- Monetary Sovereignty: This term describes the unlimited ability to issue and control a currency. Even without collecting taxes, a Monetarily Sovereign can spend forever.
- Gap Psychology: This term refers to the desire to distance oneself from those below, in any social ranking, and to come nearer to those above.
- The Big Lie: This term describes the false claim that a Monetarily Sovereign entity needs or uses income.
Joe Biden made a big mistake. He revealed, in an interview with ABC’s David Muir, that he doesn’t understand federal financing.
Here are some excerpts:
Biden to ABC’s David Muir on raising taxes: ‘No new taxes’ for anyone making less than $400,000
Everybody should pay “their fair share,” Biden said.
By Arielle Mitropoulos, August 23, 2020, 7:09 PM
Joe Biden and his running mate Sen. Kamala Harris, the former vice president (said) everybody should pay “their fair share.”
“I will raise taxes for anybody making over $400,000,” Biden told Muir, adding, “no new taxes” would be raised for anyone making under $400,000.
Presumably, Biden and Harris believe that making “soak-the-rich” statements will endear them to the working populace, who gleefully enjoy any punishment of the rich.
They may be right about those emotions, but they are at least partly wrong about the economics.
They are right that raising taxes on the rich would narrow the Gap between the rich and the rest, which would benefit the economy in myriad ways.
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.
But, the federal government neither needs nor uses tax income. The federal tax dollars you send to the U.S. Treasury leave the economy and cease to exist. So, rather than holding taxes steady, the Democrats should cut taxes for everyone who is not rich.
Tax policy is taking on additional significance for the 2020 presidential election, with the economic crisis inextricably tied to the pandemic, and more than 30 million Americans currently on unemployment.
Although Biden has been leading in the polls, polls also have shown that voters have greater confidence in President Donald Trump when it comes to the economy.
Voters may have greater confidence in Trump regarding the economy, because Trump has taken credit for the ongoing effect of President Obama’s increased deficit spending.
Trump, with his tax cuts for the rich and his increased import duties — which effectively are tax increases on the “not-rich,” has widened the Gap between the rich and the rest.
“Is it smart to tax businesses while you’re trying to recover?” Muir asked.
“It’s smart to tax businesses that are in fact making excessive amounts of money and paying no taxes,” Biden told Muir.
“It’s how we did it last time,” he said, in reference to the 2008 recession, adding that his work, at the time, with then-President Barack Obama, led to economic recovery, “with the largest, the most consecutive number of months of growth in jobs of any time in history. We did it the right way.”
No, it is not smart to tax business when you’re trying to recover, or any other time. What they actually did was pump money into the economy with increased federal deficit spending:
A growing economy requires a growing supply of money. Increased federal deficit spending (which increases the federal debt) grows the economy. When federal deficit spending does not increase sufficiently, recessions result. These recessions are cure by increases in federal deficit spending.
Increased taxation reduces federal debt growth and therefore is recessionary.
Taxing the rich more, while holding taxes level for the “not-rich” would be recessionary. While taxing the rich would help narrow the Gap, the recessionary effect must be overcome by taxing the not-rich less.
“Look [at] what he’s doing,” Biden continued, criticizing the president. “The money was supposed to go to help small businesses. You have one in six small businesses that have already closed. You’re finding a situation that over 60% of the money — only 40% of money for small businesses went to small businesses.”
When Muir pressed him on whether taxes would be raised on small businesses, Biden emphatically said, “No.”
“There will be no raising taxes” on the “90% of the businesses out there are mom and pop businesses — that employ less than 50 people,” Biden responded.
“We have to provide them with the ability to reopen. We have to provide more help for them, not less help,” he said.
Biden is correct that small businesses need help, but this will not be accomplished by taxing large businesses, however one defines “large” and “small.”
That a business employing more than 50 people should be considered “large” and taxed more, is ludicrous. The number of employees is not relevant to “making excessive amounts of money and paying no taxes.” What is relevant? Profits and taxes.
Why penalize businesses for hiring? It makes no sense to penalize businesses at all, because businesses provide goods, services, and money to the economy.
To narrow the Gap between the rich and the rest, the highest personal incomes should be taxed, not businesses.
In Summary, Biden doesn’t understand Monetary Sovereignty, Gap Psychology, and this misunderstanding leads him to tell The Big Lie.
Assuming he wishes to help the underclasses, narrow the Gap, and stimulate the economy he should begin by eliminating FICA, while leaving the funding of Medicare and Social Security to the federal government.
Contrary to popular wisdom, FICA does not fund Social Security or Medicare. Like all federal taxes (but unlike state/local taxes) FICA funds nothing. The federal government could fund unlimited spending with no taxes.
FICA is the most regressive tax in America. Eliminating FICA would benefit workers and businesses. It would decrease unemployment by making employment cheaper. It has been suggested seriously by just one politician, none other than Donald J.Trump. But, in perhaps the only time the GOP toadies have stood up to Trump, they said “No.”
Ironically, this may have been the only good idea Trump has had during his term.
Rodger Malcolm Mitchell Monetary Sovereignty Twitter: @rodgermitchell Search #Facebook: Rodger Malcolm Mitchell …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..
THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.
The most important problems in economics involve:
- Monetary Sovereignty describes money creation and destruction.
- Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”
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 Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and 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. Social Security for all or a reverse income tax
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 the rest. MONETARY SOVEREIGNTY
9 thoughts on “Joe Biden’s big mistake”
Fact check: First night of the Republican National Convention features more dishonesty than four nights of DNC
The Republican National Convention started off with a parade of dishonesty, in stark contrast with last week’s Democratic convention. While CNN also watched and fact-checked the Democrats, those four nights combined didn’t have the number of misleading and false claims made on the first night of the Republicans’ convention.
If Trump can’t get rid of FICA then noone can. I agree with MS philosophically but its formal recognition would cut a candidate’s throat. Opponents would pull out every joke in the book to bring down MS “nonsense” even though it makes sense. People aren’t ready for sense. All they know is what mainstream conformity tells them. Noone wants to appear stupid, crazy, radical, nuts, etc, etc. But the easy, acceptable way out, and ironically MORE nuts, is marching and chanting and throwing objects while going absolutely nowhere except down the street..
The only way I can see MS’s acceptance is if nothing else can prevent economic shutdown per Covid 19. When the system gets painted into a corner and disaster is imminent, only then will you see the establishment yield just as it did after the ’29 Crash. The USA became indirectly socialized unbeknownst to the public, which didn’t understand economics then and hardly does now…
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I too have been troubled by the violence of some protests.
When I become outraged enough, I imagine this: The police bullying and killing people of my religion. What would I do? I probably would march peacefully until I saw that no one noticed or cared. Then I might start throwing things and breaking things, and then people would notice and care.
In Germany, the Jews tried hunkering down and being peaceful. That accomplished nothing. Perhaps if they had started throwing bombs, the so-called “Christians” might have backed off. That’s what bullies always do, and anyway, it couldn’t get worse than death camps.
Perhaps people of color feel it couldn’t get worse, and if they do, I can empathize. As the song says, “When you ain’t got nothin’, you got nothin’ to lose.
In that vein, I have to wonder about right-wingers who love to mention how “bad” things are in big, Democratically-run cities. Does that mean things are good for blacks in Republican-run Florida, Alabama, Mississippi, Missouri, Georgia, Tennessee, Texas, and South Carolina? Check their jails.
How about just eliminating corporate taxes and then taxing dividends as ordinary income? Hasn’t the “double dipping” argument of corporate taxes and dividends been the primary argument for the preferential tax treatment of dividends, which is a key driver of the gap, and why Warren Buffet pays a lower income tax rate than his secretary? Besides, most big corporations have figured out how to not pay taxes through offshoring and pass through pricing.
Biden would be much better off eliminating corporate taxes, cutting marginal rates for the not rich and increase them for the very rich, and eliminate preferential treatment of dividends. It seems that would be pro middle class, pro business, and pro economy, and help reduce wealth inequality in the process.
I agree with your recommendation, which mostly is a combination of Steps 6, 7, and 8 of the Ten Steps to Prosperity.
I think Biden was referring primarily to sole proprietors whose business income (that they take home) is taxed at the individual level, not C-corporations. You know, the ones that Republicans claim are “small” businesses despite the owner(s) taking home seven figures, and sometimes don’t even have any employees at all.
Biden made no mistake. There is no way you can convince me that after spending 36 years in the Senate and 8 years as Obama’s Vice President that he does not know how our monetary system works.
He intentionally propagates the myth that the government must collect taxes first so that it can use that money to pay for what it needs. That’s the corporatist’s way of insuring they can continue to carry out their policy of putting corporations first above the worker.
That’s their philosophy, after all. What is good for the corporations is good for the country. Keeping a pool of unemployed workers is good for corporations because it puts downward pressure on wages.
Letting corporations consolidate their power by merging and forming monopolies is good for the corporations because it makes it easier for them to control their workers and prevent them from forming unions.
He’s been an advocate of tearing down the social safety net his entire career. The more subservient Biden and his ilk can make the American worker the more he likes it.
By your calling is rhetoric a “mistake” gives him a pass. He is not a stupid man and he is not sorry for any bill or policy he has advocated for in his long career as a public servant. None are so blind as those who do not want to see.
Kathryn, I agree. Good comment.
Trump’s 21 lies in his Republican convention speech. “He’s a serial liar.” https://www.huffpost.com/entry/cnn-fact-check-trump-rnc_n_5f4912ecc5b6cf66b2b7100b?ncid=engmodushpmg00000004