President Donald Trump nominated Jerome Powell to run the Federal Reserve once current Chair Janet Yellen’s term expires.
The move follows an extended period of speculation over who would be named to head the central bank, whose aggressive policies have been considered crucial to a climate of low interest rates, surging job creation and booming asset prices.
“Today is an important milestone on the path to restoring economic opportunity to the American people,” Trump said. “The Fed requires strong, sound and steady leadership” and Powell “will provide exactly that type of leadership.”
Yellen’s term has been marked by a mostly uninterrupted bull market run in stocks that began in March 2009.
The central bank has taken the first steps in unwinding the $4.5 trillion balance sheet built up during the efforts to spur growth through bond purchases.
Yellen is “a wonderful woman who’s done a terrific job,” Trump said.
In short, Trump fired a “wonderful womanwho’s done a terrific job,” and who has seen a “mostly uninterrupted bull market.” In her place, he hired a man who, so far as Trump knows, will do exactly the same thing. The difference: He will be Trump’s, not Obama’s.
Aside from snuggling up to the President, what is the real job of the Fed Chairman? If I were President, and about to hire a new Fed Chairman, I’d tell him/her something like this:
You have two tasks: Run the banking system efficiently and control inflation by controlling interest rates.
Don’t try to stimulate the economy; that’s Congress’s and my job.
Don’t worry about federal deficits or debt or unemployment. Those all belong to Congress and me.
Keep your focus on the banking system and inflation.
Why would I stress that focus? Recently, an article in The Week said otherwise:
John Williams, the president of the Fed’s San Francisco branch, and one of the officials who regularly votes on monetary policy, is suggesting a move to something called “price level targeting.”
The Fed manages the economy by adjusting interest rates up and down in order to meet its dual mandate: to maximize employment and to keep prices stable.
The problem is the so-called “dual mandate,” which is really a triple mandate, or more: Not only maximize employment and keep prices “stable” (i.e. 2% inflation), but grow the economy, prevent & cure recessions, prevent & cure “bubbles,” and generally be responsible for the entire economy.
Note how Janet Yellen was given tacit credit for the 9-year recovery from the “Great Recession.
Thus, Congress and the President (C&P) are not at fault for anything that goes wrong; it’s all the Fed. How very convenient.
Never mind that C&P determine all federal spending, all federal taxing, all federal regulations and all supervision of financial laws. We are supposed to believe that none of that affects employment, prices, or economic growth.
No, it’s the Fed that supposedly is responsible for the economy. Can it get more ignorant than that?
Actually, it can, because of the underlying belief that cutting interest rates is stimulative and raising rates is recessive. This belief is based on the idea that high rates make borrowing easier, and borrowing is stimulative.
There are two problems with that belief, one theoretical and one factual. The theoretical goes like this: Low interest rates stimulate businesses and individual borrowing, and borrowing is stimulative. Therefore low interest rates stimulate the economy.
But facts from history do not show that low rates stimulate borrowing:
If low interest rates stimulate borrowing, you would expect to see the blue line (Fed Funds Rate) move opposite to the red line (Household borrowing) and the orange line (Business borrowing). We see no such relationship.
More facts: History also does not show that low rates stimulate hiring:
If low interest rates stimulate hiring, you would expect to see the blue line (Fed Funds Rate) move opposite to the red line (Employment/Population ratio). Again, we see no such relationship.
With the 2008 crisis, the Fed found itself cutting interest rates all the way to zero, and it still didn’t stimulate the economy nearly enough.
If cutting interest rates all the way to zero didn’t stimulate the economy enough, doesn’t that provide a strong clue that cutting rates simply doesn’t stimulate the economy?
And let’s not forget that cutting rates reduces the number of dollars the federal government pumps into the economy in the form of interest on T-securities.
And the final nail in the “low-rates-stimulate” coffin, here is a comparison of interest rates with Gross Domestic Product:
If low interest rates stimulate the economy, you would expect to see the blue line (Fed Funds Rate) move opposite to the green line (Gross Domestic Product). Yet, again, we see no such relationship.
The central bank likely won’t have nearly as much room to cut interest rates and boost the economy when the next recession arrives.
Correct. The central bank won’t be able to “boost” the economy by cutting rates below zero. Why would anyone think a below zero — or any other low rate — would be stimulative?
But if the Fed can’t cut rates any lower, it might still be able to boost the economy by credibly promising to keep them at 0 for longer.
