Category: FICA

SOCIALISM! The Green New Deal socialism monster under your bed

Perhaps you were one of those children who feared the night monster hiding under your bed or in your closet. Perhaps you thought you could hear the night monster sneaking around you while you pulled the covers over your head.

Typical anti-socialism cartoon, misrepresenting the facts
Typical anti-socialism cartoon, misrepresenting the facts

Today, as an adult, perhaps you now fear the Green New Deal (GND) socialism monster. The GND socialism monster and the night monster have much in common.

Both scare you. Both are commonly believed in by the unknowing. And both are imaginary.

SOCIALISM: “A theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.”

The words ownership and control are bolded because they are key. When the government owns and controls something, for instance, a Veterans Administration hospital, that is an element of socialism.

But when the government merely provides funds, as when Medicare pays your hospital and doctor bills, that may be progressivism, but it is not socialism.

The abject failures of Russia’s and Venezuela’s socialist and criminal governments often are given as examples of why socialism “doesn’t work.” But do we give the examples of Greece and Brazil to demonstrate why capitalism “doesn’t work.”

It isn’t socialism that has injured Russia and Venezuela; it’s criminal dictatorships — closer to Donald Trump’s administration of criminals than to real socialism.

We Americans wisely accept some elements of socialism, i.e. government ownership and control, in our capitalistic nation. For example:

Image result for socialism cartoons
The GOP wants you to believe that government spending is socialism.

The list goes on and on. In fact, a capitalistic government could not survive without many socialist elements.

So when pundits complain that this benefit or that program is “socialist,” they merely are using a word that has become a pejorative to the ears of Americans — and that’s why they use it: For psychological impact when facts don’t matter.

Socialism, in of itself, is not a bad thing. Unless you wish to get rid of the military, the national highway system, et al, we always will, always must, have some socialism to protect us.

In fact, when Trump derides “Medicare for All” as “socialism,” he conveniently forgets that his demand for $6 billion dollars to extend the border wall, also is socialism.

The GND monster is not socialism. It is not even a law. It is a set of goals and directions toward preventing the collapse of our ecology and our economy, due to global warming.

If, like Trump, you claim global warming is a Chinese hoax (and that Trump University was a real university, and that Trump never would cheat on his wives, his taxes, or his employees), you are fact-averse, and you now have permission to return to the cult.

Otherwise, you understand that human-caused global warming is a real threat to our grandchildren, a threat we are causing, a threat we cannot ignore as it gets worse and worse.

This is Rep. Alexandria Ocasio-Cortez’s, and Sen. Ed Markey’s, framework defining what they call a “Green New Deal”:

  • upgrading all existing buildings in the country for energy efficiency;
  • working with farmers “to eliminate pollution and greenhouse gas emissions … as much as is technologically feasible” (while supporting family farms and promoting “universal access to healthy food”);
  • Overhauling transportation systems to reduce emissions — including expanding electric car manufacturing, building charging stations everywhere, and expanding high-speed rail to a scale where air travel stops becoming necessary;
  • A guaranteed job with a family-sustaining wage, adequate family and medical leave, paid vacations and retirement security for every American;
  • High-quality health care for all Americans.
For those with no imagination, all goals are unrealistic.

Contrary to what Trump’s pundits want you to believe, Ocasio-Cortez and Markey are not stupid. They do not propose killing cows to prevent cow-farts. They do not propose taking away your cars and tractors.

(An otherwise intelligent friend of mine confided in me that he was worried about the Democrats taking away airplane travel.) Such is the power of rumor and conspiracy-mongering.

Trump’s conservatives, predictably, denounced the GND. After all, conservatism wishes to “preserve or restore what is established and traditional and to limit change.”

Conservatives tend especially to embrace strict interpretations of religion because religion does not easily change. Religion does not create any new thing. Religion did not create modern medicine, or electronics, today’s machinery.  Though most religions preach kindness to the poor, a left-wing notion, religion itself is conservative. The “Word” does not change and those who try to change it are derided as “blasphemous.”

Conservatives tend to be anti-science, because science creates change. So when the vast majority of professional climatologists say that the world is warming, humans are contributing to it, and this will be to our detriment, conservatives try to dig up nay-sayers, who say, in essence, “Do nothing and all will be well.”

(That also is why the anti-vaccination movement is fundamentally conservative. If those folks had their way, smallpox still would be killing millions.)

And just as anti-science conservatives do not want us to understand the science of climatology, they also misrepresent the science of economics by threatening us with the “Green New Deal” socialism monster.

It’s so easy to claim that the government is incompetent, wasteful, and less able to accomplish good things than the private sector, and in many cases that is true.

But there are some things the federal government is able to do better than the private sector, the most prominent of which is: Create and spend dollars.

