Can there be a “Theory of Everything” in economics? Saturday, Jun 24 2017 

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

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It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders..
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The term “Theory of Everything” has been related to physics.

Quoting Wikipedia, “A theory of everything (T)E) is a hypothetical single, all-encompassing, coherent, theoretical framework of physics that fully explains and links together all physical aspects of the universe.

“Finding a ToE is one of the major unsolved problems in physics.”

The two primary “frameworks” in physics are General Relativity and Quantum Field Theory, which in their current interpretations are incompatible.  A “theory of everything” would unite these two frameworks.

If we class General Relativity as a theory of big things, and Quantum Field Theory as a theory of small things, we might draw an interesting parallel in economics with macroeconomics and microeconomics.

And just as General Relativity is the basis for explaining how gravity affects big things, Monetary Sovereignty is the basis for explaining how money affects macroeconomics.

General Relativity is based on the relationships among mass, energy, time, space, and gravity. Monetary Sovereignty is based on the relationships between money creators and money users.

Consider such subjects as income and wealth distribution, health care, taxation, poverty, education, employment, inflation, deficit spending, and economic growth. Any intelligent discussion of these subjects requires an understanding of Monetary Sovereignty.

Obamacare Vs. Trumpcare:

You’ve been reading and hearing about the Democrats’ “Obamacare” vs. the latest iterations of the Republicans’ “Trumpcare.” Both are attempts to provide health care to Americans, and in different ways, both suffer from fundamental, incorrect assumptions.

The incorrect assumptions are that the federal government’s supply of dollars is limited, and an increase in federal spending requires an increase in taxes,  an increase in borrowing, and/or inflation.

The facts are:

  1. Our federal government, unlike state and local governments, is now Monetarily Sovereign (since 1971, when it went off a gold standard).
  2. It cannot unintentionally run short of its own sovereign currency — the currency it originally created from nothing — the U.S. dollar. It instantly can pay any size debt denominated in dollars.
  3. It needs neither to borrow nor to tax in order to obtain dollars, as it creates dollars ad hoc, by paying creditors.
  4. Being sovereign, the federal government has the unlimited ability to increase or to decrease the value of its sovereign dollar, thus creating or preventing inflation.

Obamacare rightfully is criticized for taxing younger, healthier citizens and for not covering several million people, all because the realities of Monetary Sovereignty have been ignored.

Trumpcare reduces the taxation and the coverage for the same wrong reasons.

The U.S. federal government has the unlimited power to fund comprehensive, no-deductible health care and long-term care for every man, woman, and child in America.

It can fund “Medicare for All” without collecting any tax, and without borrowing, and without price inflation.

Trying to determine whether Trumpcare does or does not outweigh Obamacare, is a fool’s mission. Both are seriously lacking due to their false underlying assumptions about federal affordability.

The Kansas’s Experiment With Tax Reduction:

We discussed this at “Kansas is nothing like America.” An article in THIS WEEK Magazine (6/23/17) illustrates the problem:

“The nation’s most aggressive experiment in conservative economic policy is dead,” said Russel Berman in TheAtlantic.com. Supply-side economics “never works,” saod Eugene Robinson in The Washinbgton Post.

The Wall Street Journal, in an editorial said (Kansas Governor) Brownback was “unlucky in his timing. . .” Said Pat Garofalo in USNews.com, “Conservatives always try to explain away supply-side failures by saying the reforms weren’t quite right.

The big question is whether national Republicans will heed the lessons of Kansas, said Jordan Weissmann in Slate.com. President Trump is being advised by the same economists who engineered Brownback’s disastrous scheme, and he has proposed a similar strategy of massive income tax cuts and pass-through exemptions for businesses. “Kansas has admitted its mistake” — but Republicans may try to repeat it anyway.

Image result for bell-shaped curve

Total tax collections based on various tax rates.

Supply-side economics, often exemplified by “the Laffer curve,” teaches that tax-rate cuts can pay for themselves by increasing taxable income.

This supposedly will happen because lower taxes will increase both the Supply and the Demand for products and services.

In this vein, Arthur Laffer said that tax rates of 0% or 100% will generate zero taxes, so somewhere between 0% and 100% there is a “best” tax rate that will generate the maximum tax.

“Best” is defined as the point at which taxes collections are maximized, but not the point of maximum benefit to an economy.

