Not enough guns in America

From the 7/16/21 Chicago Tribune:

It’s still unknown why an Iowa man allegedly had a rifle with a laser scope in his hotel room overlooking a downtown Chicago beach

Guns a security concern? You think?

Casteel, 32, of Ankeny, Iowa, was arrested at the hotel in the 600 block of North DuSable Lake Shore Drive on July 4 and charged with two counts of aggravated unlawful use of a weapon. In addition to the rifle, police recovered several rifle magazines and a .45-caliber handgun from his 12th-floor room, prosecutors have said.

“See, it’s like this. I’m going to Chicago on a vacation, so I decide that for . . . uh . . .protection . . .  I need to take my rifle plus its laser scope, along with a few loaded magazines. 

“Oh, and to be doubly safe, I even took, my .45-caliber handgun.

“So, if I’m walking down Michigan Avenue, and someone wants to rob me, I just can whip out my rifle, and get him sighted in my laser scope, and start blasting away. And then, if that doesn’t do the job, I can finish him off with my .45. 

Ripper Street - Internet Movie Firearms Database - Guns in Movies, TV and Video Games
Guy in a high-rise hotel room with a sniper scope, several loaded magazines, and a .45 handgun. What could possibly go wrong?

“Really, it’s all for . . . uh . . . protection.”

OK,  Casteel didn’t actually say those words.

Click the link at the top of this article. You won’t believe the real reason why he came to Chicago, packing major heat.

And then think about how all the gun-nuts, in cahoots with a right-wing Supreme Court and its claim that the “well-regulated militia,” mentioned in the Constitution, what just so much garbage, so fire at will — think about all the deaths and suicides this intentional misreading of the Constitution has cost America.

Thousands of murders and suicides, but the real danger to America is what . . . Mexican families at the border? The federal debt? Liberals? Black people?

Does it all get any more stupid than this?

 

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

The single biggest reason America is in deep trouble.

America is in trouble. We have way too much poverty, crime, and murder.

There is far too large a Gap between the rich and the rest. Our infrastructure is crumbling. Our schools, grades K-12 are shameful. Our healthcare system is inadequate.

We no longer lead the world in most measures except perhaps in the number of nuclear weapons we can fire.

We are a long, long way from being “the greatest country in the world,” as we love to boast.

We face treason on a national scale.

And the single biggest reason for our numerous failures is exemplified by the following article:

Manchin draws red line in infrastructure talks
Jordain Carney

Sen. Joe Manchin (D-W.Va.) warned on Tuesday that he wants both a bipartisan infrastructure bill and a separate Democratic-only bill to be fully paid for.

“I think everything should be paid for. We’ve put enough free money out,” Manchin told reporters.

Actually, the U.S. federal government always has  “paid for” everything it buys. Unlike Donald Trump’s creditors, no federal government creditors ever are cheated.

But, of course, that is not what Manchin means. He means that the government should collect as many dollars in taxes as it spends — i.e. a balanced budget — which for the U.S. government, a spectacularly damaging requirement.

Either Manchin is just pandering to his right-wing, West Virginia voters, who are clueless about federal finance, or he himself is clueless about federal finance.  Or both.

The federal government is unlike you, me, and all state/local governments. It uniquely is Monetarily Sovereign, meaning it has the unlimited ability to create its sovereign currency, the U.S. dollar. It cannot run short of dollars.

Every time the federal government runs a surplus, or a balanced budget, we have recessions and depressions:

U.S. depressions tend to come on the heels of federal surpluses.

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.

We have recessions, even when we run deficits that are not large enough:

Recessions (vertical gray bars) tend to occur when federal deficit growth (blue line) declines and are cured when deficit growth increases.

Manchin’s demand, if he sticks to it, could create real problems in Democratic negotiations.

The party in a matter of weeks is seeking to exercise a complicated legislative goal of winning Senate approval of both a bipartisan infrastructure measure opposed by many progressives and a budget resolution that will tee up a larger Democratic bill filled with spending priorities.

