Money Bail: The pro-rich, anti-everyone-else “tax” on the accused Tuesday, Aug 20 2019 

“Equal justice under law” is a phrase engraved on the front of the United States Supreme Court building in Washington D.C. 

On October 1, 2016, we published the post titled, Money bail: Another foible of the Gaps,  Here are a few notes based on that post:

The income/wealth/power Gaps between the rich and the rest, constitute the single, most important economic problem facing America and the world.

The Gaps exacerbate crime, disease, poor education and housing, infrastructure decline, the ecology, unnecessary war, and unfair justice, among other issues.”

I read where an 18-year-old accused of fatally shooting a man was ordered held in lieu of $5 million bail.

Why $5 million? The clear purpose was to make the bail unaffordable for the man, so that he will not be loose on the street.

Why offer any bail at all? Answer: So if it turned out that he was rich, he could avoid jail while he awaited trial.

But, if he had enough money to make bail, would that have proved he offered less risk to the public, while awaiting trial, or was more likely to show up for his trial?

Rich people jump bail all the time.

A judge or magistrate decides the amount of bail by weighing many factors:

— the risk of the defendant fleeing,
— the type of crime alleged,
— the ‘dangerousness‘ of defendants, and
— the safety of the community.

Money bail falsely presumes that poorer people, who are less likely to afford bail money, must be more likely to flee and are more dangerous to the community.

Money bail forces many innocent people to remain in jail for months, simply because they cannot afford to pay.

Sometimes judges set bail at a low amount, even $500. What is the purpose? Why set bail at all, and just rely on the accused to show up for trial?

And what if the accused is too poor even to afford payment of that low amount of bail? What does that prove?

Here is what Bernie Sanders had to say:

“For most of our history as a country, the United States incarcerated people at about the same rates as other western democracies do today.

“In the early 1970s we had the same low crime rate as today, but we now have an incarceration rate five times higher. Indeed, America is now the world’s leading jailer.

“We lock up more than 2 million people in America, which is more of our own people than any country on Earth.

“Hundreds of thousands of incarcerated people in America have not been convicted of a crime and are solely in jail because they can’t afford their bail. We are criminalizing poverty.”

“Right now, hundreds of thousands of people without a criminal conviction are in jail simply because they could not afford bail. Young people can spend hundreds of days in jail, only to be acquitted — yet the severe damage to their lives cannot be undone.

“This is why Bernie introduced the No Money Bail Act of 2018 to end cash bail and to end the criminalization of poverty in America. ”

See also: S: 3271

The money bail system is a relic of the old imperial view that the rich are honest and dependable, while the poor are criminal and irresponsible.

When a judge imposes, for instance, a million-dollar bail, what does that tell you? It says that the judge doesn’t trust the accused to return for trial.

But that bail might require a poor man to languish in jail for weeks or months, while a rich man will be free to go about his business, spend time with his family, perhaps even travel.

And if he is wealthy enough, he even may leave the jurisdiction, sacrifice the million dollars, and go free to a foreign jurisdiction, without enduring a trial.

The notion that the rich can be trusted more than the poor not only is false and bigoted, but dangerous to society.

As currently practiced, it is a violation of the Sixth Amendment to the Constitution and the U.S. Code:”In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial . . . ”

18 U.S.C. § 3161 – U.S. Code – Unannotated Title 18. Crimes and Criminal Procedure § 3161. Time limits and exclusions:

Any information or indictment charging an individual with the commission of an offense shall be filed within thirty days from the date on which such individual was arrested or served with a summons in connection with such charges.

If an individual has been charged with a felony in a district in which no grand jury has been in session during such thirty-day period, the period of time for filing of the indictment shall be extended an additional thirty days.

In any case in which a plea of not guilty is entered, the trial of a defendant charged in an information or indictment with the commission of an offense shall commence within seventy days from the filing date (and making public) of the information or indictment, or from the date the defendant has appeared before a judicial officer of the court in which such charge is pending, whichever date last occurs.

If a defendant consents in writing to be tried before a magistrate judge on a complaint, the trial shall commence within seventy days from the date of such consent.

