Libertarians attack Warren, so she must be good.

Background: The Cato Institute is an American libertarian think tank, founded as the Charles Koch Foundation.

It supports lowering or abolishing most taxes, opposition to the Federal Reserve system, the privatization of numerous government agencies and programs including Social Security, the Affordable Care Act, and the United States Postal Service, along with adhering to a non-interventionist foreign policy.

Reason is an American libertarian monthly magazine published by the Reason Foundation. Peter Suderman works for Reason.


Libertarianism tends toward anarchy; seemingly any level of government ownership or control, no matter how small, is considered too large by libertarians.

The following article perfectly illustrates the libertarian worldview:

Elizabeth Warren’s Plans Don’t Add Up

The Warren worldview of ill-founded economic pessimism is both bloodless and moralizing.


At the heart of Elizabeth Warren’s campaign for president—and of her entire career as a politician and public intellectual, are two simple ideas.

The first is that the economy is fundamentally broken. She declared that “millions and millions of American families are also struggling to survive in a system that has been rigged by the wealthy and the well-connected” and in which she insisted that the only response was to fight for “big structural change.”

She inveighed against corporate profits and monopolistic businesses and corrupt lawmakers who have “made this country work much better for those who can make giant contributions, made it work better for those who hire armies of lobbyists and lawyers, and not made it work for the people.

It was present in the 2007 essay that imagined what would eventually become the Consumer Financial Protection Bureau, a federal agency premised on the notion that American families were being “steered into overpriced credit products, risky subprime mortgages, and misleading insurance plans'”

She proposed an array of economic policies, from a $15 minimum wage to enforcing restrictions on certain bank loans, that she argued could stave off the crisis.

(She issued a) slew of white papers and policy proposals that have poured forth from Warren’s campaign as if she were running a think tank rather than a presidential bid.

Image result for poverty in america
It’s her own fault. Don’t ask for government help.

Apparently, libertarian Suderman doesn’t believe that “millions of American families are also struggling to survive in a system that has been rigged by the wealthy and the well-connected” and “this country works much better for those who can make giant contributions, and for those who hire armies of lobbyists and lawyers.”

He is living in a libertarian dream world.

He doesn’t like that Warren has proposed a $15 minimum wage, up from the current federal minimum of $7.25 hour — barely survivable for a single person, and poverty-level for supporting a family.

Libertarian Suderman doesn’t like that Warren wants to restrict the terrible bank loans that contributed to the “Great Recession of 2008.”

Suderman doesn’t like that Warren has issued “white papers and policy proposals,” rather than merely promising generalities and American greatness.

In the space of just a few months this year, Warren released plans for everything from ending drilling on public lands to breaking up Facebook and Amazon.

She wants to spend $500 billion on affordable housing and trillions more to cancel most student debt, make public college tuition free, and offer subsidies for childcare.

And she has proposed paying for these costly programs with wealth taxes designed not only to offset the price tag of new government spending but to help reduce economic inequality by shrinking large stores of wealth.

To Suderman, ending drilling on public lands, providing affordable housing, canceling student debt, and offering free college tuitions — i.e. ideas to narrow the Gap between the rich and the rest — are terrible.

He is right about one thing: “Paying for” her ideas with a wealth tax is unnecessary and unworkable. It is unnecessary because the federal government, being uniquely Monetarily Sovereign, it creates dollars at will. So, your federal taxes do not fund federal spending. 

Unworkable, because “wealth” is far too easy for the truly wealthy to hide.

Warren’s penchant for wonky policy detail has defined her candidacy: “Elizabeth Warren has a plan for that” has become a rallying cry and a slogan, one her fans have plastered across an array of T-shirts and campaign signs.

Warren has happily embraced this persona, joking with crowds that her focus on the details of federal agencies would turn them all into nerds.

Heaven forbid that a candidate supplies plans and details. To Suderman, it would be far better to offer bland Trump-like generalities, like “Repeal and replace ACA”” and “Build the wall” than to provide specific, people-friendly details.

Warren wants the federal government to be the American economy’s hall monitor, telling individuals and companies what they can and can’t sell or buy and making some of the nation’s most successful businesses answer to her demands.

Being the economy’s “hall monitor,” i.e. preventing miscreants from stealing, is exactly what the federal government should do.