Supply-siders fail to take into consideration four facts:

  1. The federal government has no need for taxes, so federal tax cuts always will be pro-growth for the economy.
  2. Federal deficit spending adds dollars to the economy and so is pro-growth
  3. Federal taxes always remove dollars from the economy, but a growing economy requires a growing supply of dollars. Thus, federal taxes always are anti-growth.
  4. State and local governments do need taxes, though complexity prevents knowing what that magical “best” tax rate is. For each state, it could be lower or higher than the current rate. State and local government deficit spending neither adds nor removes dollars from the economy, so may or may not facilitate growth.

Berman, Robinson, the Wall Street Journal, Garofalo, Weissmann, Brownback, and Trump do not seem to understand the differences between Monetary Sovereignty (the U.S.  federal government) and monetary non-sovereignty (the states, counties, cities, you, and me).

The federal government, having neither the need for, nor the use of taxes, should not use the Kansas experiment as a model. Unlike Kansas, the federal government could eliminate all taxes today and yet continue spending, forever.

Kansas needs and spends tax dollars. It can, and has, run short of dollars. Though the Kansas experiment seems to have failed — tax rate reduction did not generate enough taxable income to “pay for itself” — exactly the same experiment might work for other states.

Florida, Alaska, and others have no income tax, simply because they receive dollars from outside sources, Florida from tourism and Alaska from oil. The Kansas experiment may apply to some states and not to others, but it definitely does not apply to the federal government.

The common element among the arguments about Obamacare, Trumpcare, and the Kansas experiment is Monetary Sovereignty, or rather, the lack of understanding it.

A need to understand Monetary Sovereignty is at the foundation of meaningful discussions about education access, federal and local tax reform, income and wealth inequality, poverty, Social Security, immigration, inflation, unemployment, infrastructure, climate change, war, scientific research, states’ rights, charity, business regulation and many other dollar-related subjects.

In that sense, Monetary Sovereignty is the “theory of everything” only in macroeconomics.  It is not a Theory of Everything in all of economics because it barely touches on microeconomics

(Monetary Sovereignty does include “Gap Psychology,” the popular desire to distance ourselves from people below us on the income/wealth/power scale, whom we view as inferior, while wishing to come closer to people above us, whom we deem superior).

Microeconomics, being a subset of Psychology, is like Quantum Field Theory in that both involve predictable unpredictabilities we have yet to master. Thus, like physics, economics will have to wait for its Theory of Everything (though I suspect individual humans will continue to be even less predictable than quantum particles).

In summary:

Those who do not understand and use Monetary Sovereignty, do not understand federal economics, and cannot develop workable economics plans.

They are fixated on cost-cutting and budget-balancing, when the federal government needs neither, and both are anti-growth.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

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

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

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

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

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

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

MONETARY SOVEREIGNTY

 

Are the Dems willing to learn? What will it take? Thursday, Jun 22 2017 

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

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It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders..
………………………………………………………………………………………………………………………………………………………………………………

In the publication, This Week, Ryan Cooper wrote:

The big lesson of Ossoff’s defeat is that Democrats must run on policy 

I suggest that what Democrats need to do is sharply discount predictions about what sort of politics will play best, and proudly run on something substantive.

Oooh, “run on something substantive”? What a concept! Actually give voters real facts!

You wouldn’t know it, but when it comes to something substantive, the Dems hold all the cards:

  1. There are far more middle-income and poor voters than rich voters.
  2. Most progressive initiatives favor those middle-income and poor voters
  3. By contrast, the conservatives have a record of favoring the few rich voters.

So what’s the problem?

  1. The rich are better able to bribe the politicians than are the middle-income and poor.
  2. The rich also are better able to bribe the economists and the media.
  3. Those bribes, over the years, have moved the Democrats from progressivism toward conservatism.

Thus, we endured a faux progressive President in Barack Obama, who repeatedly opted for social spending cuts and deficit cuts. Today, there are few-to-no progressive politicians, and any such will be labeled “socialists.” Our last progressive President was Lyndon Johnson.

And now we have arrived at today, from which we can look back and ask, “How did we get here?”

First, the Dems lost Congress, despite there being more of them registered as voters than the Republicans have.

Then, they lost the Presidency to a semi-literate, rich bigot, who was elected, in part, by the very people against whom he expressed his bigotry.