This is especially true of big projects or projects that have no profit motive, like free national highways, armies, space exploration, free libraries, free public schools, et al. Left to the private sector, these things would not exist in America.

The federal government has the unlimited ability to pay for anything. It can pay to upgrade existing buildings, though upgrading “all” existing buildings within a short time period would be functionally impossible.

It could pay farmers to “eliminate pollution and greenhouse gas emissions … as much as is technologically feasible”

It could pay for “expanding electric car manufacturing, building ‘charging stations everywhere,'” and expanding high-speed rail, reducing the use of air travel. It also could pay for research to make air travel less carbon intensive.

And those government dollars will stimulate economic growth for more than have Trump’s tax cuts for the rich.

The federal government has the ability to pay for all the things the GND proposes. And while accomplishing these things in the goal of ten years may not be feasible, as Laozi said, “A journey of a thousand miles begins with the first step.”

That journey also begins with a goal. The Green New Deal provides us with the goal — a goal of saving the world for our children. If we allow the conservatives to do nothing, our children will suffer, and they will know it was we who did this.

They will look upon us in the same way as we look upon the religious fanatics who tortured and murdered those who claimed the sun circled the earth — as ignorant savages who refused the truth.

Now, we must convince the Democrats to have courage, and not to fear the Green New Deal (GND) socialism monster. It is a friendly monster that can save the world.

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

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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.

MONETARY SOVEREIGNTY

–Saving America by closing the gap: A suggestion for #OWS

Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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It had seemed mysterious to me, that otherwise well-informed, often intelligent people – people who have easy access to the facts – still seem not to understand the very basis of all economics: Monetary Sovereignty. Media writers and politicians are examples of groups who easily could discover the truth, yet they don’t.

For years I’ve ascribed this to laziness of mind or reluctance to admit error. I may have been wrong on both counts.

Let’s begin with a few, absolute, undeniable facts:

1. In 1971, the U.S. federal government became Monetarily Sovereign. It gave itself the unlimited ability to pay any bill of any size, any time.
2. Given this unlimited ability to create dollars, it needs neither taxes nor borrowing to support its spending.
3. U.S. states counties and cities, corporations and individuals are monetarily non-sovereign
4. The sole economic limitation on federal spending is inflation.
5. Since the U.S. became Monetarily Sovereign, and deficits increased greatly, the Fed largely has been able to control inflation at close to its target range of 2%-3%, and there never has been imminent danger of hyperinflation.
6. Federal deficit spending is economically stimulative and supports many economic benefits; reduced deficit spending, i.e. austerity, restricts benefits.
7. Dollars have no physical existence. Much like numbers, they exist only as accounting references. You nether can see nor touch a dollar.
8. The federal government pays its bills, not by sending dollars, which being non-physical, cannot be sent, but rather by sending instructions to banks to mark up accounts.
9. Austerity negatively impacts the poor more than the rich.

One may choose to argue these points, but the evidence suggests such arguments devolve to word play and sophistry. I never have known of an intelligent – emphasis on “intelligent” – debt hawk who seriously will deny any of the above. Yet, these same debt hawks continue to maintain that reductions in federal deficits are prudent and necessary, which strangely does not result in feelings of cognitive dissonance. They seem comfortable holding conflicting beliefs.

As said earlier, I first thought this indicated mental laziness, a cousin to low intelligence. And later I felt it might be closer to pride, hubris and the difficulty in admitting error. In my more recent posts I’ve suggested the real problem is class warfare. The wealthiest 1% are pressing down on the less wealthy 99%, not so much to increase absolute power, but to increase comparative power.

As a businessman, I often saw that absolute compensation was much less important to workers than comparative compensation. A worker making $25K per year was happy, if he were the highest paid among his peers, but a worker making $50K per year was angry if he were the lowest paid. One only need look at professional athletes to see this effect.

Though rationally, absolute income and benefits should be of paramount importance, the “wealth gap” has great psychological meaning. While austerity impacts the poor and the rich, the upper 1% are willing to accept some loss of wealth if the loss to the poor is greater, i.e. if the “gap” grows.

We see this everywhere. Deficit cutters want to reduce Social Security benefits. This negatively would impact the 1%, but not nearly so much as it would hurt the 99%. The same is true for Medicare reductions. Reducing military expenditures might make America less safe for all, but this has the “advantage” of unemploying thousands of soldiers and workers in militarily-related industries, thereby increasing the gap. Cutting postal services will be an inconvenience for the 1%, but a major trauma for those postal workers who lose their jobs.

Everywhere you look, reduced deficit spending hurts America overall, but the 1% are hurt less than the 99%. Reduced deficit spending growth leads to recessions, which grow the gap.

