The real reason why the GOP rescue package is so skimpy.

The U.S. economy is in deep trouble. President Trump’s re-election chances would improve greatly if the economy were healthy. But the GOP(!) is reluctant to provide enough stimulus.

Why?

Let’s begin with the basics:

  1. Millions of Americans suffer because they lack money. Many are jobless and many slave in low-paying jobs. Children go hungry. Families lose their homes. Millions more can’t afford adequate health care.
    homeless usa - | Help homeless people, Homeless people, Homeless person
  2. Millions of American businesses suffer because they lack customers, i.e. money. Many have closed, some permanently.
  3. The federal government, being Monetarily Sovereign, has infinite money. It never can run short of dollars. Even if zero federal taxes were collected, the government could continue spending forever.
  4. The federal deficit spending and “debt” are no burden on anyone — not on the government, not on taxpayers, not on future taxpayers’ grandchildren.

Given that background, why is it the GOP that doesn’t want to pump sufficient dollars into the economy to rescue us from recession or depression?

Coronavirus stimulus: What’s in Senate Republicans’ pared-down relief bill
Jessica Smith, Reporter, Yahoo FinanceSeptember 8, 2020

Senate Republicans unveiled a pared-down coronavirus relief on Tuesday. Negotiations over the next round of aid have been stalled for weeks on Capitol Hill and there is still little evidence of bipartisan progress.

Republicans aim to put pressure on Democrats with their so-called “skinny” relief bill.

The legislation is expected to cost roughly $500 billion, around half of what the GOP proposed in the HEALS Act earlier this summer. McConnell has struggled to unite his party and many of his own members rejected the first Republican proposal.

In an attempt to keep costs down and satisfy Republicans who don’t want to spend additional money, the slimmed-down bill would repurpose hundreds of billions of dollars in unspent CARES Act funding.

“Pared down coronavirus relief”? “Skinny relief” “Keep costs down” “Republicans don’t want to spend additional money”? “Repurpose hundreds of billions”? “Unspend CARES Act funding”? What the heck is going on with the GOP?

Here we have a government with infinite money, and there we have a populace in desperate need for money, and Congress doesn’t know what to do? I have a suggestion for them:

SPEND THE DAMN MONEY! Get money into the hands of the people. Do it now.

Why do they hesitate to do the obvious?

Then there’s this article:

Republicans Push Scaled-Back Stimulus Plan as Impasse on Virus Aid Persists
The economic recovery measure Republicans presented on Tuesday is a fraction of the size of their original offer and was immediately dismissed by Democrats as inadequate.
New York Times, By Emily Cochrane, Sept. 8, 2020

WASHINGTON — Senate Republicans on Tuesday proposed a substantially scaled-back stimulus plan to provide federal aid to unemployed workers, schools, farmers, the Postal Service and small businesses, announcing a vote this week whose primary purpose was to try to foist blame on Democrats for a continuing stalemate.

The legislation — immediately rejected by Democrats as an inadequate response to the crisis — slashes by hundreds of billions of dollars the $1 trillion proposal Republicans had initially offered in negotiations, and is a fraction of the $2.2 trillion Democrats have said is necessary.

Not only is the Republican proposal too little, too late, but it is even less than they originally proposed. Seemingly, they are doing everything possible to avoid an agreement. This is a negotiation??

But Mr. McConnell, said he would force action on the doomed package, to accept a much smaller plan than they have been willing to agree to.

While Americans starve, the Republicans play political games. What exactly is the game? Keep reading.

Since lawmakers left Washington in early August, millions of Americans have filed new unemployment claims, wildfires and devastating storms have ravaged the country, schools have struggled to safely reopen and states have begun carrying out a series of budget cuts to remain solvent.

Moderate lawmakers in both chambers, particularly those facing difficult re-election challenges, are growing increasingly anxious over the gridlock and eager to persuade voters that Congress is addressing the toll of the pandemic, a dynamic that Republicans hope will help pressure Democrats to lower their spending demands.