Image result for georgia people

Trump voters will lose most under Trump

Most recently, the Dems spent mega-millions to lose in Georgia,  whose voters will lose most under Trumpcare.

Meanwhile, Hillary Clinton, the perennial presidential loser, and a representative of the old Democratic style, continues to mouth off about Russia, the FBI, and hacking, which may be important to her, but don’t mean a damn thing to the voters.

So the question (or rather the questions) are:

  1. Do the Democrats care?
  2. Are the Democrats brave enough to tell the voters the truth?

Question #1 has to do with motivation.  If you are a leading Democrat in the Senate, you very likely are safe. Aside from being caught in bed with a sheep, you probably cannot lose your seat.

If you are a Democrat in the House, you probably have been elected via Gerrymandering, and are as locked in as a gold bar at Fort Knox.

In either case, you have yours, and they have theirs, and all’s well with the world. The boat will not be rocked by your hand.

For example, here in Illinois, we have a Democratic Senator named Durbin.  He was a House member from 1993-1997 and a Senator since 1997.  That’s 24 years in Congress and currently the senior Democratic Senator from a blue state.  You couldn’t pull him out of Congress with an 18-wheel truck.

Despite his 24 years, you might not have heard of him.  He keeps a very low profile, so low he scarcely comes up for air, at which time he whispers that he’s for all things good, and against all things evil. Then down he goes for another six years.

Do you think Durbin and all the other “Durbin’s” want to learn or do anything different? Not a chance. They have won for themselves by doing what they have been doing.  So they just sit back in that rocking chair and watch the votes come in.

But let’s say you’re one of those rare Democrats who not only cares about the Party, but also cares about the party’s traditional constituents, the men and women of the middle and lower income groups, the minorities and the underdogs.

You know the party needs to change its ways. You know you can’t be the party of the middle and the poor, and at the same time coddle the crooked bankers who caused the recession.

You know you can’t opt for “Medicare for All” while pretending the federal government needs to ration spending. You know you can’t provide the benefit without deficit spending or tax increases. (That was Bernie Sanders’s problem. He denied reality. He claimed he could pull ten pounds of potatoes from a five-pound bag. )

You know you must acknowledge the federal government’s unique and unlimited ability to create dollars while preventing inflation.

But, do you care enough to risk your Congressional seat? Do you care enough, knowing you’ll receive no help from the establishment Dems?  After all, look what they did to Bernie, and he wasn’t even revealing the truth that federal taxes don’t fund federal spending.

Now, my friend, Professor Stephanie Kelton, who understands Monetary Sovereignty, just wrote to me today. She continues her Quixotic effort to find, then teach, the one or two Democrats who might have the courage and the influence to change the trajectory of the formerly left-wing.

God bless her and keep her.

She tried with Bernie, indeed she tried with the whole Democratic Party just last year when she was the Senate’s official Democratic economist. As a result of her efforts, did you hear Bernie, or any other Democrat, say anything resembling, “The federal government cannot run short of dollars, so there is no reason to cut spending“?

No? Nor did I.

Did you hear a single Democrat say, “Federal deficit spending is necessary for economic growth“? Me, neither.

Still, Kelton tries; I’ll give her credit for persistence.

If the Democratic Party is composed solely of people who don’t care about progressivism, and/or are fat and comfortable in their seat, and/or are too stupid to learn or too cowardly to teach, and/or have no influence, what is the Party’s future?

Dire, I fear.

The Dem’s slide to the right makes them increasingly irrelevant,  a virtual GOP-Lite. The poor and the middle will see more Trumpcares, more tax base widenings, more bank regulation cuts, more taking from the poor and giving to the rich.

The title question is, “Are the Democrats willing to learn? What will it take?”

Facts won’t do it. Logic won’t do it. Charts and tables won’t do it.

I believe it will take a charismatic, widely respected, and influential leader, someone rich enough and brave enough to ignore the bankers, and smart enough to understand and defend Monetary Sovereignty,  a person who has true compassion for the poor and the middle.

Know anyone?

I don’t.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

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

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

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

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

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

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

MONETARY SOVEREIGNTY

Don’t kid yourself. The cult doesn’t serve you. You serve the cult. Tuesday, Jun 20 2017 

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

…………………………………………………………………………………………………………………………………………………………………………..
It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders..
………………………………………………………………………………………………………………………………………………………………………………

David Koresh was the leader of the Branch Davidian cult, whose followers blindly approved of every noxious thing he did, though he cared nothing for them.

