Panic in the ranks of the rich

Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful.
Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

To be rich, there must be a wealth/income/power Gap between you and those who are not rich. If there were no Gap, everyone would be the same and no one would be rich.

A “debt limit” law tears up a credit card bill rather than paying it. The law turns the debtor into a deadbeat.

The wider the Gap, the richer are the rich. That Amazon guy, who has what . . . $200 Billion . . . is rich because no one else has $200 Billion. If we each had $200 Billion, he would just be an average, middle-class bloke.

Clearly then, if the rich wish to become richer (and virtually all of them do), they either must increase their own wealth/income/power and/or decrease everyone else’s, the latter often being the easier path.

President Biden wants the federal government to spend upwards of $3.5 trillion, most of it landing in the pockets of the poor and the middle classes, thus narrowing the Gap. This is anathema for the rich and those who support the rich.

The panic already had begun, with the GOP, the Party of the Rich, vowing to do everything possible to kill the bill. A couple of pusillanimous Democrats, more worried about campaign contributions than with helping their constituents, are helping the GOP to succeed.

But, just to be on the safe side, that shameless mouthpiece for the rich, the Committee for a Responsible Federal Budget (CRFB), accelerates its Big Lie format and produces this bit of demagoguery:

No Score, No Vote: House Should Not Vote on Reconciliation Without a Score
September 27, 2021
Speaker Nancy Pelosi (D-CA) recently called for the House of Representatives to pass its reconciliation bill, the Build Back Better Act, this week. However, the Congressional Budget Office (CBO) has only scored very small portions of the bill so far, and substantial revisions are expected before the House vote.

The Committee for a Responsible Federal Budget has long opposed efforts to enact legislation, outside of an emergency, without a comprehensive score. Unless and until a CBO score of the legislation under consideration is released, the House should not vote on the Build Back Better Act.

Let’s be clear. The CRFB doesn’t give a hoot about the “score” unless the score is: Rich everything; everyone else crumbs.

The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
Passing a reconciliation bill without a CBO score would make a mockery of the entire budget process.

Because the “budget process” omits the single most important element — the federal government, being Monetarily Sovereign, is not constrained by cost — the budget process already is a mockery.

The government is constrained only by effect, that is whether the proposal benefits America. 

Right now, we don’t know whether the reconciliation package currently being considered would cost $3.5 trillion, $4 trillion, or $5 trillion, and we don’t know whether it is deficit-neutral or a huge budget buster.

Ah, good old “deficit-neutral,” that benign-sounding idol of the rich. If the government was run deficit-neutral, we would have recessions and depressions as huge as a rich man’s appetite for more, more, more.

Historically, during those eras when the rich have gained sway, that is exactly what has happened:

1804-1812: U. S. Federal Debt reduced 48%. Depression began 1807.
1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.
1997-2001: U. S. Federal Debt reduced 15%. Recession began 2001.

Reductions in federal debt growth lead to inflation
Most recessions (vertical gray bars) occur when deficit growth (blue line) has declined and nearly all are cured when deficit growth increases.

And we won’t know until CBO has a chance to score it. You wouldn’t buy a new house without knowing its price; why would you vote for transformative legislation without knowing the cost?

As always, the CRFB intentionally confuses personal (monetarily non-sovereign) finances with federal (Monetarily Sovereign) finances.

You can run short of dollars. The federal government cannot. The CRFB, servant to the rich, doesn’t want you to understand that.

Once Members of Congress know the cost of their proposal – and how much of it they have actually paid for so far – they can decide how to meet President Biden’s commitment to “pay for everything we spend.”

The government always “pays for everything it spends,” unless some dishonest Congresspeople vote for a restrictive debt ceiling.

“Paying” does not mean “taxing,” though these days a bribed Congress would have you think otherwise.

That debt ceiling is based on the lie that it prevents future spending (which would be a bad idea, anyway.)

But, in fact, the debt ceiling prevents the money creation that would pay for past (i.e Trump’s) spending.

Not only will the Republicans send the world into a depression, but they will deprive Americans of the following programs — programs that won’t cost you one cent:

The federal government would invest $200 billion in universal preschool for all 3- and 4-year-olds through a national partnership with states. The administration estimates it would benefit 5 million children and save the average family $13,000 when fully implemented.