Strangely, the author (and most policy “experts”) believes cutting rates down to zero is stimulative, but cutting rates below zero is recessive.
So for instance, if the rate is at 5%, and the Fed cuts five percentage point all the way down to zero, that will stimulate the economy, but if instead, the Fed cuts 5.1 percentage points, that will be recessive???
Folks, if that makes sense to you, you also might be interested in what a Nigerian prince has to offer.
In summary: The Fed controls interest rates, which in turn, partly control inflation. That’s it. Economic growth is controlled by Congress and the President.
America is a business; a very, very big business. Never ask a bank to run a business.
•All we have are partial solutions; the best we can do is try.
•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money no matter how much it taxes its citizens.
•No nation can tax itself into prosperity, nor grow without money growth.
•Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
•A growing economy requires a growing supply of money (GDP = Federal Spending + Non-federal Spending + Net Exports)
•Deficit spending grows the supply of money
•The limit to federal deficit spending is an inflation that cannot be cured with interest rate control. The limit to non-federal deficit spending is the ability to borrow.
•Progressives think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
You have been invested in the stock market for the past nine years. You now view yourself as a financial genius. Calm down. It would have taken exceptional “skill” for an investor not to have made money, lots of it, in this bull market.
And the market still bulls upward, newly propelled by the anticipation of stimulative federal tax cuts.
Why do tax cuts simulate? Very simply, because they leave more dollars in the economy.
Think of yourself as a car and the gas station as the federal government. When you pump gas into your car, the gas station runs a gas deficit and you run a gas surplus.
The station’s gas deficit is a good thing, just as the federal government’s money deficit is a good thing for you.
But if for some strange reason, you are forced to give the gas station more gasoline than you receive (i.e. the station runs a gas surplus), your driving will be limited.
Now, you begin to see articles by pundits, who tell you the end is nigh, or surely must be nigh, because all bull markets end, sometime. The January/February issue of MONEY Magazine contains just such an article. It is titled, “3 Ways This Bull Market Could End.”
The “3 ways” are interesting, and each contains a grain of truth, but they don’t include the real way this bull market will end.
First, MONEY’s “3 ways”:
Scenario #1: The Economy Did It
What bull markets fear most isn’t the shock of war or political crisis, but recessions.
Two-thirds of all bull markets since World War II have ended in anticipation of an economic contraction. Still, most traditional indicators are signaling that the economy is doing just fine and isn’t likely to shrink in the next year or two.
Historically, real estate construction has been a terrific indicator of the economy because it takes months to construct a new home. Every recession since 1960 was preceded by a double-digit decline in housing starts.
Yet in October housing starts rose by double digits—13.7%, to be exact—indicating that construction firms aren’t betting on a slowdown in the economy in 2018.
There’s another concern. “The economy typically slips into a recession four years after the first Federal Reserve rate hike,” says John Lynch, chief investment strategist for LPL Financial.
The central bank actually started lifting rates in late 2015. Four years after that would put a possible recession start date in late 2019. And if stocks foreshadow recessions up to a year before, that means a bear could be lurking at the end of 2018.
The stock market is the world’s business-prediction method. With hundreds of millions of investors inputting their beliefs, it is the ultimate “Wisdom of the crowd” device.
But, a problem with this “wisdom,” it that not only does the “crowd” try to predict the overall market, and not only does it also try to predict the effect of individual stocks, but the crowd also tries to predict the actions of the crowd, and then act on these predictions.
Thus the crowd becomes a self-referential, self-fulfilling prophesy machine.
Further, federal interest rate hikes are not, in of themselves, recessive. On the contrary, to the degree a rate hike forces the federal government to pay more interest dollars into the economy, the increased rates are stimulative.
Rate hikes always are a prevention and cure for excessive inflation, and excessive inflation is a cause of business downturns.
It is the disease (inflation), rather than the cure (higher interest), that causes the symptom: Recession.
Scenario #2: The Fed Did It
Central bankers at the Fed have publicly stated that they believe there will be around two or three more rate hikes in 2018, bringing the so-called Federal funds rate, which banks charge one another on overnight loans, to around 2% or so next year.
The markets have a knack for testing newly installed Fed chairmen.
It happened to Alan Greenspan, who became chairman in August 1987, at the end of an economic cycle. The Greenspan-led Fed proceeded to raise interest rates just before the October 1987 crash.
Similarly, Ben Bernanke assumed the Fed chairmanship in 2006 toward the end of another economic cycle as the central bank was hiking rates—and just before the 2007–2009 bear market.
