Why we will have a recession this year

We are on track to sliding into a recession if we are lucky, or into a depression if we are not. It all is due to a massive misunderstanding about the role of the Federal Reserve, Congress, and the President with respect to inflation.

The Fed blame game Neil Irwin, AXIOS

It is the high season for being mad at the Federal Reserve.

Critics accuse them of being feckless as inflation pressures built last year, and as a result, the United States is facing prolonged high inflation, a painful recession to rein it in — or both.

Why it matters: In reality, the Fed didn’t create the current inflationary surge by itself— but it was too complacent as prices spiked last year.

Fact: Not only did the Fed not create the current inflationary surge by itself, but as we shall see, the Fed wasn’t at all responsible for today’s inflation.

Now the economic future depends on its ability to make up for lost time, and navigate a tightrope-thin path to bringing inflation down without tanking the economy.

Fact: It is not up to the Fed to bring inflation down. It doesn’t have the tools.

The Fed always takes heat for its decisions. That is to be expected when a handful of technocrats make decisions, behind closed doors, that shape a $24 trillion economy.

As you will see, the fault for inflation lies not with the Fed, but with a bunch of politicians — Congress and the President — and circumstances.

What is notable is how the most mainstream of economic commentators are piling on. The Economist’s recent cover called it “The Fed that Failed.”

Bloomberg published an essay headlined “The Fed Has Made a U.S. Recession Inevitable” — written by the former president of the New York Fed.

Blaming the Fed for inflation is like blaming the phone company for 911 calls. There is no cause/effect between the problem and a tangentially related agency.

Flashback: Last year, even as inflation started to surge, the Fed kept its aggressive monetary stimulus — interest rates near zero and buying billions of dollars in bonds — in place, only ending it last month.

This infers the commonly believed myth that low interest rates and increased money supply cause inflation.

**From 1960 through 2009, interest rates were relatively high (compared to current rates) and inflation also was relatively high.**

**Beginning in 2009, interest rates had been low as had been inflation**

In reviewing the above two graphs, it is difficult to infer that high interest rates prevent inflation and low interest rates cause inflation. In fact, one more easily could infer that inflation causes high rates simply because the Fed believes in raising rates when inflation threatens. We have what amounts to a self-fulfilling prophecy by the Fed. And also:

**Changes in the M2 money supply do not parallel changes in inflation.**

From the above graph, one would have difficulty inferring that “excessive” money creation causes inflation. So if low interest rates and “excessive” federal money creation don’t cause inflation, what does?

Insiders at the central bank don’t really dispute that they should have begun withdrawing that stimulus earlier.

The Fed was lulled by the fact that the initial surge of inflation last spring was concentrated in a handful of categories, then by a temporary softening in inflation last summer.

Those “insiders” should dispute the notion that should have begun withdrawing stimulus (taking dollars from the economy) earlier. Had they done what they now believe they should have done, we would be in the midst of a recession, or more likely, a depression.

“We don’t have the luxury of 20/20 hindsight in actually implementing real-time decisions in the world,” Chair Jerome Powell said at a news conference last month.

Had they known how persistent inflation would be, Powell added, “then in hindsight, yes, it would have been appropriate to move earlier.”

Wrong. They do have the benefit of 20/20 hindsight, because this hindsight now shows no cause/effect relationship between interest rate increases and inflation decreases, nor does it reveal a cause/effect between money creation and inflation.

At the same time, it’s not clear that inflation right now would be radically different in an alternate universe where they had moved to tighten money earlier.

Right. It’s “not clear” because tightening money would not have reduced inflation, but would have destroyed the economy. To control inflation, one must control the true cause of inflation, and the true cause of inflation is not low interest or high money supply.

“It is unlikely that the Fed could have lowered the inflation rate in 2021 because the fiscal support was so massive and its tools work with a lag,” Jason Furman, the Harvard economist and former White House economist, tells Axios.

Wrong., “Fiscal support” and “lag” are not the issues.

But by not acting sooner, the Fed has increased the risk that inflation will remain high through 2022, and beyond, he said: “If it had been more aggressive last year, we would be seeing the effects more this year.”

If the Fed had been more aggressive last year (in cutting the money supply while raising interest rates), we would have seen the effects last year: Recession and or depression. Consider this admission from the article’s author, Neil Irwin:

Countries with central banks that did tighten faster are also experiencing high inflation. (In New Zealand, which raised rates back in October, it’s 6.9%.)

Wait! What? If countries that did tighten faster also are experiencing high inflation, why doesn’t that give the Fed, Congress, the President, the economists, the media, and Mr. Irwin a clue?

Moreover, there is a risk that if they had moved more aggressively last year, it would have slowed the rapid recovery without improving the inflation results very much, given the unusual mix of factors around the supply chain disruptions that are driving higher prices.

Right. There is a mix of factors driving higher prices, and those factors all can be summarized in one word: Shortages. And there you have it. Inflations — all inflations — are caused by shortages of key goods and services. Not by too much money, not by too-low interest rates: All inflations are caused by shortages, and all inflations are cured by curing the shortages. And often, these shortages can be cured by additional, not by less, money creation.