This effect may not always be intentional or even conscious by the 1%. It may simply be a matter of “comfort.” The 1% are uncomfortable when the gap narrows – when members of the 99% move into the neighborhood or into the exclusive building. Some clubs levy high fees to keep the “riff-raff” out. In organizations catering to the 1%, the staff goes beyond courtesy into obsequiousness, further to extend the gap.

Even racial and religious bigotry may be related to a psychological desire to press down some groups in order to extend the gap.

America’s and the world’s opinion leaders – the T.V. personalities, the print media editors, the politicians, the economists – they generally are part of the 1%, and if not the 1% at least the upper 5%. Emotionally, they all treasure the gap and feel uncomfortable when it closes.

Increased deficit spending would stimulate the economy, benefitting everyone, but it would benefit the 99% more, and that bothers the 1%. Even the upper 50% treasure the gap between them and the lower 50%. Everyone loves the gap if they are part of the “haves.”

Citizens, who don’t want immigrants to become citizens, use non-factual excuses like crime and job loss to explain their feelings. “Straights” deny marriage to gays, thereby maintaining the social gap. Everywhere we look, we find groups trying to press down other groups, not for any personal benefits, but to maintain a gap.

And that may be why facts and logic have had so little effect on economic beliefs. The greatly maligned (by me) Chicago Tribune editors, who stoutly refuse even to look at facts, much less acknowledge them, may not reflect mental laziness or reluctance to admit error. They may reflect their possibly subconscious, personal desire to maintain or build the gap.

So if facts and logic cannot overcome the myth that deficits should be reduced and austerity is beneficial, what can? In many nations, military power. In today’s America, political power.

Historically, efforts to reduce the gap have been met with resistance by the upper levels, this resistance being overcome only by political power. All the bloody revolutions fall into that category. Martin Luther King’s marches and especially voter registration, led to the gap-closing, Civil Rights act of 1964, perhaps America’s greatest revolution since the Civil War.

Political power means votes. While #Occupy Wall Street wishes to close the gap, it’s immediate goals are not clearly defined. They seem to want to bring down the upper 1%, a goal that will be met with the fiercest resistance, and which would not benefit the 99%.

#OWS first must learn Monetary Sovereignty, then put forth and support candidates (probably Democrats, not independents) who will show the 99% how MS can close the gap. The 1% will resist, but the 99% have the votes.

Warren Mosler ran for office. He was creamed. He had no backing, no name, no voice, no organization. He was alone with his facts and logic. #OWS should get behind people like Warren (and Warren himself, if he still has the stomach for politics), march for them, gather voters for them and give them big, loud, visible soapboxes, where they can shout the benefits of federal deficit spending – where they can show the 99% how their lives and their children’s lives need not be relegated to agonizing austerity.

That should be the focus of #OWS’s efforts: Learn MS, then elect candidates who understand MS. Given enough votes, the media, the politicians and even the old-school economists will fall in line, and America will emerge from the doldrums into the light.

Don’t damage the 1%. Damage the gap.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com


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No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
b>Gross Domestic Product = Federal Spending + Private Investment + Private Consumption + Net exports

#MONETARY SOVEREIGNTY

–Financial frauds who give exactly the same advice to every client, no matter what the situation.

The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.
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We all are aware of the euro nations’ financial problems, especially the problems of the PIIGS – Portugal, Italy, Ireland, Greece and Spain. We have discussed the fact that because these nations, in surrendering their Monetary Sovereignty, surrendered their control over their money supply. They are unable to create the money necessary to support their economies.

I predicted in a 1995 speech at the UMKC, “Because of the Euro, no euro nation can control its own money supply. The Euro is the worst economic idea since the recession-era, Smoot-Hawley Tariff. The economies of European nations are doomed by the euro.” However, not all European nations surrendered their Monetary Sovereignty. Among the nations choosing to remain Monetarily Sovereign are Poland, Romania, Sweden, Norway and the United Kingdom.

Here are some sample news items:

Bloomberg; 5/25/11: “Poland’s economic-growth forecast was raised to 3.9 percent from 3 percent at the Organization for Economic Cooperation and Development

5/27/11: According to Capital Economics, a British research group, Romania’s economy will grow by 3% this year compared to a previous forecast of 1%, followed in 2012 by a 2.5% advance. The recovery will be fueled by private consumption, but also by the resumption of investments. Also the research group states that Romania has the second best potential for economic development in the region, along with Bulgaria, Poland and Russia.

OCDE:1/2/11 – Sweden is expected to continue to recover strongly from the recession as high saving, low interest rates and an improving jobs market encourage consumers to step up spending, according to the OECD’s latest Economic Survey of the country.

Bloomberg: 5/26/11: The mainland (Norway) economy will expand 3.3 percent this year and 4 percent in 2012, after growing 2.2 percent in 2010, the Organization for Economic Cooperation and Development said yesterday.