Any period of delay resulting from a continuance granted by any judge on his own motion or at the request of the defendant or his counsel or at the request of the attorney for the Government, if the judge granted such continuance on the basis of his findings that the ends of justice served by taking such action outweigh the best interest of the public and the defendant in a speedy trial.

In short, the Constitution allows an innocent person to be held for 60 to 70 days, to any length of time that “serves the ends of justice.”‘

So if you are accused of a crime you didn’t commit, and you don’t have access to the bail money set by a judge, you could suffer in jail for weeks, months, years — even for longer than a guilty verdict would impose.

If you are rich, you don’t need to worry about that.

Is that equal justice for all?

Some might claim that the bail system actually protects you, because if it didn’t exist, judges might be tempted to keep innocent you in jail longer, just to protect against you fleeing.

Judges are people. They do smart things and they do stupid things. The convict innocent people and find guilty people innocent. There is no failsafe method of justice.

But, we trudge on.

Americans believe it is better to release a guilty person than to imprison an innocent person. (That is why we require all 12 people in a jury, rather than just a majority, to agree on criminal charges.)

But the bail system imprisons innocent people every day — often for long periods.

I suggest we eliminate the entire bail system, and replace it with an honor system along with an ankle bracelet system.

Yes, that will allow some criminals to flee, and it also will allow some to create crimes while awaiting trial. But that is the price we should be willing to pay so that we stop imprisoning innocent people for lengthy terms.

It is far more in keeping with the purposes of the Sixth Amendment.  

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

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

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

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

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

Ten Steps To Prosperity:

1. Eliminate FICA

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

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

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

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

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

9. Federal ownership of all banks

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

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

MONETARY SOVEREIGNTY

THE WEEK Magazine spreads the Big Lie Monday, Aug 19 2019 

THE WEEK Magazine is an outstanding, left-leaning publication that might be expected to opt for more social spending. Sadly, they too are caught up in the traditionally right-wing Big Lie.

The Big Lie is: Federal finances are similar to personal, state government, and local government finances.

State and local government spending is funded by state and local taxes. Federal spending is not.

While you and your local governments require income in order to spend, the federal government creates its own income. It has no need for taxes.

The Big Lie is disseminated by the very rich, who are motivated by Gap Psychology, the common motivation to distance oneself from those below, and to approach those above. The rich wish to widen the income/wealth/power Gap between them and the rest of the populace.

The easiest way to accomplish this: Cut federal benefits to the non-rich.

The very rich disseminate the Big Lie by influencing our primary, trusted information sources: The media, politicians, and university economists.

The media are influenced via advertising dollars and media ownership.
The politicians are influenced via campaign contributions and promises of future lucrative employment.
The university economists are influenced via university contributions and jobs in think tanks.

Here is a classic example of a medium, THE WEEK Magazine, doing the bidding of the very rich:

Why is 2030 significant? (August 18, 2019)
It’s the year when America’s so-called dependency ratio — or the percentage of nonworking citizens who rely on those who are employed — will exceed 70 percent.

“Nonworking citizens do rely on those who are employed,” but only if we are talking about state and local government assistance, not federal assistance.

The reason: State and local taxes do fund various social services; federal taxes do not.

The federal government, being Monetarily Sovereign, has the unlimited ability to create its own sovereign currency, the U.S. dollar.

Even if all tax collections totaled $0, the federal government could continue spending, forever.

The federal government does not need or use tax dollars for anything, and indeed, destroys tax dollars upon receipt. Federal taxpayers do not support nonworking citizens. Federal deficit spending fends Social Security.

The article continues:

This will have profound consequences for Social Security and Medicare, the former of which is now projected to exhaust its $2.9 trillion reserve by 2035.

(At that point, unless Congress increases taxes or cuts benefits, only payroll taxes from a shrinking workforce would finance the program, and benefits would likely be reduced by 20 percent.)

To widen the Gap between the rich and the rest, the rich focus on the two biggest social benefits, Social Security and Medicare, by making the false claim that these two programs are funded by payroll taxes (FICA).

They are not. They are funded by federal deficit spending.