The latter bill will not win any GOP support and will need to pass with just Democratic votes, including Manchin’s.

The GOP will not support any bill that will benefit America, because such bills would make President Biden and the Democrats look good. The GOP’s greatest fear is that America will like what Biden does.

They hope for a recession or a depression they can point to. These are “patriots”?

A group of 22 senators, including Manchin, agreed to a framework for a bipartisan infrastructure deal that would spend $1.2 trillion over eight years. But there are concerns among Republicans that the bill isn’t fully paid for, threatening GOP support for it. 

It’s a fake concern, for political purposes. Having already spent $25 trillion that “isn’t paid for” (i.e. via taxing) the federal government easily can pay for this bill, too. The 22 senators know this.

Republican negotiators in the group have warned that the Congressional Budget Office (CBO) could lowball the amount of revenue the proposal will raise.

“I know there are some things that we’re relying on as pay-fors that will probably not receive a CBO score but nonetheless are real,” Sen. Mitt Romney (R-Utah) told reporters.

Meanwhile, Democrats are trying to agree to a price tag for their larger bill.

The two parties are arguing about how many angels can dance on the head of a pin. It’s all political theater for you, a gigantic lie to keep you from receiving federal benefits. The GOP’s purpose is to widen the Gap between you and the very rich, who run the GOP.

Democrats have yet to agree on a top-line figure. Senate Majority Leader Charles Schumer (D-N.Y.) met with Democrats on the Senate Budget Committee on Monday night but didn’t get an agreement. They’ll meet again on Tuesday night.

Senate Budget Committee Chairman Bernie Sanders (I-Vt.) has thrown out $6 trillion, paying for roughly half, as where he would like to go on the Democratic-only bill.

Sen. Mark Warner (D-Va.), a member of the panel, has suggested he’s closer to roughly $4 trillion.

All federal spending always is fully “paid for.”

The liars would like you to forget that last year alone, the government spent more than $4 trillion in stimulus money that supposedly wasn’t “paid for.” And the GOP specifically would like you to forget their Trump tax cut for the rich, that wasn’t “paid for.”

Manchin has acknowledged that a Democratic-only bill is “inevitable” but hasn’t committed to a specific top-line figure. He’s warned, though, that he doesn’t want to go as high as Sanders.

“I want to make sure we pay for it. I do not want to add more debt on. So if that’s $1 trillion or $1.5 trillion or $2 trillion, whatever that comes out to be over a 10 year period, that’s what I would be voting for,” Manchin told ABC News last month.

Sadly, Manchin either is lying or doesn’t know what he is talking about. That horrible thing called “debt” isn’t debt at all. It’s deposits in T-security accounts.

How can an entity having the unlimited ability to create money, also have a worrying “debt”? It mathematically and logically is impossible.

If you owned a legal, money-printing press, would you ever be concerned about your “debt”?

It’s all a giant charade to keep you from receiving federal benefits. Next, we’ll hear the lie that Social Security has run out of money, so you’ll receive less in benefits or pay more in FICA taxes. Then will come the lie that Medicare is broke, so it will have to reduce your benefits by increasing the deductible.

Traitor: A person who betrays a friend, country, principle, etc.
Treason: The crime of betraying one’s country

I suggest that no traitor in American history has done more damage to America than the current Republican Party, led by Donald Trump. These people care nothing about America and are concerned only with pleasing the rich, collecting bribes, and winning elections.

The GOP has abided gangs to attack the Capital, conspiracy theorists like Qanon, and endless liars like Donald Trump, all to gain power for themselves.

The GOP has denied global warming, the seriousness of COVID-19, and the need for vaccination and face masks. As a direct result, Americans have died and continue to die.

The GOP’s current efforts to restrict voting rights under the subterfuge of eliminating (non-existent) fraud, is yet another step in the GOP’s treason.

Think of how the dictatorships around the world began, and you will think of today’s Republicans.

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

Yes, you can have it all. Here’s how.

The U.S. federal government has all the tools it needs to control the value of the U.S. dollar.