Have low- and middle-income households pay no more than 7% of their income on child care for kids younger than age 5. Parents earning up to 1.5 times the median income in their state would qualify. The president also wants to invest more in the child care workforce to bring their wages up to $15 an hour, from the typical $12.24 hourly rate they earned in 2020.

Make community colleges tuition-free for two years. The federal government would cover about 75% of the average tuition cost in each state when the program is fully implemented. States would cover the rest.

Increase the Pell Grant award and invest in historically Black colleges and universities, as well as other institutions that cater to students of color.

Create the first paid federal and medical leave benefit, giving workers a total of 12 weeks of guaranteed paid parental, family and personal illness/safe leave by the 10th year of the program.

Extend the $3,600 tax credit for each child under 6 and $3,000 for each one under age 18, the earned income tax credit and child and dependent care tax credit — all of which were enhanced as part of the Democrats’ $1.9 trillion coronavirus rescue plan but are only in effect for 2021.

Add dental, vision and hearing benefits to Medicare, as well as lowering the eligibility age.

Extend the enhanced Affordable Care Act subsidies that reduce the amount Obamacare enrollees have to pay to no more than 8.5% of their income and make assistance available to more Americans. Also, lower-income policyholders will receive subsidies that eliminate their premiums completely.

Invest in home and community-based services to help seniors, the disabled and home care workers.

Creating a new federal health program for Americans who live in states that have not expanded Medicaid under the Affordable Care Act. A dozen “red” states have yet to do so. More than 2 million low income adults fall into the coverage gap.

Lower the price of prescription drugs.

Implement new polluter fees, create new consumer rebates for home electrification and weatherization, provide clean energy, manufacturing, and transportation tax incentives and grants and electrify the federal vehicle fleet and buildings.

expand education, health care and child care support, tackle the climate crisis and make further investments in infrastructure.

Invest in agriculture conservation, drought and forestry programs to help reduce carbon emissions and prevent wildfires.

More investments in infrastructure projects that would not be funded by the bipartisan infrastructure package.

In summary, if the Republicans have their way:

  1. The U.S. default on its debt, will be a catastrophic event for the entire world’s economies, potentially initiating a deep and long-lasting depression (that would allow the rich to widen the Gap between them and the rest of the people).
  2. The U.S. dollar no longer will be the world’s leading reserve currency, and more importantly, decimate America’s position as the world’s economic leader.
  3. Deprive you of the above-mentioned economic benefits.
  4. Exacerbate global warming
  5. Salaries or benefits for federal or military personnel and retirees will not be paid
  6. Social Security, Medicare, and Medicaid benefit payments would stop.
  7. Student loan payments, tax refunds, and payments to keep government facilities open will stop.

And all will happen is because the Trump-controlled Republican party, in wanting to cripple President Biden, is willing to cripple America.

It all begins with the telling of the Big Lie that the federal government’s finances are like your and my finances.

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

  1. Monetary Sovereignty describes money creation and destruction.
  2. 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
  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

3 thoughts on “Panic in the ranks of the rich

  1. Just once I wish there was someone in the media or in the government who would point out that if a government shutdowns stops social security payments, then it is a LIE that the social security payments come from a special trust fund!

    Like

  2. Game of Chicken

    The first observation I would like to make is that the possible standoff that could lead to a government shutdown and default is entirely unnecessary.

    The Democrats could have chosen to raise the debt limit through budget reconciliation.

    This would not require a single Republican vote. So keeping it out of budget reconciliation and asking the Republicans for support is a conscious decision by the Democratic leadership.

    The main reason is that raising the debt ceiling could hurt the Democrats in the midterm elections in 2022, so they prefer sharing the blame with the Republicans by forcing them to support a suspension of the debt limit.

    In other words, the Democrats have set up a game of chicken to get the Republicans’ fingerprints on the debt limit suspension. The Democrats are counting on business leaders to pressure the Republican Party into avoiding a government default. However, the Republican Party’s relationship with corporate America has suffered in recent years as the party has moved toward economic populism

    . Of course, Biden only needs 10 Republican votes. However, in August 46 Republican senators signed a letter that they would not raise the debt limit. Hence, at most 54 votes are available, which is not enough.

    As of this date I have not seen or read where the House Speaker has call for Budget Reconciliation.

    There is no need for all of this Partisan Warfare in Congress. The Gephardt Rule would eliminate periodic partisan battles over the national debt ceiling. Bring it back.

    Liked by 1 person

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