Congress does not need to “increase taxes or cut benefits.” To fund unlimited Social Security and Medicare for All, Congress and the President merely need to agree to spend what is needed — which the government has the unlimited ability to do.

For example, the Tax Relief Act of 2010 gave a two-percentage-point payroll/self-employment tax holiday for employees and those self-employed. The purpose was to help the economy recover from the “Great Recession” of 2008.

Social Security benefits were not reduced, which made it obvious that the federal government has the unlimited ability to fund Social Security, or indeed any expenditure, without collecting taxes.

The article continues:

Will this affect the economy? 
As the percentage of Americans with full-time jobs drops, so, too, will GDP.

Researchers from Har­vard’s Med­i­cal School and the RAND Corp. recently compared the growth rates of states that are aging at different paces. Their findings were startling. For every 10 percent jump in the portion of a population over 60, economic growth fell 5.5 percent.

Nationally, the group estimated, the aging of America’s workforce has already lopped 1.2 percent off Gross Domestic Proeduct (GDP) this decade; this may explain why the average rate of growth has been a meager 2.3 percent since 2009.

Another vexing question is how well America’s consumer-driven economy will hold up when so many of us are living frugally on fixed incomes.

The article, accidentally or intentionally, omits one key mathematical fact. The equation for GDP is:

GDP = Federal Spending + Non-federal Spending + Net Exports

To instantly increase GDP, Congress needs only to increase one term in the equation — Federal Spending — which Congress has the unlimited ability to do.

Not only would a federal spending increase, in of itself, immediately increase GDP, but the downstream effects of a federal spending increase also would be to increase non-federal spending (by putting more dollars into consumers’ pockets).

And there is no fundamental need for fixed-income Americans to live frugally. The federal government could solve that problem with the stroke of a pen and the press of a computer key.

Merely enact the Ten Steps to Prosperity (At the end of this post).

Former Federal Reserve 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.”

The article continues:

How about health care? 
American spending on health care is expected to rise from about $4 trillion a year to $6 trillion, or 19.4 percent of GDP, by 2027.

By 2025, U.S. health-care providers believe they will face a collective shortage of about 500,000 home health aides, 100,000 nursing assistants, and 29,000 nurse practitioners. Some are also bracing for a shortage of up to 122,000 doctors by 2032.

This problem was complicated by Congress capping Medicare reimbursement to teaching hospitals for each resident in 1997, when there was talk of a doctor glut. 

The problem could be solved by uncapping Medicare reimbursements and by enacting Steps #2, #4, and #5 of the Ten Steps to Prosperity.

What other problems are ahead? 
Cities will need to adjust their infrastructure for older people: Crosswalk timers will have to be reset to give them more time to get across the street, and far more curb cutouts for walkers and wheelchairs will need to be installed.

The problem, ironically, will be worse in the sidewalk-less, car-oriented suburbs America created to make Baby Boomer childhoods so utopian.

What happens to tens of millions of suburban residents when they’re 85 and unable to drive or walk to stores, community centers, or doctors?

All of the above problems, and many not even mentioned, can be solved with money, of which the federal government has an unlimited supply.

Former Federal Reserve Chairman, Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”

When THE WEEK Magazine writes about a non-working citizens problem, a retirement problem, a Social Security problem, a health care problem, a GDP problem, an infrastructure problem et al, what the publication really is writing about is a money problem.

Given an unlimited supply of dollars — which Congress has available to it — all these problems can be prevented and solved.

The very rich do not want you to understand that simple fact, because they wish to widen the Gap between them and you.

It truly is sad that even a liberal-leaning publication promulgates the Big Lie, that federal taxes fund federal spending.

By failing to differentiate between federal government finances vs. state/local government finances and personal finances, THE WEEK Magazine reinforces the myths that make the rich richer and the rest poorer.

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

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

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

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

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

Ten Steps To Prosperity:

1. Eliminate FICA

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

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

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

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

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

9. Federal ownership of all banks

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

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

MONETARY SOVEREIGNTY

 

The coming recession — and fake predictions. Friday, Aug 16 2019 

I predict a recession is coming. I just don’t know when.

