.

St. Louis Federal Reserve: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills.

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

I’ve been promulgating the Ten Steps to Prosperity (see the end of this post) for several years. It is a program designed to narrow the income/wealth/power Gaps between the rich and the rest of us.

As the St. Louis Federal Reserve and many others say,  federal deficit spending is infinitely affordable for our Monetarily Sovereign government.

Now comes evidence that programs incorporating elements of the Ten Steps do work, though by themselves still are insufficient:

There’s now clear evidence that anti-poverty programs like welfare and Social Security work
By: Ethan Wolff-Mann, Senior Writer, Yahoo Finance, May 11, 2018

Poverty-alleviation programs like food stamps (SNAP), Social Security, and other “welfare” programs are broadly effective at reducing poverty, a new study from University of Chicago researchers found.

Researchers Bruce Meyer and Derek Wu, conducted a more comprehensive analysis than found in most studies, because it used administrative data from the programs’ payment records, not just survey data of recipients from the Census Bureau.

The effectiveness question is often at the crux of the dispute, and the study finally answers it in a more complete way for six major programs: SNAP, Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF), Social Security, housing assistance, and the Earned Income Tax Credit (EITC).

Wu told Yahoo Finance. “Even though single-parent are still relatively underserved by the safety net, the effects of certain programs (like Social Security, SSI, and Public Assistance) on their poverty rate more than double when we bring in administrative data.”

Respondents in Census surveys often significantly under-reported the effects of these programs, failing to count 50% of public assistance dollars, 42% of SNAP dollars, and 16% for SSI.

The research found that all programs except for the EITC “sharply” reduces deep poverty, (50% below the poverty line — income of $12,140 for an individual and $20,780 for a family of three).

The EITC has a bigger impact on families around 150% of the poverty line, an income level often described as “working poor.” The researchers called the tax credit, along with SNAP, the “most effective” of the means-tested programs.

For the elderly, Social Security benefits slash poverty by 75%.” Social Security’s overall effect on all poverty is also enormous, responsible for by far the largest poverty reduction among all these programs, the study said.

When it comes to alleviating deep poverty “many of the means-tested transfers (like SSI, SNAP, and housing assistance) play a substantially larger role than Social Security, which pays out more for those who put more in.

The income/wealth/power Gaps constitute the single most important problem in economics.

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.

Social benefit programs narrow the Gap between the rich and the rest. Such programs not only are easily affordable for our Monetarily Sovereign government, but they do not lead to an uncontrolled inflation (See: Deficit spending does not cause inflation).

So why have we not instituted the Ten Steps, which would focus on Gap reduction? Answer:

The rich do not want Gap reduction, and they have brainwashed the public into believing help for the poor is immoral and unnecessary.

Gap Psychology, the human desire to separate oneself from those below on economic scales, and to come closer to those above, aids the rich in their brainwashing efforts.

The populace is all-too-ready to believe that the poor are lazy takers, who could, if they wished, lift themselves by the bootstraps. Much of the populace falsely believe that aids to the poor encourage the poor to remain lazy and poor.

Further, the populace has been trained to believe that for the poor to receive benefits while not working is sinful (though perfectly fine for the idle rich).

The notion that the poor are so lazy they prefer poverty to work, has no basis in fact, and is beyond contemptible. But it provides a handy excuse for Gap Psychology.

In summary, there are no economic reasons not to institute the Ten Steps to Prosperity.  They would benefit not only the poor, but the entire economy.

We should begin without further delay.

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

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

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 The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Also refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Also, click: The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

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

MONETARY SOVEREIGNTY
frod

…………………………………………………………………………………………………………………………………………….

What is the purpose of money? You may never have thought of it this way.

Yes, money acts as a convenience. As opposed to a purely barter economy, in which you would need to carry and ship various items of value to trade for other items of value, transactions using money allow you simply to press a computer key.

Yes, money acts as a measure. It helps you determine and compare how the public values things.

Yes, money acts an incentive, to do what society wants to be done.

Yes, money helps you evaluate people’s trustworthiness. Depending on how people use their money, and how much money they own and owe, you can determine credit.

Yes, money helps you evaluate people from many perspectives. You think about rich people differently from the way you think about poor people. You may not like the shallow implications of this sort of evaluation, but it is reality. You do it all the time.

And yes, money acts as a reward, and this is a clue to the real function of money.

In fact, money is so pervasive in your life, you scarcely can imagine a society operating without money.

And yet . . .

. . . yet, termites don’t use money, and some of their societies can include several million individuals. Each termite simply does its job, without any exchange of money. The same is true of bees and other social insects.

Emporer penguins form large societies, and the males especially, work together to shelter one another from the cold and wind. But no money is exchanged.

Our nearest relatives, the chimpanzees, don’t use money, though they do use a back-scratch grooming system that is a vague cross between barter and money.

Now, consider human families. I have a wife, two children, and five grandchildren. We don’t use money for our family internal transactions. I do things for them, and they do things for me and for each other, and no money changes hands. In our little society, we do not use money.

But in our dealings with the rest of the world, we use money.

How is it possible for my family to operate internally without money, and for termites and penguins and chimpanzees to function without money, but nations and large human societies seem to demand money?

I propose that the primary purpose of money is to mediate the conflict between Gap Psychology and Fairness.

Gap Psychology is the common desire to narrow the income/wealth/power (IWP) Gaps above you and to widen the Gaps below you.

You wish to follow, mingle with, and know more about the rich and famous, while you wish to distance yourself from those poorer and less powerful than you.

Being nearer to the strong and farther from the weak is a human survival technique.

The following graph provides a demonstration of one of the many Gaps, the salary Gap:

Fairness opposes Gap Psychology. Gaps, by many measures, are unfair. Ironically, though we are strongly influenced by Gap Psychology, we also are strongly influenced by the desire for Fairness.

From an early age, you felt the urge for Fairness. Consider these excerpts from an article in Scientific American Magazine:

Do Kids Have a Fundamental Sense of Fairness?
Experiments show that this quality often emerges by the age of 12 months
By Katherine McAuliffe, Peter R. Blake, Felix Warneken on August 23, 2017

There is a commonly held belief that humans are fundamentally selfish agents and fairness is a construct designed to help us override our selfish instincts.

Not only this, but the idea really seems to be that fairness doesn’t come naturally, which is why we need institutions like the justice system to make sure that fairness prevails.

Psychologists and economists have begun to gradually chip away at this notion, showing that people are actually pretty fair even when they can get away with selfishness.

Recent studies with children suggests fairness is an integral part of how our social world operates.

Infants as young as 12 months expect resources to be divided equally between two characters in a scene. By preschool, children will protest getting less than peers, even paying to prevent the peer from getting more.

As children get older, they are willing to punish those who have been unfair both when they are the victims of unfairness as well as when they witness someone else being treated unfairly.

Older still, children would rather receive nothing than receive more than a peer.

The purpose of money is to deal with two conflicting desires: Your desire to gain relative to other IWP levels,  and your desire to achieve a fair distribution of IWP.

Paying money for goods and services justifies your receiving those goods and services (fairness). Receiving more money than others to buy goods and services, provides the Gap.

In my family, and probably in yours, there is no Gap Psychology and no concern about fairness. You do not wish to distance yourself from your children who have less IWP than you, nor do they wish to come closer to you just on the basis of your IWP.

Thus, there is no need for money in your family internal transactions. But you do need money in your exterior transactions to achieve fairness and the Gap.

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

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

The most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-lesses.

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 The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

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

———————————————————————————————————————

MONETARY SOVEREIGNTY