The same was true of Charles Manson, leader of the “Manson Family” cult, and Jim Jones, leader of the “People’s Temple.” Though they did not care what happened to their followers, those poor people defended every ridiculous thing the cult leader did.

That is the way with cults. The leader (or leaders) can do no wrong in the eyes of the followers. Anyone who points out simple facts that demonstrate the selfishness, incompetence, criminality, or mental defects of the leader, will be ignored, or more likely, attacked.

There is no logic in cults. If the leader tells you, his follower, to give him all your belongings, and your wife, and your daughter, you not only will do as you are told, but you will defend it ardently.

When outsiders point to what they believe to be obvious shortcomings — “He has taken everything for himself and given you nothing” or “He repeatedly lies to you.” — the outsiders are met with hostility.

To normal people, this hostility is illogical. It makes no sense whatsoever. But cults themselves make no sense.

To understand cults, one must look at the followers, not at the leader. Leaders merely step in and reap what the followers already have planted in their own minds.

No one is more angrily certain than a cult member. People who are not cult members cannot understand this. They view it as stupidity.

But, cult followers are not stupid, though their lack of reason makes them seem so. Instead, they are the world’s most needy people.

They believe life has been unjust to them. They wake up angry, and they go to bed angry at what they perceive to be the unfairness of it all.

They eagerly believe the leader who tells them:

This is not your fault. It is the fault of bad people — foreigners, Muslims, the press, the establishment, gays, immigrants, liberals, communists, Mexicans, Jews, politicians.  These people have cheated you out of what rightfully is yours.

“If not for them, you could have been great. But I alone can punish them and I will make you great, again.”

The followers desperately want a leader who will give them promises. It doesn’t matter that the promises won’t be kept. The promises provide hope and hope is sufficient reward.

In a cult, the leader is the ant queen, and the followers are the ants. Everything focuses on the queen. There is no concern for the ants.

Cult leaders know this. They know that the more ridiculous the statements and demands put upon the followers, the more fervently the followers will believe.

Cult leaders and followers play a game:

The leader tests the followers with illogical statements and requests, and the followers try to demonstrate their fealty by passing those tests, i.e by believing and defending.

Then the process is repeated, with the tests and demands being made ever more difficult, and the believing and defending ever more impassioned.

If you, an outsider, point out the leader’s selfish lies and the impossibility of the leader keeping his promises, it is you, not the leader, who will be hated, for it is you who is perceived as trying to destroy the dreams the leader offers.

Consider, for example, the usual reaction to any criticism of a cult leader who:

*Cheats thousands of innocent students with a fraudulent school, by promising wealth and success,
*Promises foreign workers well-paying jobs, then cheats them out of their salaries,
*Promises to create jobs by claiming climate change is a “Chinese hoax” that kills jobs,
*Promises to “make America great again,” by demeaning Muslims, Mexicans, all Latinos, gays, immigrants, women and the media.
*Promises strong leadership by showing admiration for strongmen like Vladimir Putin, Kim Jon Un, and Rodrigo Duterte,
*Promises openness and honesty, then reneges on his promises to release his tax returns and put his businesses in a blind trust,
*Promises health protection by claiming he will replace an insurance program with “something much better,” then puts forth a bill that takes from the poor and gives to the rich
*Promises to protect his followers’ health, then tells them vaccination causes autism,
*Promises to “drain the swamp,” then hires wealthy “swamp” bankers for his advisors,
*Promises to protect his followers from Mexican rapists and criminals by building a wall and forcing Mexico to pay for it.
*Refuses to accept any blame for anything, ever.

Promises, illogical or broken, have no effect on cult members. All they desire is for someone to promise them heaven, even when they know deep in their hearts that heaven does not await them.