Does America understand that the Democrats wish to give more money to those devastated economically, and the Republicans wish to give less — and this is supposed to pressure the Democrats??

While House Democrats approved a $3.4 trillion measure in May, Ms. Pelosi in recent days has told Steven Mnuchin, the Treasury secretary, that Democrats would be willing to accept a package of $2.2 trillion. (Mr. Mnuchin, for his part, has signaled that the administration may be willing to accept up to a $1.5 trillion package.)

The $3.4 trillion probably would not be enough to bring America out of the recession, but in the name of political cooperation, Pelosi reduced the Democrats’ proposal to $2.2 trillion.

Then Mnuchin cut that to $1.5 trillion, not for any financial reasons, not for any affordability reasons, but just to please the Republicans.

And even that cut wasn’t deep enough to satisfy the GOP, which clearly is more interested in tax cuts for the rich than helping the impoverished.

Fiscal hawks are deeply reluctant to embrace more spending after an infusion of nearly $3 trillion this spring, and the Congressional Budget Office said on Wednesday that government debt had ballooned in the 2020 fiscal year and nearly outpaced the size of the economy.

The measure presented on Tuesday, crafted after weeks of daily conference calls with senators and top administration officials, would provide up to $700 billion, Republican aides said, although about half of that money would come from repurposing funding already approved by Congress in the stimulus law enacted in March.

The “$700 billion” really was just “$350” billion to stimulate a $27 trillion economy from the depths of despair. Why so cheap?

The Republican-written legislation would provide a $300-per-week federal unemployment benefit, and provide that relief through Dec. 27. Democrats have pushed to revive the full $600-per-week payment established in the March stimulus law, at least through January.

The bill does not provide funds for another round of $1,200 stimulus checks for Americans, which both chambers had included in their opening offers, or offer any additional funding to state and local governments.

Democrats called the measure “emaciated” and doing little to address the long-term impact of the pandemic on the nation’s economy. “What they have is so meager that it insults the intelligence of the American people,” Ms. Pelosi . “We know we have to negotiate in order to reach an agreement. We all want an agreement, make no mistake about that. But get serious.”

If you didn’t understand the politics, you would think the Republicans not only would want a greater benefit than “$300-per-week” (How many families can live on that?) but would be the ones pushing for $600 or even $1,000 per week.

And why did the $1,200 stimulus checks, which the Republicans first included, suddenly disappear from the latest GOP proposal? Here is why:

Big business wants desperate workers.

The GOP, the party of the rich, does what the rich want it to do. Do you remember the tax cut that was supposed to save you money? The vast majority went to the rich.

Do you remember all the GOP efforts to eliminate Obamacare, the insurance that covered pre-existing conditions? Those efforts continue. The GOP hates that kind of insurance because it allows workers to be independent of company-provided insurance. Without Obamacare, leaving your employer or demanding a raise would be easier.

And now, when the U.S. government has the power to pull everyone out of this virus-induced poverty, big businesses are telling their GOP friends, “We need workers who will work long hours for short pay.”

And what about Trump’s re-election chances?

No one cares about Trump. Certainly not the Democrats, and not even the Republicans. He may be the most despised President in history, perhaps the most despised man in all of America, today.

The Republicans know he is a threat to American democracy and more importantly, he will do nothing for them. He is a “me-first, me-only” fool, who himself shows no loyalty to anyone.

By contrast, the rich provide the GOP Congresspeople with their election money. Long after Trump is gone, the rich will remain loyal, checkbooks in hand.

And the rich have good memories. They will remember who helped them and who didn’t.

If you helped them acquire cheap, hard-working labor for your business, you will be thanked. If you don’t help them, they will help your next opponent.

That is why the rich want to cut Medicare benefits, Social Security benefits, and indeed all benefits to the not-rich. They want a big supply of desperate people.