The Fed doesn’t even have to make a big error—for instance, by raising rates too aggressively—to spook the markets. Simply raising rates unexpectedly or communicating their intentions poorly “could create volatility as rates rise.”
Although functionally, interest rate increases are not recessive, the mere belief that they introduce recessions can be sufficient to cause recessions.
The 2007-2009 bear market, which corresponded to the “Great Recession,” was caused by flagrantly illegal lending by big banks, not by interest rates.
Scenario #3: The Market Has a “Minsky” Moment
A “Minsky moment,” named after the late economist Hyman Minsky, who studied boom-and-bust cycles in the financial markets and argued how unstable bull markets can be after a long run.
[Investors take on additional risk during prosperous times or bull markets. The longer a bull market] lasts, the more risk is taken in the market. Eventually, so much risk is taken that instability ensues.
A Minsky moment was blamed in part for the global financial crisis, when investors took on ever more debt to make speculative investments in houses and mortgage securities without worry until it eventually reached a tipping point when every investor did start to worry.
To be sure, Rob Arnott, chairman of Research Affiliates, notes that “the temptation in a bull market is to buy more.”
Not only does a bull market tempt investors to buy more, but the bull market itself automatically rebalances an investor’s portfolio toward more speculative, higher-flying investments.
Market action alone could take a very conservative portfolio consisting of 50% stocks and 50% bonds, into a new, aggressive ratio of 75% stocks and 25% bonds.
And now, The Real Reason for Recessions:
A large economy contains more money than does a smaller economy. The U.S. economy contains more dollars than does the California economy, which in turn contains more dollars than does the Los Angeles economy.
Gross Domestic Product, the typical measure of a nation’s economy, consists of three, basic measures: Federal Spending + Non-federal Spending + Net Exports.
All three are money measures. Federal Spending pumps dollars into the economy. Non-federal spending is done with dollars that are in the economy. Net Exports add dollars to the economy.
While Federal Spending adds dollars to the economy, federal taxes take dollars out of the economy. The difference between spending and taxing is Federal Deficit Spending, the net amount of dollars the government adds to the economy.
When net dollars are added to the economy, this stimulates economic growth. When net dollars are taken from the economy, this is recessive.
When the federal government runs a deficit, the economy receives dollars, and when the federal government runs a surplus, the economy runs a deficit.
If the normal federal deficit instead becomes a federal surplus, the economy will have a Depression or at “best,” a recession.
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%. Great Depression began 1929.
1997-2001: U. S. Federal Debt reduced 15%. Recession began 2001.
Even reductions in deficit growth can lead to recessions:
Federal Deficit — 1955 – Present. Vertical Bars are recessions
As the federal deficit growth line drops, we approach recession. Recessions are cured only by deficit increases.
Federal deficit growth is necessary for economic growth.
Recently, the Republican-dominated Congress passed a tax law that included reductions in business and personal taxes, predicted to add $1.5 Trillion to the federal debt.
That represents $1.5 Trillion added to the economy, which is stimulative — or would be stimulative but for this:
“House Speaker Paul D. Ryan (R-Wis.) said Wednesday that congressional Republicans will aim next year to reduce spending on both federal health care and anti-poverty programs, citing the need to reduce America’s deficit.”
Because deficits add stimulative dollars to the economy, deficit reductions lead to recessions. If Ryan cuts federal spending for social programs, we will have a recession, the severity of which will be related to the size of deficit cuts.
Starve consumers of their purchasing dollars, and businesses will experience reduced sales and profits.
In summary, interest rates are not a true point of concern. Rather, deficit growth cuts, or worse yet, federal surpluses, will drag us down to recession or depression, and only massive deficit spending will cure the disease.
The 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:
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.
Donald Trump says he is all about helping business, to “make America great again.”
He defended tax cuts to benefit business. He has employed business leaders for his cabinet. He himself is a business leader. You could say that Trump is four-square, 100% pro-business.
Yes, you could say that, until you read the following article which appeared in the Washington Post and many other papers:
Trump calls for U.S. Postal Service to raise Amazon’s shipping rates
By Brian Fung The Washington Post
President Donald Trump on Friday called for the U.S. Postal Service to raise the shipping rates that it charges Amazon, the online retailer, in a deal that he said disadvantages the federal agency.
Huh?