And oh, horrors, telling the nation’s most successful businesses what dishonesty not to commit, is unthinkable to Suderman, who seems to believe that “liberty” means allowing big business to do whatever it pleases.

It seems to be working. During the first six months of 2019, this strategy vaulted Warren into the top tier of Democratic primary contenders, helping her raise more than $19 million during the year’s second quarter and placing her among the top three or four candidates in the party’s crowded field.

Focus groups and political reporting have consistently found that Democratic voters are warming not only to the substance of Warren’s ideas but to the very fact that she has them.

Well yes. Having ideas and detailing them, not only is good politics, but it is good governance. Would that more politicians did it.

Although she has received kudos for the volume and specificity of her plans, Warren has a history of pushing misleading research and cherry-picked data designed to support politicized conclusions.

Warren first rose to prominence as the co-author of a pioneering study of consumer bankruptcy, which was published in book form in 1989 under the title As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America.

Warren and her co-authors based the book on a trove of court data from about 1,500 bankruptcy cases in Pennsylvania, Illinois, and Texas during 1981.

The book relied on real-world case studies. Warren statistically analyzed a trove of unique data. She was telling a story to make an argument about politics and policy.

The story was that rapacious credit card companies, rather than consumer overspending, were primarily responsible for a run-up in consumer debt and the resulting sense that household budgets had grown more precarious.

The book’s authors saw bankruptcy in broadly sympathetic terms, as a financial safety net for struggling families. In the years that followed, Warren would go on to become one of the nation’s most prominent advocates of making bankruptcy easier, more lenient, and more accessible.

But that story had some notable problems. Among others, it was based on cases from 1981, a recession year when consumers would have looked worse off than usual. It was released years later, after a significant reform to the bankruptcy code in 1984 rendered its picture of American bankruptcy somewhat out of date.

Here, Suderman criticizes the currency of Warren’s bankruptcy research, none of which has anything to do with the currency of her above-mentioned economic recommendations.

It’s as though Suderman would hate her ideas for child-rearing because her book on auto repair is out of date. In short, Suderman’s criticism is inane and utter nonsense.

And note the words, “rather than consumer overspending.” They illustrate the libertarian belief that poor people are responsible for their own misfortune.

Warren drew on her bankruptcy research to argue that the middle class had been given a raw deal.

The number of households filing for bankruptcy had shot up dramatically, she said, and it wasn’t because they were spending too much.

Instead, the increasingly high cost of housing, driven heavily by competition for access to good schools, and the pile-up of medical debt were driving families into dire straits.

It is the high cost of living, not just housing, has driven families into dire straights.

Again, Suderman wants to “prove” Warren is completely wrong, by trying to nit-pick a point of data, when her overall conclusion (that the Gap between rich and poor has widened, and many families are in financial trouble and need protection) is correct.

These effects were compounded by the movement of women into the workforce.

Where stay-at-home wives had once served as a safety net—the earners of last resort should a breadwinner husband lose his job—the rise of the working mother had increased financial risk for two-earner families.

The book’s findings were marked by controversy and unanswered questions about the soundness of her methodology. In particular, Warren’s notion that housing prices have been pushed upward by school competition doesn’t fully stand up to scrutiny.

Although research has found that school quality does impact housing prices, the effect is fairly modest. A 2006 study in the Quarterly Journal of Economics found a 2.5 percent increase in home prices for every 5 percent increase in test scores.

And in what way does the so-called “fairly modest” difference in home prices negate Warren’s position on student debt, mortgage supervision, family bankruptcy, the minimum wage, and the prevention of financial cheating by large companies?

It doesn’t, but Suderman tries to make his point by fixating on minutia to distract you from the main point, that middle-class families are struggling, and the very purpose of government is to improve the lives of its citizens.

And then there’s the role of taxes. In the book’s hypothetical comparison budgets, Warren presents taxes as a percentage of household income—24 percent in the 1970s, 33 percent in the 2000s—which the book describes as a 35 percent change.

Yet as George Mason University law professor and consumer finance scholar Todd Zywicki has noted, the choice to render taxes only as a percentage of income has the effect of masking the total dollar value.

