Every politician wants to be known as “tough on crime.” No one wants to be seen as “soft on crime.”
The Republicans especially like to rage at crime, especially when the criminals are immigrants, poor, black and not Christian — not so much when the criminals are white, Christian, and Republican.
We’ll interrupt here to explain that for the typical American voter, “crime” means “violent street crime.
The “Central Park 5” are the faces Americans see in their imagination when demanding politicians be “tough on crime.” These young boys were convicted, though innocent, and only later, exonerated.
It does not seem to include white-color crime of the sort Donald Trump has been accused, convicted, and even paid fines for. Daft-dodging, Trump U., Trump Foundation, tax cheating, assaulting women, and all the assorted low-life cons and lies that don’t involve extreme physical violence or the threat thereof are not included in the “crime” we should be “tough” on.
The average American visualizes “crime” as something that involves a black or brown teenage boy pointing a gun. Being “tough on crime.” means locking up said teenager for long stretches of his life.
You don’t hear the same Fox News outrage when it comes to Trumpers Rep. Matt Gaetz, Rudy Giuliani, Sidney Powell, Steve Bannon, and all the other traitors who defended and/or attempted what previously was unthinkable in America –a coup — so inconceivable, that many people still refuse to believe the crime they have seen actually occurred.
Even a respected judge is not immune to “soft-on-crime” criticism. Here are excerpts from a Fox News article written by none other than Sen. Josh Hawley, who, as a coup encourager and thus a traitor to the U.S., is not the best one to complain about criminals.
“While serving on the Sentencing Commission, she (Judge Jackson) supported eliminating the existing child pornography mandatory-minimum sentence.)
(She opposes all mandatory minimums as being blind to circumstances and substituting generalizations for specifics.)
“Those views carried over to Judge Jackson’s time on the bench. Over and over again, she handed down sentences well below the congressionally endorsed Sentencing Guidelines recommendations.)
(Not to mention the many times all judges do that — it’s the purpose of using human judges rather than robots — and she often handed down sentences above those guidelines, but why quibble about facts when you are a typical mean-spirited Trumper writing for Fox News?)
“Unfortunately, Jackson is not the first judge to do that.”
Right, judges normally impose a range of punishments.
“But she stands out because she also consistently sentenced child pornography offenders below even what liberal prosecutors in Washington, D.C., were seeking.”
(It wasn’t consistent, and prosecutors always ask for the maximum. In most cases, judges look at circumstances and don’t grant the maximum the prosecutors seek. All of Hawley’s shrieking is about normal judicial procedure. The notion that Judge Jackson encouraged child pornography stretches credulity.)
Hawley knows all this, but he is a renowned liar who writes for Fox,, a proven-to-be-lying network. They are Trumpers, and we expect nothing less from them.
But even the most softhearted, squishy Democrats have no idea what “tough on crime” really means:
The Washington PostThe 5-Minute FixBy Amber Phillips with Caroline Anders
Crime is looking like it’s going to be a big issue in November’s midterm elections — and that has Democrats on the defensive.
“We must invest in our police departments,“ said Rep. Val Demings (D-Fla.), a former police chief who is running for Senate in Florida.
Ask virtually anyone, winged right or left, about being “tough on crime,” and you will hear such suggestions as:
More police
More money spent on policing
More laws
Tougher judges
Longer jail sentences
Harsher jail conditions
Everything has to do with increasing the punishment for committing crimes and nothing for reducing the cause of crimes.
Republicans especially are interested in punishment, especially of the aforementioned poor immigrant, brown, non-Christian, blacks:
It (crime) has been fed and fueled in multiple ways by the Democratic Party’s far-left turn,” Senate Minority Leader Mitch McConnell (R-Ky.) has said of the country’s recent crime wave.
Strange, how Mitch suddenly seems unconcerned about a mob of people attacking the nation’s capital, attempting to overthrow the United States government, and even causing death and injuries. And for certain, he is not worried about gun crime.
To Mitch, criminals are street, not white-collar, criminals, who are born bad and born black.
From 2019 to 2020, the homicide rate in the United States jumped nearly 30 percent, according to FBI data, marking the largest increase since we started keeping track of those stats.
Third Way, a Democratic think tank, found that cities (run by Democrats) in red states were hit harder by the 2020 murder surge than blue states were.
Democrats who have been recently elected as mayors in liberal cities such as New York and Seattle have campaigned on being tough on crime.