Doubt does not appear when cult members are reminded that their leader:

Lied that he won the popular vote,
Lied that he had the biggest attendance at his inauguration,
Lied that a bad person tapped his phones,
Lied for years that a bad person is a foreigner,
Has failed to pass any promised legislation, despite his party owning the House, the Senate, and the Supreme Court,
Is a nepotist who hired his children as his most important advisors,
Wants to change the Constitution’s “freedom of the press” so he can sue papers for saying things he doesn’t like,
Leaked secrets to the Russian ambassador, in public,
Admires crooked conspiracy theorist Alex Jones,
Has failed to hire enough people to run the various government agencies, and has had to fire some of the people he hired,
Lied to coal miners he would bring them jobs despite the impossibility due to mechanization
May be the most psychologically immature and unstable leader in our history

To a cult follower, neither fact nor disappointments matter. The leader can do no wrong. There are people who still admire Hitler and Stalin. They know these men were mass murderers, but these cult leaders promised to make Germany and Russia great again.

The people were told the troubles that enveloped pre-war Germany and Russia were not the fault of the Germans and Russians. The troubles were the fault of the Jews.

“It’s not your fault. It’s not my fault. It’s their fault.” 

A cult leader never admits error. Never. Even in the face of overwhelming evidence, a cult leader always will deny fault.

There is one other peculiarity about cults. To deflect any criticism, cult followers have been given short, pre-programmed responses.

Tell the Trump cult followers any criticisms or their leader, and their responses will be some version of:

*Obama was worse.
*Bill Clinton was worse.
*Hillary would have been worse.

They seldom will attempt to defend the leader’s innocence. They know in their hearts that he is guilty, but they don’t care. He is their golden-haired hero, so the only defense is “[Blank] was worse.”

If you mention the criminality of Trump University and the Trump Foundation, his followers won’t defend them. Instead, they inexplicably will say, “Hillary should be locked up.”

Of course, this doesn’t exonerate Trump, but it seems sufficient for followers that they can name someone they hate.

If you mention Donald Trump’s groping of women and cheating on his wives, they will say, “Bill Clinton was worse,” as though somehow that excuses Trump.

If you mention Trump’s incessant lying, they will excuse it by saying “Hillary lied, more.”

Any offense is excused if someone else’s offense (especially an offense, real or imagined, of someone from another party) can be brought forth.

Image result for trump supporters

A cult leader does not serve his followers.   His followers serve him.

The illogic of these responses escapes cult followers. Cults have no logic. Trump said it himself: I could stand in the middle of 5th Avenue and shoot somebody and I wouldn’t lose voters.

That is the sure sign of a cult: An immaculate, inculpable leader.

So do not despair. You cannot argue away a cult. No reason can penetrate. Cults must run their course. And generally, they don’t just fade away. They usually fail in some resounding, spectacular fashion, with many people injured or dying.

All you can do is pray you escape the inevitable cataclysm.

Meanwhile,  if ever you find yourself arguing about some cult leader with one of his followers, and the follower refuses to understand or even listen to the facts, but instead greets your comments with sneers and bile, try to be compassionate.

A cult follower cannot admit the failings of his leader, for such an admission will leave him with no one to blame, no self-respect, no hope.

He will believe he has nothing.

Later, after the cult has ended in ignominy, which it must, there will remain a core of believers, who will defend the indefensible, forever.

Considering what they have lost, be kind to them.

Rodger Malcolm Mitchell
Monetary Sovereignty

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THOUGHTS

•All we have are partial solutions; the best we can do is try.

•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money no matter how much it taxes its citizens.

•The more federal budgets are cut and taxes increased, the weaker an economy becomes..

•No nation can tax itself into prosperity, nor grow without money growth.

•Cutting federal deficits to grow the economy is like applying leeches to cure anemia.

•A growing economy requires a growing supply of money (GDP = Federal Spending + Non-federal Spending + Net Exports)

•Deficit spending grows the supply of money

•The limit to federal deficit spending is an inflation that cannot be cured with interest rate control. The limit to non-federal deficit spending is the ability to borrow.

•Until the 99% understand the need for federal deficits, the upper 1% will rule.

•Progressives think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

•The single most important problem in economics is the Gap between the rich and the rest.

•Austerity is the government’s method for widening the Gap between the rich and the rest.

•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

MONETARY SOVEREIGNTY

The AI problem. Do you have the solution? The most powerful machine humans ever have created Monday, Jun 19 2017 

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

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It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders..
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There is a problem coming at us like a roaring freight train — no, more like a rocket. It is expressed in this article from the June 10, 2017, issue of NewScientist Magazine.