Using Warren’s own figures, Zywicki calculated that the tax increase—owing partly to the hypothetical family hitting a new tax bracket and partly to the imposition of additional state, local, and property taxes over time—was by far the largest factor affecting the modern family’s budget.

Warren’s numbers, in other words, showed that families had been strapped not by increased spending on homes or health insurance but by a bigger tax bill.

Yes, taxes on the middle classes are too high. So, how does that eliminate the need to follow Warren’s proposals? Again, it doesn’t. It’s just another Suderman diversion.

Zywicki is among Warren’s most outspoken critics, and he has made this case—that Warren’s data do not show what she claims they do about the plight of the middle class—on multiple occasions over the span of more than a decade.

What Suderman fails to mention is that Zywicki is a senior fellow, paid by the Cato Institute, that aforementioned libertarian think tank, which spends its time and money trying to prove that government not only is unnecessary but a hindrance to America.

Zywick is not exactly an impartial commenter.

Warren co-authored a Health Affairs study purporting to show that at least 46 percent of the nation’s bankruptcies were a result of medical bills, a figure she subsequently updated to 62 percent.

Her research claimed that medically induced bankruptcies had increased a shocking 23-fold since 1981.

President Barack Obama warned that sky-high medical costs had forced many Americans to “live every day just one accident or illness away from bankruptcy.”

One wonders, what is the fundamental point Suderman is trying to demonstrate? That sky-high medical costs are not a serious financial problem for millions of Americans?

The response by Warren and her co-authors was revealing. In one sense, they were engaged in a conventional academic dispute about interpreting bankruptcy data. But what they were really fighting about—what was really at stake—was public policy.

Warren clearly believed that the value of her research was in the story it told and the way that story informed and influenced the real world of politics and public affairs.

Yes, that exactly is the point. What does it matter whether housing prices, or school costs, or medical costs are most responsible for bankruptcies or other forms of financial distress?

The point that Suderman doesn’t want you to understand is that these are problems the federal government can and should address. It has the means, if only it had the will.

Sadly, the Sudermans of the world would rather quibble about differences in data than to solve the clear and obvious problems that plague us.

Yes, some things are more troublesome than others, but that does not mean we should stall. while people suffer, debating how much more troublesome school costs are than medical costs.

But perhaps, stalling is what Suderman wants.

In the aftermath of the 2007–08 financial crisis, Congress, then controlled by Democrats, passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was billed as a direct response to the economic meltdown and an attempt to make sure it never happened again.

A centerpiece of the bill was the creation of a new federal agency, the Consumer Financial Protection Bureau (CFPB), which was modeled on Warren’s original proposal.

The bureau, as imagined by Warren, was premised on the notion that consumers did not and in some cases could not understand the financial services they relied on, and that only an army of unusually powerful government bureaucrats could save them from blundering into the tricks and traps set by lenders.

And that is absolutely correct. Left to their own designs, the banks created the most convoluted, complex financial products, that no one, not even Suderman, could understand, then sold them to the public, with disastrous results.

The CFPB’s mission, meanwhile, was far more expansive than its origin story might imply. From payday lenders to cash advance services, many of the financial products it was given the power to regulate had little or nothing to do with the financial crisis.

Suderman’s senseless point seems to be that if a financial scam had nothing to do with the Great Recession, it should be ignored.

The CFPB was the culmination of decades of research and advocacy on Warren’s part. She had imagined it, fought for its creation, and then, from her perch in the administration, ushered it into being.

And yet there was a kind of victory as well, in the simple fact of the CFPB’s creation. Warren would not be its leader—that role would eventually go to former Ohio Attorney General Richard Cordroy, who was given a recess appointment that caused its own controversy—but she had willed it into being and would continue to provide spiritual guidance.

She did not achieve her political ambitions, but on the policy question, she had triumphed.

In the years that followed, something strange happened: Warren, the icon of progressivism whose political brand had proven too toxic to move through the CFPB nomination process, became the object of a strange new respect from the right.

Apparently, being respected by some right-wingers is a curse for Suderman.

Under President Donald Trump, in July, The American Conservative, long a bastion of immigration-skeptical conservative nationalism, ran an essay extolling Warren’s economics, particularly her plans for a new bureaucracy dedicated to “defending good-paying American jobs,” and saying that in some respects, “Warren may be a bigger economic nationalist than even Trump himself.”

