Mr. President, Members of Congress: WTF is wrong with you people? Friday, Mar 27 2020 

Mr. President, Members of Congress: WTF is wrong with you people?

Could it be that you really don’t know that:

1. The U.S. Government is Monetarily Sovereign. That means it has the unlimited ability to create U.S. dollars. The U.S. government never can run short of dollars. Even if all federal tax collections totaled $0, the federal government could continue spending, forever.

Who says so?

Well, there’s:
Chairman Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”

And there’s:
Chairman Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

And there’s:
The St. Louis Federal Reserve: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e.,unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.”

2. And because the federal government has the unlimited ability to create dollars, federal deficit spending does not require tax increases. Federal taxes do not fund federal spending.

How do we know? Because since 1940, the federal government has spent more than $20 trillion that was not funded by taxes. That is how we came to have a $20 trillion debt.

And yet, over those 80 years, the economy has grown substantially, with minimal inflation.

3. The federal debt is no burden on taxpayers, and it is not an inflationary problem, either.

While the federal debt has risen dramatically, inflation has been moderate and within the Federal Reserve’s targets.

Those who predict that federal deficit spending will cause an inflation similar to the Weimar Republic, Zimbabwe, or Argentina are very simply not supported by history.

Inflations are not caused by federal government spending. Inflations are caused by shortages, usually shortages of food and/or energy (oil).

 

Mr. President and Members of Congress, you are sitting on an infinite pile of money, pretending you are trying to prevent a recession or a depression, but on the cheap.

And rather than just preventing a recession or a depression, you are not even trying to improve the lives of us people.

WTF is wrong with you people?

Why are you pulling FICA taxes out of our pockets, when even the originator of Social Security, President Franklin D. Roosevelt, knew that SS taxes are not necessary?

Luther Gulick, 1971: “In the course of (a) discussion (with President Roosevelt) I raised the question of the ultimate abandonment the payroll taxes in connection with old age security and unemployment relief in the event of another period of depression.

“I suggested that it had been a mistake to levy these taxes in the 1930s when the social security program was originally adopted.

“FDR said, ‘I guess you’re right on the economics. They are politics all the way through. We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits.

“‘With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics, they’re straight politics.‘”

Mr. President and Members of Congress, Roosevelt understood what you don’t seem to understand: FICA taxes are not economically necessary.

You could eliminate them today, at the stroke of a pen, and add well over a trillion dollars to the economy.

FICA tax totals.png

And that money would go to exactly the right place: We working men and women of America.

And it would be so easy. Just stop collecting it. No complicated laws are necessary.

Simply fund Social Security, Medicare, et al the same way you fund it now. The simplest thing you ever have done.

But you resist doing it. WTF is wrong with you people?

The sole purpose of government is to improve and protect the lives of the people.

And yet you resist funding free Medicare for All — free health care insurance for every man woman and child in America.

Some of you, to avoid your responsibility, apply the false epithet, “socialism,” to any federal funding of anything.

Wake up. “Socialism” is federal ownership and control, not simply funding.

Medicare is not socialism, though the Veterans Administration hospitals are socialism. They are owned and controlled by the government. See the difference?

So which do you prefer, and why do you snarl “Socialism!” every time Medicare for All is proposed?

What is your plan? For the middle classes and poor to do without health care? For millions of Americans to choose between financial destitution or death? For elderly people lacking money, to be denied even the bare comforts of a nursing home?

Is that your plan?

WTF is wrong with you people?

You all march around pretending to be a great friend to the common man. Yet, you keep reducing Social Security payments and availability, when you should increase them.

The Social Security tax system.png

The “system”: Send FICA to SS. Receive $ from SS. Pay income tax to SS.

You even collect income taxes on Social Security benefits, which is beyond ridiculous.

Why would any sane government first take tax money from the people, then provide those same people with money benefits, and finally take back some of the same money?

The whole process makes no sense.

The government easily could provide Social Security for All — every man, woman, and child in America, simply by lowering the age requirement.