You can have it all. We all can have it all. Nothing prevents it other than our own ignorance.

How is your imagination? Imagine a world in which:

  1. We have no poverty
  2. We have is no violent crime
  3. We all can afford the best health care
  4. We all can afford as much, and as fine an education as we wish
  5. There is no air, water, or land pollution, nor shortages of pure water
  6. Global warming does not exist
  7. Our entire infrastructure is kept current
  8. Our government is run to benefit all of us, not just the very rich

We actually do have the power to create this paradise on earth. We can have it all.

Background: The Problem Begins With Poverty

Money is not the root of all evil. Lack of money is.

Have you noticed that street crime — robbery, burglary, assault, murder, rape, shoplifting, drug-pushing — is most prevalent in impoverished neighborhoods? Of course, you have.

Before becoming a resident of Florida this year, I lived 60+ years north of Chicago, in what locally is known as “The North Shore.” It includes mostly upscale, “bedroom” communities, one of which is Wilmette, Illinois, where I lived.

According to “Neighborhood Scout:” 

Wilmette home prices are not only among the most expensive in Illinois, but Wilmette real estate also consistently ranks among the most expensive in America.

Wilmette is a decidedly white-collar village, with fully 94.76% of the workforce employed in white-collar jobs, well above the national average. Overall, Wilmette is a village of professionals, managers, and sales and office workers.

Wilmette is home to many people who could be described as “urban sophisticates”. Urban sophisticates are people who are both educated and wealthy, and thus tend to be older, richer, and more established than young professionals.

“Urban sophisticates” is not just about being educated and well-off financially: it is a point of view and state of mind, one that you might call ‘urbaneness’. But such people can and do regularly live in small towns, suburbs and rural areas, as well as in big cities. They read, support the arts and high-end shops, and love travel.

Do you have a 4-year college degree or graduate degree? If so, you may feel right at home in Wilmette. 83.23% of adults here have a 4-year degree or graduate degree, whereas the national average for all cities and towns is just 21.84%.

The per capita income in Wilmette in 2018 was $87,576, which is wealthy relative to Illinois and the nation. This equates to an annual income of $350,304 for a family of four.

Can you visualize Wilmette?

Google “Murder in Wilmette,” and you might possibly find a half dozen references from the past 50 years. Here is what violent crime looks like in Wilmette, in Illinois, and in the whole United States.


Get the picture?

What is the fundamental difference among Wilmette, Illinois, and the U.S., which can account for the massive differences in crime rates, education rates, and home prices?

Money.

No people are born murderers, rapists, robbers, burglars, and attackers. But lacking money, people are far more likely to grow up as street criminals.

And please spare yourself the anecdotes about impoverished kids who ultimately became pillars of society. Yes, there are plenty of them, and somewhere in their lives occurred fortuitous events that led to their achievements.

Perhaps nature provided them with the necessary brains or brawn to succeed, despite the odds. Or some mentors took them under wing and provided them with the leadership to find success.

And yes, there are rich people who commit crimes, though most often of the white-collar variety. Scant exceptions do occur, but the relationship between poverty and crime, especially violent crime, cannot be denied.

I am as opposed to the proliferation of guns as anyone, but I now do not believe guns are an important cause of crime, though they are an important facilitator of crime (and an even more important facilitator of suicide).

I have come to the conclusion that America could enact the most draconian gun laws on the planet, and that would not solve our crime problems. 

We are at the stage in which gun ownership is an addiction, similar to alcohol and drug addictions. The time long has passed when we legally could prevent gun ownership and usage, any more than we were able, via laws, to prevent alcohol ownership and usage during Prohibition, or prevent drug ownership and usage during the “War on Drugs.” 

We once could have prevented the disease, but now we are too infected for a cure.

We simply cannot stop gun crime by using the brute force of prohibitive laws. That mule will not respond to the stick. At long last, we must learn to use the carrot — the federal government’s infinite ability to create dollars– and thus cure the poverty that is the root cause of violent crime.

Our primary problem is: People who are not impoverished resent the government giving to the poor. It’s a state of mind that each day is fostered by wealthy propaganda.