“There is little doubt that the sheer stress and strain of the pandemic, not to mention the economic dislocation, helped to push up homicide rates,” criminologist Richard Rosenfeld told Witte.
Democrats are nervous about getting tagged as anti-police — again. This time, they’re already campaigning on more funding for police departments.
And none of this “tough on crime” blustering addresses the root cause of most street crime: Poverty.
Poverty is the mother of crime.
Yes, crime has many parents — that “stress, strain, and economic dislocation” to name three. But walk through any wealthy area, and you will fear street crime far less than in an impoverished area.
Republicans are adamant in their desire to apprehend and punish street criminals. However, while apprehending and punishing after the fact may be their focus, Republicans have no desire to address cause and prevention.
They are adamant in their opposition to gun control, to keep guns out of the hands of potential criminals, and to reduce the lethality of the guns being sold, which would have a significant impact.
Similarly, Republicans vote against anti-poverty benefits, i.e., Social Security for All, Medicare for All, School lunch programs, housing aid, food aid, college for all, and the myriad other easily affordable (by the federal government) programs that would reduce poverty and crime in America.
Punishment, punishment, punishment; that is all the right-wing knows. One reasonably might think putting blacks, browns, and immigrants in jail is the real motive, and crime is just the convenient excuse.
The right dismisses them all with one word, “socialism,” then blindly continues to chatter about the need for tougher police and harsher sentences.
(White-color crime and political crime are OK, except if found on a Hunter Biden laptop)
Even the Democrats have been dragged into the false rhetoric:
“Fund the police,” Biden roared at his State of the Union address this spring, to bipartisan applause.
Yes, fund the police. We do need well-trained, well-paid police.
But, digging recruits from the bottom of the barrel, and then without training, setting them loose on the public, is no way to be tough on crime.
Fund the police, but also fund the people.
Our Monetarily Sovereignfederal government, having the infinite ability to spend dollars, can reduce poverty in America — and thus reduce crime — without levying one cent in taxes or causing inflation.
There is a reason why poor areas of the country endure more street crime than wealthy areas. It’s not that poor people are innately more dishonest. They simply have less money and less of what money can buy.
They have the same desires the rich have but fewer means of satisfying them. So they steal. It has been the same for time immemorial.
We can curse the darkness by arresting a hungry kid for stealing food from a grocery store and locking him up forever, or we can light a candle by giving him food, shelter, and reasonable hope for his future.
For some reason, we have lately shown a greater desire to beat down than to lift up, and that truly is wrong. It is wrong morally and wrong an effective solution.
Beating down may satisfy the mob’s bloodlust, but it will not reduce crime, and it will turn on the innocent.
I was reminded of the 2022 article (above) when I read this yesterday:
Voters want solutions to crime, not fighting from Trump, HarrisAna Zamora, Chicago TribuneAmericans aren’t interested in overheated rhetoric or petty name-calling. What people want are real solutions to make our communities safer and more just.
Last year, Gallup showed that when you ask Americans whether the criminal justice system is “too tough” or “not tough enough,” most say it should be tougher.
But then the pollsters went a level deeper and asked people what should actually be done.
The top answer wasn’t to hire more police. It was to address the social and economic problems that drive crime in the first place — by a margin of 2 to 1.
Typically, such social efforts as enhanced Medicare and more generous Social Security, unemployment compensation, free school lunch, free housing, and other anti-poverty measures are not considered “toughon crime,” and that is the problem.
Efforts to reduce poverty and its associated hopelessness, lack of education, and lack of stable home life are the best ways to be “tough on crime.” Still, too many Americans, especially those on the right, consider such benefits to be unaffordable, socialist, and soft-hearted rewards for indolence.
The reform movement has notched remarkable wins, beginning with the fact that 3 in 4 Americans— Democrats and Republicans — now believe in its aims, according to a report from the bipartisan group FWD.us.
Many of its solutions enjoy broad political appeal — among voters and legislators alike. States have passed laws to give police the resources they need while improving oversight and accountability.
They’ve also pushed ahead on other fronts — strengthening the public defense system, ending mandatory minimum sentencing and juvenile life without parole, creating deflection and diversion programs, funding education and workforce development in prisons, expanding access to parole, sealing criminal records and making sure people who leave the prison system have the support they need to reenter society successfully.
The above all are worthwhile, but most don’t address the fundamental cause of street crime: Poverty.
Now the prison population is shrinking in many places, and crime rates are plummeting. We have to protect those precious gains. And we can’t let the overheated rhetoric of a presidential election keep us from making more.
