to threaten separating children from their parents as a bargaining chip? That’s the very definition of callousness,” Schumer said.

Trump, the GOP, and their followers have a long history of mean-spirited cruelty. The attempts to take health care from the poor, by eliminating ACA (“Obamacare”) failed only because one decent Republican (John McCain) objected.

Trump, being indecent himself, still hates McCain for that act of decency.

And then there are the states that deny health care to their own poorer citizens by refusing to expand Obamacare, even though the expansion would bring billions of federal dollars into the states.

More Trump, GOP cruelty.

And not to forget the gay hatred and Muslim hatred that courses through right-wing veins.

Finally, let us remember the “DREAMers.”

They are the young undocumented immigrants —who often arrived at a very young age in circumstances beyond their control.

They have grown up as Americans, identify themselves as Americans, and many speak only English and have no memory of or connection with the country where they were born.

Under current immigration law, most of these young people had no way to gain legal residency even though they have lived in the U.S. most of their lives.

Many DREAMers say they didn’t know they were unauthorized immigrants until they were teenagers—often when they discovered they couldn’t join their peers in getting a driver’s license or filling out financial aid forms for college because they didn’t have Social Security numbers.

The children live each day, knowing they are subject to deportation. Trump and the GOP could solve their plight in an instant. Cruelly, the right wing invents excuses to continue the torture.

Trump is a bully and a coward, as his “Cadet Bone Spurs,” draft-dodging persona demonstrates.

He has the shocking temerity to claim that bullying helpless men, women, and children somehow will “make America great again.”

And ironically, his “religious, patriotic, law-and-order” followers believe him.

The world looks on in astonishment as Reagan’s (and others’), “Shining City upon a hill” sinks into depravity, led down by an egomaniacal psychopath.

MAGA, indeed. That slogan will live in infamy.

One only can hope that when the Trump Gestapo begins to kick down doors and starts herding unfortunate families into boxcars for travel to nowhere, thousands of good Americans, true Americans will surround the jackals and chase them off, never to disgrace America, again.

Only then will America recover from traitorous Trumpism, and prove to ourselves and to the world, that we indeed are the world’s Shining City, deserving of worldwide admiration.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell

The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually.

8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9%

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY

An excellent idea, soon to be ruined

“In a generation hard hit by the Wall Street crash of 2008, the government forgives all student debt and ends the absurdity of sentencing an entire generation to a lifetime of debt for the ‘crime’ of getting a college education,”
Sen. Bernie Sanders

I could not agree more. Education is our prime device for creating America’s economic growth and leadership.

The notion of making education difficult to obtain, while punishing those who get an education, either is madness or stupidity — both, really.

Two of The Ten Steps to Prosperity — Step 4: Free education for everyone, and Step 5: Salary for attending school (see below) address the issue.

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.”

Sadly, the following two articles tell why the madness and stupidity will not easily be solved.

Sanders, Progressives Unveil Bill To Cancel Student Debt
THE ASSOCIATED PRESS — BY LAURIE KELLMAN AND ELANA SCHOR

WASHINGTON (AP) — Days before the first Democratic presidential debates, Sen. Bernie Sanders and House progressives are unveiling legislation cancelling all student debt, going further than a signature proposal by Sen. Elizabeth Warren as the two jockey for support from the party’s liberal base.

Excellent idea. We absolutely should cancel student debt. We should take the millstones from the necks of our future social, economic and political leaders. See: Student debt, the intentional crisis.

By canceling all student loans, Sanders says the proposal addresses an economic burden for 45 million Americans.

The key difference is that Warren’s plan considers the income of the borrowers, canceling $50,000 in debt for those earning less than $100,000 per year and affecting an estimated 42 million people in the U.S.

There is no economic reason to consider the income of borrowers. Warren’s plan is based on the false idea that federal spending is financially limited and is paid for by taxpayers.

I’m sure Warren knows that the federal government has the unlimited ability to spend, and that federal taxpayers do not fund federal spending. (The federal government, being Monetarily Sovereign, does not use tax dollars.

Instead, each time it pays an invoice, it creates new dollars, ad hoc.)

Sadly, Warren seems to lack the courage to tell voters the truth.