Today’s inflation is caused by shortages of food, energy (mostly oil but also other forms of energy), shipping, computer chips, labor, and all the thousands of related products.

Food prices have risen because food is in short supply. Food is in short supply, not because the government added dollars to the economy, and not because people suddenly are eating more, but because of COVID and weather, and related shortages of labor, equipment, fertilizer, and other farming needs. One does not cure a food shortage by starving the populace. One cures a food shortage by growing more food. Energy is in short supply because the energy suppliers can’t obtain sufficient materials and labor to extract the oil, gas, and coal we need. This is related to COVID and lately, the Russia/Ukraine war. One does not cure an energy shortage by forcing the nation to use less energy. One cures an energy shortage by creating more oil, gas, wind, geothermal, and solar energy. Everything in our economy is inter-related. We are now short of homes, not because more people suddenly want homes, but because builders, who are short of labor and materials, can’t build fast enough. So home prices are soaring. The cure for a shortage of homes: Fund the building of homes via appropriate tax cuts for all the home-building-related industries. The list goes on and on, with the main culprits always being the same: Shortages, due not to increased demand but to decreased supply. The cure for a shortage: Increase the supply.

“I guess, with perfect hindsight, perhaps we would’ve moved to a contractionary policy stance to try to offset some of the supply chain issues and to offset the strong demand from the fiscal stimulus,” Minneapolis Fed President Neel Kashkari tells Axios.

“Offsetting supply issues” with a contractionary policy stance (i.e. creating a recession) is like starving the people as a cure for a food shortage.

But, he added, “I’m a little bit cautious about saying, ‘Boy, we should have just tightened earlier,’ because if the inflation’s being driven by … supply-side factors, it’s not clear what the benefit of that would’ve been.”

It should be clear that there would have been no benefit at all — just punishment of the private sector.

Yes, but: The real risk is that by waiting as long as it did to pivot to tighter money, the Fed will have to move so quickly to catch up that it triggers a breakdown, as the economy struggles to adapt to a world of less abundant cash.

When the Fed moves with maximum speed, consumers and businesses have less time to adjust to higher rates on all sorts of debt.

Time is not the issue. If cash is less abundant, the economy cannot adapt, slowly or quickly. When federal deficit spending does not increase sufficiently, we have recessions. Period. Starving the economy of money is the issue. Fast starvation or slow starvation, both ultimately produce starvation.

**When federal debt growth (purple line) declines we have recessions (vertical gray bars), which are cured by increased federal debt growth.**

At its meeting that concludes this coming Wednesday, the Fed is likely to begin its catch-up process in earnest by raising short-term interest rates half a percentage point and commencing with shrinking its balance sheet by up to $95 billion a month.

To “shrink its balance sheet,” the Fed must pull money from the economy. That’s $95 billion removed from the private sector (i.e. the economy) every month. That absolutely, positively will have a depressive effect on economic growth.

The shift toward tighter money has rapidly spread out across lending markets. The average rate on a 30-year fixed-rate mortgage has soared from 3.11% at the end of last year to 5.10% now.

And still, we have inflation because the problem is not low interest rates. The problem is shortages. Cure the shortages and you cure inflation. This is a situation where the government should throw money at the problem. Give the oil companies money on the condition they use it to raise salaries (to attract more people) and to purchase equipment.

**Inflation (red line) parallels oil prices (blue line). Increase the supply of oil and you decrease the price of oil, which will decrease inflation.**

Give farmers higher supplements and tax breaks for growing, and cut supplements for not growing. Similarly fund the building trades, purchase computer chips using the government’s unlimited funds, aid the shipping industries, all with direct supplements and tax breaks. Meanwhile, eliminate the FICA tax to encourage management to hire, and and lower income taxes to encourage more people to come back to work. Also, provide Medicare for All, taking that financial burden off corporations, to encourage hiring.

The bottom line: The Fed spent last year driving their metaphorical car at full speed, not realizing that they were entering a dangerous, curvy stretch of road. The road would still be dangerous no matter what.

The mistake was not slowing down sooner — making for a high risk of crashing. And we’re all in the car.

No, the mistake was driving their metaphorical car in the wrong direction. They already have the map in hand. They merely have to use it, and not stubbornly drive faster toward the east, when the goal is west. Another metaphor: Trying to cure inflation by cutting the money supply is like trying to cure anemia by applying leeches. IN SUMMARY Inflation is a supply problem; inflation is not a demand problem. Today’s inflation is caused by shortages of food, energy (mostly oil but also other forms of energy), shipping, computer chips, labor, and all the thousands of related products. To cure inflation one must cure the shortages by increasing the supply. There is no other rational solution. Attempting to cure inflation by cutting demand will result in recession or depression. There is no other outcome. The U.S. government is Monetarily Sovereign, meaning it has all the tools it needs in order to increase the supply of scarce goods and services. Congress and the President control the U.S. government, so they, not the Fed, are responsible for preventing, causing, and/or curing inflations, recessions, and depressions.