Clearly, that is a fake prediction, because a recession always is coming. Perhaps tomorrow; perhaps in 50 years;  perhaps in a thousand years. But a recession always is coming.

Yet, the savants, who for many years predicted imminent recessions, finally were rewarded with the Great Recession of 2008. Now, they never fail to beat their chests, boasting about their prescience.

It works like this: When they are wrong, no one remembers. When they are right, no one is allowed to forget. Making such predictions is a no-lose proposition for an economist, or for any other forecaster.

Now the same savants (or perhaps different savants) are predicting another recession, and if we have a recession at any time in the next two, or even ten, years, you can be sure the chest-thumping will commence.

This chest-thumping will generate idol-worship amongst then masses. Here is a true example:

For three consecutive years, my wife (a football maven) correctly and remarkably predicted the exact number of games the Chicago Bears would win.

Despite her modesty, the word got out, and she became a goddess. So before the fourth year, our friends wanted to know her god-like predictions.

Sadly, her streak did not continue, and she was wrong because the Bears managed to acquire a handful of super game-changers.

Sic transit gloria mundi? Not exactly. Her reputation continues. People still want her predictions, which embarrasses her.

Predicting tomorrow is tough, but predicting that something will happen a year or two from now, is a pretty good gig. It can make one famous, especially if one happens to luck into the stopped-clock syndrome (right twice a day).

Here is an article, written in May of 2018, that is illustrative:

7 Smart Market Thinkers Predict When The Next Recession Will Start
John Mauldin Senior Contributor, President of Mauldin Economics

People often ask what I do on my travels and what it’s like to sit in dinners with serious market thinkers. So, let me tell you about my recent meetings with…

Art Cashin, of UBS and CNBC fame;
Peter Boockvar, who writes several letters every day covering markets and the latest economic data;
Lakshman Achuthan, founder of the Economic Cycle Research Institute and the guru on economic cycles. Membership to his “club” costs well into six figures yearly.
Randall (Randy) Forsyth, lead columnist at Barron’s
Barry Habib, who, according to Zillow, is the country’s top housing and mortgage analyst;
Brent Donnelly, Forex maven extraordinaire; and
New friend Jonathan Golub, Chief U.S. Equity Strategist at Credit Suisse.

[All made predictions about the “coming” recession.]

…………………………………………………………………………………………………………………………………………

When Will the Next U.S. Recession Start?
The average prediction was for the second half of 2019—just in time for the 2020 U.S. elections. Golub was the outlier, being certain it will be 2022.

There were a couple of late 2018 guesses. Lakshman thinks the economy is beginning to cycle down but probably not enough for a recession this year.

My own vote is for late 2019, though I may turn more bullish as medium-term data comes in.

Well, as for the 2018 predictors — we probably will not hear from them, again.

If we have a recession this year (2019), you can be sure those oracles will broadcast their powers to the heavens. Otherwise, we will hear the sounds of silence from them, too.

“Sadly” for the oracles, we already are into latish 2019, the clock is ticking louder, and still no recession.

There was a temporary market jolt because of an “inversion” (short term Treasuries paying more than long-term Treasuries).  Inversions supposedly predict recessions; they came before six out of the last.

But inversions, in of themselves, are just predictions being made by bond buyers. People who make predictions based on inversions simply are saying, “Bond buyers predict a recession, so I will, too.”

Now, as of this writing, the marketers have returned to wondering what idiocy our President will throw at them next.

I, being a courageous soul, will make a far more daring prediction than the above mavens have. I predict we will not have a recession in 2019, or even in the next three years.

Predicting a negative is tougher. If I prove to be wrong, you will not let me forget it. But, if I am right, years will have passed, and by then I either will be dead or I almost surely will have forgotten what I wrote.

So it’s a “lose-lose.” Now that is courageous.

Here is my reasoning:

Federal deficits are rising.
In our post, “National Debt Clock: The Sign of Ignorance,” we discussed the fact that federal deficits are projected to rise above $1 trillion annually.