The bright-red state of Oklahoma just passed a law to help survivors of domestic abuse who were imprisoned because they committed a criminal act while defending themselves.
Their sentences will now be reduced, thanks to a politically diverse group of advocates, legislators, funders and community members who spent two years working to right an obvious wrong.
Stories like this remind us that “tough on crime” policies aren’t the only option. Even in an era of profound political division — and a moment when the presidential election will pry us even further apart — we are still capable of crossing party lines to make change.
It’s only when we lose sight of that fact that we end up with laws such as the Safer Kentucky Act, which promises to sweep even more people into the state’s bulging prison system, some for life, while doing nothing to prevent crime.
Give voters a choice between senseless punishment and pragmatic solutions that deliver safety, accountability and justice, they’ll pick the better option.
(Ana Zamora is founder and CEO of The Just Trust, which advocates for bipartisan criminal}
SUMMARYAmericans and their politicians continue to eschew crime prevention in favor of punishment.
It’s as though we believed the way to prevent and cure illness was to pack sick people into miserable quarantine camps rather than to give them medical care and healthful diets and surroundings.
Ironically, punishment feeds recidivism whereby those coming out of prison are more, not less, likely to recommit crimes.
They have lost the crucial education and orientation years and, upon release, are thrust unprepared into a world that does not offer them reasonable possibilities for honest lives.
Rather than preventing or curing crime, being “tough on crime” begets more crime, and not just by the criminals but by their friends, parents, spouses, and children in an unending cycle of failure.
Rodger Malcolm Mitchell
Monetary SovereigntyTwitter: @rodgermitchellSearch #monetarysovereigntyFacebook: Rodger Malcolm Mitchell;MUCK RACK: https://muckrack.com/rodger-malcolm-mitchell; https://www.academia.edu/
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The Sole Purpose of Government Is to Improve and Protect the Lives of the People.
Here is an editorial from THE WEEK Magazine. It needs no comment from me.
It does happen here
Our long history of rounding people up and kicking them out
MAGA patriots
Mass deportation. It’s an Orwellian phrase we associate with the Holocaust or the Armenian genocide.
Sending armed troops to pull millions of people, including babies and seniors, from their homes, forcing them into squalid camps, and then transferring them to a land where they have nothing — it sounds like something only a crazed dictator would do.
Not a democratic country, certainly not my own country.
But in fact, the U.S. has done it multiple times, and not just during wartime.
The Trail of Tears, when President Andrew Jackson signed the 1830 Indian Removal Act to expel tens of thousands of Native Americans from their land.
During the Depression, when the U.S. kicked out up to 1.8 million people of Mexican descent, half of them U.S. citizens, to preserve jobs for whites.
And Operation Wetback (yes, really), when President Dwight D. Eisenhower used the Border Patrol to truck over a million Mexican laborers back to Mexico. All of these actions were popular at the time, and all were seen in retrospect as shameful chapters in U.S. history.
Yet here we are again. Studies show that deporting immigrants doesn’t help the economy; it hurts it.
But Donald Trump says that if he’s elected president, he will expel up to 20 million people, a figure far higher than the 11 million undocumented immigrants believed to be in the U.S. now.
At the Republican convention, attendees carried signs blaring “Mass Deportation Now” and chanted “Send them back!”
In a June poll, 6 in 10 voters said they supported the idea, including a third of Democrats, while just under half supported mass detention centers where those arrested (some of them doubtless citizens) would be sent for processing.
Do these Americans understand how traumatic such an upheaval would be?
The spectacle of troops going door to door, of families being rounded up, would be heart-wrenching.
The blatant racismof the endeavor — it’s not Norwegians over-staying visas who would be targeted — would rip this nation apart.
Mass deportation is not un-American. But it should be.
This is the editor’s letter in the current issue of The Week magazine.
This post is dedicated to those who believe the U.S. government can run short of its sovereign currency, the dollar.
The Continental Congress met in New York in 1785, and on 6 July, the dollar was established as the official currency of the new United States of America.
Congress decided on a decimal system, i.e., 100 cents to a dollar. However, disagreements among the members of Congress meant that a mint wasn’t established in America until 1792.
It was another 70 years—1862, in the middle of the Civil War—before the US Treasury was able to print dollar bills—black on the front, green on the back, so colored because of the chemicals used to prevent counterfeiting.
And so the dollar (or greenback) as we know it today came into being.