Trump, the cut-government, pro-business, drain-the-swamp, reduce-business-taxes-to-make-them-more-competitive President, wants one of America’s biggest businesses to pay more to the government? What is that all about?
Well, it seems that Trump, the wealthy business owner, the guy who wants to cut his own taxes and to cut the taxes of his many businesses, has less concern for other people’s businesses than with his own ego.
Here are excerpts from the above-mentioned article:
“Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer? Should be charging MUCH MORE!” Trump tweeted Friday morning.
Trump is likely referring to a partnership between USPS and Amazon in which the Postal Service carries Amazon packages in the last leg of their journeys to customer doorsteps.
Amazon told Fortune magazine that the Postal Regulatory Commission, which oversees the USPS, “has consistently found that Amazon’s contracts with the USPS are profitable.”
Trump also charged that the Internet retailer hurt competitors and local governments by failing to pay sales taxes. The company did not collect sales tax for years, but it does now.
As usual, Trump gets his fact wrong.
Trump has also argued that Bezos is using The Washington Post to advance his financial interests. The Post’s editors and Bezos have declared that he is not involved in any journalistic decisions.
The Post is owned by Bezos personally, not by Amazon.
It was not clear what drove Trump’s interest in the shipping relationship between Amazon and the USPS on Friday morning.
Contrary to that last line, the real reason is quite clear. Trump is an insecure hater. He hates the weak (immigrants, Muslims, the gay, the poor), whom he bullies, and he hates those who don’t fawn over his self-proclaimed “stable genius.”
Back in August, Bloomberg published an article explaining this facet of Trump’s personality.
Why would a supposedly jobs-obsessed president denounce a company that’s in the midst of a giant hiring spree — with many of those jobs going to (Trump’s base) workers without college degrees?
In fact, Trump’s irritation isn’t really with Amazon. Rather, he is obsessed with Jeff Bezos.
Bezos — not Amazon— owns the Washington Post. But Trump regularly attacks the New York Times without mentioning the Ochs-Sulzberger family or Carlos Slim.
Rather, the very existence of Bezos seems to drive Trump crazy. Trump’s image, to himself and his fans, is that of alpha male — the dominant primate in the room.
Bezos is a far more admired and influential businessman than Trump and, of course, immeasurably richer. (Bezos doesn’t have to hide his financial records to maintain the appearance of wealth.)
He’s the opposite of Trump in nearly every dimension. Start with how can someone only five-foot-nine intimidate people into submission? In Trumpworld, intimidation, not value-creation, is what business is all about.
Bezos also has a sense of humor, often at his own expense, and a famously raucous laugh. Trump is humorless.
Trump grew up rich, went to private schools, and had an undistinguished college career. Bezos grew up middle-class, went to public schools, and knocked the top out of Princeton, graduating with highest honors and Phi Beta Kappa in electrical engineering and computer science.
One had a rich father; the other has brains.
And then there are their families. Bezos is famously close to his. Theirs is to all appearances a love match of mutually admiring equals. By contrast, Trump treats his family, and above all his wife (wives), as mere props for his personal glorification.
The biggest difference is that Bezos projects the self-confidence of someone with nothing to prove. Trump, by contrast, projects thin-skinned insecurity.
Why should you care? After all, Bezos can take care of himself. He can buy and sell Trump many times over, and long after Trump mercifully disappears from the public’s memory, Amazon still will be doing just fine, thank you.
And let’s face it, you already knew that Trump was an incompetent, mean-spirited, self-promoting blowhard, who repeatedly has proved his only business success is to put his name on businesses actually run by others — or with daddy’s financial bailouts.
You should care because forcing Amazon to pay more postage, will take dollars from your pocket and send them to the federal government, which will destroy them.The reduction in the money supply is recessionary and the increase in Amazon’s prices is inflationary — two bad things.
The GOP cut business taxes (a good idea that adds dollars to the economy) to help businesses; why not cut business postal expenses to help businesses?
The postal service is a federal agency. The federal government, being Monetarily Sovereign, easily can afford to fund one of the most vital agencies, in the same way it funds the military, and without any tax increases.
In summary, Trump bashes Amazon because of his intense jealousy of Jeff Bezos, thereby putting lie to the notion that the “very stable genius” (Trump) is pro-business.
He is pro-Trump, all-Trump, only-Trump, and unless your situation corresponds with his desires, you will pay a price for his self-adoration.
The 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:
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.