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[No rational person would take dollars from the economy and give them to a federal government that has the infinite ability to create dollars.] 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:

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.

MONETARY SOVEREIGNTY

A supplement to: “Your periodic reminder. After 80 years, the federal debt still is a ‘ticking time bomb.’”

The post, “Your periodic reminder. After 80 years, the federal debt still is a “ticking time bomb,” was a September 6, 2020, update to earlier posts, all showing the same thing:

Since 1940, economists and other misguided folks have lamented the growth of the U.S. federal debt, calling it a “ticking time bomb.”

Now, here is your updated periodic reminder.

After 83.5 years, the federal debt still is being called a “time bomb.” Having not exploded, it is the slowest time bomb in history.

We don’t need to go into too much detail. We’ve said it often enough:

The federal “debt” is not debt in the usual sense. The federal government does not borrow. The so-called “debt” is the total of deposits into Treasury Security accounts at the Federal Reserve. The federal government does not touch these deposits, and the accounts can be paid off instantly by returning the balances to the account owners. No tax dollars are involved. No burden on future generations.
Federal deficits add dollars to the economy. Federal deficits are necessary for economic growth. Recessions and depressions result from decreased deficit growth and are cured by increased deficit growth.
The U.S. government, being Monetarily Sovereign, cannot run short of its own sovereign currency. It never can become insolvent. Even if federal tax collections totaled $0, the federal government could continue spending, forever. That is why the federal government never borrows.
The U.S. debt-to-GDP ratio is absolutely meaningless with regard to federal solvency. The ratio could go to 1,000% and the U.S. government still would be able to pay its bills.

These facts do not penetrate the minds of the debt shriekers, who after all these years still do not understand the financial differences between a Monteraily Sovereign government (the U.S. federal government) and monetarily non-sovereign governments (state & local governments).

The former has the unlimited ability to create dollars. The latter, like you, and me, and the states can become insolvent. Vast difference.

So every year, every month, perhaps every day, we see warnings like this:

29 Aug 2020 LOS ANGELES, California: Commentary: America’s mountain of debt is a ticking time bomb. The United States not only looks ill, but also dead broke.

To offset the pandemic-induced “Great Cessation,” the US Federal Reserve and Congress have marshalled staggering sums of stimulus spending out of fear that the economy would otherwise plunge to 1930s soup kitchen levels.

The 2020 federal budget deficit will be around 18 per cent of GDP, and the US debt-to-GDP ratio will soon hurdle over the 100 per cent mark.

Such figures have not been seen since Harry Truman sent B-29s to Japan to end World War II.

Assuming that America eventually defeats COVID-19 and does not devolve into a Terminator-like dystopia, how will it avoid the approaching fiscal cliff and national bankruptcy?

To answer such questions, we should reflect on the lessons of World War II, which did not bankrupt the US, even though debt soared to 119 per cent of GDP. By the time of the Vietnam War in the 1960s, that ratio had fallen to just above 40 per cent.

World War II was financed with a combination of roughly 40 per cent taxes and 60 per cent debt.

It all is utter nonsense, exactly the same nonsense that has been published and spoken by self-anointed “experts, since 1940. Every year, those same-old warnings about the same-old “ticking time-bomb” that never seems to go off.

It would be laughable if not for the fact that many people still believe this stuff.

To clarify:

World War II was not financed with taxes or debt. It was financed the same way all federal spending is financed: The federal government, being Monetarily Sovereign, pays all its bills by creating new dollars, ad hoc.

Federal taxes are destroyed upon receipt. The tax check you send to the federal government is taken from your share of the M1 money supply. The instant it is received by the Treasury, it ceases to be part of any money supply measure, thus it effectively is destroyed.

Federal “debt” actually is deposits into T-security accounts, the dollars in which are not taken by the federal government.

Here is a partial list of the “boy-who-cried-wolf” calls that have emanated from the debt scare-mongers.

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September, 1940, the federal budget was a “ticking time-bomb which can eventually destroy the American system,” said Robert M. Hanes, president of the American Bankers Association.

**September 26, 1940, New York Times, Column 8**

By 1960: the debt was “threatening the country’s fiscal future,” said Secretary of Commerce, Frederick H. Mueller. (“The enormous cost of various Federal programs is a time-bomb threatening the country’s fiscal future, Secretary of Commerce Frederick H. Mueller warned here yesterday.”)

By 1983: “The debt probably will explode in the third quarter of 1984,” said Fred Napolitano, former president of the National Association of Home Builders.

In 1984: AFL-CIO President Lane Kirkland said. “It’s a time bomb ticking away.”

In 1985: “The federal deficit is ‘a ticking time bomb, and it’s about to blow up,” U.S. Sen. Mitch McConnell. (Remember him?)

Later in 1985: Los Angeles Times: “We labeled the deficit a ‘ticking time bomb’ that threatens to permanently undermine the strength and vitality of the American economy.”

In 1987: Richmond Times–Dispatch – Richmond, VA: “100TH CONGRESS FACING U.S. DEFICIT ‘TIME BOMB’”

Later in 1987: The Dallas Morning News: “A fiscal time bomb is slowly ticking that, if not defused, could explode into a financial crisis within the next few years for the federal government.”