Keep in mind that all of this was accomplished simply by passing laws, which are created from thin air. So long as the U.S. government has the infinite power to pass laws, it has the endless power to create U.S. dollars.
Former Federal Reserve Chairman Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency. There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody. The United States can pay any debt it has because we can always print the money to do that.”
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. It’s not tax money… We simply use the computer to mark up the size of the account.”
Fed Chairman Jerome Powell: “As a central bank, we have the ability to create money digitally.”
Statement from the St. Louis Federal Reserve Bank: “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.”
All of the above statements rely on the fact that the U.S. government is Monetarily Sovereign; it is sovereign over the U.S. dollar.
The statements are true for all Monetary Sovereigns. For example, the European Union is sovereign over the euro. So long as the EU can pass laws, it can create euros.
Mario Draghi, President of the European Central Bank: “We cannot run out of money.”
As you read this post, keep in mind the U.S. government’s infinite ability to create dollars out of thin air.
The subhead was: “Medicare and Social Security are projected to run out of money by 2036. Mike Townsend discusses possible solutions to the shortfalls and the likelihood of each.”
The clock is ticking on two pillars of retirement planning.
Barring major overhauls, projections indicate that Medicare’s Hospital Insurance trust fund, which covers hospital benefits, will be unable to pay full benefits after 2036, and the Social Security trust fund, which covers retirees and their survivors, will be unable to pay full benefits after 2033.
We’ll pause here to remind you that Medicare’s Hospital Insurance trust fund and the Social Security trust fund are not real trust funds.
They are just bookkeeping line items 100% controlled by Congress and the President.
If Congress and the President decide to add a trillion dollars to each of the so-called “trust funds,” they will vote, and each “trust fund” line item instantly will be a trillion higher.
Strangely, Mike Townsend, the managing director of legislative and regulatory affairs at Schwab, doesn’t seem to understand Monetary Sovereignty and the federal government’s unique and infinite ability to create U.S. dollars.
Seemingly, Townsend equates the federal government with monetarily non-sovereign state and local governments, which do not have this infinite power.
We talked with Mike Townsend about the most likely solutions, whom they’ll affect, and when.
Q: Let’s start with Social Security. What potential fixes are on the table?
Mike: There’s a universe of possibilities, including extending the full retirement age, raising the payroll tax rate, and increasing the amount of income subject to the payroll tax.
But no one in elected office is enthusiastic about promoting any solutions that might prove politically unpopular.
Townsend doesn’t mention the real solution: Eliminate the fake trust funds and simply pay for Social Security and Medicare the same way we pay for Congress, the White House, the Supreme Court, all the branches of the military, and almost every other federal agency and federal project: by creating dollars ad hoc.
Q: What might raising the full retirement age look like?
Mike: During the last major Social Security overhaul, in 1983, the age at which you could collect full benefits was gradually increased, from 65 to 67. (You can collect reduced benefits as early as age 62.)
We’re seeing similar proposals now, with one pushing for a full retirement age of 70 for those born after 1977—the rationale being that people are generally living longer and therefore also working longer.
This is at or near the top of the list of proposals, and it’s likely that the full retirement age will go up at some point—though I expect it will include a long and slow phase-in when it does happen.
This solution, called the “work ’til you drop” idea, and other “solutions” Townsend mentions, involve taking dollars from the poor and middle classes, the very people for whom Social Security and Medicare were invented.
The rich receive most of their income from sources not subject to the FICA tax.
It truly is a disgrace the people who are paid to know better pretend the federal government needs to take dollars from those who rely on them most.
Q: Have there also been proposals to change the payroll tax that funds Social Security?
Mike: Currently, the payroll tax that funds retiree benefits is 12.4% of workers’ earnings, split evenly between employer and employee. There are many proposals to increase that amount, such as by a fraction of a percentage point annually over several years to lessen the impact on the average worker.
Townsend fails to tell you that in reality, all of the money comes from salaried employees.
Every business treats the payroll tax as a cost associated with employees’ pay. This cost is one of the considerations when determining how much to pay salaried employees.
That is why so many businesses prefer to classify workers as independent contractors rather than as employees. FICA is in reality, a head tax on businesses, paid for by salaried employees.
Q: How else could the payroll tax structure change to increase revenue?
Mike: For 2024, only the first $168,600 of income is subject to the Social Security payroll tax. One proposal suggests starting to collect the tax again for income over $400,000, while another suggests collecting above $250,000.
On the political left, that’s probably the most popular proposal, because it impacts higher earners; but on the right, it’s among the least popular proposals because conservatives generally oppose tax increases of any kind.
Q: Any other ideas floating around?
Mike: There’s a bipartisan group in the Senate trying to come up with alternatives. For example, Social Security funds are now 100% invested in U.S. Treasury bonds, which are very safe but offer a relatively low rate of return.
One idea is to put some portion of Social Security taxes into a newly created sovereign wealth fund that would invest in stocks and have the potential to earn a higher rate of return.
The above is an example of the federal government pretending it isn’t Monetarily Sovereign and is helpless to increase the balance in the “trust funds” or, better yet, to do away with them and simply pay for the costs.
Q: Let’s turn to Medicare. What can be done to sustain the Hospital Insurance trust fund?
Mike: The Medicare payroll tax of 2.9%, which is split equally between employers and workers, finances this fund. For wages above $200,000, there’s an additional Medicare tax of 0.9%. Raising the tax is one way to help shore up Medicare, so it’s definitely in the mix. But again, in a divided Congress the more conservative members are unlikely to vote for a tax increase.
Q: How does the Net Investment Income Tax factor into the equation?
Mike: Currently that tax is 3.8% on investment income for those making a total of more than $200,000 ($250,000 for married couples filing jointly).
Right now, that money goes into the general coffers rather than Medicare.
However, President Biden has proposed not only an expansion of the tax—to 5% above $400,000 in income ($450,000 for couples filing jointly)—but also to apply the money to the Hospital Insurance trust fund. That proposal is also going nowhere in a divided Congress, but it’s nevertheless on the table.
It’s all ridiculous hocus-pocus. There are no “general coffers.” The federal government creates all its payment funds ad hoc. It sends instructions to each creditor’s bank, instructing the bank to increase the balance in the creditor’s checking account.
What the bank does as instructed, new dollars are created and added to the M2 money supply measure.
Further, a tax increase is entirely useless. The federal government neither needs nor uses tax dollars. When you pay your taxes, you take M2 dollars from your bank account and send them to the U.S. Treasury.
When your dollars reach the Treasury, they cease to be part of any money supply measure because the Treasury has access to infinite dollars.
Mike: The closer the government gets to the insolvency deadlines, the less time it has to raise the necessary funds.
Congress can continue to kick the can down the road, but the math is only going to get more difficult. That said, there continues to be a lack of urgency on Capitol Hill, and it may be a few years before momentum for action builds.
The Monetarily Sovereign federal government doesn’t “raise” funds. It creates all the funds it needs and destroys all dollars coming in.
Congress can continue to kick the can down the road, but the math is only going to get more difficult. That said, there continues to be a lack of urgency on Capitol Hill, and it may be a few years before momentum for action builds.
From a beneficiary’s perspective, any proposed solution likely would be phased in over many years—and people approaching or already in retirement would almost certainly be exempt.
After all, many Americans have been planning their retirement with certain assumptions around Social Security in mind, and it would be unfair to upend those assumptions without adequate time to adjust.
Townsend does not seem to understand the fundamental differences between Monetary Sovereignty (i.e., the U.S. government) and monetary non-sovereignty (i.e., you, me, state/local governments, and businesses).
The astounding lack of factual information promulgated by one of America’s largest brokerages truly is sad.
What do they do when they’re still beating the same old drum — but the drum is broken? Lie about it. At least, that is the formula the MAGAs have settled on.
Here is an example:
Politicians love to spend other people’s money. That obvious truth has never been more clear than on this, the second anniversary of the Inflation Reduction Act (IRA).
Sold to the American people as a means of mitigating the rampant inflation unleashed by the Biden-Harris administration’s prior federal spending spree, the administration was – once again – acting as both arsonist and firefighter.
Arrington implies that federal spending causes inflation, a widely promulgated lie. Inflation always is caused by shortages of critical goods and services, not by federal spending.
We were sold under false pretense that spending more money we don’t have on federal programs we don’t need would somehow tame inflation.
Three lies in one sentence may not set a record for Trumpers — the Donald does it all the time — but it may seem repugnant to normal people.
The “money we don’t have” lie. The U.S. federal government is Monetarily Sovereign, over the U.S. dollar. It can create an infinite number of dollars at the touch of a computer key, and it can never unintentionally run short of dollars.
Statement from the St. Louis Fed: “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.” You can find it in their publication titled “Why Health Care Matters and the Current Debt Does Not” from October 2011.