Additionally: 

The U.S. federal government has the financial power to provide a generous form of Social Security to every man, woman, and child in America, instantly eliminating poverty. 

The U.S government has the financial power to eliminate not only most federal taxes (including the onerous, regressive FICA tax), but importantly to reduce the need for state and local taxes — those sales and use taxes that disproportionately affect the less wealthy — by simply giving state and local governments money.

The U.S. government has the power to eliminate the financial impoverishment caused by lack of insured health care, simply by providing no-deductible, comprehensive Medicare for All.

The U.S. government has the financial power to provide schooling to all Americans who want it — grades K through advanced education, thereby not only reducing the costs of college, but by reducing the need for local K-12 school taxes.

The U.S. government has the financial power to reduce global warming by supporting not only net-zero energy use and production, but also by supporting carbon-removal technology usage, research, and development

The U.S. government has the financial power to support water recycling and desalination usage, research and development. There is plenty of water on earth, but too little is fresh, drinkable water, and we rapidly are reducing those supplies.

The U.S. government has the financial power to repair and modernize our infrastructure — our roads, bridges, dams, sewers, electric grid, telecommunication, tunnels, transportation, parks, beaches, etc.

Many of the above initiatives are being attempted by elements of local government and the private sector, all of which have limited funds,

But, for the federal government, money is unlimited and free, created at the touch of a computer key.

Will so much federal spending cause inflation? No, as we have demonstrated here, and here, and hereinflation is not caused by federal deficit spending. Inflation is caused by shortages of goods and services, and often can be cured by federal deficit spending to reduce shortages.

Will so much federal spending be a burden on future taxpayers? No, federal taxes do not fund federal spending. The Monetarily Sovereign federal government pays for its spending by creating dollars, ad hoc. The sole purpose of federal spending is to control the economy by taxing what the government wishes to discourage, and by giving tax breaks to what the government wishes to encourage.

(This is different from state and local government taxes which do fund state and local spending.)

Will so much federal spending be socialism? No, socialism is not funding; socialism is control.

Consider Social Security. It spends billions but it is not socialism. It doesn’t control. It merely funds.  Similarly, Medicare has very little control over your medical services other than the amounts it funds.

It does not tell you what doctor to see, what hospital to visit or what medicines to take. It does not control what your doctor diagnoses or treats. Medicare does not fund every procedure, but it does not control your financial ability to have the procedure.

Being Monetarily Sovereign, the American federal government has the financial ability to create paradise on earth. We lack only the knowledge and the will to do it.

The populace has been led to believe slogans like “Too good to be true,” and “No such thing as a free lunch,” which replace facts with a world of disinformation and cynicism, making us surrender before we begin.

From the standpoint of federal financing, nothing is “too good to be true,” and yes, federal spending is a “free lunch.”

As for the will, the government is blocked by the very rich, whose “Gap Psychology” goal is to widen the Gap between the rich and the rest. No matter how rich they are, the rich seem always to want to become even richer, and that requires ever-widening the income/wealth/power Gap. — and that requires pushing down those who are not rich.

In Summary:

The more you experience life’s failures, the more you tend to believe cynically, that a perfect world cannot exist, and that attempts to create perfection are fruitless, wasteful, naive, and even harmful. You have grown to expect disappointment.

So, when you are told the U.S. federal government has the infinite power to create U.S. dollars, and do it without adverse side effects, your knee-jerk response is to deride the idea. Thus, the “too good to be true,” and “no such thing as a free lunch” responses.

Yet, when you are told the U.S. government has the infinite power to create laws, and that U.S. dollars are nothing more than legal creations, not physical creations, you may pause that knee-jerk response.

Just as a federal law can say anything the federal government wishes it to say, the U.S. dollar can be anything and worth anything the law says it is, i.e. anything at all.