A paragraph of utter nonsense, but what else can one expect in political discourse?

Nor is Warren’s popularity limited to small opinion journals.

In June, Fox News’ Tucker Carlson, among the most-watched hosts on cable news and an influence on the Trump administration, opened his show with an extended monologue praising Warren’s domestic jobs plan and its elevation of “economic patriotism,” which calls for, in the senator’s words, “aggressive new government policies to support American workers.”

“Many of Warren’s policy prescriptions make obvious sense,” Carlson said. “She sounds like Donald Trump at his best.” Later, at a conference in July, he praised The Two-Income Trap as “one of the best books I’ve ever read on economics.”

Suderman’s position is if a right-winger likes any of her recommendations that is prima facie evidence she is not a progressive. It’s wrong and a bit goofy, but it’s Suderman.

But then, the quick reversal:

It is hard to imagine the Republican Party ever embracing Elizabeth Warren. Trump frequently mocks her claims of Native American heritage, and the congressional GOP continues to view her with deep hostility. She’ll never be an ally to the party.

But in some increasingly influential corners of the right, her ideas and her outlook are winning.

The rest of Suderman’s long article is a rehash of his “unaffordability” claim about her proposals, and his dislike of the detail with which she presents them.

But “unaffordability” is a false claim concerning federal spending, and quibbling about the details rather than solving the big-picture problems solves nothing.

Government is created by the governed to improve their lives. That is the purpose of government.

Peter Suderman is a classic libertarian, a hater of government. As a libertarian, he wastes more than 6,000 words denying the obvious — that for many people, good schooling, good housing, good food, and good medical care are unaffordable and that the banking industry has cheated millions of innocent people.

Suderman denies that many families are driven into bankruptcy by trying to pay for the abovementioned schooling, housing, food, and medical care, or eschewing bankruptcy, they must forego these life necessities.

Suderman also hints at the libertarian’s “bootstraps” theory, in which the victim is blamed for not earning enough, or being frugal enough, or smart enough to pay for their own needs.

To libertarians, “liberty” means freedom from government help. People should pull themselves up by their bootstraps, rather than depending on the government.

Then he applies the libertarian, “Catch 22” objection to deny people those bootstraps by implying that the $15 minimum wage is a bad idea. “Gotcha!”

In the real world, our “bootstraps” consist of things like a good education, good health, good housing, and money — all of which the federal government can and should provide — and all of which libertarian Suderman would not provide.

Why does libertarian Suderman deny the obvious?

Because to admit it would require him to offer solutions, and those solutions inevitably require federal spending — an anathema to libertarians.

Warren’s proposals are fact-driven and logical, which Suderman dismisses as “bloodless.” Her proposals also benefit the poor and middle classes, which Suderman dismisses as “moralizing.”

Suderman and the libertarians live in a harsh mythical world, where there is no allowance for poverty, people are expected to be born with all they need to succeed, and it only is laziness that prevents them from realizing their dreams.

Asking for help from the government supposedly is a moral and financial imposition on the rest of us who, of course, are self-sufficient.

It is the ultimate expression of Gap Psychology, in which people wish to widen the income/wealth/power Gap below them.

Non-transitive dice and where your intuition fails you

The universe has an infinite number of facts. We can’t learn and process them all, so we compensate. We learn about the universe by analogy, and by inference, and by reference:

Analogy: A comparison of two otherwise unlike things based on the resemblance of a particular aspect.
Inference: If two or more things agree with one another in some respects they will probably agree in others
Reference: The words of trusted people.

Think of the factual statement: Dogs have four legs and teeth. Spot is my dog. Therefore Spot has four legs and teeth.

Image result for crocodile

Knowing that Spot is a dog, you infer a picture of him.

You visualize details about Spot without ever having to see or hear him.

Often though, what we think of as analogy and inference can deceive us:

Dogs have four legs and teeth. Spot has four legs and teeth. Therefore Spot is a dog.


Your inference threw you off because it wasn’t a true analogy. It was a misleading “intuition.”

Because the universe is so big, the vast majority of what you “know” is based on your intuition.

Here is another example of where your intuition fails you. As you “know,” when

  • “A” is bigger than “B” and
  • “B” is bigger than “C” and
  • “C” is bigger than “D” then
  • “A” must be bigger than “D”

Right? Do you know any exceptions to this? Actually, there are many exceptions.