It would take little more than a click of a computer key.

Yet you resist by claiming federal deficits are “unsustainable,” and all the while knowing the federal government can “sustain” any level of debt.

Who says so:

Warren Buffett: “Those who regularly preach doom because of government budget deficits (as I regularly did myself for many years) might note that our country’s national debt has increased roughly 400 fold during the last of my 77-year periods. That’s 40,000%!”

Warren Buffett knows it and you know it, too.

So WTF is wrong with you people?

And then we come to student debt. As you well are aware, America’s future depends on the education of our young people.

Yet, you do very little to provide free education for America’s youth. As for grades K-12, you force the costs to rest largely on the backs of local government taxpayers.

Local governments are not Monetarily Sovereign, and so do not have your unlimited ability to create dollars.

So we taxpayers must pay, and this impoverishes us, which results in poorer schools and poorer people.

And rather than providing free college for all, as you easily could, you offer loans, thus indebting millions of young people.

Look at this disgraceful graph:

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It shows that an astounding 51% of federal assets are owed to the federal government by America’s students. These are the young people who leave college with a giant millstone on their backs.

They should be spending their time and money creating new ideas, new businesses, new products — all to grow America.

Instead, they are spending their time trying to gather money and send it to a federal government that not only doesn’t need the money, but destroys it upon receipt.

If any enemy nation wished to ruin America, one of their first acts would be to impede America’s college students.

Which is your plan? To prevent people from attending college, or to prevent them from using their college education? You are doing both.

Is this the way you “improve and protect the lives of the people?”

Below, is a list of Ten Steps to Prosperity, which if taken would save America’s economy, yet you resist implementing any long term actions. Everything you do is limited to a few days or weeks.

That is the extent of your planning.

Mr. President and Members of Congress, at long last, WTF is wrong with you people?

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

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

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone

3. 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 the rest.

MONETARY SOVEREIGNTY

What is the value of a human life? The Libertarians have calculated it. Thursday, Mar 26 2020 

Lest you believe (or hope) the world is coming to understand the foundation of Monetary Sovereignty (a Monetarily Sovereign government cannot run short of its own sovereign currency), we bring you sad news: The Libertarians.

They call themselves “Libertarians,” but in fact they are anarchists. To them, there is no amount of government that is not “too big,” and there is no level of government spending that is not “too much.”

Here are some excerpts from a Libertarian article you may find discouraging:

Trump Is Right To Worry About the Cost of Aggressive COVID-19 Control Measures
So far politicians have been acting as if only one side of the ledger matters.
JACOB SULLUM | 3.25.2020 12:01 AM

President Donald Trump is rightly worried that the “cure” for COVID-19—sweeping restrictions on travel, local movement, business activity, and work—could prove to be “worse” than the disease.

How is that possible? The disease causes human misery and death. How can anything be worse than human misery and death?

The Libertarians have the answer. It’s “the ledger.”

That may already be true, because politicians have been acting as if only one side of this ledger matters.

Economists are predicting that the official response to the pandemic could lead to a downturn as bad as or worse than the Great Recession of 2008–09, which cost Americans an estimated $22 trillion.

It is hard to see how a loss of that magnitude can be rationally justified.

When government agencies evaluate health or safety regulations, they routinely consider not only the number of deaths they might prevent but also the cost of doing so.

That makes sense, because finite resources spent to reduce one kind of risk, depending on the payoff, might better be spent or invested elsewhere, possibly in ways that would save more lives.

Here, the Libertarian argument begins to become a bit murky.

It is true that when resources are finite and scarce, they must be allocated to a “best use” situation. An example would be coronavirus test kits, hospital beds, even doctors and nurses.

But as you will see, those are not what the author, Jacob Sullum, is talking about. He is talking about the supply of dollars (which are infinitely available to our Monetarily Sovereign U.S. government) vs. the value of human lives.