A misnamed federal “deficit” (aka economic surplus) happens when the government takes fewer dollars out of the economy in taxes than it puts in by spending.

In short, the economy is projected to receive an additional trillion growth dollars.

I’d call that a “surplus,” but I don’t make the rules.

Historically (and logically) recessions occur when deficit growth declines:

Recessions (vertical lines) begin with deficit growth reductions, and are cured with deficit growth increases.

The reason deficit growth cures recessions: Recessions are caused by insufficient dollars in the economy, which reduces both supply and demand. Deficits add growth dollars to the economy.

Loan delinquency rates are low
The “Great Recession” of 2008 began when the delinquency rate on single-family home mortgages (green line) was 3.67%, and the rate for credit card loans (blue line) was 4.8%.

Today both rates hover near 2.63%.

Home mortgage delinquency rates (blue line) Credit card loan delinquency rates (green line)

When the public is not having great difficulty paying its mortgages and daily bills, future purchasing is more likely, which is counter-recessionary.

Now let’s look at the delinquency rate on all loans, personal and business:

At the beginning of the “Great recession,” delinquency rates for all loans had risen to 2.86%. In the first quarter, 2019, the rate was 1.53%.

The Republicans and the Democrats
Traditionally,  Republicans, the deniers of Monetary Sovereignty, have been the chief deficit scolds, demanding any federal spending that benefits the middle- and lower-income groups, be cut.

Thus, we have the constant GOP drum-beat for cuts to Social Security, Medicare, Medicaid, ACA, food stamps and other poverty aids, housing, education, and all regulations that protect the public.

While that drum-beat continues, it isn’t quite so loud these days, what with the Trump administration defending and passing trillion-dollar deficits, and debt ceilings losing their attraction.

Meanwhile, the Democrats, who now own the House of Representatives, and soon perhaps, the Presidency, usually love spending for the masses, Clinton’s second term being an ill-fated exception (His debt cuts caused a recession).

So, the nation can look forward to perhaps five years of growing, trillion-dollar-plus deficits continuing to pump major stimuli into the economy.

In summary: The combination of huge federal money inputs to the economy (erroneously termed “deficits”), and the low loan delinquency rates, bespeak economic growth for the next few years.

No recession, folks.  Lean back and enjoy the ride.

Now let us pray we don’t encounter a meteor or some other kind of black swan.

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

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

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

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

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

Ten Steps To Prosperity:

1. Eliminate FICA

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

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

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

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

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

9. Federal ownership of all banks

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

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

MONETARY SOVEREIGNTY

 

National Debt Clock: The Sign of Ignorance Wednesday, Aug 14 2019 

The Sign of Ignorance

In an August 10th post titled, “Unfunded Govt. Liabilities — Our Ticking Time Bomb? Nah!,” and in several earlier posts, we referred to the above as, “The inevitable, phony debt clock sign, which is funded, and then referred to, by those least knowledgeable about economics.”

In short, it is The Sign of Ignorance.

Now, here we are, only three days later, and we come upon an article in which the sign is top, center and huge.

The title of the article is, “It’s the Spending, Stupid,” — written by John Merline. The theme is the usual nonsense that federal deficits and debt are bad (for some unknown reason), and the solution is to cut benefits to the middle-classes and the poor.

Here are some key paragraphs from the article, :

The deficit is already bigger now than it was for all of last year, and heading to more than $1 trillion.

Two-thirds of the entire increase in spending is due to just other three items in the budget: health care spending (Medicare, Medicaid, and Obamacare), Social Security, and interest payments on the debt.

In other words, it’s entitlement spending – and more specifically, health care spending  – that is driving up the deficit, not tax cuts.

The truth is that getting the deficit under control is not hard. It doesn’t require tax hikes, just a modicum of spending restraint.

What that exercise in misinformation doesn’t tell you:

1. So-called federal “deficits” should be called economic surpluses. When the federal government runs a deficit, it actually pumps growth dollars into the economy.

2. When the government fails to run deficits, we suffer recessions and depressions.

3. Unlike you and me, our Monetarily Sovereign federal government has the unlimited ability to create dollars, which it does, ad hoc, every time it pays a creditor.