The Monetarily Sovereign nations are doing better than the monetarily non-sovereign nations. No surprise there for those of you who have been reading this blog. The key, of course, is for a Monetarily Sovereign nation to realize it’s Monetarily Sovereign. Not all do.

Why the British economy is in very deep trouble, Financial Times, Posted by Neil Hume on May 26, 2011

Here’s something for the Chancellor and the Office for Budget Responsibility (OBR) to chew on: a warning from Dr Tim Morgan, the global head of research at Tullett Prebon, that the deficit reduction plan won’t work and the UK is headed for a debt disaster.

Morgan says sectors that account for nearly 60 per cent of UK economic output are critically dependent on debt (public or private) and set to contract rather than expand. This will render economic growth implausible and means the burden of public and private debt will prove too heavy for the nation to carry:

Over the past decade, the British economy has been critically dependent on private borrowing and public spending. Now that these drivers have disappeared – private borrowing has evaporated, and the era of massive public spending expansion is over – the outlook for growth is exceptionally bleak.

Sectors which depend upon either private borrowing or public spending now account for at least 58% of economic output. These sectors are now set to contract rather than expand, which renders aggregate economic growth implausible. And, without growth, there may be no way of avoiding a debt disaster.

The UK, wisely avoided surrendering its Monetary Sovereignty, then forgot why it did so. It thinks, “the era of massive public spending is over.” Why? It has no idea. It believes it’s monetarily non-sovereign.

This puts the UK in the same position as the U.S., whose politicians, media and old-time economists do not understand the implications of Monetary Sovereignty. Read any article or listen to any politician, and you will not be able to tell whether the subject is a Monetarily Sovereign nation or a monetarily non-sovereign nation. They say exactly the same things about both.

What would you think about an investment advisor who gives exactly the same advice to a wealthy, married old man with no children, as he gives to an impoverished single, young woman supporting five children? If someone says exactly the same things, makes exactly the same predictions, and offers exactly the same advice regarding two diametrically opposite monetary situations, that person is a fraud.

I have just described the debt-hawk media, politicians and old-time economists.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com


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No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a dopey teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it screwed up my future.”

MONETARY SOVEREIGNTY

–Deficit fears do more damage than deficits

An alternative to popular faith

Those concerned about large federal deficits cite fears of inflation, high interest rates and obligations of our children and grandchildren as major factors. See:

https://rodgermmitchell.wordpress.com/2009/11/15/deficits-and-interest-rates-another-myth/, https://rodgermmitchell.wordpress.com/2009/10/30/deficits-the-possible-vs-the-certain/ and several other posts on this site. Ever since we went off the gold standard in 1971, deficits have not been related to inflation or high interest rates. And no one pays for deficits, which is what makes them deficits. We, the children and grandchildren of Reagan-era parents, never paid for the huge Reagan deficits. (By definition, deficits are paid for only when we run surpluses.)

While deficit fears are misplaced, the damage these fears do is significant. Read these recent headlines.

08/14/09: Deficit Plays Into Health Reform: Democrats say it will be hard to push an ambitious health reform bill through Congress unless it reduces projected federal spending on medical care and begins to bring the national debt under control.

11/14/09: High Costs Weigh on Troop Debate for Afghan War: The budget implications of President Obama’s decision about sending more troops to Afghanistan are adding pressure to limit the commitment, senior administration officials say.

11/14/09: China’s Role as U.S. Lender Alters Dynamics for Obama:
China’s position as the country’s largest foreign lender means that President Obama is likely to spend more time reassuring Beijing than pushing reforms.

11/14/09: Obama vows ‘serious’ bid to cut US deficit: Obama’s Republican critics, and some conservative Democrats, have called on the president to rein in spending on huge programs such as health care and climate change to avoid inflating the sky-high deficit.

Thus, deficit fears will impact medical care, the fight against terrorism, financial reforms and efforts to prevent climate change, improve the infrastructure, improve education, etc. More specifically, read what the Wall Street Journal editors said on 11/16/09 about a new Medicare Commission:

“So far, the commission has banned knee arthroscopy for osteoarthritis, discography for chronic back pain and implantable infusion pumps for pain not related to cancer. This year, it is targeting such frivolous luxuries as knee replacements, spinal cord stimulation, a specialized autism therapy and MRIs of the abdomen, pelvis or breasts for cancer. Currently, the commission is pushing through the most restrictive payment policy in the nation for drug-eluting cardiac stents – simply because bare metal stents are cheaper, even as they result in worse outcomes.”

The belief deficits are harmful is debatable, at best. What is not debatable is that deficit cutting absolutely, positively will injure our grandchildren and us. Peculiarly, those wanting to cut federal spending consider themselves “prudent,” while the nation suffers under the blows of their meat axe.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com