A rough calculation based on the “value of a statistical life” (VSL) that the Environmental Protection Agency uses to assess proposed regulations suggests that the cost of COVID-19 deaths in the worst-case scenario, which assumes that containment and suppression efforts are largely ineffective, would be huge: on the order of $13.6 trillion.

But if the economic projections are right, the cost of aggressive COVID-19 control measures will be substantially higher.

A definition to keep in mind:

From STRATA: THE VALUE OF A STATISTICAL LIFE: ECONOMICS AND POLITICS
Government agencies design regulations that are meant to benefit Americans. However, each regulation also comes with costs. Ideally, agencies use benefit-cost analysis to decide whether a proposed regulation is worth the cost.

When policies are designed to reduce health risks, agencies use a metric called the Value of a Statistical Life, or VSL to estimate benefits. In the simplest terms, a VSL is an estimate for how much people are willing to pay to reduce their risk of death.

Think about it. The VSL estimates how much people are willing to pay to reduce their risk of death.

How much are you willing to pay to reduce your risk of death? The question becomes meaningful if expressed in more concrete terms:

–How much extra would you pay for a car that has side-window airbags?
–How much extra would you pay to have a full-time lifeguard for your swimming pool?
–How much extra would you pay to employ a full-time, on-site doctor at your company?
–How much would you pay for a bodyguard?
–How much extra would you pay for a medicine that has a 75% chance of saving your life vs. a different medicine that has a 50% chance of saving your life.

We could go on and on with examples, but buried in the questions are more fundamental questions, such as:

–What is the likelihood you (or someone I care about) will sicken or die if you don’t pay for the preventative?
–How soon would your death happen if you don’t pay?
–How long will you live, even if you do pay?
–Are we talking about your life, your loved one’s life, your friend’s life, a stranger’s life?

STRATA goes on to list the problems with VSL. These are just a few examples:

PEOPLE DO NOT ACCURATELY PERCEIVE RISKS. Individuals have cognitive biases that do not allow them to accurately assess the risks they face.
THE VSL MAY BE OVERESTIMATED DUE TO PUBLICATION BIAS. Publication bias occurs when journals are more likely to publish studies that find large or statistically significant VSL estimates, while studies with small VSL estimates are less likely to be published.
MANY STATED PREFERENCE STUDIES ARE UNRELIABLE. Stated preference studies ask people how much they would be willing to pay to reduce risk in a hypothetical situation.
AGENCIES HAVE INCENTIVES TO MAXIMIZE BUDGETS. Public Choice Theory suggests that government agencies are incentivized to use policies and procedures designed to maximize budgets.
POLITICAL OR BUREAUCRATIC CONSIDERATIONS MAY TRUMP BENEFIT–COST ANALYSIS. VSL estimates are subject to political pressure.

Ideally, using accurate estimates of the VSL would enable agencies to conduct cost-benefit analyses that correctly identify efficient policies designed to protect people from risk and improve health.

Mr. Sullum’s article goes on to describe why he is “skeptical of policies proposed by government agencies” (his words).

That comparison assumes government intervention will be completely successful at preventing those deaths, which is certainly not true, and it uses a VSL that is arguably excessive in this case, since COVID-19 fatalities are concentrated among the elderly, meaning fewer years of life lost on average.

The true case fatality rate (CFR) for COVID-19 is likely to be much lower than the rates suggested by the official numbers, which include only confirmed cases.

Based on data from the cruise ship Diamond Princess, John Ioannidis, an epidemiologist and biostatistician at Stanford University, calculates that “reasonable estimates for the case fatality ratio in the general U.S. population vary from 0.05% to 1%.”

There is a great deal of uncertainty about these projections, and public officials may think they are erring on the side of caution. But that is true only if you ignore the potentially devastating impact of disrupting economic transactions, shutting down businesses, and depriving millions of people of their livelihoods.

If the CFR for COVID-19 is much lower than many people fear, “locking down the world with potentially tremendous social and financial consequences may be totally irrational.”

In settling on an appropriate response to COVID-19, there are no easy answers. But wise policy starts by recognizing the tradeoffs that politicians so far have been inclined to ignore.