Excerpts:

AI will be able to beat us at everything by 2060, say experts

According to a survey of more than 350 people developing artificial intelligence, there is a 50 per cent chance that machines will outperform humans in all tasks within 45 years.

AI is predicted to be better than us at translating languages by 2024, writing high-school essays by 2026, driving a truck by 2027, working in retail by 2031, writing a bestselling book by 2049 and surgery by 2053.

In fact, all human jobs will be automated within the next 120 years, say the respondents.

The survey, by the University of Oxford and Yale University, took the views of AI researchers around the world.

O.K., there is the problem.  Machines will do everything better than you can. What is your solution?

MMT’s (Modern Monetary Theory) so-called “solution” is for the government somehow to find or create (which of the two, never is clear) a below-minimum-wage job to everyone who wants one. They call it “JG” (Jobs Guarantee).Image result for dig for water in the desert

We already have discussed the many reasons why JG cannot work, even in today’s environment.  These reasons involve location, transportation, skills, salary, benefits, supervision, and effects on current workers.

You can click the link (above) to see the discussions.

Now, consider what would happen to JG in the future jobs environment described by the above article. Imagine a government agency frantically trying to find (or to create) jobs, when fewer and fewer jobs are needed.

It would be like your offering of a shovel to a desert wanderer, nearly dead of thirst, when you simply could give him a guaranteed, unlimited supply of water.

Who has the solution to the impending job shortage?

Surely not the Republicans, whose main interest is in punishing the poor for being “lazy,” and “takers,” rather than in helping them.  Cuts to Medicaid and other social spending are embedded in the fabric of the right-wing philosophy.

Not even the Democrats, who make loud noises about helping the poor, but then agree with the Republicans about “the Big Lie” — the lie that federal taxpayers fund federal spending.

Barack Obama’s Social Security cuts and Bernie Sanders’s attempts to “pay for” Medicare via current taxes provide examples of the Big Lie.

The reality is this:

  1. As machines become ever more adept at doing the jobs people traditionally have done, fewer people will be able to find jobs.
  2. But all people still will want food, clothing, housing, entertainment, health care, and other mental and physical comforts.
  3. In the far-distant future, machines might provide all these human needs free of charge. But until then, they will have to be paid for.
  4. Someone will need to pay for these human needs, when fewer people will be able to find jobs.
  5. The only entity in America with the unlimited ability to pay for anything is the Monetarily Sovereign U.S. government.

Being Monetarily Sovereign, the federal government uniquely cannot run short of dollars.  Even if all federal tax collections totaled $0, the U.S. federal government could continue spending, forever.

The only logical conclusion is that the Monetarily Sovereign, U.S. government (and all other Monetarily Sovereign governments) will have to step in and provide the people with more money and more benefits. 

Humans evolved big brains, and our using our big brains allowed us to adapt to change better than any other animal. We continually have created labor-saving, life-improving machines. It was via our machines — first, hand axes, then increasingly more sophisticated machines — that we separated ourselves from the rest of the species.

It was via our machines — first, hand axes, then increasingly more sophisticated machines — that we separated ourselves from the rest of the species.

Though our machines reduced the need for hand labor, they didn’t eliminate the need for all labor. Instead, they created more consumer needs and these additional needs created more, less-physical jobs.

Until now.

With Artificial Intelligence, and especially with machine learning, machines not only can do more physical work, faster and more efficiently, but they can think, remember, imagine, communicate and learn.

For any given job, no matter how great the intellectual requirement, we will create machines that can do it better than humans.

So, what will become of us?

Our solution is not to create more jobs for human hands.  Our solution is to utilize the Monetarily Sovereign governments our big brains have created.

We now must leave behind the old notions of nobility in sweat labor and dirt under the fingernails, and adapt to our newest machine, the most powerful machine humans ever have created: A Monetarily Sovereign government.

This machine, like all machines, must be used properly, as it can be used for good or for evil. 

But, if the same big brains that were smart enough to invent Monetary Sovereignty, also are smart enough to master Monetary Sovereignty, this greatest of all machines can help us create all we need and all we want.

We have but to understand which buttons to push and levers to pull.

I suggest we begin with the Ten Steps to Prosperity (below).

Rodger Malcolm Mitchell
Monetary Sovereignty

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

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

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

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

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

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

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

MONETARY SOVEREIGNTY

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