Questions face both candidates about how to pay for all of that plus their proposals for free tuition at public colleges and universities.

Sanders’ effort at one-upsmanship on student loans, named the College For All Act, would cancel $1.6 trillion of debt and save the average borrower about $3,000 a year, according to materials obtained by The Associated Press.

The result would be a stimulus that allows millennials in particular to invest in homes and cars that they wouldn’t otherwise be able to afford.

Yes, not only would the elimination of student loans benefit students, but the additional dollars in the economy would grow the economy.

But here is where the excellent idea goes sour:

It would cost $2.2 billion and be paid for — and then some — by a series of taxes on such things as stock trades, bonds and derivatives, according to the proposal.

Absolutely wrong. Unlike state and local taxes, federal taxes do not pay for anything. In fact, they are destroyed the instant they reach the U.S. Treasury.

Thus, Warren guarantees her plan will be rejected by the rich (who actually run America):

Warren’s plan, which she has suggested in published reports will be introduced as legislation, would be paid for by imposing a 2% fee on fortunes greater than $50 million, a wealth tax designed to target the nation’s top 0.1% of households.

Not only will this idea be dead on arrival at the U.S. Senate, but it also will prove to be uncollectable. The rich always find ways to duck taxes.

Warren projects the levy would raise $2.75 trillion over 10 years, enough to pay for a universal child-care plan, free tuition at public colleges and universities, and student loan debt forgiveness for an estimated 42 million Americans — with revenue left over.

Even if the economy operated the way Warren seems to think, she is proposing that the federal government take $2.75 trillion from the economy, and because there would be “revenue left over,” return less than $2.75 trillion to the economy — a net loss for the economy.

But if the free college and student debt relief advocates don’t hit their revenue goals, they could simply add to the deficit — as President Donald Trump and congressional Republicans have by passing more than $1 trillion in tax cuts without paying for them.

Exactly right. And just like the tax cuts and everything else that takes dollars from the federal government and gives them to the private sector, the student debt relief would stimulate the economy.

Here’s one more example of economic ignorance, ironically titled, “Bernie Sanders doesn’t have a clue about Economics 101 (and that’s scary)”
By Andy Puzder | Fox News

The Mercatus Center, a think tank at George Mason University, “conservatively” found that Sanders’ “Medicare-for-All” would cost taxpayers $32.6 trillion over a 10 year period, or an average of about $3.26 trillion per year after associated cost saving.

The question is where would Sanders find the additional $3.26 trillion in revenue to cover these costs?

Mercatus found that “doubling of all currently projected federal individual and corporate income tax collections would be insufficient to finance the added federal costs of the plan.”

That makes sense as the federal government’s total revenue from all sources for fiscal year 2018 was $3.3 trillion, or about the $3.26 trillion annual cost of Sanders’ proposed healthcare plan.

If the plan had been proposed for a city government, a county government, or a state government, the above would be correct. Those governments are monetarily non-sovereign. They do need to use tax dollars for spending.

But the federal government’s finances are unique — nothing at all like state and local government finances. The Monetarily Sovereign federal government has the unlimited ability to create its own sovereign currency, the U.S. dollar.

The federal government never can run short of dollars. Even if all federal tax collections were $0, the federal government could continue spending, forever.

Puzdner’s article ends with this ignorant nonsense:

Should we ever enact Sanders’ economic policies we would end up with higher taxes — on everyone — declining growth, fewer jobs, vastly more borrowing and massive underfunded programs(some new, some old) unable to meet the expectations of everyone who wants to take advantage of them — because their costs will grossly exceed our revenue.

All of which will last until, as Margaret Thatcher once said, the government “runs out of other peoples’ money.”

Absolute tripe. Our Monetarily Sovereign government can go on forever with “costs that grossly exceed revenue,” simply because the U.S. federal government has no use for revenue.

I pray for the day when the populace finally learns the differences between Monetary Sovereignty and monetary non-sovereignty. Then, the politicians, magazine writers, and economists will claim in Trumpian fashion, “Hey, we knew it all the time.”

Meanwhile, the elimination of student debt is an excellent idea, soon to be ruined.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell

The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually.

8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9%

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY

Share this:

Share this:

Share this:

Share this: