You can have it all. We all can have it all. Nothing prevents it other than our own ignorance.
How is your imagination? Imagine a world in which:
- We have no poverty
- We have is no violent crime
- We all can afford the best health care
- We all can afford as much, and as fine an education as we wish
- There is no air, water, or land pollution, nor shortages of pure water
- Global warming does not exist
- Our entire infrastructure is kept current
- Our government is run to benefit all of us, not just the very rich
We actually do have the power to create this paradise on earth. We can have it all.
Background: The Problem Begins With Poverty
Money is not the root of all evil. Lack of money is.
Have you noticed that street crime — robbery, burglary, assault, murder, rape, shoplifting, drug-pushing — is most prevalent in impoverished neighborhoods? Of course, you have.
Before becoming a resident of Florida this year, I lived 60+ years north of Chicago, in what locally is known as “The North Shore.” It includes mostly upscale, “bedroom” communities, one of which is Wilmette, Illinois, where I lived.
According to “Neighborhood Scout:”
Wilmette home prices are not only among the most expensive in Illinois, but Wilmette real estate also consistently ranks among the most expensive in America.
Wilmette is a decidedly white-collar village, with fully 94.76% of the workforce employed in white-collar jobs, well above the national average. Overall, Wilmette is a village of professionals, managers, and sales and office workers.
Wilmette is home to many people who could be described as “urban sophisticates”. Urban sophisticates are people who are both educated and wealthy, and thus tend to be older, richer, and more established than young professionals.
“Urban sophisticates” is not just about being educated and well-off financially: it is a point of view and state of mind, one that you might call ‘urbaneness’. But such people can and do regularly live in small towns, suburbs and rural areas, as well as in big cities. They read, support the arts and high-end shops, and love travel.
Do you have a 4-year college degree or graduate degree? If so, you may feel right at home in Wilmette. 83.23% of adults here have a 4-year degree or graduate degree, whereas the national average for all cities and towns is just 21.84%.
The per capita income in Wilmette in 2018 was $87,576, which is wealthy relative to Illinois and the nation. This equates to an annual income of $350,304 for a family of four.
Can you visualize Wilmette?
Google “Murder in Wilmette,” and you might possibly find a half dozen references from the past 50 years. Here is what violent crime looks like in Wilmette, in Illinois, and in the whole United States.
Get the picture?
What is the fundamental difference among Wilmette, Illinois, and the U.S., which can account for the massive differences in crime rates, education rates, and home prices?
Money.
No people are born murderers, rapists, robbers, burglars, and attackers. But lacking money, people are far more likely to grow up as street criminals.
And please spare yourself the anecdotes about impoverished kids who ultimately became pillars of society. Yes, there are plenty of them, and somewhere in their lives occurred fortuitous events that led to their achievements.
Perhaps nature provided them with the necessary brains or brawn to succeed, despite the odds. Or some mentors took them under wing and provided them with the leadership to find success.
And yes, there are rich people who commit crimes, though most often of the white-collar variety. Scant exceptions do occur, but the relationship between poverty and crime, especially violent crime, cannot be denied.
I am as opposed to the proliferation of guns as anyone, but I now do not believe guns are an important cause of crime, though they are an important facilitator of crime (and an even more important facilitator of suicide).
I have come to the conclusion that America could enact the most draconian gun laws on the planet, and that would not solve our crime problems.
We are at the stage in which gun ownership is an addiction, similar to alcohol and drug addictions. The time long has passed when we legally could prevent gun ownership and usage, any more than we were able, via laws, to prevent alcohol ownership and usage during Prohibition, or prevent drug ownership and usage during the “War on Drugs.”
We once could have prevented the disease, but now we are too infected for a cure.
We simply cannot stop gun crime by using the brute force of prohibitive laws. That mule will not respond to the stick. At long last, we must learn to use the carrot — the federal government’s infinite ability to create dollars– and thus cure the poverty that is the root cause of violent crime.
Our primary problem is: People who are not impoverished resent the government giving to the poor. It’s a state of mind that each day is fostered by wealthy propaganda.
Additionally:
The U.S. federal government has the financial power to provide a generous form of Social Security to every man, woman, and child in America, instantly eliminating poverty.
The U.S government has the financial power to eliminate not only most federal taxes (including the onerous, regressive FICA tax), but importantly to reduce the need for state and local taxes — those sales and use taxes that disproportionately affect the less wealthy — by simply giving state and local governments money.
The U.S. government has the power to eliminate the financial impoverishment caused by lack of insured health care, simply by providing no-deductible, comprehensive Medicare for All.
The U.S. government has the financial power to provide schooling to all Americans who want it — grades K through advanced education, thereby not only reducing the costs of college, but by reducing the need for local K-12 school taxes.
The U.S. government has the financial power to reduce global warming by supporting not only net-zero energy use and production, but also by supporting carbon-removal technology usage, research, and development
The U.S. government has the financial power to support water recycling and desalination usage, research and development. There is plenty of water on earth, but too little is fresh, drinkable water, and we rapidly are reducing those supplies.
The U.S. government has the financial power to repair and modernize our infrastructure — our roads, bridges, dams, sewers, electric grid, telecommunication, tunnels, transportation, parks, beaches, etc.
Many of the above initiatives are being attempted by elements of local government and the private sector, all of which have limited funds,
But, for the federal government, money is unlimited and free, created at the touch of a computer key.
Will so much federal spending cause inflation? No, as we have demonstrated here, and here, and here, inflation is not caused by federal deficit spending. Inflation is caused by shortages of goods and services, and often can be cured by federal deficit spending to reduce shortages.
Will so much federal spending be a burden on future taxpayers? No, federal taxes do not fund federal spending. The Monetarily Sovereign federal government pays for its spending by creating dollars, ad hoc. The sole purpose of federal spending is to control the economy by taxing what the government wishes to discourage, and by giving tax breaks to what the government wishes to encourage.
(This is different from state and local government taxes which do fund state and local spending.)
Will so much federal spending be socialism? No, socialism is not funding; socialism is control.
Consider Social Security. It spends billions but it is not socialism. It doesn’t control. It merely funds. Similarly, Medicare has very little control over your medical services other than the amounts it funds.
It does not tell you what doctor to see, what hospital to visit or what medicines to take. It does not control what your doctor diagnoses or treats. Medicare does not fund every procedure, but it does not control your financial ability to have the procedure.
Being Monetarily Sovereign, the American federal government has the financial ability to create paradise on earth. We lack only the knowledge and the will to do it.
The populace has been led to believe slogans like “Too good to be true,” and “No such thing as a free lunch,” which replace facts with a world of disinformation and cynicism, making us surrender before we begin.
From the standpoint of federal financing, nothing is “too good to be true,” and yes, federal spending is a “free lunch.”
As for the will, the government is blocked by the very rich, whose “Gap Psychology” goal is to widen the Gap between the rich and the rest. No matter how rich they are, the rich seem always to want to become even richer, and that requires ever-widening the income/wealth/power Gap. — and that requires pushing down those who are not rich.
In Summary:
The more you experience life’s failures, the more you tend to believe cynically, that a perfect world cannot exist, and that attempts to create perfection are fruitless, wasteful, naive, and even harmful. You have grown to expect disappointment.
So, when you are told the U.S. federal government has the infinite power to create U.S. dollars, and do it without adverse side effects, your knee-jerk response is to deride the idea. Thus, the “too good to be true,” and “no such thing as a free lunch” responses.
Yet, when you are told the U.S. government has the infinite power to create laws, and that U.S. dollars are nothing more than legal creations, not physical creations, you may pause that knee-jerk response.
Just as a federal law can say anything the federal government wishes it to say, the U.S. dollar can be anything and worth anything the law says it is, i.e. anything at all.
Throughout American history, federal law has stated that U.S. dollars were worth varying amounts of silver and gold, a process one hopes finally will have ended in the Nixon year 1971. But the U.S. government could pass a new law stating that the U.S. dollar is worth anything at all — a 1-carat diamond, or a pound of salt, or a quart of pure water. The value of the dollar, i.e. inflation, is in the hands of the government.
Beginning in 1971, the government has allowed the U.S. dollar to “float,” i.e. to allow the public to decide the exchange rate (vs. other currencies) of the dollar.
For that reason, there now can be no real answer to the question, “What is a dollar worth?” You can express it only with regard to other currencies, whose worth is equally vague.
Because a dollar is, in reality, a debt owed by the U.S. government, its value, like the value of all debts, is determined by its collateral, and the full faith and credit of the debtor, the U.S government.
Without gold, (or even with gold), the real collateral for the U.S. dollar is the full faith and credit of the U.S. government — not our “spacious skies or amber waves of grain” — just our full faith and credit.
If you were to try to drill down below exchange value to find the “real” value of the U.S. dollar, you would have to determine the “real” value of the full faith and credit of the U.S. government, an impossible task.
All of the above is meant to show you the truly amorphous nature of the U.S. dollar. It is what the government says it is, and it is worth what the government says it is — and there is no limit to the number of dollars the government can create. The dollar is the offspring of the government’s laws.
In short, there is no limit to what the government can spend to purchase paradise.
This simple fact makes a mockery of the President’s and Congress’s “struggles” to pass spending legislation, against those who falsely claim the government cannot or should not spend so much money.
In addition to interest rate control, which affects the market demand for money, and Federal Reserve bond purchases and sales, the federal government can revalue or devalue the dollar, at will.
We created a Monetarily Sovereign federal government and gave it all the power it needs to make America a paradise on earth. It is not constrained by money. It has infinite money and infinite control over the value of its money.
Our world is constrained only by our intellect, our imagination, our will, and our honesty. Barring a meteor strike or the sun failing us, we always will have exactly the world we create for ourselves — exactly the world we deserve.
Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
Rodger Malcolm Mitchell Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell
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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:
- Eliminate FICA
- Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
- Social Security for all
- Free education (including post-grad) for everyone
- Salary for attending school
- Eliminate federal taxes on business
- Increase the standard income tax deduction, annually.
- Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
- Federal ownership of all banks
- 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
#Monetary Sovereignty - Mitchell 
Rodger – Welcome to the South, although Florida isn’t really a part of The South. It’s more the southern province of New York/New Jersey (and the upper Midwest). Regardless, the weather is much better than Chicago, except for the hurricanes.
I hope you’re not too close to the coast, as much of southern Florida is going to be underwater in the next few years. I live in Mobile, but I’m on a hill 200 feet above sea level, so I’m safe from rising water.
——-
I sincerely wish more people would realize the truth in your assertion that poverty is the main cause of most crime. There are some obvious exceptions, but if we lifted everyone out of poverty the whole country would have crime rates like Wilmette. I also agree that guns don’t cause crime, but they sure do make it more dangerous for everyone.
A small quibble, the correct quote is something like “the love of money is the root of all evil”, not money itself. Gap Psychology is proof of that.
There’s another potential cause of inflation, other than shortages of food or energy. That is, any spending, by the government or the public, or rising net exports (the three sectors making up GDP), will cause inflation if it continues above the level necessary to provide full employment for the populace. (This is not a contradiction to your point about shortages, it encompasses it.) Although taxes can ameliorate this by reducing the purchasing power of the public, getting Congress to change the tax laws is a slow and laborious process, at best. That’s why MMT’s Job Guarantee (JG) is so much better than a Universal Basic Income (UBI), but that’s a discussion for another time.
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What is your definition of “full” employment?
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The choice is not between a UBI/Universal Dividend and a job guarantee but rather the proper integration of both policies into the economy.
That is made possible by the paradigm-changing policy of a 50% discount to the consumer at retail sale all of which discount is rebated back to the enterprise so they can be whole on their price, overheads, and profit margins.
The current monetary and financial paradigm of Debt Only is an onerous, parasitical, monopolistic, and dominating one, and the new monetary and financial paradigm of Direct and Reciprocal Monetary Gifting resolves inflation, monetary scarcity and does the impossible in the eyes of orthodox economic theory, namely by integrating price deflation beneficially into profit-making systems.
It’s also the way to enable the very large fiscal spending necessary to handle climate change without inflation as well as opening the door to an ecologically sane industrial policy that would rapidly make EV’s and solar-powered homes the no-brainer choice for everyone.
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The mechanics of the “50% discount to the consumer at retail sale” are unclear to me. Currently, prices are based on cost and competition. How would prices be determined for the 50% to take effect? Is this another way to create a deflation?
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Someone goes to Walmart to buy groceries or to a home builder for a new house. Participating merchants (read every one of them because why would they want to have to get 100% of their price when their competition who do participate only have to get 50% from their customers) Walmart or Acme home builders reduce their price 50% and log an entry in their sales account for the remaining 50%. The government or monetary authority creates the money and debits or credits it back to the merchant so they actually get their full price.
Voila`! One policy doubles the purchasing power of everyone’s earned income and thus also the free and available demand for every enterprise’s goods and services, not only forever slays inflation, but beneficially integrates price deflation into profit-making economic systems and so also enables the fiscal deficits necessary to create the best infrastructure possible as well as make green purchases for EV’s, solar panels/batteries skyrocket when we also implement an additional 50% discount/rebate policy at the point of loan signing for such green items.
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Prices change daily. That’s a problem.
Think of this scenario: Today, Walmart sells widgets for $10.00 each. In response to the new law, Walmart increases the price to $15.00 each, collects $7.50 for each one sold, then uses coupons to cut the price back to $5.00 each.
Walmart has now collected from the government, an extra $2.50 each, though some people use the coupons and some don’t.
Now multiply that by the hundreds of millions of items sold by the many thousands of different retailers all over the country, with prices changing every day — billions, perhaps trillions of price changes.
Who is going to monitor all of that? d
And then, what about services? Does the process extend to the guy who comes to my home to wash my windows? Mow my lawn. My cleaning lady? My babysitter? How are their prices determined?
Think of the used car dealer negotiating his prices. What is the “real” price that will be the basis for the 50% from the government?
Then there is the question, does this apply only to retail? What about wholesale? Is wholesale included in the process? If not, who decides whether something is retail or wholesale?
Then, there are medical services, which are covered by Medicare, or by private insurance, or not covered at all. How are they handled? And think of all those deductibles.
Then there are home sales, the single biggest purchase anyone makes. Are they included in the process? If so, how would those prices be calculated? (Home prices include many factors — land, building, contents, necessary repairs, closing costs, etc.)
And by the way, is the 50% paid by the government taxable? At what rate? Does that give the IRS another job it can’t handle?
The bookkeeping is mind-boggling. I visualize a bureaucracy bigger than the Pentagon needed not only to monitor all that, but just to physically make the payments for it.
About the only good thing I can say about the complex process is: It would employ millions of people.
I would rather give $X to every man, woman, and child in America, and to allow them to use it as they please. Much simpler and fairer.
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Roger, While it’s always important to analyze thoroughly it is a mistake to over complicate when it comes to paradigms. The key to paradigms is actually their simplicity (they are always a single concept), their universality (the definition of a paradigm after all is an entire pattern) and the resolution of the major problems of the current/old paradigm (inflation despite individual monetary scarcity and systemic monetary austerity).
In the first place the accounting infrastructure for the primary temporal universe changing 50% discount/rebate policy is already in place. It will simply require another T-account to implement it. The slight continuous changes in price is of no concern as the 50% discount still mathematically creates beneficial price deflation for both commercial and individual economic agents. Secondly, in order to opt in to the wildly beneficial 50% policy you will have to click the “I Accept” button that outlines the rules, regulations and punishments for trying to game the system. If you read my book these include both tax incentives and disincentives (tax cuts for abiding by the rules and a 100% tax rate on any revenue garnered by large arbitrary unjustified price increases, and if one is a serial arbitrary inflater loss of the 50% discount/rebate privileges). Also, individual and corporate taxes will priorly be able to be reduced by at least 50% as the efficacy of fiat monetary systems with beneficial deflationary consequences become mathematically apparent, and if one abides by the rules further incentives could easily reduce rates even more.
Of course house prices and services of all kinds will be included in the 50% discount regime. All they will need to do is opt in and register with the monetary and accounting systems that will oversee the new paradigm. Certain businesses/products will not qualify for the 50% discount and they will have to get 100% of their price from the consumer like hard core pornography, cigarrettes, etc. Petroleum/gas prices will qualify for the 50% discount/rebate until their market share is drastically reduced by ecologically intelligent alternatives made much more competitive by the second 50% discount/rebate at the point of loan signing.
In my book I also sketch out the policies of a new government department semi-whimsically referred to as the Department of Competition, Innovation, Boycotting and The Bully Pulpit which will report flagrant rule breaking enterprises to the public. If social security is the “third rail” of government bureaucracy messing with the new monetary paradigm which just doubled your purchasing power, cut your taxes and saved the planet will become the public relations kiss of death for anti-social businesses. So be it.
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Or, the government simply could send each man, woman, and child a $10,000 check, which not only is simpler (we already have done something similar), but it’s less regressive than basing reward on purchasing. It would narrow the Gap more effectively.
I assume you won’t like this because you wrote a book, but that’s also why Stephanie resists the idea that federal spending doesn’t cause inflation. She wrote a book.
By the way, my first book does allow that federal deficits do cause inflation, but I later changed my mind. It happens. Writing a book isn’t the end of learning. It can be the beginning of another book.
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My policies include both a $1000/mo. universal dividend which paired with the 50% discount/rebate policy enables everyone 18 and older to have $2000/mo guaranteed purchasing power, and a job guarantee. Those are both good policies, but they are just palliatives. The ancients, who were smarter than we are, used the debt jubilee to reset the problem (the monetary paradigm of Debt Only) which Is also one of my policies, but the burden of debt buid up always came back because again, the real, deepest problem is the current/old paradigm of Debt Only. The 50% discount/rebate policy integrates price deflation so effectively into profit making systems because it occurs at the strategic point/ending point of the entire economic/productive process and is so continuous,ubiquitous and abundant that debt will not build up.
Acquisition can become a mania that’s true albeit most do not fall into such even when they are quite wealthy. My observation is that graciousness is the solution to human life, and continuously and ubiquitously implementing graciousness as in Monetary Gifting would be a very nice way to make the self actualization of grace/graciousness a greater human reality. All you’d need is a reminder of the actuality of such for the experience to catch on.
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OMG! A 50% price cut, plus a universal dividend, plus a “job guarantee.” Could it get any more complex?
How would that job guarantee work, today, where there are plenty of (crap) jobs that people don’t want? I have renamed MMT’s Job Guarantee (JG) to CJG (Crap Job Guarantee), and have discussed it many times. See: https://mythfighter.com/2016/11/09/more-proof-that-mmts-jg-is-a-bad-idea/
I will say this, however: I suspect that the combination of the 50% price reduction with the universal dividend plus the job guarantee will create millions of jobs, perhaps hundreds of millions of jobs — government bureaucratic jobs.
I still am mystified about why the convoluted, complex, billion-step processes you recommend are superior to simply giving people money and letting them spend it as they choose. But then, I must admit that I don’t understand any part of your final paragraph. Way too deep for me. Sorry.
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Excellent post Rodger. Money generally staves off desperation and hopelessness. You still have the problems of wealth when you end the problems of poverty, but the choice between the two is a no brainer.
The natural philosophical concept of grace as in Gifting and its primary policy of a 50% Discount/Rebate at the point of retail sale is not only the new monetary and financial paradigm it is also the next new zeitgeist replacing knowledge and control with grace as in graciousness. Then we can begin to build a true “golden age”. So be it….with post haste.
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Yes, money’s ScaryCity is the root of all evil, and guns are Not the cause of so much murder. But notice that the growth of an invention is gradual, like the first, crude Ford moving assembly line, or the airplane industry, or a “baby” anything.
What you’re proposing is an automatic, full blown, world around acceptance of an idea of unleashing Money-For-All……How exactly does that work, from beginning to end, in one nation and out the other, to eventually all 180 nations. And it has to be done without the entire human populace wondering…’ WTF ….after all these centuries of denial…and unnecessary death and starvation, etc. etc.’
So suddenly everything is Okie Dokie? Don’t you think credibility will be at stake, and which political party will risk it? Do you think 7 billion people will just scratch their head, “Yea, OK, Gr-reat idea, man!,” then just Ho-Hum go on trusting those wonderful guardians of our welfare, and then return to utopia???
It appears MS and MMT are actions without consideration of consequences. I don’t think you can suddenly unleash financial utopia on one part of the world without the controlling .01%’s permission, nor w/o immediately including the whole world , nor w/o a hellava good explanation. How do you, as a politician, explain to the people this sudden change of events other than shrugging your shoulders, looking stupid, and admitting you’ve been playing a very big, very dangerous game and, Gee Whiz, could you forgive me?
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We cannot control the world, except by example. The U.S. could be first.
It necessarily would begin with the election of President, a filibuster-proof Senate, and a House dominated by people who understand and believe in Monetary Sovereignty — something akin to the Lyndon B. Johnson situation.
Ironically, the closest current situation is the government of China, which has the power and the knowledge. Sadly, Communism does not follow point 8 (“government-run to benefit all of us, not just the very rich”) and that, not the need to understand Monetary Sovereignty or the courage to do it, is the primary impediment.
It is quite rare for a governor to cede power to the people (aka “democracy.”) The closest I know was Costa Rican President José “Pepe” Figueres. See: https://www.thoughtco.com/biography-of-jose-pepe-figueres-2136347
Sadly, Costa Rica is too small to be a model for the world.
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Actually the primary impediment is lack of the knowledge of the personal and commercial benefits available with the policies of the new monetary paradigm. If I could get the media to broadcast the benefits of just one of its policies (the 50% discount/rebate at retail sale) it could probably go viral and launch the mass movement necessary to herd pols on both sides toward its implementation.
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Thank you Rodger Malcolm Mitchell. The obstacle to federal unlimited money for anything, is that now money is free speech, and it elects executive and legislative representatives whom promulgate the myth about money scarcity.
Citizens United gave corporations free speech to elect politicians by money and propaganda to keep the gap between the rich and the rest of us. Please Rodger I would like you to have discussion with Thom Hartmann, a progressive radio host.
Next week Stephanie Kelton will be a guest on The Thom Hartmann Show please listen into it. Please call him for a discussion at 202-808-9925. This would spread the message you have on mythfighter to the public and congress.
He has a youtube channel or is on Democracy Now between 10AM and 1PM eastern time. Also he is on Sirius Radio, Thank You, Gary Alan Jepson
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Thanks, jepsonga,
I am not a fan of the two-minute explanation. It is too easily mocked with phony, but sage-sounding nonsense.
The Citizen’s United decision is irrelevant to the idea of federal financial support for human benefits.
Stephanie and I are on the same page with just a couple of exceptions:
1. She believes federal spending can cause inflation,, and the cure would be to cut spending or increase taxes. She. and the rest of MMT, are wrong about both ideas.
No inflation in history has been caused by federal spending. And, spending cuts cause stagflations, recessions, and depressions, as do tax increases.
2. She believes the goal of the economy is 1. a stable currency and 2. full employment.
A stable currency easily is achieved by federal fiat, so it’s not much of an economic goal. The government can set the value of the dollar at any level it chooses, as it has done many times throughout history.
Full employment (however defined) is just plain wrong for reasons I often have articulated on this blog. The goal of an economy is not to make people labor, but rather to make people happy.
If full employment is your goal, slavery accomplishes it, easily. And MMT’s “Jobs Guarantee” (JG) should be renamed, “Crap Jobs Guarantee.”
Currently, millions of crap jobs are available and people don’t want them. There goes the JG idea, right out the window.
Of course, the GOP idea is to cut benefits, and starve the people until they accept the crap jobs. The Pharaoh would approve.
I have tried to tell Stephanie this, but have been unsuccessful. I even considered getting a PhD in economics, just to get their attention, but am too old and lazy to spend time and effort on something so meaningless.
I only can hope that people like you will spread the word.
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Rodger, thank you for the quick response to my reply to you. I’m sorry I didn’t give you a lengthy explanation of what I was trying to message to you. I’m new to blogging., So I curtailed my explanation, thinking you would get it. I was wrong. I’ll give you a better explanation of why I think Citizens United is relevant to your blog. Not now. I’m tired and need rest. I agree with your analysis of “Monetary Sovereignty ” . That is why I’ll write again with a better explanation of my message. I do spread the word of ” Monetary Sovereignty “. Please keep writing about it. Thank You, Gary
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Interesting that Stephanie has given you no rational explanation for how or why MMT would succeed. Maybe it’s in her book I never read, but would if there was a full, rational explanation. I’d like to see you two in a televised back and forth discussion .
Getting a PhD in economics means you’d have to convince your professors not to be afraid of losing their jobs as well as calling you every name they can think of.
Economics should be called Equinomics, “equal opportunity” funded from birth
All the political/social efforts are a waste of time: Operation Push, Operation Breadbasket, SCLC, United Negro College Fund, etc. will scratch the surface for a lucky few, but will never go deep.
Yet at the same time the rich and powerful rocket off into space and expect everybody to remain calm, while all goes awry. This is not and never was a real system, it’s a desist-ym.
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Great article, and congratulations on your move to Florida, which is a great state, as long as it can keep above the rising waters.
I’ve come to believe that Social Security is not only a payment to retirees that they’ve earned and deserve, but also an indirect but still efficient government economic stimulus program. Since most SS money is spent rather than saved, and even in some cases, taxed back from wealthier recipients by the states in another form of redistribution, it is stimulative to the economy.
It is not the dreaded socialism, because it does nothing to control the means of production; seniors do that through their boosted purchasing power (i.e. demand).
It is also, of course, one of the greatest anti-poverty mensures ever devised. Those who oppose SS have no alternative, just as they have no alternative to the ACA. Well, poverty and death are the real alternatives, if left to the so-called “free market” which is not and never has been free (all the 19 megabanks would have failed in the GFC if left to the “free market”).
But as you point out, the desire to maintain the Rich-Poor Gap, plus the will of even those who would benefit, not to ever ever allow for anything that looks like a “free lunch” lest someone less deserving then them, in their opinion, benefit, will prevent SS from being divorced from the payroll tax mechanism.
Very soon, probably in the Biden Administration, SS is going to have to be “reformed” or else it will start “running out of money.” Neither Biden – who cares but is clueless – or Trump – who pretended to care but was also clueless – took their own lessons from spending trillions to fight Covid to heart.
If Covid spending proved anything once and for all, it proved that the federal government could spend an almost infinite amount of money when it wanted to – unbound by anything except a shortage of things like PPEs and doctors (nurses’ salaries went up during the pandemic.
Why is this a bad thing?). The public has actually finally begun to catch onto this lesson, but in the absence of socially beneficial spending elsewhere, and in the presence of asset market bailouts, the only way Joe Public can benefit is to buy stocks, bonds, or even ephemeral instruments like Bitcoin (I believe this will end badly, and may already be doing so).
Yanis Voroufakis and others say we are entering the age of Techno-Feudalism, leaving capitalism behind. Maybe so, but the neo-feudalists will only get even wealthier in that system. Buy stocks, bonds, land, etc. What else can one do?
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Good summary, Scott
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Scot, Yes social security is a good program but it’s not actually direct (you have to work, if you can find it, for 40-50 years before you can collect it) and it may not be socialism, but it requires socialistic re-distributive taxation which liberals have idiotically embraced in order to try to (unsuccessfully) stave off inflation thus pinning themselves to neo-liberal macro-economics and simultaneously setting up the eternal (and unnecessary) political gridlock we find ourselves in because enterprise will always oppose the additional costs of funding it and the left can’t think a new thought because it hasn’t recognized the better alternative of the new monetary and financial paradigm of Gifting.
The combination of a $1000/mo. universal dividend and the 50% discount/rebate policy at retail sale resolves inflation, guarantees a livable income for life for every adult 18 and older….and enables us (individuals and enterprise) to eliminate the payroll taxes for welfare, unemployment insurance and even faze out those for social security. In other words it is a better, more effective policy and politically integrative to boot.
By the way, what ever happened to Ellen Brown’s Public Banking Google group? I woke up one morning and couldn’t access it. I probably got banned for suggesting too many times that she work for creating a true public national bank instead of state public banks. State banks are like social security, somewhat better than rapacious rule by private banks, but a pale palliative reform that actually solidifies the the entrapment of the present paradigm. again better to envision a new monetary and financial paradigm which actually and thoroughly solves problems.
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chdwr,
I became a bit lost in your one-sentence first paragraph, but “redistributive” is not socialist. Claiming that something is not socialism but is “socialistic” makes a mockery of English and logic. It looks like a sad attempt to hang someone with an epithet that doesn’t apply.
Shall we also claim that conservatism is not Nazism, but is “Naziist”?
Anyway, the U.S. tax code always has been ostensibly “redistributive” in that tax rates are higher for higher incomes. Are you opposed to that?
Unfortunately, the higher income folks know how to avoid past efforts at “redistribution,” and instead use financial “piggism,” the swinish attempt to hog all he money for themselves.
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“Claiming that something is not socialism but is “socialistic” makes a mockery of English and logic. It looks like a sad attempt to hang someone with an epithet that doesn’t apply.”
No, it’s just exposing the fact that the right considers it so. My statement agrees that taxation is not socialism because it isn’t government ownership of production, yet advocates for greater taxation play into the regressive agenda and strengthen political gridlock because they can’t think of better policy alternatives as I have shown are possible with the new monetary paradigm.
I’m for progressive taxation….but with much less overall taxation which is possible by making direct monetary distribution in a fiat system. The government must have the cudgle of taxation or you’d have complete economic chaos instead of the alternately goosed and strangled financial chaos we presently have. Taxation has largely become theft as the right says. They just have to stop demaguoging the socialism and embrace the policies of the new monetary paradigm. The left is correct that economic democracy is a good idea, but increased taxation doesn’t accomplish that….while the policies of the new paradigm do….in spades. Everyone needs to re-examine their own orthodoxies is all.
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I agree with you regarding taxation. The sole purpose of federal taxation is to encourage what the government likes and to discourage what the government doesn’t like. Apparently, the government likes rich people and doesn’t like the not-rich, as evidenced by tax breaks for the rich and FICA for the not rich.
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Scot, Yes social security is a good program but it’s not actually direct (you have to work, if you can find it, for 40-50 years before you can collect it) and it may not be socialism, but it requires socialistic re-distributive taxation which liberals have idiotically embraced in order to try to (unsuccessfully) stave off inflation thus pinning themselves to neo-liberal macro-economics and simultaneously setting up the eternal (and unnecessary) political gridlock we find ourselves in because enterprise will always oppose the additional costs of funding it and the left can’t think a new thought because it hasn’t recognized the better alternative of the new monetary and financial paradigm of Gifting.
The combination of a $1000/mo. universal dividend and the 50% discount/rebate policy at retail sale resolves inflation, guarantees a livable income for life for every adult 18 and older….and enables us (individuals and enterprise) to eliminate the payroll taxes for welfare, unemployment insurance and even faze out those for social security. In other words it is a better, more effective policy and politically integrative to boot.
By the way, what ever happened to Ellen Brown’s Public Banking Google group? I woke up one morning and couldn’t access it. I probably got banned for suggesting too many times that she work for creating a true public national bank instead of state public banks. State banks are like social security, somewhat better than rapacious rule by private banks, but a pale palliative reform that actually solidifies the the entrapment of the present paradigm. again better to envision a new monetary and financial paradigm which actually and thoroughly solves problems.
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No, it’s just exposing the fact that the right considers it so. My statement agrees that taxation is not socialism because it isn’t government ownership of production, yet advocates for greater taxation play into the regressive agenda and strengthen political gridlock because they can’t think of better policy alternatives as I have shown are possible with the new monetary paradigm.
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“…taxation is not socialism because it isn’t government ownership of production…
”
This simple fact must not be understood; otherwise so many people everywhere would quit using the “socialism” argument. And we wonder why economics is so poorly understood and taught.
But New Deal legislation IS indirect socialism; government still backs the private sector’s profiteering should those forward thinking, rugged individuals need bailing out from time to time, i.e. Chrysler.
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The right-wing has discovered that its ignorant voters hate socialism, though they have no idea what it is. They also hate liberalism, Democrats, Critical Race Theory, vaccination, masks, blacks, browns, yellows, Muslims, Jews, foreigners, immigrants, educated people, social media that disallow liars, mail-in voters, judges, Supreme Court Justices who don’t do what Donald Trump wants, and everyone else Donald Trump hates.
Having once been a Republican myself, I am saddened to see the GOP populated with liars, nincompoops, criminals, and traitors who care nothing for America.
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Yes it is kind of quasi-socialism in that sense. Wat we require is an integration of the interests of both business and the individual that is so beneficial that it is “an offer they can’t refuse” ….but with no uncertain rules that all parties must abide by. Like for instance if you opt into the 50% discount/rebate you agree to not inflate your prices unless you have incurred ACTUAL additional costs….additional costs that also consider the huge cost SAVINGS you receive by the elimination of payroll taxes and 50+% cuts in corporate income taxes. In other words there’s no gaming of the system or you get taxed for price increases and eventually lose your 50% discount/rebate privileges. In other words if you inflate Mr. anti-social asshole CEO…you lose the gracious benefits the government has bestowed upon you.
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A couple of questions:
1. Which agency would audit this?
2. How much profit margins are the businesses allowed?
3. How much profit margin is a new business allowed?
4. What about newly created products?
5. Are executive salaries considered part of a business’s costs. (Including “Mr. anti-social asshole”?)
6. Does this apply only to sales to the public or are sales to other businesses included?
7. What about export sales?
8. Are imports included?
9. Are services included or just products?
I have a few more questions, but the above nine should help you crystalize your thinking.
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1 My thought would be the new Department of Competition, Innovation, boycotting and the Bully Pulpit, but the IRS could also be mandated to doso. If not those two then I’d like to see a permanent Bill Black type forensic accounting committee to do so.
2 Whatever margin they can ge through competition and innovation but still not inflating despite their overall costs being cut by the new paradigm policies.
3 and 4 New businesses will have to abide by the same rules as their costs would also be cut compared to what they would have been before the new paradigm policies. True innovative products and services could probably be allowed to charge larger margins, but there are also policies that we need to implement break up monopolistic practices like we see in health care, pharma etc. must be eliminated.
5 Yes, of course.
6 Businesses other than retail buy retail products and they would probably be eligible for the discount. Capital goods producers, no. They would benefit though from lowered and eliminated taxes so they would be subject to punishment for inflating unnecessarily.
7 Nope. One of the objects of the new paradigm is to discourage export platform nations and encourage more domestically robust production.
8 For the present imports would qualify for the discount, but only if they do not inflate, then they are subject to the sanctions. One of the benefits of the new monetary and financial paradigm would be the capability of new domestic production due to the resulting cost savings. Hence we would undoubtedly become less dependent on imports.
9 Both
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1. It would require a department of at least the size of the IRS, not a “committee.” This would be a monster addition to the bureaucracy.
2. The allowed margin is the whole point of your recommendation. You would have to fix everyone’s margins or your system would fall apart. Think it out. Do you really want to be in the price-fixing business?
3. and 4. No one knows “what they would have been.” That’s the whole point of the question.” And what is a “true innovative product”? No one can answer that. You’re skipping by the real weaknesses in your program. Think it through. I’m helping you, here.
5. If the answer is “yes,” then all a company needs to do is raise CEO compensation, which would subvert your program.
6. Very vague definitions here. Easily re-defined by businesses. Again, think it out.
7. Really?? So an exporter’s price would be double the price domestically?? Goodby American exporting. You definitely need to rethink this.
8. So, you envision the United States government sending billions of dollars overseas to assist foreign manufacturers in lowering their prices???
9. My cleaning lady? My plumber? My gardener? The snowplow guy? My barber? How are you going to determine what their profit margins should be?
In total, you have suggested an uber Rube Goldbergian project, massive in complexity, that does nothing more than provide the populace with buying power — something that easily can be accomplished by simply sending people money.
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1. No, all it would technically require is the IRS. Once you opt in you’d be required to submit your accounting to them, and for the cost benefit savings and the absolute uncompetitiveness if you didn’t it would be a no brainer. You’re over complicating without considering the benefits to all economic agents.
2. I don’t care whether anyone considers it price fixing or not. In actuality it’s letting enterprise charge their best competitive price…and then the monetary system, whose current monopolistically dominating paradigm IS the problem, now instead pays them half of that price, and for that benefit and inevitable additional sales and profits they are asked to restrain themselves from committing the economic vice of price inflation. If you want the benefits, you have to abide by the rules. That’s ethics is all.
3 and 4. No I’m not. Innovation isn’t hard to recognize, and besides as I said they’d still be subect to the same (actual not phony) cost accounting which only requires them to consider the genuine and considerable cost savings the policies make possible. If we can’t demand honesty from enterprise, well then we should probably just through up our hands.
5. No it wouldn’t. Executive compensation is a business cost, no?
6. There isn’t any thing unclear about whether you buy retail or not, whether you’re an individual or an enterprise. Retailers often give discounts for large purchases to business already. They may chose to continue to do that or not. Regardless, the discount/rebate policy applying would only benefit both parties. Again you’re over complicating here.
7. The point is to encourage domestic production and consumption (an economic virtue) and discourage (but not eliminate) exports (an economic vice) so as to prompt other exporters and export platform nations to see the benefits of the new paradigm and better serve their populaces. Exports would still be profitable as they are now. No harm, no fuss.
8. As I said, for the moment yes…until enterprising Americans see how profitable the new paradigm is for them to compete, innovate and produce such things themselves. No harm, no fuss.
9. All they need is to opt in, register with the monetary authority in order to receive the rebate….and compete on price…or be short lived.
Basically the system operates seamlessly within the same accounting/economic infrastructure it already operates within. It’s just that it’s much more beneficial for everyone because the monopolistic, parasitic and increasingly uncompetitive/unworkable monetary and financial paradigm….is changed.
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I disagree with every single thing you have said, but I respect your right to say it, comfortable in the knowledge that your program never will be implemented.
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You are of course entitled to your opinion, but the truth is that your concept of Monetary Sovereignty, which is a very good and valid concept, is what will never be implemented because it does not qualify as an actual paradigm change and does not have the policies (merely the demands) required to accomplish such. Unlike my policies, It does not have the ability to integrate the self interests of both individuals and commercial agents and hence lacks the possibility of political integration necessary to break through our current gridlock. Historically, everything adapts to a genuine paradigm/pattern change, not the other way around, but certain signatures must be fulfilled in order for it to be a valid and actual change needed. First it must be the actual concept that changes the actual problematic present pattern. (the monetary and financial pattern. Genuine paradigm changes have always been in conceptual opposition to the current problematic paradigm (For instance terra-centrism vs helio-centrism and in this case Debt Only vs Monetary Gifting). It must completely and immediately invert temporal reality with its policies (For instance individual monetary scarcity, systemic austerity and erosive price and asset inflation vs individual monetary abundance, systemic/fiscal abundance and beneficial price and asset deflation). Other signatures apply.
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You should read the Ten Steps to Prosperity (below). Several of which are close to, or partially have been, implemented. Meanwhile, I pray you live long enough to see your programs even attempted. (i.e. I am wishing you a very, very long life)
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The real problem, identified by Steve Keen and Michael Hudson, is the fact that private debt always builds up and continues to do so despite the occasional reform, and has been recurrent since the time of Rome because they stopped doing debt jubilees which was the ancient’s relative solution to the debt problem. And even with that the debt jubilees needed to be recurrent because the debt problem still re-occurred.
The other thing economic reformists fail to recognize is that inflation has always occurred and will continue. MMT, which is a largely accurate account of the fiscal money creation process and scheme to increase fiscal spending, thinks that simply trying (and failing) to balance production and consumption will stop it, and anyone who thinks we can simply spend and not have erosive inflation will be severely disappointed when higher prices occur.
There are multiple identified reasons for inflation, but what economists have missed about it is that the ROOT and most PROBLEMATIC cause of inflation is that ultimately it is a DECISION by a CEO or other business decision maker and that there currently is no sure way to prevent this from occurring until now. With the large 50% discount/rebate policy and its strategic implementation point at the very end of the economic/productive process at retail sale inflation’s root cause is finally empirically and mathematically put to rest. With the discount/rebate the retailer gets his full price and every agent commercial and individual benefits by the discount’s “knock on” enabling policies.
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