In 1989: FORTUNE Magazine: “A TIME BOMB FOR U.S. TAXPAYERS”

In 1992: The Pantagraph – Bloomington, Illinois: “I have seen where politicians in Washington have expressed little or no concern about this ticking time bomb they have helped to create, that being the enormous federal budget deficit, approaching $4 trillion.”

Later in 1992: Ross Perot: “Our great nation is sitting right on top of a ticking time bomb. We have a national debt of $4 trillion.”

In 1995: Kansas City Star: “Concerned citizens. . . regard the national debt as a ticking time bomb poised to explode with devastating consequences at some future date.”

In 2003: Porter Stansberry, for the Daily Reckoning: “Generation debt is a ticking time bomb . . . with about ten years left on the clock.”

In 2004: Bradenton Herald: “A NATION AT RISK: TWIN DEFICIT A TICKING TIME BOMB”

In 2005: Providence Journal: “Some lawmakers see the Medicare drug benefit for what it is: a ticking time bomb.”

In 2006: NewsMax.com, “We have to worry about the deficit . . . when we combine it with the trade deficit we have a real ticking time bomb in our economy,” said Mrs. Clinton.

In 2007: USA Today: “Like a ticking time bomb, the national debt is an explosion waiting to happen.”

In 2010: Heritage Foundation: “Why the National Debt is a Ticking Time Bomb. Interest rates on government bonds are virtually guaranteed to jump over the next few years.

In 2010: Reason Alert: “. . . the time bomb that’s ticking under the federal budget like a Guy Fawkes’ powder keg.”

In 2011: Washington Post, Lori Montgomery: ” . . . defuse the biggest budgetary time bombs that are set to explode.”

June 19, 2013: Chamber of Commerce: Safety net spending is a ‘time bomb’, By Jim Tankersley: The U.S. Chamber of Commerce is worried that not enough Americans are worried about social safety net spending. The nation’s largest business lobbying group launched a renewed effort Wednesday to reduce projected federal spending on safety-net programs, labeling them a “ticking time bomb” that, left unchanged, “will bankrupt this nation.”

In 2014: CBN News: “The United States of Debt: A Ticking Time Bomb”

On Jun 18, 2015: The ticking economic time bomb that presidential candidates are ignoring: Fortune Magazine, Shawn Tully,

On February 10, 2016, The Daily Bell: “Obama’s $4.1 Trillion Budget Is Latest Sign of America’s Looming Collapse”

On January 23, 2017: Trump’s ‘Debt Bomb’: Deficit May Grow, Defense Budget May Not, By Sydney J. Freedberg, Jr.

On January 27, 2017: America’s “debt bomb is going to explode.” That’s according to financial strategist Peter Schiff. Schiff said that while low interest rates had helped keep a lid on U.S. debt, it couldn’t be contained for much longer. Interest rates and inflation are rising, creditors will demand higher premiums, and the country is headed “off the edge of a cliff.”

On April 28, 2017: Debt in the U.S. Fuel for Growth or Ticking Time Bomb?, American Institute for Economic Research, by Max Gulker, PhD – Senior Research Fellow, Theodore Cangeros

Feb. 16, 2018 America’s Debt Bomb By Andrew Soergel, Senior Reporter: Conservatives and deficit hawks are hurling criticism at Washington for deepening America’s debt hole.

April 18, 2018 By Alan Greenspan and John R. Kasich: “Time is running short, and America’s debt time bomb continues to tick.”

January 10, 2019, Unfunded Govt. Liabilities — Our Ticking Time Bomb. By Myra Adams, Tick, tick, tick goes the time bomb of national doom.

January 18, 2019; 2019 Is Gold’s Year To Shine (And The Ticking US Debt Time-Bomb) By Gavin Wendt

[The following were added after the original publishing of this article]

April 10, 2019, The National Debt: America’s Ticking Time Bomb. TIL Journal. Entire nations can go bankrupt. One prominent example was the *nation of Greece which was threatened with insolvency, a decade ago. Greece survived the economic crisis because the European Union and the IMF bailed the nation out.

July 11, 2019: National debt is a ‘ticking time bomb‘: Sen. Mike Lee

SEP 12, 2019, Our national ticking time bomb, By BILL YEARGIN
SPECIAL TO THE SUN SENTINEL | At some point, investors will become concerned about lending to a debt-riddled U.S., which will result in having to offer higher interest rates to attract the money. Even with rates low today, interest expense is the federal government’s third-highest expenditure following the elderly and military. The U.S. already borrows all the money it uses to pay its interest expense, sort of like a Ponzi scheme. Lack of investor confidence will only make this problem worse.

JANUARY 06, 2020, National debt is a time bomb, BY MARK MANSPERGER, Tri City Herald | The increase in the U.S. deficit last year was about $1.1 trillion, bringing our total national debt to more than $23 trillion! This fiscal year, the deficit is forecasted to be even higher, and when the economy eventually slows down, our annual deficits could be pushing $2 trillion a year! This is financial madness.there’s not going to be a drastic cut in federal expenditures — that is, until we go broke — nor are we going to “grow our way” out of this predicament. Therefore, to gain control of this looming debt, we’re going to have to raise taxes.

