Pouring water into the ocean, and other dumb federal tax ideas.

Imagine a swarm of politicians assembled to discuss ideas about how to fill the Atlantic Ocean with water. Image result for child pouring water into the ocean

One wants to require each person in the U.S. to pour a bucketful of water into the sea.

Another says to use a firehose. A third wants to build a pipeline from the Pacific Ocean.

A fourth suggests that if everyone only urinated into the Atlantic . . .

The Atlantic Ocean, for all practical purposes, contains an infinite amount of water. So, why would anyone waste the time, effort and water, by pouring it into the Atlantic?

Only a pack of fool politicians would debate the best way to pour water into the ocean, but that is exactly what they are doing with regard to your federal taxes.

For all practical purposes, the federal government has an infinite amount of dollars. Who says so, aside from me? Many people, including:

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

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.”

St. Louis Federal Reserve respondent: “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 (i.e. federal debt) to remain operational.

If the federal government cannot run short of dollars, and can “produce as many dollars as it wishes,” why does it require you to send it your precious dollars to pay taxes?

Why does the federal government require you to pour your precious water into the Atlantic Ocean?

There are several reasons why the government collects federal taxes, but two are primary:

1. To control the economy by punishing less “desirable” activities and rewarding more “desirable” activities. “Sin” taxes on cigarettes and alcohol supposedly reduce the consumption of booze and smokes.

Similarly, lower taxes on long-term vs. short-term capital gains supposedly discourage speculation. And most importantly:

2. To fool you into believing the federal government cannot afford to fund such social benefits as Social Security, Medicare, Medicaid, poverty aids, education, housing, transportation, food, clothing, etc.

By collecting taxes, and claiming some social benefits are running short of money, the federal government wrongly implies that it needs income in order to pay its bills.

Number 1 is understandable, but what about #2? Why does the federal government want you to believe it cannot pay its bills unless it has tax income?

The answer lies with Gap Psychology, i.e. the human desire to distance oneself from those “below” on any economic or social measure, and to come closer to those above.

The rich, who run our nation and our government, always want to be richer. “Rich” is a comparative term.

For the rich, getting richer does not mean making more money. Rather, it requires widening the Gap between the rich and those below them.

If you own only $100 but everyone else owns $1, you are rich. But if you own $1 million, and everyone else owns $100 million, you are poor.

The Gap is what makes you rich or poor. Without the Gap, no one would be rich (We all would be the same.) The wider the Gap, the richer the rich are.

Cutting benefits to the middle-classes and the poor widens the Gap, and thus makes the rich richer.

America’s politicians are owned by the rich. Don’t let their protestations and plans to tax the rich fool you. They and the rich know that most taxes on the rich are avoidable.

Donald Trump hasn’t paid taxes in years because of his loss carryforwards. Warren Buffet said he pays at a lower percentage than his secretary.

Keep in mind the following points as you read some ideas from Democratic contenders:

  1. Federal taxes pay for nothing. They so useless they are destroyed upon receipt.
  2. The very rich pay at a lower tax rate than you do.
  3. The primary purpose of federal taxes (as opposed to state and local taxes) is to justify widening the Gap by reducing your social benefits.

Here are a few of the candidates’ federal tax ideas, as discussed in Kiplinger’s Personal Finance (09/2019)

Biden
*Increase the top income tax rate to 39.6% from 37%.
*Subject all income to Social Security payroll tax.
*$5,000 tax credit to cover caregiving for a family member.

Comment: The rich always avoid the top rate. Social Security is not funded by FICA. If caregiving is needed, that $5,000 is a pittance, that might cover just one month.

Sanders
*Raise estate tax rates
*Financial transaction tax
*Charge FICA on wages above $250K
*Increase top tax rate
*Increase long-term capital gains rate

Comment: The rich use trusts and other devices to avoid estate taxes. Financial transaction tax supposedly will reduce high-volume speculation — but why? FICA doesn’t fund anything. The very rich do not pay the top tax rate. No purpose for a long-term capital gains tax.

Warren
*Wealth tax on all forms of wealth worldwide
*Increase estate taxes
*$3,000 tax credit for family caregivers
*Adoption tax credit (no matter how low your tax bill)

Comment: Even with 10 million employees, the IRS could not measure everyone’s worldwide wealth. The rich use trusts and other devices to avoid estate taxes. Only $3,000 for family caregivers? Do adoptions really need to be encouraged?