Throughout American history, federal law has stated that U.S. dollars were worth varying amounts of silver and gold, a process one hopes finally will have ended in the Nixon year 1971. But the U.S. government could pass a new law stating that the U.S. dollar is worth anything at all — a 1-carat diamond, or a pound of salt, or a quart of pure water. The value of the dollar, i.e. inflation, is in the hands of the government.

Beginning in 1971, the government has allowed the U.S. dollar to “float,” i.e. to allow the public to decide the exchange rate (vs. other currencies) of the dollar. 

For that reason, there now can be no real answer to the question, “What is a dollar worth?” You can express it only with regard to other currencies, whose worth is equally vague. 

Because a dollar is, in reality, a debt owed by the U.S. government, its value, like the value of all debts, is determined by its collateral, and the full faith and credit of the debtor, the U.S government. 

Without gold, (or even with gold), the real collateral for the U.S. dollar is the full faith and credit of the U.S. government — not our “spacious skies or amber waves of grain” — just our full faith and credit.

If you were to try to drill down below exchange value to find the “real” value of the U.S. dollar, you would have to determine the “real” value of the full faith and credit of the U.S. government, an impossible task.

All of the above is meant to show you the truly amorphous nature of the U.S. dollar. It is what the government says it is, and it is worth what the government says it is — and there is no limit to the number of dollars the government can create. The dollar is the offspring of the government’s laws.

In short, there is no limit to what the government can spend to purchase paradise.

Authentic Happiness | Authentic Happiness
Working together, we have all the tools we need to create our paradise.

This simple fact makes a mockery of the President’s and Congress’s “struggles” to pass spending legislation, against those who falsely claim the government cannot or should not spend so much money.

In addition to interest rate control, which affects the market demand for money, and Federal Reserve bond purchases and sales, the federal government can revalue or devalue the dollar, at will.

We created a Monetarily Sovereign federal government and gave it all the power it needs to make America a paradise on earth. It is not constrained by money. It has infinite money and infinite control over the value of its money.

Our world is constrained only by our intellect, our imagination, our will, and our honesty. Barring a meteor strike or the sun failing us, we always will have exactly the world we create for ourselves — exactly the world we deserve.

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

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

……………………………………………………………………..

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

 

 

It’s 2021, and after 81 years, the “debt bomb” is about to explode. Again?

As President Ronald Reagan said (often), “There you go again.”

And again.

And again.

The Boy Who Cried “Wolf!”
The economists who cried, “Wolf!”

For 81 years, the debt-nuts have been predicting the imminent doom of the U.S. government and U.S. taxpayers, because the so-called federal “debt” (which isn’t even a “federal debt”) supposedly is too big.

And in the following article, the doom-sayers do it, again.

The Democrats’ ‘Big’ Infrastructure Plan: A Giant Debt Bomb? by Rachel Bucchino, a reporter at the National Interest. Her work has appeared in The Washington Post, U.S. News & World Report and The Hill.

“What would happen to the national debt will depend on the extent to which the bill would include revenue raisers as well as spending.

Of course, Congress basically has two options: borrowing money or raising taxes, whether it uses reconciliation or not,” Stan Veuger, a resident scholar in economic policy studies at the American Enterprise Institute, said.

Wrong, in every respect.

The federal government,  unlike state and local governments, and unlike what the debt-nuts tell you, does not need “revenue raisers.” To pay its bills, the federal government creates new dollars, ad hoc. It cannot run short of its own sovereign currency, the U.S. dollars.

The irony is that the debt-nuts, having made exactly the same complaint for 81 years, do not recognize that their complaint actually disproves their own complaint.

The so-called “debt,” which isn’t actually debt, exceeds (depending on who is counting) $25 trillion. So, if “revenue raisers” are needed, where did the $25 trillion come from? 

And if you think the government borrowed it, then explain where the “lenders” got it.

The answer is that despite the byzantine process by which all dollar lenders create dollars, ultimately all U.S. dollars begin with the U.S. government, and that government never can run short of U.S. dollars.

Why isn’t the U.S. debt actually debt? Because those T-bills, T-notes, and T-bonds are not loans. They are deposits, similar in nature to your deposits into your bank safe-deposit vault.