February 14, 2020, OMG! It’s February 14, 2020, and the national debt is still a ticking time bomb! The national debt: A ticking time bomb? America is “headed toward a crisis,” said Tiana Lowe in WashingonExaminer.com. The Treasury Department reported last week that the federal deficit swelled to more than $1 trillion in 2019 for the first time since 2012. Even more alarming was the report from the bipartisan Congressional Budget Office (CBO) predicting that $1 trillion deficits will continue for the next 10 years, eventually reaching $1.7 trillion in 2030

April 26, 2020, ‘Catastrophic’: Why government debt is a ticking time bomb, Stephen Koukoulas, Yahoo Finance [Re. Monetarily Sovereign Australia’s debt.]

August 29, 2020, LOS ANGELES, California: America’s mountain of debt is a ticking time bomb The United States not only looks ill, but also dead broke. To offset the pandemic-induced “Great Cessation,” the US Federal Reserve and Congress have marshalled staggering sums of stimulus spending out of fear that the economy would otherwise plunge to 1930s soup kitchen levels. Assuming that America eventually defeats COVID-19 and does not devolve into a Terminator-like dystopia, how will it avoid the approaching fiscal cliff and national bankruptcy?

April 16, 2021, NATIONAL POLICY: ECONOMY AND TAXES / MARK ALEXANDER /
The National Debt Clock: A Ticking Time Bomb: At the moment, our national debt exceeds $28 TRILLION — about 80% held as public debt and the rest as intragovernmental debt. That is $225,000 per taxpayer. Federal annual spending this year is almost $8 trillion, and more than half of that is deficit spending — piling on the national debt.

Money bomb Stock Photo by ©digiart 60550903 — **OK, it’s not a time bomb. It’s a money bomb with a short fuse. Same idea.**

April 29, 2022, Don’t Wait! The National Debt Is Only Getting Worse
New CBO report shows that the longer Congress waits to deal with the debt, the bigger the problem becomes. By Eric Boehm: In short, taxes will have to go up and government services—including benefits from programs like Social Security and Medicare will likely have to be reduced. Debt-watchers have been warning for years that benefit cuts and tax increases will likely be needed to have any realistic shot at managing America’s long-term debt. (And, remember, we’re talking about what’s needed to merely stabilize the debt, not reduce or eliminate it).

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Actually “debt-watchers have mongered the same warning for at least 82.5 years, and here we are, still growing and still no explosion from the mythical “debt bomb.”

Actually, if/when we do reduce the federal debt, we will have the same results we always have had: A recession or more likely, a depression:

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.

Seemingly, that is what the “debt-watchers” want.

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:

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.”

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone

3. Social Security for all or a reverse income tax

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually.

8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10.Increase federal spending on the myriad initiatives that benefit America’s 99.9%

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.

MONETARY SOVEREIGNTY

The primary goal of the GOP:

INTRODUCTION

America currently has two major political parties.

The Democrats lean toward social progressivism. That includes such concepts as the government providing money and leadership to achieve equality, compassion, human rights, empathy, and concern for future generations’ well-being.

Dems see the income/wealth/power Gaps between the richer and the poorer as being too wide and fundamentally unfair. Democrats’ charity tends to support the less fortunate, who are welcomed as the source of future progress.

The focus is on the similarities of people, on acceptance, and on the tearing down of walls.

“Lean toward” indicates that like all things human, the Dems often depart, in the short term, from these noble long-term goals.

The Republicans ostensibly are conservatives. To “conserve” is to oppose change from such traditional values as self-sufficiency, religion, the value of work, patriotism, and minimal government interference.

The GOP sees the income/wealth/power Gaps as being earned, fair, and the result of hard work and normal human differences. The fundamental belief is that giving to the poor encourages sloth.

Republican charities tend to support religion, particularly Christianity, and the economic status quo.

The GOP tends to reject the less fortunate as dragging down the rest of “us” by contributing little and taking much.

The focus is on the differences among people, on the rejection of those who don’t contribute, and on the building of walls.

Of late, the GOP has drifted into Trumpism, which is a form of fascism in which Donald Trump is the Truth, the Word, and the government.

Trumpism is based on the belief that white, Christian, straight, male followers of Trump are naturally superior, and that only they should receive acceptance and support from the federal government. All others should be excluded.

Both the Democrats and the Republicans base much of their day-to-day actions on the same myth, the federal taxes fund federal spending, and when the federal government spends, it is spending “taxpayers’ money.”

While this “spending taxpayers’ money” notion is true of state and local governments, it is not true of our Monetarily Sovereign federal government which not only creates new dollars ad hoc, every time it pays a bill, but actually destroys all tax dollars sent to it.

When you send your tax check to the government you send dollars that are part of the M1 money supply.

The instant your dollars reach the Treasury, they cease to be part of any money-supply measure. Effectively, they are destroyed.