Pete Buttigieg
[In addition to some of the above]:
*Carbon tax

Comment: A carbon tax might be a good idea, depending on the details. The rest of his ideas are “pouring water into the Atlantic.”

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I could continue, but you get the idea. Almost all of the proposals (except the carbon tax), make the tacit assumption (aka “the Big Lie”) that the federal government needs taxes in order to pay its bills.

But it simply is not true. Alan Greenspan, Ben Bernanke, the St. Louis Fed all agree it simply is not true.

But the bought-and-paid-for politicians want you to believe you should pour your precious dollar water into the Atlantic tax Ocean.

The politicians propose exorbitant taxes on the rich, knowing the rich won’t pay them. The worldwide wealth tax is almost laughable. Note to IRS: Good luck trying to discover that house on the island of Fakarava or the Surin archipelago, then trying to appraise the 50 remote acres it sits on.

The purpose of these politicians’ proposals is to make you think they’re on your side, while they take dollars from the rich with both hands.

Perhaps one day there will be an honest politician who tells you:

“Though state and local taxes do fund state and local spending, federal taxes fund nothing.

So, we only will tax what we don’t like, and we will give you healthcare, shelter, food, education and the other things you and your family need for decent lives.

We’ll narrow the Gap and we’ll end poverty, and that is how we really will ‘make America great,’ not with bigotry toward non-Christians or people of color.”

Hmmm . . . Did I really use the words, “honest politician”? Well, one can dream.

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

 

Unfunded Govt. Liabilities — Our Ticking Time Bomb? Nah!

On January 10, 2019, RealClear Politics published an article titled, “Unfunded Govt. Liabilities — Our Ticking Time Bomb” by Myra Adams (A media producer and writer who served on the McCain Ad Council during the GOP nominee’s 2008 campaign and on the 2004 Bush campaign creative team.) 

Like all these previous articles comparing the federal debt to a ticking time bomb, the article was utter nonsense.

Here are some excerpts and comments:

Tick, tick, tick goes the time bomb of national doom. Every second the ticking grows louder, but you won’t hear the muffled sound that’s more akin to white noise.

The doom of which I speak is unfunded liabilities — $122 trillion in payments the government owes and has promised its citizens — without the funds to fulfill those obligations.

Across all media platforms, the threat goes largely unreported. Members of Congress from both parties are also deaf to the ticking.

The same is true at the White House, where Donald Trump, like Barack Obama before him, never mentions this impending catastrophe.

Oh, my. “Time bomb of national doom.” Hyperbole usually is used when facts are absent. That is the case with Ms. Adams’s article

Obama said,

“My goal is not to chase a balanced budget just for the sake of balance.  My goal is how do we grow the economy, put people back to work, and if we do that we are going to be bringing in more revenue.

“If we control spending and we have a smart entitlement package, then potentially what you have is balance – but it is not balance on the backs of the poor, the elderly, students who need student loans, families that have disabled kids.

“That is not the right way to balance our budget.” 

In short, Obama believed the debt was too high, but didn’t want to make the middle classes and the poor suffer, which by the way, is the only way to stop the “time bomb of national doom.”

Why? Because that so-called “time bomb,” consists primarily of federal deficit spending — the “unfunded liabilities” for entitlements — Social Security, Medicare, Medicaid, poverty aids, education aids, and everything else the government does to help the middle classes and the poor.

And, Obama knew that cutting these programs would be a political disaster. Sadly, he didn’t reveal that cutting deficit spending also would be an unnecessary economic disaster.

The article continues:

Image result for debt clock
The electric sign of ignorance

Among the hordes of 2020 Democratic candidates, count on the time bomb to be a topic non grata while Medicare-for-all gains momentum and Medicare-as-is remains a lethal bomb component.

Before you call me an alarmist, I refer you to the U.S. Debt Clock. Here you can watch our time bomb tick in real time with that $122 trillion in unfunded liabilities as one of the major “fuses.”

Ah, the inevitable, phony debt clock sign, which is funded, and then referred to, by those least knowledgeable about economics.