Here is one example. It’s called “non-transitive dice.”

Non-Transitive Dice by MathArtFun

These are not ordinary dice. As you can see that they are numbered differently.

The numbers are:

A. Blue Die: 6 6 6 6 5 5

B. Black Die: 4 4 4 4 12 12

C. Red Die: 10 10 3 3 2 2

D. Green Die: 7 7 7 7 1 0

When rolled, die “A” will beat die “B” 2/3 of the time. “B” will beat “C” 2/3 of the time. “C” will beat “D” 2/3 of the time.

And counter-intuitively, “D” will beat “A” 2/3 of the time. No one die is the greatest.

We often see non-transitiveness in sports, where the winningest teams do not always have winning records against the poorest teams. Your favorite team may win the World Series in the same season as they have a losing record against a last-place team.

Politicians repeatedly create false analogies and false inferences. President Barack Obama, in his weekly radio address, July 2, 2011, said, “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on a sounder footing.”

This is misleading on multiple levels.

The federal government is Monetarily Sovereign. It has a sovereign currency, the U.S. dollar, of which it can create an infinite supply. By contrast, you and your family are monetarily non-sovereign. You do not have a sovereign currency nor can you create an infinite supply of dollars.

The federal government can pay any debt denominated in dollars. You cannot. The federal government never unintentionally can run short of dollars. You can. The federal government needs no income to pay its bills. You need income to pay your bills.

Although you have a “means,” within which you must live, the federal government does not. And, unlike you, the federal government does not need to cut spending so it can afford to spend. Even if the federal government collected zero taxes, it could continue spending, forever.

And finally, it is federal spending, not spending cuts, that grow the U.S. economy and “put it on a sounder footing.”

Obama’s two short sentences were 100% wrong, and the inferences they were meant to draw were 100% misleading.

But to the average person, they sound logical, reasonable and prudent.

Because so much of what you know is based on what seems logical, reasonable, and prudent, you have learned to trust your intuition. You will fight mightily against anything that violates your intuition, despite powerful facts supporting the opposition.

You will believe your intuition especially if it supported by comments from a leader. You might more readily believe that vaccination causes autism, and immigrants cause disproportionate crime, and global warming is a Chinese hoax, if these ideas are supported by the President of the United States.

You have been primed for these beliefs by the knowledge that many medicines cause unpublicized problems, strangers are more responsible for crime than are friends, and China is an economic foe.

Nearly every politician, economist, and media writer tells you that federal financing is just like your personal financing (so debt is a danger and living within one’s means is prudent). The brainwashing comes at you from all sides.

Add such retorts as, “There’s no such thing as a free lunch,” and “Why are you the only one who knows this,” and you have created a powerful belief system that cannot be shaken by facts.

The federal government has increased its debt almost every year for the past 80 years, yet still, you are told that federal debt is a “ticking time bomb.”

Belief is less logical than emotional. You believe what you feel comfortable believing.

If, to help you visualize Monetary Sovereignty, I show you why federal finances are very much like those of the Bank in the game of Monopoly, you may dismiss that as being unrealistic, and “just a game.”

But by rule, the financial parallels between the Monopoly Bank and the federal government nearly are perfect. In the Monopoly rules, you will find this:

“The Bank never goes ‘broke.’ If the Bank runs out of money, the Banker may issue as much more as may be needed by merely writing on any ordinary paper.”

You didn’t question that rule in Monopoly, yet the vast majority of people’s intuition questions exactly the same rule for our Monetarily Sovereign federal government.

Finally, we come to inflation and the brainwashed belief that federal money “printing” causes inflation.

Let’s say you go to the store, and you find that the price of apples has gone up. Do you immediately think, “The government is printing more money,” or more likely do you think, “There must be a shortage of apples”?

In any capitalist economy, supply responds to demand, and prices result from an imbalance between supply and demand.

If supply is less than demand, there will be shortages and price increases, upon which producers will respond by creating more product, alleviating the shortages and lowering prices.

Here is the normal sequence leading to low amounts of inflation, and then inflation moderating:

  1. Shortages develop —>
  2. Prices rise —>
  3. Production increases to meet demand —>
  4. Shortages are eliminated —>
  5. Prices fall.

