My sincere thanks to the CRFB’s efforts to make the rich richer

Politics is a unique system by which pigeons and dupes demand to give their money and trust to crooks, liars, and hypocrites.

……………………………………………………………………………………………..

In one sense, medical doctors should appreciate illness, for without illness the doctors would have no jobs.

Similarly, teachers should appreciate ignorance, police should appreciate crime, and firefighters should appreciate fire.

And, by the same logic, I appreciate the CRFB (Committee for a Responsible Federal Budget) for spreading disinformation. Without the economic ignorant, I would have no reason to write this blog.

Here is the latest example from my favorite doofi.

Though most COVID relief has already been spent, several policies continue to provide ongoing financial support and could be renewed again by Congress or the President.

In particular, the federal government continues to offer increased payments to Medicare providers, forbearance for student loan borrowers, and an enhanced Medicaid matching rate(a form of aid to states).

Get it? The CRFB wants to cut federal support for Medicare, students, and Medicaid, all of which benefit those who are not rich.

Though some spending to specifically address the pandemic may still be warranted, policymakers should wind down these COVID relief policies rather than continuing to extend them.

In this piece, we show that continuing these three policies would be:

Costly – the policies would cost a total of $160 billion in 2022 if continued and roughly $2 trillion over a decade if made permanent, based on our estimates.

Unjustified – the economy is saturated with demand, household incomes are well above pre-pandemic levels, the unemployment rate is near historic lows, hospital finances are strong, and state governments are flush with cash.

Inflationary – the policies would be responsible for adding 14 to 68 basis points (0.14 to 0.68 percentage points) to this year’s inflation rate if in effect for the full year, based on our estimates.

Let us analyze the three lies:

“COSTLY”:
The CRFB objects to the federal government pumping 160 billion growth dollars into the economy this year, and $2 trillion over 10 years. (Not sure how that math works.)

Those are dollars that could narrow the Gap between the rich and the rest, a Gap which the CRFB apparently is paid to widen.

REALITY: The Gap widens. The rich (blue) grow richer, while the middle (red) is poorer.

Because the federal government has the infinite ability to create dollars, the word “costly” does not apply. Nothing is “costly” for the federal government.

The federal government creates dollars by spending. That is the method by which the federal government creates its own sovereign currency, not with a printing press but with a computer key.

When the government pays a creditor, it sends instructions to the creditor’s bank, instructing the bank to increase the balance in the creditor’s checking account. (“Pay to the order of”).

When the bank does as instructed, it the M1 money supply measure increases. In short, federal spending creates the dollars ad hoc, that pay for the spending.

Unlike you and me, and unlike state and local governments, the federal government cannot unintentionally outspend its supply of dollars.

Despite what you may have been told by devious politicians,  the federal government even could eliminate all federal taxes and still have no difficulty spending that $160 billion or $2 trillion.

Taxes do not fund federal spending. Money creation funds federal spending.

Tax dollars are destroyed upon receipt by the government. Tax dollars move from the M1 money supply measure (i.e. your checking account) to no money supply measure at all. There is no measure of how many dollars the federal government has because it has infinite dollars.

There is no specific answer to the question, “How much money does the federal government have?” At any moment in time, it has as much or as little as it wishes to have. That is the meaning of “Monetary Sovereignty.” The government is sovereign over the U.S. dollar. It creates dollars at will.

“UNJUSTIFIED”:
The economy is not “saturated” with demand, nor has it ever been “saturated.”

The economy is experiencing shortages, and those shortages are claimed by the CRFB to result from too much demand.

But shortages of food do not imply “too much” demand for food. (Do we really demand too much food?)

Shortages of oil do not imply “too much” demand for oil. Shortages of labor do not imply “too much” demand for labor. (Does anyone believe we “demand” too much labor?)

Shortages of computer chips and lumber do not imply “too much” demand for chips and lumber. Shortages of shipping do not imply “too much” demand for shipping.

The whole foolish concept of “too much” demand, implies that the economy is too healthy and is growing too fast.

Where was this “too much” demand during the past decade, when the federal government spent massively and inflation was very low?

“Saturated with demand” is a ridiculous notion, especially when millions of Americans still live in poverty, and millions more are unable to afford good housing, good medical care, a good education, and good food.

Because the CRFB is funded by the rich and is in fact a mouthpiece of the rich, it closes its eyes to the needs of those who are not rich.

“INFLATIONARY”:
This old saw is widely believed but unsupported by data. There is no historical relationship between federal spending and inflation.

Inflation (blue line) bears no relationship to federal debt (red line). There is no cause/effect correlation between the two.

All inflations are caused by shortages. The current inflation was not suddenly caused by the massive federal spending of the past decade.

The current inflation suddenly was caused by the sudden COVID-related shortages of oil, food, labor, shipping, lumber, etc.

The CRFB, supported by the conservative rich, promulgates the lie that to combat inflation we must cut spending to further impoverish the poor and the middle.

They tell you we must cut federal support for healthcare, education, food, housing, and retirement. These cuts would impact your life, but not the lives of the rich, who can afford the best of everything, even during recessions.

The conservatives prefer cuts that would widen the income/wealth/power Gap between the rich and the rest of us, effectively making the rich richer.

