The poker bromide goes something like this: If you’re sitting in a poker game for a half-hour, and you still can’t tell who the sucker is, you’re the sucker.
The economics bromide could be: If you think the minimum wage should be raised, but you oppose Social Security for All and Medicare for All, hello, sucker.
You’re a sucker for wondering, “Who’s going to pay for it?” when considering federal spending. You’re a sucker for thinking the federal government can’t afford it. You’re a sucker for thinking spending will cause inflation.
You’re a sucker who offers no alternative to the following:
The federal minimum wage hasn’t risen in almost 13 years and US workers are paying the price
Opinion by Gina Cummings for CNN Business Perspectives
Updated 11:10 AM ET, Tue March 22, 2022
With inflation hitting a 40-year high in the United States, working families are swimming ever faster in the effort to stay afloat. But the water keeps rising, as mostly stagnant wages are rapidly losing value.
The federal minimum wage has lost at least 21% of its value since Congress last raised it in 2009.
This has become an emergency for the millions of workers who earn less than $15 an hour and are finding it impossible to trim other costs enough to still be able to put food on the table and fill the tank.
According to new research released by Oxfam, roughly 32% of workers in the US earn less than $15 an hour. Nearly 52 million people are trying to make it on less than $31,200 a year, or $2,600 a month before taxes.
This is not right, nor is it viable — not for working families, the economy, or communities. We can’t keep an economy going if people can’t pay the rent and drive to work.
The federal minimum wage and federal poverty levels either are a disgrace or a joke, depending on your sense of humor. For one thing, they don’t take into consideration local differences in cost of living.
Apparently, earning more than $13K while living in a Mississippi shack puts you above the poverty level. Imagine that while trying to survive in Manhattan.
But perhaps the saddest statistics of all can be seen in the charts, below. Poverty is most often seen in Republican states. The people who live there vote for the political party more dedicated to keeping them in poverty.
Guess who America’s suckers are.
It’s not true that we “can’t keep an economy going if millions of Americans live in poverty.”
Yes, allowing millions of impoverished children means we forego so many of their educated talents. It means many industries will grow more slowly or not grow at all. It means that scientific advancement will be slower, and life-spans will be lower than they should be.
It means that millions of our fellow Americans will live in misery.
But the economy will keep going — for the upper-middle and the rich — just as the economy is going in impoverished Mississippi, Louisiana, West Virginia, New Mexico, Alabama, Arkansas, Georgia, Kentucky, et al.
Even in 3rd-world countries, the economy is “going.”
But is that the America you want? Do you really want an America where the rich keep getting richer and the rest keep getting poorer? Do you really want an America where one of the major political parties wishes to deny Americans decent healthcare?
The fact is that many people in America are poor, not because they are lazy but because fate has dealt them bad hands. The most common reason for poverty is impoverished or missing parents — the unlucky gene problem.
Another reason for poverty is a government bought and paid for by the rich — a government dedicated to widening the Gap between the rich and the rest.
What should be done about those people? Here is a common suggestion:
That’s why Congress must pass the Raise the Wage Act of 2021, which would gradually increase the wage from $7.25 an hour to $15 by 2025 and would tie increases to median wage growth over time.
The “Raise the Wage Act” tells businesses to pay to solve the problem. But is this a problem businesses should pay to solve?
If businesses pay, business profits pay, no money is added to the economy, and the economy shrinks. If the government pays to solve the problem, business profits rise, new dollars come into the economy, and the economy grows.
In truth, this is a civil rights crisis, as the people most impacted by low wages are historically marginalized populations: women and people of color.
It’s a civil rights crisis, and businesses are expected to solve it???
Not only did these workers get hit harder, longer and deeper by the pandemic, they’ve been watching their wages buy less each day, as they account for a vastly disproportionate share of the low-wage workforce — 40% of women versus 25% of men.
Half of all women of color earn under $15 per hour versus a quarter of all men.
And while 26% of White workers earn less than $15 an hour, 46% of Hispanic/Latinx workers and 47% of Black workers earn less than $15 per hour. These are the people suffering the worst sticker shock at the grocery store and the gas pump, choosing between rent and utilities.
What’s more, federal law still allows US employers to pay subminimum wages to nearly a million workers. The Raise the Wage Act would fix that, prohibiting anyone from being paid less than the federal minimum wage.