There is one key point Mr. Sullum ignores. There is no cost for federal money.

There is no cost for federal money.

Zero. Zilch. Zip. And no, not even inflation.*

If you were to ask someone, how much extra would they pay for side-window airbags or for a medicine that has a 75% chance of saving their life (vs. a 50% chance), they would receive varying answers, depending on among other things, their personal wealth.

But if you asked a person the same kinds of questions, but said, “The federal government would pay — it would be free to you; do you want it?” — the vast majority would say, “Yes.”

In short, if we are talking about money cost, the VSL is meaningless when the Monetarily Sovereign federal government is the payer.

Unlike state and local governments, and unlike businesses and individual people, the federal government is Monetarily Sovereign. That means it has the unlimited ability to create dollars. It simply cannot unintentionally run short of dollars.

No matter how many dollars the federal government spends, it has no need to raise taxes. Federal money is absolutely free to all taxpayers. Federal spending could double, triple or increase by a factor of ten, and not one additional penny of federal taxes would be needed.

(Federal taxes serve two purposes: To help the government control economic activity and to fool the public into not asking for benefits. See: A Monopoly™ story, why you can’t see dollars, and why federal tax dollars are destroyed.)

When Mr. Sullum writes about, ” . . . the potentially devastating impact of disrupting economic transactions, shutting down businesses, and depriving millions of people of their livelihoods” he is referencing money, which the federal government has the unlimited ability to create.

*Though the public has falsely been told that federal spending causes inflation, the fact is that it would be the shutting down businesses that creates the unavailability of goods and services, and the resultant shortages are the real cause of inflation.

The best cure for inflation actually is increased federal spending for, and dissemination of, the goods and services whose scarcity caused the inflation.

In summary:

The coronavirus crisis can be addressed by massive federal investment directed in three fundamental directions.

  1. Increasing the supply of medical resources: research/development, equipment, drugs, facilities, and personnel.
  2. Increasing the supply of human resources — food, clothing, housing, education, transportation, infrastructure, etc.
  3. Increasing the buying power of the public.

The Value of Statistical Life (VSL) is meaningless in discussions of federal Monetarily Sovereign spending, which is limitless and comes at no cost.

Please give all of the above information to your favorite Libertarian.

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

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

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone

3. 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 the rest.

MONETARY SOVEREIGNTY

Who or what is John Kass and why is he promulgating the Big Lie? Wednesday, Mar 25 2020 

John (Jack) Kass is a far-distant, way-out, right-wing columnist.

Jack Kass

As such, he is a follower of Trump (who himself is neither right-wing nor left-wing, but rather wing-ding).

Kass really should write for Brietbart or sit glassy-eyed on the Fox News couch defending Trump’s latest lies.

Instead, he conducts his mischief by writing for the formerly right-wing, but now having adopted a bit of morality, middle-wing, Chicago Tribune.

Here are some excerpts from Kass’s March 25th Tribune article:

From the animal farm in D.C.: A $2 trillion sausage
When governments frantically throw more money than they can afford at a crisis — and we’re throwing trillions (yes, trillions) at the desperate war against the coronavirus with that federal relief package out of Washington — two truths are self-evident.

One was famously expressed by Rahm Emanuel. And the other was proclaimed by Comrade Napoleon, the talking pig from George Orwell’s “Animal Farm.”

Before we go further with Jack’s opus, we should get to the very heart of his claim, which is: The U.S. government is “frantically throwing more money than it can afford” at the virus crisis.

Being Monetarily Sovereign, the federal government can afford to spend any amount of dollars. ANY amount. In fact, the federal government’s primary method for creating money is to pay bills.

Thus, the U.S. federal government never can run short of dollars. Even if all tax collections fell to $0, the federal government could continue spending forever. There is zero relationship between tax collections and federal spending.

The notion that the U.S. federal government “can’t afford” two trillion, or even fifty times that much, is what is known in economics circles as “The Big Lie.”