Pay no attention to the fake concerns about the federal debt being “unsustainable,” or the U.S. becoming “insolvent.” The rich know that cannot happen. They understand Monetary Sovereignty.

The purpose of those fraudulent rationales is to give a “logical” gloss to the illogical idea that the federal government could run short of its own sovereign currency.

After all, the politicians can’t admit they are doing it to keep you in slavery, can they?

The federal government has all the financial power it needs to pull America out of this recession and to help the states, counties, and cities return to solvency.

To do the bidding of the rich, the politicians rely on the ignorance of the public. That is why the GOP rescue package is so skimpy. Big business wants desperate workers.

Now, you know.

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 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

Now that you’re hearing the predictable denials from Trump’s sycophants, here are the facts

The history is overwhelming. Trump repeatedly has demeaned members of the military and their families. That he himself is a lying draft-dodger is but a tiny example of his character and mindset.

His groveling before our enemy Putin is another example.

Everyone who touches Trump is ruined. They forever will be remembered as liars and bootlickers — defenders of a criminal and a traitor.

And Trump will be remembered only as a bad example.

When people have said, “He’s another Hitler,” that was considered the worst possible insult for any leader.

That now has been superseded by, “He’s another Trump.”

Listen to the above link and ask yourself, how many examples does it take before even the most hypnotized Trumpers finally say, “This man is no good. I don’t believe him”?

At long last, enough is too much.

Rodger Malcolm Mitchell

Why does bigotry work so well?

It often is claimed, people vote with their wallets.

In 1992, James Carville, President Clinton’s strategist, famously said, “It’s the economy, stupid,” and those words have come down through the years as the mantra for successful politics.

The idea is if you promise people jobs, money, and success –“a chicken in every pot” (1920’s Republican slogan) — you will win.

Ambition, greed, and compassion are strong motivators, appealing motivators, motivators that often work.

But I suggest there is an even stronger motivator, and that is bigotry. The most powerful human emotions are anger and fear — the ultimate survival emotions — and bigotry appeals to both.

Franklin Roosevelt’s famous “date which will live in infamy” speech was based on bigotry — anger at, and fear of “The Japanese Empire.” It was meant to stir up hatred of Japan and the Japanese people, and it succeeded so well that subsequently, Roosevelt was able to round up and sequester thousands of American citizens whose only crime was to be of Japanese descent.

Hitler, of course, used bigotry to justify the most terrible and gruesome acts. Hatred is not bounded by reason or compassion. The German people were able to sleep at night.

And Donald Trump has used the Hitler playbook to gather otherwise good, religious people, specifically white evangelicals, into his web.

Bigotry often masquerades as economics and safety. “The Mexicans will take your job.” “The Jews own everything.” “When the blacks move in, they will destroy your house values.”

Most people deny being bigots, so if you ask someone why they hate, they will give you a reason, not the real reason, but a reason.

When Trump talks to white, suburban housewifes, he makes a blatant overture to bigotry:

How Trump Is Using Westchester to Stir Up Suburban Fears
In an appeal to racism among white voters, the president says that Democrats tried to ruin Westchester County, N.Y., through fair housing policies.

“Westchester was ground zero, OK, for what they were trying to do,” Trump said on Monday, in an interview on Fox News with Laura Ingraham, referring to Mr. Biden and his fellow Democrats. “They were trying to destroy the suburban, beautiful place. The American dream, really. They want low-income housing, and with that comes a lot of other problems, including crime.”

It’s all a lie, of course. Democrats Obama, Clinton, Johnson et al didn’t “destroy the suburban, beautiful places.” In fact, suburbs have prospered over the years.

But like Hitler and other bigots, Trump tries to paint a vivid picture: Hoards of wild, untamed blacks and Mexicans, pillaging and raping and turning your neighborhood into a slum. And if you have a tendency to bigotry, this provides a perfect excuse for your beliefs.