It’s a money problem. Rather than relying on monetarily non-sovereign businesses (i.e. entities that do not have infinite money) or on state/local governments (also monetarily non-sovereign), the Monetarily Sovereign federal government, which has infinite money, should solve the problem.
And what exactly is the problem? Lack of financial resources. The poor, very simply, don’t have enough money, not only to live decent lives, but to live productive lives that would benefit all America.
Their poverty hurts all of America.
Rather than forcing monetarily non-sovereign entities (businesses and local governments) to pay specified minimum salaries, the Monetarily Sovereign federal government should provide what is lacking: Medicare for All, Social Security for All, College for All, Food for All.
Federal support for healthcare, college, food, and income, would be the “tide that raises all of America’s boats.”
The federal government has infinite money. While some may complain about multi-billionaires not paying their fair share, our multi-trillionaire government pleads poverty, and unnecessarily takes FICA money from lower-end salaries.
Sadly, the federal government rations aid to make sure that the poor stay poor.
A measure of income issued every year by the Department of Health and Human Services (HHS). Federal poverty levels are used to determine your eligibility for certain programs and benefits, including savings on Marketplace health insurance, and Medicaid and CHIP coverage.
Why? Why must Americans jump through hoops to prove they can’t afford healthcare? Why doesn’t the federal government simply pay for everyone’s health care? Isn’t that why we have a government? Look at the convoluted, complex, and totally unnecessary formula:
How federal poverty levels are used to determine eligibility for reduced-cost health coverage
- Income above 400% FPL: If your income is above 400% FPL, you may now qualify for premium tax credits that lower your monthly premium for a 2022 Marketplace health insurance plan.
- Income between 100% and 400% FPL: If your income is in this range, in all states you qualify for premium tax credits that lower your monthly premium for a Marketplace health insurance plan.
- Income at or below 150% FPL: If your income falls at or below 150% FPL in your state and you’re not eligible for Medicaid or CHIP, you may qualify to enroll in or change Marketplace coverage through a Special Enrollment Period.
- Income below 138% FPL: If your income is below 138% FPL and your state has expanded Medicaid coverage, you qualify for Medicaid based only on your income.
- Income below 100% FPL: If your income falls below 100% FPL, you probably won’t qualify for savings on a Marketplace health insurance plan or for income-based Medicaid.
What is the purpose of this complexity? What is Congress’s concern that creates this difficult path to eligibility? Why doesn’t everyone simply receive free, comprehensive, no-deductible health insurance, paid for by the federal government?
The answer: The Big Lie. The lie is that the federal government can run short of dollars, and taxes are necessary to fund federal spending.
By Amelia Thomson-DeVeaux
MAR. 30, 2022, AT 6:00 AM
Imagine the federal government could lift millions of American children out of poverty with a single program. That program would help parents put nutritious meals on the table, pay for school expenses and even save for kids’ college — all with no negative impact on the economy.
You don’t have to imagine. We had it just last year … and now we don’t.
By nearly every empirical measure, the expanded child tax credit (CTC) — the policy passed in 2021 that gave parents a few hundred dollars per month for each child in their family — was a wild success, dramatically reducing child poverty and making it easier for families to buy food and pay for housing and utilities.
In combination with other COVID-19 relief measures, particularly the stimulus payments that went out to Americans in April 2020, January 2021 and March 2021, the CTC helped buffer families against the economic upheaval of the pandemic.
It’s rare that researchers can say with certainty that a program like the CTC actually worked. Politicians usually consider policies in an abstract, hypothetical way, knowing that a piece of legislation might not accomplish their aims.
But by the time Congress was thinking about extending the CTC, there was a mountain of cold, hard data showing that this program did a lot to help children and families.
Yet that wasn’t enough to save it. The expanded tax credit ended in December 2021, and chances are low it will be renewed. That tells you all you need to know about which is more powerful in Washington — politicians’ biases or actual evidence.
By the time the pandemic hit, reformers had been pushing for years for the U.S. to establish a universal allowance for families with children.
In the spring of 2021, Democrats in Congress transformed the CTC, an anti-poverty measure that’s been part of the tax code since 1997, into a kind of emergency child allowance.
Government programs are often glitchy when they start, but the fact that most families were eligible for the payments meant that they were fairly easy to administer.