This process creates the average low inflation that has been the norm for decades.

Here is the process leading to large inflations and hyperinflations:

  1. Shortages develop —>
  2. Prices rise —>
  3. Production is unable to increase sufficiently to meet demand—>
  4. Shortages continue to grow —>
  5. Prices continue to rise into hyperinflation —>

All inflations and hyperinflations are caused by shortages, usually shortages of food or energy, never by federal money “printing.”

In the following graph, note how peaks and valleys of inflation do not match peaks and valleys of federal money “printing.”

In summary, the universe contains more facts than you can absorb. You are forced to develop shortcuts that allow you to bypass the vast majority of facts and to come to conclusions about the reality around you.

These shortcuts include analogy, inference, and reference, the guidance of other people.

Despite common belief, the federal government cannot run short of dollars with which to pay its debts, and federal money creation does not cause excessive inflation (which is caused by shortages.)

And yes, the federal government easily can pay for the Ten Steps to Prosperity (below), without causing inflation.

So why not?

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell


The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

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

2. Federally funded Medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

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

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

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

9. Federal ownership of all banks

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

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



Medicare for All: The real stumbling block

Imagine that everyone in America — you, your family, your friends and neighbors — everyone,  could receive health care from doctors, hospitals, rehab facilities, extended care facilities, and all pharmaceuticals and equipment, and never have to worry about cost.

Related image
A choice?

Imagine you being forced to choose between your financial devastation vs. sickness or death for your loved ones.

Then, imagine the federal government paying all your health-related bills, leaving you free from worry.

The rich in America already live in such a glorious world, but for most of us, current and future health affordability is an ongoing concern.

Yet, many non-rich Americans oppose even the concept of Medicare for All. Why?

1. It’s unsustainable. Debt fear mongers have been promulgating that myth for at least 80 years.In 1940, when the federal debt was $40 Billion, the fear-mongers were calling it a “ticking time bomb.

“Every year afterward, they have pounded the same lies into our brains: “The federal government will go broke. It’s “unsustainable.” Your children’s taxes will have to go up.”

Today, the debt is $20 Trillion, and the government has not gone broke, and indeed cannot go broke, and taxes have not risen.

2. It’s socialism. Actually it isn’t. It’s progressivism. Socialism is government ownership and control, not merely government support.

The federal government supports many things: Social Security, Medicare, Medicaid, poverty aids, education, etc. Shall we eliminate them?

Additionally, we do allow many forms of real socialism: The military, roads, bridges and dams, public libraries, NASA, the VA, etc. Shall we eliminate those, too?

3. It will cause inflation or hyperinflation. Although in the past 80 years, federal debt has risen an astounding 50,000%, inflation has averaged close to the Fed’s 2.5% target.

The reason is that the Fed has tools it needs to prevent and cure inflations, among which is: Control over interest rates.

Raising rates increases demand for the dollar, making it more valuable, so fewer dollars are needed to buy goods and services.

While federal “debt” (blue, i.e. deposits into T-security accounts) increased massively, inflation (red) increased modestly.

4. We don’t have enough resources. What this really means is: “If the poor start using doctors, hospitals, et al, then there won’t be enough doctors and hospitals for me.”

These objectors believe that a viable health-care system relies on the poor not being able to afford health-care — that “limited” resources should be reserved for the wealthier among us. This is America?

A nation’s resources grow with the money available to  pay for them. Funded by a government’s unlimited ability to pay, resources are unlimited.

5. It will take money and jobs from the health insurance industry. Right, just as public transportation takes money and jobs from taxi drivers.

Some jobs will be added in the federal sector. But in any event, the notion that the poor should do without healthcare so that the insurance industry can keep its jobs is ridiculous. It’s an example of misplaced priorities.

The above are fake reasons, used to conceal the real reason, which is described in the following, brief, “THE WEEK Magazine” (2/22/19) article:

Despite all the attention tech gets, the biggest five insurance and health benefits companies have greater revenues than the FAANGS – Facebook, Amazon, Apple, Netflix, and Google.

The top five health insurers and benefit managers expect &787 billion in revenue for 2019, compared with $784 billion for the FAANGS.