The Primary GOP Goal

If you vote Republican, you should understand this:

An End to Obamacare

And the propaganda continues from the anarchist lapdogs of the GOP, the “Libertarians”:

Warren’s pitch for a presidential program to help “working people” is a trillion-dollar bailout for the upper-middle class.

No Peter, it’s a trillion-dollar investment in the people who wish to lift themselves and thereby, lift America.

And then, as if being stupid and deceptive wasn’t sufficient, Suderman gets desperate:

Here’s another question worth asking that no one involved seems to want answered: Would a unilateral program of debt forgiveness like the one that is apparently under discussion be legal?

The lawyers for the Education Department found that the secretary of education “does not have statutory authority to provide blanket or mass cancellation, compromise, discharge, or forgiveness of student loan principal balances, and/or to materially modify the repayment amounts or terms thereof, whether due to the COVID-19 pandemic or for any other reason.”

That sounds like a pretty firm no.

Uh, Peter. Congress can change any statute. But I’ll bet you already knew that. You did know that, didn’t you?

Sex

Republicans are fixated on gay sex and marriage.

They believe that being gay is a decision as in, “When did you make the decision to be straight or gay?

This leads to phony conversion therapy designed to make gay people “normal.”

Thus, Republicans believe gays are attempting the impossible task of “grooming” straight kids to turn gay.

Republicans seem to think that being gay is such a wonderful and attractive lifestyle, that any education about gay people creates the danger of enticing straight children to become gay.

To prevent children from “deciding” to become gay, the GOP has passed laws outlawing any teaching about LGBTQ people (lesbian, gay, bisexual, transgender, and queer).

Florida Governor Ron DeSantis signed the controversial “Parental Rights in Education” bill into law, prohibiting classroom discussion or instruction on sexual orientation and identity in kindergarten to third grade or in older grades in “a manner that is not age-appropriate or developmentally appropriate.”

No one knows what is “age-appropriate” (or age-inappropriate) or “developmentally appropriate” (or developmentally inappropriate) means, with regard to discussions of sexual orientation.

Sexual orientation exists. Children will ask about it. Not discussing it won’t make it go away.

If children are not given answers from an adult, they will get their answers from other children. If the adult happens to be a gay-hating parent, the children will turn out to be gay-haters (unless they themselves are gay, in which case they will be self-loathing.)

This is how ridiculous the GOP’s hatred of gays (and non-whites) has become. From Florida newspapers:

With great fanfare and very little evidence, the Florida Department of Education banned more than 50 new math textbooks for containing “indoctrinating information” on “prohibited topics.”

Specific examples of offensive material are still hard to come by, which should anger parents who want better schools, not more crass politics.

Where are the examples of “indoctrination,” “prohibited topics” and “divisive concepts” that threaten public schools in Florida and have so rattled Gov. Ron DeSantis and Education Commissioner Richard Corcoran?

Barring proof that publishers are now pushing 3+3 equals Critical Race Theory (CRT), the decision amounts to a nod to fringe politics.

It clearly hasn’t helped school districts now thrown into a tizzy as they scramble for instructional material for the upcoming school year.

Taxes

The GOP hates taxes, which would be a good thing, except Republicans hate only those taxes that affect the rich.

They love taxes on the middle and lower-income people, and always are on the search for reasons to raise those taxes.

GOP’s new plan: Raise taxes on working people, end Social Security and Medicare. Rick Scott believes he can get elected president on a program of making inequality great again. By Thom Hartmann, March 14, 2022

They’re at it again: Republicans want to raise taxes on poor and working-class Americans, end Social Security and Medicare, jack up pollution and corporate profits, all while continuing to pamper their billionaire donor base.

This time it’s the guy in charge of getting Republican senators elected and re-elected, Florida Sen. Rick Scott.

You may remember him as the guy who ran the company convicted of the largest Medicare fraud in the history of America, who then took his money and ran for governor of Florida, where he prevented the state from expanding Medicaid for low-income Floridians for all the years he ran the state.

Low income working people in America generally pay a higher percentage of their income as taxes than do most of our billionaires and multi-multi-millionaires.

They pay Social Security taxes, Medicare taxes, property taxes, sales taxes and taxes in the form of fees for everything from a driver’s license to road tolls to annual car inspections.

Here is the GOP mantra, as expressed by Senator Mitt Romney, “There are 47 percent who are with him,” (Barack Obama’s voters back in 2012), “who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it. These are people who pay no income tax.”

No Mitt, the people who pay no income tax are Donald Trump, Jeff Bezos, and the rest of the billionaires. They are the real freeloaders. They get all the benefits life has to offer while complaining about the supposed cost of benefits going to the not-rich.

Yes, federal taxes should be cut — No rational person would advocate taking dollars from the economy and giving them to a federal government that has the infinite ability to create dollars — but not if that is used as an excuse to cut the benefits we receive from the government.

Our Monetarily Sovereign federal government has no need for and no use of tax dollars.

The ostensible purpose of federal taxes is to control the economy by taxing what the government wishes to discourage (liquor, cigarettes, etc.) and by giving tax breaks to what the government wishes to encourage (home ownership, solar energy, etc.)