(It is the Gap that makes the rich rich, for without the Gap, no one would be rich. We all would be the same. The wider the Gap, the richer are the rich.)

That, of course, is the CRFB conservative plan: To make the rich richer.

Gap Psychology dictates that people generally wish to widen the Gap below them and to narrow the Gap above them.

This includes the rich, who always wish to be richer by widening the Gap below them.

Notice that the rich do not want to cut the military or the police or border control, for those are protections for the rich that take their orders from the rich.

In short, while every spending cut demanded by conservatives is designed to widen the income/wealth/power Gap between the rich and the rest, the few spending increases backed by conservatives are designed to reward and protect the rich.

……………………………………………………………………

And then there’s this:

White House officials say U.S. has exhausted funds to buy potential fourth vaccine dose for all Americans
As a congressional stalemate stretches into its third week, officials warn it will hurt pandemic readiness
By Dan Diamond, Rachel Roubein and Yasmeen Abutaleb

The Biden administration lacks the funds to purchase a potential fourth coronavirus vaccine dose for everyone, even as other countries place their own orders and potentially move ahead of the United States in line, administration officials said Monday.

“Right now, we don’t have enough money for fourth doses, if they’re called for,” White House coronavirus coordinator Jeff Zients said. “We don’t have the funding if we were to need a variant-specific vaccine in the future.”

Administration officials said placing orders for additional doses ahead of time — rather than waiting for the United States to be swamped by another wave of the virus — was imperative and a key lesson from the pandemic’s past two years.

They also noted that the fast-moving omicron variant evaded some immune protection conferred by existing vaccines, demonstrating the need to invest in more targeted shots that could better fend off omicron and potential future variants.

“Vaccines don’t just appear when you snap your fingers and say, ‘Okay, I want the vaccine.’ We’ve got to make it,” a senior administration official said.

“And this year, it’s going to be more complicated because there’s a very significant chance — although we’re still waiting for data — that the vaccines are going to need to be tweaked to cover omicron.”

There is Congress, again playing political games with the lives of Americans. The government has plenty of money — infinite money — but the pretense of federal poverty continues.

And this:

Higher food prices around the country are pushing more Americans to food banks
Food banks have more customers as safety net programs end and people struggle with inflation
By Laura Reiley

Even as coronavirus rates continue to drop and the American labor market nears full recovery from the pandemic, food banks are seeing another surge in need. Most pandemic assistance programs have ended, inflation is rising and many Americans are once again having trouble making ends meet.

Food bank officials are reporting growing lines at their distribution centers nationwide. Rates of reported hunger have been increasing since early August, when nearly 8 percent of respondents said they “sometimes” or “often” did not have enough to eat, according to data from the Census Household Pulse Survey.

In late January and early February, after child tax credit payments ended, 35 percent (!) of adults living in households with children said they struggled to cover usual costs, according to census data.

The CRFB liars might tell you the demand for food is “saturated” — simply too much demand for food — and that too much federal spending is causing this “saturation.”

In Summary
There is no relationship between federal spending and inflation. All inflations are caused by shortages, most of which actually can be cured by federal spending.

Conservatives, who wish to widen the Gap between the rich and the rest, use the nonexistent spending/inflation relationship and the false “government can’t afford it” meme as excuses to cut all spending that benefits the middle- and lower-income groups.

Similarly, the conservatives support increased taxes on the poor- and middle-income groups, supposedly to fund social programs. The rich avoid these taxes, and the ultimate irony is, the taxes don’t actually fund anything.

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

4 thoughts on “My sincere thanks to the CRFB’s efforts to make the rich richer

  1. Don’t they see that deficit spending providing growth dollars opens the path to trillionaires just as it made billionaires possible?

    Surely they want to have their cake and eat it too if the R in Republican still stands for Rich.

    Like

  2. How small can a country be while making monetary sovereignty work for itself internally? I had in Iceland with it’s crazy high taxes as an example.

    Like

    1. The key to successful Monetary Sovereignty is not just size, though size helps. The key is world acceptance of your currency, which allows you to trade for needed products (food, energy, other assets).
      Acceptance is based on several factors. Oil-rich Qatar, for instance, has only about 3 million people, but the Qatari Rial has sufficient acceptance to allow the government to make Monetary Sovereignty work, if it wishes.
      Predictably and unnecessarily, Qatar does levy taxes, but the taxes (like all other nation’s taxes) are levied for the primary purpose of widening the Gap between the rich and the rest.
      Last I heard, Qatar corporations pay taxes, but because corporations merely are money transfer devices (from customers to employees and owners), those taxes actually come out of the pockets of employees.
      Revealingly, Qatar has had no inheritance tax. Think of where the Qatar government gets its power, and you can see why.

      Like

      1. What is a good ratio for amount of growth dollars spent to cancel back out of existence through taxes? Or put in fractions like our markets that resisted decimalization right up into the late 19990’s… an eighth, a tenth, or say a bit more than a twelfth like 8:100 commercial banks that can create a hundred dollars for every eight dollars of tier one capital (unless making personal mortgages in which case it doubles to 8:200). A straight up tenth would yield $100 billion in shredded deleted dollars for every trillion worth of payment instruction sent out. KISS keep it simple & stupid for all those fools in Congress.

        Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s