And notice those words, “YOUR family share.” Ridiculous and a lie. Your family does not owe a penny.

Your parents never paid a penny for past federal debt; you will not pay for the present federal debt, and your grandchildren never will pay for the future federal debt.

Not one tax dollar ever is used to pay for the federal debt. This is explained later in this post.

Then the article becomes truly childish in its attempts to shock you:

Surely, such an incomprehensible number makes you gasp. But now, get ready to gag because in 2023 the “Debt Clock Time Machine” projects unfunded liabilities will be $157 trillion, a $35 trillion increase in only four years.

I would wager that a majority of citizens have no concept of what “just” $1 trillion looks like or even means. For the record, one trillion is 1,000 times 1 billion.

And, since $1 billion is thrown around Washington like a rounding error, it is instructive to remember that 1 billion itself is 1,000 times 1 million.

OMG! I’ll bet 1 million is 1,000 times 1 thousand! Am I right, Ms. Adams?

The Debt Clock displays federal tax revenue at $3.3 trillion, but spending at $4.2 trillion.

This annual imbalance means that not only are we promising too much down the road, we can’t cover our current costs, and we fall behind even more — every second of every day.

No, what it really means is the federal government is pumping .9 trillion growth dollars into the economy — dollars that go into the pockets of Americans. Without federal deficit spending, the economy would fall into recession or depression.

The so-called, misnamed federal “debt” was only $40 billion in 1940, and now, 80 years later, it is near $20 trillion.

And every year, for those last 80 years, writers like Ms. Adams have been calling it a “ticking time bomb.” (See: “It is 2019, and the phony federal debt “time bomb” still is ticking.”)

Strangely, it never seems to occur to the Myra Adamses of the world, that the “bomb” never explodes.

Being wrong for 80 consecutive years is a strong signal to change your mind. But they just keep on shoveling the bullsh*t.

And now we come to the “solution” that the rich want you to believe is necessary: Cut benefits to the middle and the poor.

Here it is, as delivered by Ms. Adams:

Reducing Social Security benefits — the main driver of unfunded liabilities — will be painful now, but even more painful in 2034 when present inaction forces draconian cuts.

What if every news network continuously displayed the $122 trillion unfunded liabilities debt clock — all 15-digits rapidly ticking in real time — at the same corner of the screen?

Perhaps then, when the public is fully aware of the problem, our leaders will be forced into discussing very tough and real solutions followed by legislative action.

But doing nothing is not an option.

What a marvelous idea. Every news network continuously displaying the most misleading piece of crap imaginable, just so the rich can get richer.

How does that make the rich richer? By making the middle classes and the poor poorer. “Rich” is a comparative term. The greater the Gap between the rich and the rest, the richer that makes the rich.

If you have $1 million are you rich? Yes, if everyone else has $1 thousand; no if everyone else has $10 million. It’s the Gap that determines whether or not you are rich.

Widening the Gap is exactly what the rich want. It’s called Gap Psychology: the desire to distance oneself from those below, and to approach those above.

Here are the facts:

1. The U.S. Federal government is Monetarily Sovereign. It has the unlimited ability to create its sovereign currency, the U.S. dollar.

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

Former Fed 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.

2. Get it? No matter how much the federal government owes, it simply creates the dollars to pay its creditors. Even if federal tax collections were zero, the federal government could pay its bills, forever.

3. Not only that, but the so-called federal “debt” isn’t a real debt. It is the total of deposits into Treasury Security accounts (T-bills, T-notes, T-bonds).

The government doesn’t touch those dollars, because having the unlimited ability to create dollars, the federal doesn’t need to use the deposited dollars. So these accounts are paid off upon maturity, simply by returning the dollars to their account owners.

Thus, the sole effect (and possibly the sole purpose) of the “National Debt Sign” is to fool you, the public, into docilely accepting cuts to your federal benefits, just as the rich want.

People who use that debt clock sign to “prove” the supposed unsustainability of the federal debt either are ignorant of economics or are being intentionally deceptive.

It’s one situation or the other.

Ask Ms. Adams which is hers.

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

 

Trump likes Blago’s wife, and . . .

Here’s a direct Trump quote: “His wife, I think, is fantastic and I’m thinking about commuting his sentence very strongly.”