4. Though state and local governments, being monetarily non-sovereign, do use taxes to pay creditors, the federal government does not use taxes, and in fact, it destroys tax dollars upon receipt.

Another paragraph from Mr. Merline’s article:

Every Democrat running for president is busy trying to find new ways to double or triple the size of the federal government, while pretending that it all can be paid for simply by making the rich pay their “fair share.”

Here, the authors conflate federal government size (i.e. personnel) with spending. They try to use the popular “government is too big” meme, to imply falsely that spending on your social programs should be cut.

But, government spending cuts on the Social Security benefits you receive will not reduce the size of the Social Security Administration. Nor will stingier payments for Medicare reduce the size of the Centers for Medicare & Medicaid Services.

Writing smaller checks does not reduce the number of check writers.

The authors are correct, however, that Democrats are almost (though not quite) as guilty as Republicans in broadcasting the notion that federal finances are like personal finances.

Consider Bernie Sanders, trying to justify his good Medicare for All idea, by claiming it will be paid for by cost savings and tax increases.

Wrong, Bernie. If Medicare for All ever is adopted, it will not be paid for by cost savings, and federal taxes pay for nothing.

Medicare for All will be paid for by federal deficit spending, which the federal government can do endlessly, and which will pump growth dollars into the economy.

Sanders knows this, because early on, he had hired Professor Stephanie Kelton to advise him on economics, and she told him.

(Sadly, Sanders did not have the courage to pass this information on to the electorate. He believed they would not believe him, so it would cost him votes.)

Not one politician, Democrat or Republican, has had either the knowledge or the courage to reveal the facts to the American public.

(Warren Mosler tried, and it repeatedly cost him elections. But Mosler was a relatively unknown, local politician. The facts await strong support from a well-known, respected national politician.)

Returning to the article, here is another shameful paragraph:

Overall spending growth averaged just 3% from 1994 to 1999.

The economy boomed, and the budget went from a $255 billion deficit to a $236 billion surplus in just six years.

Hmmm. . . . so from 1994 to 1999, federal defict spending declined and the economy boomed?

Let’s look at what really happened.

The horizontal black line represents a balanced federal budget, where taxes equal spending. The red line falling below the black line represents a federal “surplus.” The vertical gray bar is a recession.

As you can see, the writer failed to mention one simple fact: The federal surplus (economic deficit) caused the recession, which was cured only when federal deficits again began.

The reason should be obvious. Federal surpluses remove dollars from our economy. Federal deficits pump growth dollars into our economy.

And it has happened before. If you are a fan of depressions, here is how to start one:

1804-1812: U. S. Federal Debt reduced 48%. Depression began 1807.
1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.
1997-2001: U. S. Federal Debt reduced 15%. Recession began 2001.

That’s right, to start a depression, just run a federal surplus (i.e., reduce the federal debt).

And, if you would prefer just a recession, just keep cutting the federal deficit until you get one.

Vertical bars are recessions, which are caused by percentage decreases in federal deficits, and cured by percentage increases in federal deficits.

And now one final word from Mr. Merline’s article:

That’s how it always works in Washington. Spend like a drunken sailor today, and promise to sober up tomorrow.

The problem is that with the national debt now topping $22 trillion, and scheduled to go up another $13 trillion in just a few years, tomorrow will be too late.

Oh, dear. “Tomorrow will be too late. Is that phrasing similar to “ticking time bomb”?  

For 80 years, since 1940, ignorant pundits have bemoaned the federal debt as a “ticking time bomb,” ready to explode at any second. And for 80 years they have been proven wrong.

Image result for national debt clock anita's way

The sign of ignorance

Does that unblemished record of failure deter them? Apparently not, for it certainly has not deterred Mr. Merline.

And whoever now pays for the Sign of Ignorance — and I refer to, the voting public.


(The infamous debt clock was installed in 1989, by real estate investor (not an economist) Seymour Durst.

And it still exists — in a new location — appropriately semi-hidden in a little alley called “Anita’s Way,” in NYC, where it broadcasts its ignorance to passers-by.)


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

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