The Big Lie is the false claim that federal taxpayers fund federal government spending.

If you don’t believe it’s a Big Lie, read what Chairman Alan Greenspan, Chairman Ben Bernanke, and  Billionaire Warren Buffet said at: Economic rescue bill — far too little and way too late.

Continuing with excerpts from the Kass article:

“You never let a serious crisis go to waste,” said Emanuel. “And what I mean by that it’s an opportunity to do things you could not do before.”

He perfectly described House Speaker Nancy Pelosi’s cynical leveraging of human misery and fear as she used the coronavirus in a push for more political power.

And Napoleon the pig offered that other self-evident truth, proclaiming that “All animals are equal, but some animals are more equal than others.”

Pelosi, true to Emanuel’s Rule of power politics, didn’t waste the coronavirus crisis. She stalled a Senate bipartisan coronavirus relief package.

Pelosi caused the delay, dumping the Democratic Party platform that she never could have passed on her own into the relief package.

It contained leftist Green New Deal ridiculousness on climate change provisions for airlines, race- and gender-based regulations on business, even federal cash for more wind and solar energy.

To Kass, “cynical leveraging of human misery and fear, means helping the poor by providing them with some food, clothing, housing, and medical care.

Oh, how cynical. In Kass-world, it would be less cynical to deny them food, clothing, housing, and medical care, as the GOP repeatedly tries to do.

Image result for wind and solar energy

To Kass: Ridiculous

Like a true conservative, Kass hates anything that might save the world for our children.

He thinks climate change provisions are “ridiculous.” He thinks gender-equality regulations are “ridiculous.”

He even thinks investing in wind and solar energy is “ridiculous.”

But what he really, really hates is Pelosi’s stalling of the Trump money-grab that would have given Mnuchin $500 billion to distribute secretly, as he saw fit, with no one the wiser. (How do you say, “Have a bucketful of cash, Mr. Trump, for your failing hotels” in Congressese?)

For reasons unknown, Trump’s personal assurance that he would oversee the money distribution just didn’t cut it for that old meanie, Pelosi.

Here, Jack explains his objection:

One feature of the compromise Democrats wanted was congressional oversight of a $500 billion fund managed by the U.S. Treasury Department to help struggling businesses with loans and loan guarantees.

Such oversight sounds reasonable. What wasn’t reasonable was the hideous partisan rhetoric from the hard left about corporate bailouts and slush funds.

That was irresponsible.

Oh, poor little Jack Kass had his tender feelings hurt by the insinuation that Honest Don Trump (of the Trump University and Trump Foundations scams, plus at least four bankruptcy scams plus his many criminal associates) might fill his grubby little hands with secret federal money to save his on-life-support hotels.

Who could imagine such a thing, other than everyone with a brain?

So Jack decried the “hideous partisan rhetoric that said, in essence, “Don’t put that proven crooked Fox in charge of the henhouse.”

How hideous! How partisan! How irresponsible!

The American economy wasn’t hamstrung by bad management. The economy was booming.

The mass unemployment and business losses are a direct result of government shutting down commerce to stop the spread of infection.

No, they are a direct result of the infection and the government’s tardy acceptance that the infection is real.

In essence, Kass’s objection is like complaining, “The jails are filled with criminals because the cops are catching them.”

With trillions being thrown around, and human nature being what it is, it is inevitable that some who’ll pass out the government cash, those at the receiving end or perhaps those in the middle will act like greedy piggies and oink their way into deals.   jskass@chicagotribune.com, Twitter @John_Kass

Kass’s hypothesis goes like this, folks: “Our government is not only dead broke, but cursed with human nature, which is to lie, steal, and insult like you know whom.

“So that being the case, why not just let an experienced liar, stealer, and insulter take charge of the money rather than those Democrat amateurs?”

I can only summarize this article in one way.

You don’t know Jack.

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

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

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone

3. 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 the rest.