Related image
Patti Blagojevich. Trump thinks she’s fantastic

And here is the background:

Chicago Tribune:
Trump considers ending Blagojevich’s prison term, citing Comey, ‘sleazebags’
By Rick Pearson and Jason Meisner

President Donald Trump has once again dangled the idea of commuting the 14-year prison sentence for disgraced former Illinois Gov. Rod Blagojevich, telling reporters aboard Air Force One on Wednesday night he was “very strongly” considering springing Blagojevich from prison five years early.

The president’s comments — largely echoing remarks he made 14 months ago — gave new hope to Blagojevich’s wife, Patti, who released a statement Thursday saying the family was “very hopeful that our almost 11 year nightmare might soon be over.”

But Trump also showed he has done little homework on the case since he first raised the idea of using his powers of executive clemency for Blagojevich in May 2018.

Trump repeated the same misstatement he made last year that Blagojevich was sentenced to 18 years in prison and once again mentioned only one wiretapped phone call by Blagojevich, when much of the evidence presented at trial came from witnesses who said the governor was shaking them down for campaign cash in exchange for official acts.

The victims included the then-CEO of Children’s Memorial Hospital, now Lurie Children’s Hospital, who said he was pressured to contribute tens of thousands of dollars in exchange for state funding.

“He’s been in jail for seven years over a phone call where nothing happens. But over a phone — where nothing happens. But over a phone call which, you know, he shouldn’t have said what he said, but it was braggadocio you would say.”

Such mischaracterizations have been blasted before by those who investigated and prosecuted Blagojevich.

Robert Grant, the former head of the FBI in Chicago who helped lead the sprawling Operation Board Games investigation that ultimately led to Blagojevich’s downfall, told the Tribune in May 2018, “It’s clear (Trump) has never seen any of the evidence.

“He took his talking points from Patti Blagojevich. It’s pure fantasy. This was flat-out, old-fashioned corruption, pure and simple.”

Trump: “A lot of people thought it was unfair, like a lot of other things — and it was the same gang, the Comey gang and all these sleazebags that did it.”

Well, for once he didn’t blame Hillary or Obama.

Typically, Trump doesn’t know what he is talking about, and he hopes you are too stupid to notice or care. That may be true of his most ardent fans, but not true of moral human beings.

And you surely know how Trump hates “sleazebags” like:
Health and Human Services Secretary Tom Price
EPA Administrator Scott Pruitt
HUD Secretary Ben Carson
Campaign manager Paul Manafort
Deputy campaign manager Rick Gates
National security adviser Michael Flynn
Personal lawyer Michael Cohen
Commerce Secretary Wilbur Ross
Rep. Chris Collins
Rep. Duncan Hunter
Mobster Salvatore Testa
Mobster Fat Tony Salerno
Roger Stone
Felix Sater
Jeffrey Epstein
Secretary of Labor Alexander Acosta
Trump Campaign Foreign Policy Adviser George Papadopoulos
Alex Van der Zwaan
Konstantin Kilimnik
Ralph Shortey
Timothy Nolan
The people who ran the crooked Trump University
The person who ran the crooked Trump Foundation
Stormy Daniels and other porn stars
Ivanka Trump
Jared Kushner
Donald Trump, Jr.
And whoever the politician was that stiffed creditors out of millions by going bankrupt at least four times while running gambling casinos (Bankrupting gambling casinos?? Is that even possible?) — and now is unable to get credit from any bank in America, so must beg Russia and the Saudis for money.

But hey, Trump thinks Blago’s wife is fantastic, so . . .

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

Why nations pretend not to understand Monetary Sovereignty

Preface: Monetary Sovereignty means just what it says: Being sovereign over your form of money.

The U.S. government is Monetarily Sovereign over its sovereign currency, the U.S. dollar. The federal government created the very first dollars out of thin air.

It continues to create dollars at will. Even without collecting taxes or receiving any other form of income, the federal government can pay any debt denominated in dollars. It never can run short of dollars. It can control the value of the dollar by controlling interest rates.

U.S. cities, counties, and states are monetarily non-sovereign. They have no sovereign currency. Instead, they use the U.S. dollar.

They cannot create dollars at will. They need taxes or other forms of income, in order to pay their debts. They can run short of dollars with which to pay their bills.