When you buy federal “debt,” you open a T-security account into which you put dollars. The federal government is Monetarily Sovereign. It has the unlimited ability to create dollars, so it has no need for, or use of, your dollars.

No matter how much the federal government spends, you never will see a deduction, even temporarily from you T-security account.

Your dollars will remain untouched in your T-security account, earning interest, until maturity, at which time your dollars are sent back to you.

No taxes or other sources of revenue are involved. Those are your dollars simply being returned, unused and unneeded by the federal government. 

Here's who owns a record $21.21 trillion of U.S. debt - MarketWatch
The U.S. government owns more than $8 trillion of its own U.S. “debt.” If the government borrows, it must borrow more than a third from itself!

Immediately, the situation looks less dire than the debt-nuts would have you believe. But, here’s even more proof that all the hand-wringing about federal “debt” is nonsense.

The purpose of borrowing is to acquire money. But the U.S. federal government never needs to acquire money. It creates all the money it wishes, just by pressing computer keys.

Exactly correct. So, if the government does not borrow, what is the purpose of T-securities? Answer: In days past, the U.S. government was not Monetarily Sovereign. It did not have the unlimited ability to create dollars.

Its dollar creation was limited by its gold and silver supplies.

The Bretton Woods System tied all global currencies to the value of the dollar, and set the value of the dollar at 1/35th of an ounce of gold.

In 1971, President Nixon revalued the dollar to 1/38th of an ounce, which in turn caused a run on gold reserves.

In order to stop the run on gold reserves, Nixon severed the ties from gold completely.

The above demonstrates that the value of the U.S. dollar is completely arbitrary, and is under the total control of the U.S. President and Congress. Because inflation is a reflection of the dollar’s value, compared with other currencies and with commodities, U.S. inflation also is controlled by the President and Congress. 

The above also demonstrates that precious metals standards limit the government’s ability to create dollars, a limit the federal government has not suffered since 1971.

Days after President Joe Biden’s $1.9 trillion rescue package finally passed, Democrats are already working on another big-spending initiative that will likely target the nation’s infrastructure and invest billions into new projects like broadband internet.

It will likely include provisions aimed at gaining a tighter grip on climate change, mirroring the $2 trillion infrastructure and climate plan proposed by Biden on his campaign trail.

“It is going to be green and it is going to be big,” Rep. Peter DeFazio (D-Oregon), said.

The president’s infrastructure and climate proposal outlined goals including achieving a carbon pollution-free power sector by 2035, upgrading four million buildings and weatherizing two million homes over four years, constructing 1.5 million sustainable homes, expanding broadband internet to every American and investing in 500,000 electric vehicle charging stations.

The initiative also aims to create millions of jobs in related industries such as agriculture, clean energy and auto manufacturing.

Think of what the Biden government wishes to address: Infrastructure, internet, pollution, upgrading, weatherizing, electric charging station, and job creation — and it will not cost you, the taxpayer, one cent. Not one.

The government will create, from thin air, all the money needed. In fact, it could cut tax collections to zero and still pay for everything. And it will do all that while growing the economy.

(Question: Why does the federal government collect taxes if it doesn’t need the money? Answer: To control the economy. It taxes what it wants to discourage and gives tax breaks to what it wants to reward.)

But the debt-nuts in the Republican Party don’t want these wonderful benefits to happen under a Democratic President. So they promulgate lies about the federal “debt,” falsely comparing it with personal debt.

But federal “debt,” not being debt, and not owed by the federal government, is nothing at all like personal debt. It is not a burden on the federal government. It is not a burden on today’s or future taxpayers.

It merely is deposits into quasi safe-deposit boxes.

Think about it. When you put bonds into your bank safe-deposit box, does the bank owe you money? At most, it simply owes you the contents of the box.

While Republicans support widespread infrastructure spending, most have concerns about the overall price tag of the package that would add to the alarming national debt level and the Democrats’ push to incorporate items on climate into a big-spending initiative.