Trump cannot cause you to become a bigot. He only can appeal to you if you already are a bigot. No one is born a bigot. Bigotry is a learned disease.

Here are excerpts from an article in “The American Conservative.”

After Trump Loss, ‘Deplorables’ Will Be The Democrats’ First Target
Blame the president for leaving his core supporters at the mercy of the opposition’s cultural and economic revolution
Robert M. Merry, September 7, 2020.

If President Trump loses his reelection bid in November, as appears likely, the greatest victims of his presidency will have been his own constituency—the Americans who have given him his consistent but sub-par approval rating of between 39 percent and 43 percent throughout his tenure.

And when the new Democratic regime takes over, those people will become its target of choice.

We know who they are: largely white, more male than female, generally older than 45, largely blue collar, educated through high school but not much beyond, agitated particularly by U.S. immigration policies of the past few decades, with widespread feelings that their financial standing in the country has been increasingly constricted.

Note the fear-loaded, anger-inducing words: “First target,” “cultural and economic revolution,” “victims,” “target of choice.” These are not words of logic. They are not thoughtful words. They are words to incite the torch-carrying, pitchfork-carrying mob gone mad.

And remember, the words are directed at Joe Biden, a man who has spent many years in public office, 36 as a U.S. Senator and 4 as the Vice-President of the United States. There is nothing in his history to indicate he seeks a “cultural and economic revolution” (whatever that means). But to bigots, facts mean nothing.

Resentful people, who believe their poor circumstances have been caused by “THEM,” need someone to blame — the rich, the criminal, the blacks, Mexicans, Democrats, unpatriotic, gays, and anyone of a different religion or no religion at all. In short, everyone but US.

So, illogically, they vote for a man who expresses hatred for “THEM,” despite the man being one of THEM: A rich, criminal, former Democrat, irreligious, draft-dodging, multiple adulterer. So long as he expresses fear and hatred for “THEM,” that is sufficient.

They are nationalist in outlook, not globalist, with strong feelings of traditional patriotism of the kind that guided their parents and grandparents.

Yes, they will overlook his draft-dodging, his tax-cheating, his four-star-general-insulting, his comments about those who die for their country as being “losers” and “suckers,” so long as he keeps expressing hatred for the people the bigots hate and fear.

Many of them don’t much care for Trump as a person. A Pew Research Center study during the 2016 primaries revealed that fewer than half of Trump supporters ascribed any favorable traits to him. Many didn’t consider him well informed, admirable, or even honest.

But, based on their consistent support for the president over the past four years, it seems that they view him as standing between them and an emerging Democratic coalition, whose policy prescriptions pose an economic threat to them and would otherwise marginalize them in American society.

And those are the key words — “marginalize them in American society.” Trump’s supporters are made to believe the GOP, the party of the rich, together with the rich man who passed a tax cut for the rich, and who has appointed rich incompetents who only try to line their own pockets — that man somehow will lift them from marginalization, while the Democrats, the party of the poor, will marginalize them.

Yes, there is no logic in bigotry, and it is so sad to see people who would benefit most from the implementation of the Ten Steps to Prosperity (below) — a liberal initiative — vote against their own best interests, to further be enslaved by a GOP, a Trump, and Trump’s rich, pack of convicted crooks.

They see the Democratic Party lurching to the left and know that, should the Dems take complete power over the federal government in January, it will go even worse for them than it has over the past quarter century.

U.S. borders will become more porous, largely through executive action. Asylum policies will be loosened up. Pro-immigrant legislation, such as free medical care for illegals, will serve as an enticement for greater illegal entry. A path to legal status, or even citizenship, will be pushed through.

All this will devastate wage rates, thus harming the economic wellbeing of the Trump constituency. It also will serve over time to generate millions of new Democratic voters who will overwhelm the beleaguered white middle-class.