The real purpose of federal taxes is to help the rich become richer by widening the gap between the rich and the rest. The rich pay a much lower percentage of their income and/or wealth as taxes than do the rest of us.

Voting Rights And Other Constitutional Rights

The GOP supports such Constitutional rights as:

States’ rights: The rights of states to pass discriminatory laws that disenfranchise certain voting groups, without interference from the federal government.
Gun rights: The right of anyone to own, carry and wildly use any gun at any time, but not the rights of any state to regulate, tax, or even make a record of any gun or gun owner.
Fetal (even microscopic fetal) rights, but not a woman’s rights to decide her own medical treatment, or the rights of already-born children to a stable, loving home.
The right to poverty, hunger, sickness, homelessness, and ignorance without interference from any government.
The right to spew hate-mongering, fear-mongering, and QAnon-style conspiracy theories, but not school discussions of hate-mongering, fear-mongering, or QAnon-style conspiracy theories, as these classroom discussions may make some students feel “uncomfortable.”
The right to riot and to physically attack Congress and the Vice President in an effort to overturn a proven, legitimate election and to install a Hitlerian psychopath as President. (The GOP terms this type of riot a “normal tourist visit” and does not want it investigated.)
The right to ignore selected portions of the Constitution while claiming “originalism” and “textualism.” Example: Ignoring the original text, “A well regulated Militia, being necessary to the security of a free State . . .”

Science

Hurricane Dorian: Trump map mysteriously loops in Alabama - BBC News — **Donald Trump with his hand-drawn black Sharpie line “proving” the weather service was wrong and he was right about a hurricane hitting Alabama.**

The GOP follows its leader in ignoring science and even attempting to harass and discredit scientists who deliver truths in opposition to Donald Trump’s “truths.”

The denial of the seriousness and severity of COVID led to unpreparedness and to date, a million lost American lives, and many times that number of illnesses and lost working days.
The denial of the anti-COVID effects of vaccination and mask-wearing has compounded #1.
The denial of global warming has led to excessively slow adoption of solar, wind, geothermal, and nuclear energy sources. Our children will pay the price of rising oceans, habitat loss, species loss, and food shortages.
The denial of the environmental damage caused by fracking.

Being Republican demands that you believe, or at least claim to believe, that everyone who disagrees with Trump is a liar or part of “fake news.“ This includes all elements of the scientific community.

“The people who deny science are often trying to uphold membership in something that they find meaningful.” That is why anti-vaxxers tend to be pro-Trumpers. (Ironically, Trump paid for his ignorance by getting COVID, and only later receiving multiple vaccinations. His followers ignore those truths.)

SUMMARY

The GOP has no proposals to improve the lives of you who are not rich. None. Everything the GOP does and advocates is in the service of the rich. No one else matters to the Party Of The Rich.

The current GOP neither is conservative, Libertarian, nor progressive. It is Trumpist. It wants what Trump wants. It hates whom Trump hates. It denies what Trump denies.

The GOP has become a party of bigots, which is why it fears teaching about the dangers of bigotry (what it refers to as “Critial Race Theory“.)

It burns books, just as Hitler did.

Led by a Hitlerian psychopath, the GOP again has proved that hatred and fear are stronger than logic and compassion.

By focusing on the supposed dangers coming from the “other,” they have managed to close people’s eyes to real patriotism, morality, and even self-interest. They support overthrowing of our elected government and installing a martinet

The GOP is a traitorous party, unrecognizable in U.S. history. If you asked, “What are the goals of the GOP,” you now have your answer.

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:

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.”

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.

MONETARY SOVEREIGNTY

The crime rate is way up. What is the best way to prevent crime in America?

Every politician wants to be known as “tough on crime.” No one wants to be seen as “soft on crime.”

The Republicans especially like to rage at crime, especially when the criminals are immigrants, not Christian, poor, and/or black — not so much when the criminals are white, Christian, and Republican.

You don’t hear the same Fox News outrage when it comes to Trumpers Rep. Matt Gaetz, Rudy Giuliani, Sidney Powell, Steve Bannon, and all the other traitors who defended and/or attempted what previously was unthinkable in America –a coup — so inconceivable, that many people still refuse to believe the crime they have seen actually occurred.

We also don’t hear much from Republicans regarding gun control while guns are used in thousands of crimes, annually,

Even a respected judge is not immune to “soft-on-crime” criticism. Here are excerpts from a Fox News article written by none other than Sen. Josh Hawley, who, as a coup encourager and thus a traitor to the U.S., is not the best one to complain about criminals.

Supreme Court nominee Judge Jackson’s soft-on-crime sentences are disturbing By Josh Hawley

“While serving on the Sentencing Commission, she (Judge Jackson) supported eliminating the existing child pornography mandatory-minimum sentence.)

(She opposes all mandatory minimums as being blind to circumstances and substituting generalizations for specifics.)

“Those views carried over to Judge Jackson’s time on the bench. Over and over again, she handed down sentences well below the congressionally endorsed Sentencing Guidelines recommendations.}

(Not to mention the many times all judges do that — it’s the purpose of using human judges rather than robots — and she often handed down sentences above those guidelines, but why quibble about facts when you are a mean-spirited Trumper writing for Fox News?)