In a little-noticed 6-3 vote today, the House Administration Committee voted along party lines to eliminate the Election Assistance Commission, which helps states run elections and is the only federal agency charged with making sure voting machines can’t be hacked.
“It is my firm belief that the EAC has outlived its usefulness and purpose,” said Committee chair Gregg Harper (R-MS), explaining why his bill transfers the EAC’s authority to the Federal Election Commission.
It’s particularly ironic that the Trump administration is preparing to launch a massive investigation into nonexistent voter fraud based on the lie that millions voted illegally, while House Republicans are shutting down the agency that is supposed to make sure America’s elections are secure.
It’s more proof of how the GOP’s real agenda is to make it harder to vote.
What do you do if you’re a bigoted, dictator wannabe, and you want to take action against a group you don’t like — Muslims, Jews, Mexicans, blacks, immigrants in general, the poor, etc.?
You take away their right to vote, and you give that assignment to an agency that cannot be questioned, an agency that by law, works completely in the dark, an agency that can do anything it wishes to anyone it wishes, with no oversight at all.
Don’t be fooled by news of Trump’s Executive Order dissolving the so-called Commission on Election Integrity. Trump is not ending the Kris Kobach scheme to attack, he’s moving it into Homeland Security as per Kobach’s original plan.
Kobach gloats that Homeland Security is exempt from Freedom of Information Act demands and public hearings— that was part of his original plan given to Trump.
Kobach claims Homeland Security can REQUIRE states to turn over voter records and can secretly gather lists of “double” or “alien” voters — this is Kobach’s “Crosscheck” on steroids.
The one Democrat on Kobach’s committee, Maine Secretary of State Matthew Dunlap, warns: “Homeland Security operates very much in the dark…and I think people should be, frankly, frightened by that.”
Kobach will be advising Homeland Security and that’s MORE dangerous than operating through an open committee. This is not a win for progressives — it’s a brilliant chess move by KKK (Kris Kobach of Kansas).
Yes, it is brilliant for an administration that does not want the public to know what it is doing, and for a President who lies a dozen times before breakfast.
It is brilliant for a party that has made Gerrymandering to deny some voters of their votes, its prime political movement.
It is brilliant for those who despise everyone but the rich, adult, white, male, Christian citizens.
It’s brilliant for bigots, but is it really the job of the Homeland Security Agency?
A six-point agenda for the Department of Homeland Security was developed and announced in July 2005, by Secretary Chertoff to ensure that the Department’s policies, operations, and structures are aligned in the best way to address the potential threats – both present and future – that face our nation.
The six-point agenda is structured to guide the department in the near term and result in changes that will:
Increase overall preparedness, particularly for catastrophic events
Create better transportation securitysystems to move people and cargo more securely and efficiently
Strengthen border security and interior enforcement and reform immigration processes;
Enhance information sharing with our partners
Improve DHS financial management, human resource development, procurement and information technology
Realign the DHS organization to maximize mission performance.
Supporting the agenda, the department proposed to realign the Department of Homeland Security to increase its ability to prepare, prevent, and respond to terrorist attacks and other emergencies.
These changes are to better integrate the Department and give department employees better tools to accomplish their mission.
Does searching for violations of “Election Integrity” (i.e. blacks and Latins daring to vote), increase preparedness for catastrophic events? Does it improve transportation security?
Does it help prevent terrorist attacks and deal with emergencies? Does it enhance information with “our partners”? Does it improve the agency’s financial management or maximize its mission performance?
Uh, no.
And it is only with the wildest stretch of mission-creep imagination that one could say the mission of Homeland Security to strengthen our borders and to reform immigration processes, includes “election integrity.”
The sole purpose of Trump’s move is to threaten and intimidate minority voters, who are more likely to vote Democrat.
It is a Gestapo at the polling place — perfect for a President who denigrates the media that disclose his lies and errors, a President who wishes to punish those speak ill of him, a President who wishes to wreck and control the very agencies that protect us from dictators, a President who wishes to jail his opponents, a President who has expressed admiration for dictators as being strong leaders, a President who cannot get past the fact that he lost the popular vote — a President who affects the Mussolini frown at every public appearance.
Trump is a dictator wannabe, and slowly his noose tightens on us.
If we don’t object, we will lose America, and he will have succeeded in making America Trump.
It takes only two things to keep people in chains:
It takes only two things to keep people in chains:
It takes only two things to keep people in chains:
It takes only two things to keep people in chains:
#Monetary Sovereignty - Mitchell 