Keep in mind that the immigrants are consumers, whose buying provides more jobs, not fewer, and better jobs because immigrants are less educated than “the beleaguered, white, middle-class.” Immigrants take the lowest, meanest, least remunerative jobs, not the jobs the white, middle-class wants.

And free medical care for the illegals also is free medical care for “the beleaguered white, middle-class” — a benefit the GOP consistently has fought. Medicare, Medicaid, Obamacare, poverty aids — those dreaded liberal initiatives — would be much more beneficial to the white middle-class if the Democrats were not hobbled by Mitch McConnell and his GOP Senate.

Even today, the Democrats wish to pump $3 trillion more into the economy, the vast majority of which would benefit Trump’s followers. The GOP says, “No.”

The Democratic elite will resuscitate the free-trade policies of recent decades, thus reviving the deterioration of industrial America that Trump sought to reverse.

Trump’s efforts largely consisted of ending existing trade agreements and replacing them with almost identical trade agreements, destroying any hope of international trust and cooperation, and importantly, levying tariffs on imports — tariffs that are paid by “the beleaguered, white, middle-class.”

As the world’s former moral, political, and economic leader, America under Trump has become just like Trump: A selfish, dishonest nation whose word means nothing on the international stage, and whose “America first, America only” policy prevented us from even being able to condemn Iran for breaking a treaty we alread had broken.

The further evaporation of working-class industrial jobs will deliver another financial blow to his constituency. A likely return to humanitarian interventionism, meanwhile, will lead to new foreign wars, sap the nation’s resources, stir internal frictions, and pull the sons and daughters of Middle America into the maw of conflict.

To “sap the nation’s resources” Trump has begun a war — a trade war — paid for by his followers, as is the Wall which was not paid for by Mexico.

The evaporation of industrial jobs was caused not by immigrants, but by computer automation, and was inevitable. Rather than curse the darkness, America’s leaders should have provided the finances and education necessary to help “the beleaguered, white, middle-class” benefit from this new reality. Trump could have done that, but he didn’t.

Machines now do the mind-numbing, repetitive, brainless industrial jobs Trump’s followers are told to desire. Is that what they really want for their children and grandchildren? Helping people to again become coal miners does them no favors. It merely destroys hope. It is Trump’s dystopian vision.

Trump supporters can see the shape of things to come when they witness Black Lives Matter protesters accosting people in restaurants and bars, yelling “silence is violence” into their faces and demanding gestures of support.

They can’t miss the implications of protests turning into violent riots, with property destroyed, businesses obliterated, downtowns turned into war zones, even violence perpetrated on innocent people with the wrong views—all while police forces in cities throughout America, hobbled by anti-police zealotry (or intimidation) on the part of liberal local officials, stand by and watch.

Portland is not everywhere, but it is far more interesting to the television networks than pictures of the many thousands of people all over America, quietly protesting against racial bigotry.

Rather than demonize the comparatively few violent protesters (many of whom are white supremacists, and Russian-backed thugs fomenting violence), Trump should use his power of office to eliminate the fundamental reason for the crime, the violence, and the protests: Poverty.

Instead, he blames the victims and adds fuel to the class-warfare fire. Given two ways to deal with unfairness in American society — penalize the rich or lift up the poor — Trump has chosen a third way: Beat down the poorest.

What went wrong? Trump went wrong.

He built his constituency by exposing to America the fundamental political reality of 2016—namely, the widening chasm between Middle America and its bicoastal elites of big media, government officials, think tanks, big tech, burgeoning financial institutions, the federal deep state, and mavens of popular culture.

He pulled his voters together into a tight knot of political support born of fear and intimidation and self-interest.

But then he couldn’t build on it. He could never take his 43 percent support and find a way to add another 10 percent by devising policies designed to operate on the political margin.

Trump identified a real problem — the Gap between the rich and the rest — and because he is a psychopath, he has not led us away from the Gap but right into it. His real policy has not been “America first” or even “America only.” His real policy has been “Trump only.”