The IRS already had all the information it needed for anyone who had claimed children on their previous year’s taxes — no additional applications or forms to fill out. The payments went straight into recipients’ bank accounts or they got a check in the mail, with minimal fuss.
And the money helped — a lot. Beginning July 15, the vast majority (88 percent) of families with children received a payment of either $300 or $250 per child. Researchers at the Columbia University Center on Poverty and Social Policy found that the July payment kept around 3 million children out of poverty. At the end of 2021, the researchers estimated that the program was keeping 3.7 million children out of poverty.
“Families were living in very precarious economic circumstances,” said Megan Curran, one of the researchers on the Columbia team. “That $300 or $600 per month — it might not sound like much, but when you’re making very little, it can be enough to give you a financial cushion.”
So there it is. A program worked, but it didn’t help the very rich, so our bribed politicians, especially the GOP white men, weren’t interested in poor children of color, so the policy that worked was abandoned.
The excuse: “Who will pay for it.” The lie: Taxpayers pay for it.” The fact: Not only don’t taxpayers pay for federal spending, but federal spending adds dollars to the economy, and those added dollars wind up in taxpayers’ pockets.
And finally, lest you doubt that taxes don’t fund federal spending and the government has the infinite ability to spend, here are excerpts from an article in the 4/4/2022 Chicago Tribune:
Biden’s defense budget is big. Democrats might
make it bigger
Doyle McManus, LOS ANGELES TIMES
WASHINGTON — Last week, President Joe Biden sent Congress his proposed defense
budget for the next fiscal year: an $813 billion wish list, almost $60 billion more than
he requested a year ago — more military spending than any president, including
Donald Trump, has requested since World War II.
Once Congress approves the request — and, in all likelihood, makes it bigger — U.S.
defense spending will be larger in inflation-adjusted dollars than it was at the height
of the Vietnam War or President Ronald Reagan’s Cold War buildup.
Moderate Democrats, including House members from districts with defense
industry jobs, say they’ll join with Republicans to support more military spending —
just as they did last year, when a big bipartisan majority passed record-breaking
Even with its big increase, the Biden budget won’t keep pace with inflation if prices
keep rising at the current 7% or more. Republicans have seized on that as their most
powerful argument; they’re demanding a real increase of 5% on top of inflation, and
they’ll probably get part of it.
“Most Democrats have already given up on cuts,” noted Todd Harrison, a defense
budget expert at the Center for Strategic and International Studies. “They’ve adopted a
strategy of parity instead: ‘OK, you get more for defense, but give us more for domestic spending in exchange.’”
Notice what’s missing from the article: There’s no mention of a “federal trust account,” similar to what we see for Medicare and Social Security.
There’s no mention of affordability or “who’s going to pay for it,” or concerns about federal spending causing inflation or the need for tax increases.
Why? Because the money is available. The federal government has an infinite supply. No tax increases are necessary.
But helping poor and middle-income Americans is not what the rich want. Cutting FICA and saving Social Security is not what the rich want. Raising the minimum wage is not what the rich want.
The rich want spending on defense. That’s where the business profits are.
And the American public, being ignorant of federal finance facts, goes along with the Big Lie.
- The Big Lie in economics is: “Federal spending is funded by federal tax collections.” (Federal spending actually is funded by ad hoc dollar creation.)
- The federal government, being Monetarily Sovereign, unintentionally cannot run short of dollars. Even if the government collected $0 taxes, it could continue spending forever.
- No agency of the federal government can run short of dollars unless Congress wills it.
- Inflations never are caused by the federal government’s “excessive spending.” All inflations are caused by scarcities. Federal spending can cure inflations by curing scarcities.
- Federal taxes do not fund federal spending. All M1 tax dollars sent to the Treasury are destroyed upon receipt.
- The government is run by the very rich, who want to be richer, which they accomplish by widening the Gap between the rich and the rich. This is known as “Gap Psychology.”
- The Big Lie is disseminated via bribery of information sources:
The media are bribed via advertising dollars and ownership of media
Economists are bribed via university donations and promises of jobs in think tanks
Politicians are bribed via political donations and promises of jobs
[No rational person would take dollars from the economy and give them to a federal government that destroys those dollars and has the infinite ability to create new dollars.]
Rodger Malcolm Mitchell
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:
- 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.