Pharmacy benefit manager CVS, the biggest of the health-care group, expects revenues of $246 billion.

In short, the insurance companies, that massively bribe politicians with campaign contributions and promises of lucrative employment later, don’t want the federal government to offer you better, more comprehensive, no deductible insurance at no cost. reveals:

One-third of Senate Democrats have cosponsored the Medicare for All Act, which Sanders introduced in September.

Democrats who haven’t cosponsored the bill received 146 percent more money on average from health insurance companies between 2011 and 2016 than those who have ($147,186 to $59,789)

If you’ve been told lies #1 thru #5, there is a good chance the source either is ignorant of economic reality or has been bribed by the health insurance industry.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell


The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

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

2. Federally funded medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

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

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

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

9. Federal ownership of all banks

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

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


My split feelings about the GOP tax “cut” plans.

Image result for freedom from chains


It takes only two things to keep people in chains:

The ignorance of the oppressed
and the treachery of their leaders.


My feelings are split regarding the GOP tax “cut” plans.

First, on the good side: If it passes it may be the death knell for the politicians who voted for this take-from-the-poor, give-to-the-rich monstrosity. Even those who still back Trump will, at long last, wake up.

Or is that too much to hope?

Second, it will add an estimated $1.5 trillion to the federal deficit. This means, the U.S. federal government, which never can run short of its own sovereign currency, will add $1.5 trillion dollars to the economy.

Though most (nearly all?) of those dollars will go to the rich, and thus widen the Gap between the rich and the rest, adding dollars to the economy is necessary for economic growth.

The formula is:

Gross Domestic Product = Federal Spending + Non-federal Spending + Net Exports.

The two terms — Federal Spending and Non-federal Spending — increase with an increased money supply, which in turn is increased by deficit spending.

There is ample evidence for the positive relationship between deficit growth and economic growth. Even the GOP tacitly admits that this relationship exists by claiming (correctly) that tax cuts will grow the economy.

How do tax cuts grow the economy?

Tax cuts grow the economy by leaving more dollars in the economy.

“The economy” includes you, me and American business. When any of us has more money to spend, we tend to spend more, which increases GDP. That is why taking money out of our pockets, via taxes, reduces GDP, and why cutting taxes increases GDP.

This is straightforward and should be easy to understand, except when the politicians, the media, and even the university economists confuse you with the ridiculous proposition that deficit spending should be cut.

If tax cuts grow the economy then deficit spending grows the economy. Since deficit spending grows the economy, why would anyone wish to cut deficits?

Here are the (wrong) reasons most often given:

  1. Deficits are “unsustainable.” No one knows exactly what that means, but presumably, the idea is that the federal government will run out of dollars to pay its bills. But our Monetarily Sovereign government cannot run short of its own sovereign currency. There is nothing “unsustainable about federal deficits.
  2. The federal government is like you and me. It must live within its means. (This was an Obama favorite). But the government is not like you and me. You and I are monetarily non-sovereign. You and I can run short of dollars to pay our bills; the federal government cannot.
  3. Deficits cause inflation.  (This usually is followed by a mention of Weimar Germany and/or Zimbabwe). Inflation is caused not just by too much money Supply but by too little Demand for money and too little Supply of goods and services compared to Demand..


Deficits refer to money supply, but they do not refer to money demand, goods and services supply, or goods and services demand.

Further, “deficits” refer only to net dollar creation by the federal government, but do not include net dollar creation by the private sector, mostly by banks. Every time a bank lends, it increases the money supply.

Hyperinflations like Weimar and Zimbabwe are caused by shortages, not by money “printing.” Weimar had a shortage of gold to pay its bills. Zimbabwe had a shortage of food, when its leader, Robert Magube stole land from farmers. The hyperinflations caused the money “printing,” and not the other way around.

In summary, the GOP tax bills will increase the deficit and the debt. That’s the part I like.

What I don’t like is that the bills reward the rich and widen the Gap between the rich and the rest. From THE WEEK:

GOP senator says tax cuts must be followed by ‘structural changes to Social Security and Medicare‘ 

At a Politico Playbook forum on Wednesday, Sen. Marco Rubio (R-Fla.) said that cutting taxes needs to be followed by cutting spending on popular federal programs.