“Unfortunately, Jackson is not the first judge to do that.”

Right, judges normally impose a range of punishments.

“But she stands out because she also consistently sentenced child pornography offenders below even what liberal prosecutors in Washington, D.C., were seeking.”

(It wasn’t consistent, and prosecutors always ask for the maximum. In most cases, judges look at circumstances and don’t grant the maximum the prosecutors seek. All of Hawley’s shrieking is about normal judicial procedure. The notion that Judge Jackson encouraged child pornography stretches credulity.)

Hawley knows all this, but he is a renowned liar who writes for Fox,, a proven-to-be-lying network. They are Trumpers, and we expect nothing less from them.

But even the most softhearted, squishy Democrats have no idea what “tough on crime” really means:

The Washington Post
The 5-Minute Fix
By Amber Phillips with Caroline Anders

Crime is looking like it’s going to be a big issue in November’s midterm elections — and that has Democrats on the defensive.

“We must invest in our police departments,“ said Rep. Val Demings (D-Fla.), a former police chief who is running for Senate in Florida.

Ask virtually anyone, winged right or left, about being tough on crime, and you will hear such suggestions as:

More police
More money spent on policing
More laws
Tougher judges
Longer jail sentences
Harsher jail conditions

Everything has to do with increasing the punishment for committing crimes and nothing for reducing the cause of crimes.

Republicans especially are interested in punishment, especially of the aforementioned poor immigrant, brown, non-Christian, blacks:

It (crime) has been fed and fueled in multiple ways by the Democratic Party’s far-left turn,” Senate Minority Leader Mitch McConnell (R-Ky.) has said of the country’s recent crime wave.

Strange, how Mitch suddenly seems unconcerned about a mob of people attacking the nation’s capital, attempting to overthrow the United States government, and even causing deaths and injuries. And for certain, he is not worried about gun crime.

To Mitch, criminals are street, not white-collar, criminals, who are born bad and born black.

Syracuse Police Handling of 8-Year-Old Black Boy Reminds Us How Anti-Black Blue Lives Can Be

From 2019 to 2020, the homicide rate in the United States jumped nearly 30 percent, according to FBI data, marking the largest increase since we started keeping track of those stats.

Third Way, a Democratic think tank, found that cities (run by Democrats and GOP-led) in red states were hit harder by the 2020 murder surge than blue states were.

Democrats who have been recently elected as mayors in liberal cities such as New York and Seattle have campaigned on being tough on crime.

“There is little doubt that the sheer stress and strain of the pandemic, not to mention the economic dislocation, helped to push up homicide rates,” criminologist Richard Rosenfeld told Witte.

Democrats are nervous about getting tagged as anti-police — again. This time, they’re already campaigning on more funding for police departments.

And none of this “tough on crime” blustering addresses the root cause of most street crime: Poverty. Poverty is the mother of crime.

Yes, crime has many parents — that “stress, strain, and economic dislocation” to name three. But walk through any wealthy area, and you will fear street crime far less than in an impoverished area.

Republicans are adamant in their desire to apprehend and punish street criminals. However, while apprehending and punishing after the fact may be their focus, Republicans have no desire to address prevention.

They are adamant in their opposition to gun control, to keep guns out of the hands of potential criminals, and to reduce the lethality of the guns being sold, which would have a significant impact.

Similarly, Republicans vote against anti-poverty benefits, i.e., Social Security for All, Medicare for All, School lunch programs, housing aid, food aid, college for all, and the myriad other easily affordable (by the federal government) programs that would reduce poverty and crime in America.

The right dismisses them all with one word, “socialism,” then blindly continues to chatter about the need for tougher police and harsher sentences.

(White-color crime and political crime are OK, except if found on a Biden laptop)

Even the Democrats have been dragged into the false rhetoric:

“Fund the police,” Biden roared at his State of the Union address this spring, to bipartisan applause.

Yes, fund the police. We do need well-trained, well-paid police. Digging recruits from the bottom of the barrel, and then without training, setting them loose on the public, is no way to be tough on crime.

Fund the police, but also fund the people.

Our Monetarily Sovereign federal government, having the infinite ability to spend dollars, can cure poverty in America without levying one cent in taxes or causing inflation.

There is a reason why poor areas of the country endure more street crime than wealthy areas. It’s not that poor people are innately more dishonest. They simply have less money and less of what money can buy.

They have the same desires the rich have but fewer means of satisfying them. So they steal. It has been the same for time immemorial.

We can curse the darkness by arresting a hungry kid for stealing food from a grocery store and locking him up forever, or we can light a candle by giving him food, shelter, and reasonable hope for his future.

For some reason, we have lately shown a greater desire to beat down than to lift up, and that truly is wrong. It is wrong morally and as an effective solution.

Beating down may satisfy the mob’s bloodlust, but it will not reduce crime, and it will turn on the innocent.

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:

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.”

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.

MONETARY SOVEREIGNTY

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