England is Monetarily Sovereign over the British pound. Germany is monetarily non-sovereign. It uses the euro, over which it has little control. It can run short of euros and be unable to pay its debts denominated in euros.

Japan and China are Monetarily Sovereign over their currencies. They never can run short. Italy and Greece are monetarily non-sovereign. They use the euro.

For reasons I will explain, Monetarily Sovereign nations pretend they are monetarily non-sovereign.

They pretend to borrow, when they really don’t. They collect taxes, though they have no financial need for income. They strive to export more, though increased importing would be more beneficial.

They allow poverty, though they easily could cure it. And they allow the Gap between the rich and the poor to be excessive, though they easily could cure that, too.

I mention all this because recently I read the following article excerpts:

Quantitative Easing vs. Currency Manipulation
1. In general, countries prefer their currency to be weak because it makes them more competitive on the international trade front.

A lower currency makes a countries exports more attractive because they are cheaper on the international market. For example, a weak U.S. dollar makes U.S. car exports less expensive for offshore buyers.

2. Secondly, by boosting exports, a country can use a lower currency to shrink its trade deficit.

3. Finally, a weaker currency alleviates pressure on a country’s sovereign debt obligations.

After issuing offshore debt, a country will make payments, and as these payments are denominated in the offshore currency, a weak local currency effectively decreases these debt payments.

Consider the Monetarily Sovereign United States. It has the unlimited ability to create U.S. dollars.

Exports are a method by which the U.S.  sends goods and services, created by the natural assets and labor of its citizens, to a foreign nation, in exchange for dollars.

The article says countries wish to make exports more attractive and shrink their trade deficit. But why?

It’s easy to understand why a monetarily non-sovereign nation, like Portugal for instance, would want to acquire money in exchange for natural assets. To Portugal, which uses the euro, money is in limited supply.

Portugal needs income to pay its bills.

To all nations, natural assets are limited; labor is limited. But to the U.S., dollars are unlimited. The U.S. needs no income to pay its bills.

Why should the U.S. exchange its limited assets to gain an asset of which it has an unlimited supply?

A common answer is that U.S. exports help U.S. businesses grow and profit, and with those profits, pay employees. But the answer is illogical.

“Grow and profit” means to acquire dollars, of which the federal government has an unlimited supply.

The easier and more sensible plan would be for the federal government to do what businesses are designed to do, i.e. provide dollars to employees. This would cost the government nothing (remember that unlimited money supply), and more importantly, no scarce natural resources would be expended.

One such method would be to implement the Ten Steps to Prosperity. (See below.)

The article says,

“A weaker currency alleviates pressure on a country’s sovereign debt obligations.

“After issuing offshore debt, a country will make payments, and as these payments are denominated in the offshore currency, a weak local currency effectively decreases these debt payments.”

The whole idea is illogical and factually wrong.

First, federal so-called “debt” actually is nothing more than deposits into Treasury security accounts. When you “lend” to the federal government, you don’t really lend. You make a deposit into your T-bill, T-note, or T-bond account at the Federal Reserve Bank.

Your dollars remain in your account, gathering interest, until your account matures, at which time your dollars are returned to you. Your dollars never leave your account until maturity.

The exchange rate of those dollars is irrelevant. Whether a dollar is worth one pound, two yen, or three partridges in a pear tree makes no difference. To pay off the misnamed “debt.” the government returns whatever is in your account.

The federal government does not use your dollars, but even if it did, giving you your money back would be no burden on a government that has the unlimited ability to create its own sovereign currency.

Third, making a currency weaker is inflationary because imported goods instantly become more expensive. (Fortunately, the U.S. government has the unlimited ability to strengthen the dollar, simply by increasing interest rates.)

This increases the demand for dollars, which makes them more valuable.

Bottom line:

  1. Increasing the level of exports does not benefit a Monetarily Sovereign government
  2. Shrinking the trade deficit similarly does not benefit a Monetarily Sovereign government
  3. Federal “debt” and federal finances are substantially different from personal (monetarily non-sovereign) debt an finances. Unlike you and me, the Monetarily Sovereign federal government needs no income, can produce dollars at will, can control the value of those dollars, and never can run short of dollars.