“I analyze this very differently than most,” Rubio said. “Many argue that you can’t cut taxes because it will drive up the deficit. But we have to do two things. We have to generate economic growth which generates revenue, while reducing spending. That will mean instituting structural changes to Social Security and Medicare for the future.”

He suggested reducing benefits and raising the retirement age for future retirees, so people can prepare for the changes.

“Tax reform is the economic component of this equation,” Rubio said. “When more people are working, there are more taxpayers and more revenue, but that alone won’t be enough. You are still going to have a debt problem in the absence of spending cuts.”

The legislation already includes $25 billion in automatic Medicare cuts for next year alone, along with $111 billion in other cuts to federal programs, and it would either raise taxes or keep them the same for 6.3 million Americans 65 or older in 2019 and 10.8 million by 2027.

Let’s be absolutely clear: THERE IS NO “DEBT PROBLEM.” It is a fiction promulgated by the rich, to make you accept the belief that your benefits should be cut. It is their attempt to widen the Gap between the rich and the rest.

Even AARP has acknowledged there is no need to cut benefits. You may not remember this, but back in 2012, the federal government declared a FICA tax “holiday.” Here are excerpts from a post we published that year:

AARP President Rob Romasco admits FICA does not support Social Security, Wednesday, Aug 15, 2012

In an August 14th online discussion, AARP President Rob Romasco answered questions about Social Security funding, and essentially admitted the BIG LIE, though he didn’t realize it at the time:

The “BIG LIE” is the statement that the federal government relies on federal taxes to pay its bills.

Comment From Guest: “I hear conflicting statements in the media about Social Security running out of money. What is the real story: Is it expected to run out of money?”

Rob: “Social Security receives money from 3 main sources: the payroll tax, interest earned from bonds that are held in the Trust Funds, and the taxation of benefits.”

That is the myth — that Social Security receives money from taxes.

But, federal taxes do not fund Social Security. The so-called “Trust Funds” are an accounting myth, that the federal government can increase, decrease, or do without at will, and still pay all its financial obligations.

Comment From Guest: “Is the FICA tax holiday hurting Social Security?”

Rob: “This is a very good question… The FICA tax holiday is in no way hurting the Social Security program. Even though the payroll tax was decreased by 2 percent, money is transferred from the ‘General Fund’ to make up for the lost payroll tax.”

So there you have it. To pay for the “lost payroll tax,” money is transferred from the mythical General Fund. And in fact, to pay for any “lost” tax, money always can be transferred from the mythical General Fund.

If there were no payroll tax at all – i.e. if FICA were $0 – money to pay Social Security benefits still could be transferred from the mythical General Fund.

What does this all mean? The General Fund, the Social Security Trust Fund, and indeed all federal funds are accounting fictions.

They all are nothing more than numbers on balance sheets, and the numbers are wholly controlled by the U.S. government. That is what we mean when we say the government is Monetarily Sovereign. Contrary to the lies you have been told, your children and grandchildren will not “pay for the debt,” any more than you currently pay for the $14 trillion debt.

The government actually has the power to pay off the entire debt tomorrow, without levying a single penny in taxes, and without inflation.

You might ask your Senator or Representative, “If, in 2012, the government could continue paying Social Security benefits without collecting FICA tax from me, why can’t it continue to pay my Social Security without collecting FICA tax from me?”

The gobbledegook answer you receive should be amusing, though not informative.

Bottom line: Cutting taxes grows the economy, which is a good thing. The GOP plan will, as all GOP plans do, widen the Gap between the rich and the poor/middle classes.

If you have at the very least, $5 million – $10 million in assets (that’s AT LEAST),  you personally will benefit from the GOP plan. If you have $100 million or more, you will come out like a prince.

If you have less than that bare minimum, or if you plan to collect Social Security, Medicare, Medicaid, or any other poverty benefits, you will be worse off.Related image

Hey, it’s a GOP plan. What did you expect?

And, why do you think President Trump hides his tax returns?

Anyway, we have elections coming up next year, so this time, vote.

It’s not enough to gripe after the fact.

And though marching is good, today’s GOP doesn’t pay attention to your marches.

When you stay home, that’s a vote for the rich, who do vote for themselves and who buy votes from others.

Don’t vote for the politicians; vote for yourself.

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-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.
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.
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.
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.
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.