MONETARY SOVEREIGNTY

 

Economic rescue bill — far too little and way too late. A disgrace. Wednesday, Mar 25 2020 

Mountain labor.pngThe nation is in worse trouble now than before.

This deal is a disgrace.

Congress, White House reach agreement on $2 trillion coronavirus economic rescue bill
THE WEEK, Peter Weber

“Ladies and gentlemen, we are done,” White House legislative affairs director Eric Ueland said early Wednesday, after five days of intense talks with congressional leaders about a coronavirus economic rescue bill. “We have a deal.”

No need to puff up your chest, Mr. Ueland. After “five days of intense talks” a $2 trillion deal was produced, when at least $7 trillion is needed right now, and much more later.

Think about it: If you gave every single adult in America (all 200 million of them) a check for $3,000 every month for the next six months, that would come to just $3.6 trillion.

Can the Monetarily Sovereign, U.S. federal government — a government with the infinite ability to create its own sovereign currency, a government that never can run short of dollars — can that U.S. government afford it?

Chairman Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”
Chairman Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”
St. Louis Federal Reserve: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e.,unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.”
Warren Buffett: Those who regularly preach doom because of government budget deficits (as I regularly did myself for many years) might note that our country’s national debt has increased roughly 400 fold during the last of my 77-year periods. That’s 40,000%!

The $2 trillion deal includes money for most Americans, $367 billion for small businesses who continue to pay employees forced to stay home, $130 billion for hospitals, and a $500 billion loan program for corporations, states, and local governments.

Beggar.png

Too little, too late.

Do the 30 million small businesses in America need more than $367 billion to stay alive?

What is the Definition of Small Business?
Depending on your industry, a small business could be defined as business with a maximum of 250 employees or a maximum of 1,500 employees.

That comes to about $12,000 per small business. More importantly:

Small businesses employ over 56 million people in the United States, and, according to the Small Business Administration, that is equal to 57 percent of the private sector employees in the nation.

So the $130 billion comes to only $2,321 per small business employee.  Considering FICA (an additional cost that is money coming right back to the government) plus the costs for health insurance, rent, maintenance, and the cost of lost business, many small businesses will not survive on that $2,321 per person.

As for the 6,000 hospitals in America, the $130 billion comes to $21,000 per hospital, less than the average cost of a 1-day, 1-patient stay, and clearly not enough to do whatever the federal government has in mind.

And finally, we come to the “$500 billion loan program for corporations, states, and local governments.” Is this supposed to be a joke?

First, what is $500 billion supposed to accomplish for corporations, states, and local governments? Gross domestic product is about $20 trillion. Do the politicians believe that an additional 2% will make up for the losses due to the virus?

More importantly, it’s a loan. It has to be paid back to the government. Why? What is the purpose of paying it back?

The federal government neither needs nor uses any dollars it receives. The payback dollars will be destroyed upon receipt. (A Monetarily Sovereign government destroys all income upon receipt, and creates new money when it spends.)

The U.S. federal government never should lend. Never. It only should give. There is no reason for the government to want money coming in.

The deal was negotiated by Ueland, Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell (R-Ky.), and Senate Minority Leader Chuck Schumer (D-N.Y.), who was in frequent contact with House Speaker Nancy Pelosi (D-Calif.).

At the insistence of Democrats, the legislation includes an independent inspector general and an oversight board for the $500 billion loan program, as well as other protections.

The Republicans tried to slip in a provision that essentially allowed the oft-bankrupt Donald Trump, the owner of the crooked Trump University, the crooked Trump Foundation, and the hard-hit Trump hotels, to determine secretly who gets the loans and the terms.

Now, what could possibly go wrong with that?

The nation is suffering financially. Additionally, more dollars are needed for research and health care related to the virus.

The government has unlimited dollars. What is the purpose of rationing them?

Visualize a billionaire dropping a single dime into a beggar’s cup. “Here, buy yourself some food.”

Far too little, and way too late. A disgrace.

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

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THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone

3. 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 the rest.

MONETARY SOVEREIGNTY

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