That as many as 43 percent fell for it, is a credit to his personal charisma, a common feature of psychopaths.

(In the Robert Hare Checklist of Psychopathy Symptoms, #1 is: GLIB AND SUPERFICIAL CHARM — the tendency to be smooth, engaging, charming, slick, and verbally facile. Psychopathic charm is not in the least shy, self-conscious, or afraid to say anything.)

A well-crafted grand strategy on immigration probably could have served the purpose, had there been sufficient compromise involved.

A success on the health care issue would have helped.

A big factor could have been a foreign policy success fulfilling the president’s promise of reducing America’s military footprint overseas.

A use of language and a comportment signifying a sense of national unity, at least to the point of creating a majority coalition, could have helped tremendously—and would have been easy to do.

But Trump couldn’t do any of it. The result was that he couldn’t get beyond his core constituency and hence probably can’t be reelected. That likely will leave that core constituency in the lurch as the nation continues the politics of rancor, recrimination, and abuse under a new Democratic regime.

He couldn’t do any of it because he is a psychopath. He had no grand strategy on immigration or anything else. (Hare Checklist item #13 LACK OF REALISTIC, LONG-TERM GOALS — an inability or persistent failure to develop and execute long-term plans and goals.)

He had no success with health care because it didn’t affect him personally. He simply has no compassion for the sick. (Hare Checklist item #8 CALLOUSNESS and LACK OF EMPATHY — a lack of feelings toward people in general; cold, contemptuous, inconsiderate, and tactless.)

He had no foreign policy success because no one can trust him to live up to a commitment. (Hare Checklist item 15. IRRESPONSIBILITY — repeated failure to fulfill or honor obligations and commitments; such as not paying bills, defaulting on loans, performing sloppy work, being absent or late to work, failing to honor contractual agreements.)

He caused national disunity because he has Hare Checklist item 10. POOR BEHAVIORAL CONTROLS —  expressions of irritability, annoyance, impatience, threats, aggression and verbal abuse; inadequate control of anger and temper; acting hastily.

If Trump loses, his core constituency will not be left in the lurch. In fact, a Democratic White House and Senate would be the best thing that ever happened to “the beleaguered, white, middle-class.”

They will have free, comprehensive health care, jobs well above the ditch-digging, brainless jobs Trump wants them to have, education for their children, and better Social Security benefits.

And the violent protests, which really are protests against Trump’s violent police state, would end. Trump preaches violence, and his violence always begets more violence. Then he blames the protesters for what he has wrought.

The beleaguered, white, middle-class need only to ignore the siren song of a man and a party — Trump and the GOP –that uses them and takes from them, but cares nothing for them.

Bigotry works because it appeals to our fundamental emotions of fear and hatred, but bigotry is self-consuming, and those who follow Trump are being led into the darkness.

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 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

Your periodic reminder. After 80 years, the federal debt still is a “ticking time bomb.”

Here is your periodic reminder. After 80 years, the federal debt still is being called a “ticking time bomb,” the slowest time-bomb in history.

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

  1. 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.
  2. 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.
  3. 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.
  4. 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.This image has an empty alt attribute; its file name is mountain-of-debt.png

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.

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.

================================================================================================================================================================================================

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?

APR. 16, 2021NATIONAL 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.

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Oooh, “the approaching fiscal cliff and national bankruptcy” still are approaching — but never arriving. The only fiscal cliff we have is the one that Trump + COVID are pushing us over. The people in America may go bankrupt, but the federal government never will.

And yet, the GOP refuses to implement the latest $3 trillion rescue package proposed by the Democrats because . . . well, because it was proposed by the Democrats and it includes benefits for the poor and middle-income groups, and “not enough” for the rich.

Millions of Americans are jobless and starving, but that ole’ federal debt bomb is still ‘a tickin’.

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 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