Why then does the federal government pretend dollars are scarce to it? Why does it pretend that total deposits in T-security accounts are a burden and a threat? Why the claim that a trade surplus is superior to a trade deficit.

United States Balance of Trade
For the past 10 years the U.S. has run persistent trade deficits.

For the past 10 years the U.S. has run persistent trade deficits. During that same period, Gross Domestic Product has risen from $14.5 trillion, to $21.3 trillion, a massive 47% increase.

In the past 10 years, GDP has risen from $14.5 trillion, to $21.3 trillion, a massive 47% increase.

Clearly, trade deficits have not prevented GDP growth. The reason is that federal deficit spending has more than made up for the dollar loss trade deficits cause.

And that is the whole point and the reason why trade deficits do not harm a Monetarily Sovereign nation. Any dollar loss easily is overcome by federal deficit spending.

The question then is, “Why do nations pretend not to understand Monetary Sovereignty?” Why everywhere you turn, do your information sources — the politicians, the media, the economists — tell you that the federal deficit and debt are so high as to be “ticking time bombs“?

The answer is this: The rich run America.

“Rich” is a comparative word. The farther distant one is from the poor the richer one is.

Owning a million dollars makes one rich if everyone else owns one dollar. Owning a million dollars does not make one rich if everyone else also owns a million dollars.

Being “rich” depends on the Gap between the rich and the rest.  To be richer, the rich want to widen the Gap between the rich and the rest. That is called, “Gap Psychology.

So:

–The rich bribe the politicians via campaign contributions and promises of lucrative employment when their political careers end.
–The rich bribe the media via advertising dollars and via ownership.
–The rich bribe the economists via gifts to their universities and employment in “think tanks.”

The rich do not want you to learn that the federal government has the unlimited ability to provide you with free medical care, free schooling, fine housing, food and clothing, and the other benefits that the rich receive.

The rich don’t want you to know you can have all these benefits, without paying a penny in taxes.

If you understood that you could have a much better life, you naturally would want it. But, that would narrow the Gap between the rich and the rest. And narrowing the Gap would make the rich less rich.

So, in addition to trying to gather more for themselves, the rich also want you to have less, thus widening both sides of the Gap.

We’ll finish with a few excerpts from an article in the TILJournal,  a massive exercise in ignorance, demonstrating the point:

The National Debt: America’s Ticking Time Bomb
By D.T. Osborn
Each taxpayer in America owes approximately 250,000 dollars to places including China through its state-controlled institutions of finance. Here comes the worst news of all; 22 trillion is only a small part of the real National Debt.

That’s because the official dollar amount does not include America’s unfunded liabilities. Unfunded liabilities are those items the Federal government must pay for by American law.

By far the largest and most significant of these are Social Security, Medicare, and Medicaid. Together they currently total more than 50 trillion dollars. When added to the Debt, the total becomes slightly more than 73 trillion dollars… for the moment.

The final figure also includes items such as Federal pensions for workers and elected officials and interest paid on the Debt. The grand total of America’s real debt is about 130 trillion dollars!

This means each American taxpayer owes over 1 million dollars of the real debt as it exists today. So, what do you say, fellow taxpayer? Got an extra million to chip in for poor old Uncle Sam? Yeah, me neither.

This is a path which will lead to the eventual bankruptcy of America.e

And that lie, that you owe someone over 1 million dollars, is the ridiculous scare tactic being fed to you and the rest of the American public. It wrongly assumes that federal financing is similar to personal financing.

It isn’t.

Personal financing requires a person must have some form of income — salary, interest, borrowing, inheritance, etc. — in order to acquire the dollars with which to pay his bills. That is known as “monetary non-sovereignty.”

By contrast, the federal government is Monetarily Sovereign. It needs no form of income — not even taxes — because it has the unlimited ability to create its own sovereign currency, the U.S. dollar, to pay an infinite number of bills.

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

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.”

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.

And here, in one sentence, By author D.T. Osborn expresses the big lie the rich want you to believe:

“Any real solution to stave off national insolvency requires massive changes in how unfunded liabilities are handled.”

The rich want the federal government to cut Social Security, cut Medicare, and cut Medicaid, thus widening the Gap between the rich and the rest.

That is how they make themselves richer.

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