There is nothing alarming about the national “debt” (deposit) level. It is an invented “alarm” to keep you from receiving the benefits our government was designed to create.

These are the same Republicans who supported Trump’s tax cuts for the rich, which also added to the “debt,”

The ratio of debt held by the public to gross domestic product (GDP), which currently stands at 99.37 percent, could reach as much as 110 percent by the end of fiscal year 2021.

It will continue to grow under current law, “but if we were to add another $2 [trillion] from the infrastructure bill by borrowing the full amount, it would go up to a little under 120 percent.

That is very high by historical standards, but interest rates are at historically low levels, making for more moderate annual interest payments.”

Contrary to popular myth, the “debt”/GDP ratio is meaningless.  GDP is a measure of spending in any one year. Federal “debt” measures the net amount of deposits into T-security accounts.

Two completely different measures and two completely time scales. The “debt”/GDP ratio isn’t just apples and oranges. It’s apples and adverbs — two measures that could not be more different.

The meaningless Debt/GDP ratio. It’s not related to growth, to recessions, to inflations, or to any other economic measure. It, very simply, is meaningless.

The ratio has no predictive value. You could examine the ratio for every nation on earth, and it would tell you nothing about the health of that nation’s economy.

Anyone quoting that ratio essentially is telling you, “Either I know nothing about economics, or I believe you know nothing, so I feel I can con you.”

“The problem is that rates may go up and that the debt to GDP ratio will go up dramatically over the next few decades if we continue on the current path. Both of those factors will lead to a dramatic increase in interest payments.” 

While the growing national debt is a looming issue, some economists pointed to the historically low interest rates for borrowing and that investing in infrastructure projects tends to yield a high rate of return.

“What matters is not the debt but the size of interest payments relative to GDP. Since interest rates are so low, any investment that raises GDP significantly is worth it.

Investing in infrastructure has a high rate of return and so it should be done,” Jonathan Gruber, a former technical consultant to the Obama Administration and an economics professor at the Massachusetts Institute of Technology, said.

Now, a new story: “What matters is not the debt but the size of interest payments relative to GDP”?

See? Now the dept doesn’t matter. It’s that meaningless ratio that matters. No not the Debt/GDP ratio. A new meaningless ratio: Interest payments/GDP.

It’s like eating Jello with one chopstick. As soon as you disprove one lie, the slippery debt-nuts come up with a new one.

They want you to worry about interest payment ratios, all while knowing the federal government has the unlimited ability to make interest payments, no matter how large.

And why exactly does the ratio matter? No one knows, but the debt-nuts are sure that somehow, someway it simply must matter, and you should be very afraid.

The fact: Those interest payments are no burden on anyone, and they will help grow the economy.

Top congressional Democrats have suggested removing former President Donald Trump’s 2017 tax cuts or implementing stiff tax policy on the wealthy to help fund the package, moves that will likely see rejection from the other side of the aisle.

While removing tax cuts for the wealthy will do nothing to “fund the package,” it will help narrow the Gap between the rich and the rest, and that is important. The wide Gap punishes millions of Americans while giving near-dictatorial power to the chosen few.

It’s unclear how Biden and the Democrats will look to fund the infrastructure and clean energy plan at this point, as the focus is more targeted on developing a bipartisan package that won’t resort to budget reconciliation.

What a terrible shame. For no good reason at all, the marvelous benefits the federal government is able to provide, are stalled because of ignorance and politics.

In summary, here is the latest sampling of the ignorant, disgraceful, “ticking time-bomb” references — all proven wrong by history — that we have recorded since 1940.

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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, 2019National 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, 2020LOS 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?

March 17, 2021The Democrats’ ‘Big’ Infrastructure Plan: A Giant Debt Bomb? by Rachel Bucchino, a reporter at the National Interest. Her work has appeared in The Washington Post, U.S. News & World Report and The Hill. Congress basically has two options: borrowing money or raising taxes, whether it uses reconciliation or not,” Stan Veuger, a resident scholar in economic policy studies at the American Enterprise Institute, said.

 

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:

  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

 

 

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