Having the infinite ability to create dollars, it never borrows dollars and does not use tax income to pay for things. It creates brand new dollars to pay for everything.
State and local governments levy taxes because they need income to pay for things. The federal government needs no income. The purposes of federal taxes are:
To control the economy by taxing what the government wishes to discourage and by giving tax breaks to what it wishes to reward.
To assure demand for the U.S. dollar by requiring taxes to be paid in dollars.
Yes, I know. This is not what you have been told: “The federal government is just like you, your city, your state, and your business.”
Wrong!
You, your city, your state, and your business are monetarily non-sovereign. You do not have the infinite ability to create dollars; you borrow and use income to pay for things.
Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency. There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody. The United States can pay any debt it has because we can always print the money to do that.”
The confusion is partly semantic. Federal Treasury bills, notes, and bonds are nothing like private sector bills, notes and bonds. The latter are certificates denoting debt, but the former — the Treasury versions, merely are evidences of deposits into accounts, wholly owned by the depositor.
The purpose of Treasury bills, notes, and bonds is not to provide spending money but rather to provide a safe place for dollar owners to store unused dollars—safer than banks or other money storage places.
This safe storage helps support the dollar’s value. Dollars deposited into T-security accounts remain the property of the depositor and are never used by the federal government for spending.
The “programs we don’t need” lie. Here are some of the programs covered:
1. Clean Energy: The IRA allocates substantial funding to promote clean energy technologies, including wind, solar, and nuclear power. It aims to reduce carbon emissions by 40% by 2030.
2. Electric Vehicles: Incentives for electric vehicle (EV) purchases are expanded, including tax credits for both new and used EVs.
3. Prescription Drug Costs: The IRA allows Medicare to negotiate prices for certain high-cost prescription drugs, aiming to lower seniors’ out-of-pocket costs.
4. Affordable Care Act (ACA) Subsidies: The act extends enhanced subsidies for ACA health insurance plans, making coverage more affordable for millions of Americans.
One could argue endlessly about whether we “need” clean energy, electric vehicles, reduced prescription drug prices, or to make health care more affordable. Generally, Republicans hate giving these benefits to those who are not rich because the rich easily can afford them.
But one thing is beyond question: The IRA pumps dollars into the economy, and according to the formula (GDP=Federal and Non-federal Spending+Net Exports), those dollars grow the economy.
The “somehow tame inflation” lie implies that the title “Inflation Reduction Act” is misleading because inflation reduction is not the act’s sole purpose. That’s true. It is just one of the purposes.
Reducing inflation requires reducing the shortages that cause inflation. Today’s inflation was caused by COVID-related scarcities of oil, food, shipping, labor, computer chips, metals, wood, paper, and other goods and services.
Curing inflation requires curing the scarcities, which the federal government does by spending to make scarce items available to the economy. Federal support for clean energy helps reduce oil prices, the most potent inflation-inducing factor because oil prices affect the prices of all other products and services.
Inflation (blue line) parallels oil shortages (red line), demonstrating how shortages cause inflation.
By contrast, here is the relationship (or “non-relationship) between federal inflation and federal deficit spending:
Federal debt does not move in concert with inflation.
Thus, contrary to popular wisdom, federal deficit spending does not cause inflation; it can cure it by acquiring and distributing scarce goods and services.
Federal spending to support electric vehicles also reduces oil prices. Medicare negotiates prices for high-cost prescription drugs, which reduces healthcare prices.
How does that work? It doesn’t. According to the Wharton School at the University of Pennsylvania, the IRA had a statistically insignificant impact on inflation and may have even exacerbated it.
“Statistically insignificant.” “May have.” In the unlikely event that Arrington quoted the vaunted Wharton School correctly, they have no idea whether the IRA or other factors successfully reduced inflation.
Apparently, Arrington wishes to quibble about the title of the program, not its positive economic effects. Later in this post, you will read Arrington’s claims that the“statistically insignificant” IRA causedinflation. He uses the same data to prove two opposing points.
Inflation Falls Below 3% for First Time Since 2021
Consumer prices rose 2.9 percent in the year through July, a downtick from the prior month. The report keeps the Federal Reserve firmly on track to cut interest rates next month. (NY Times August 14, 2024)
When the Republican fearmongers no longer can promulgate fake inflation and immigrant fears, they have nothing to offer voters.
Their notorious Heritage Project 2025 (that Trump claims he has “no knowledge of”, just as he “never met” the women he attacked) is a playbook for enriching the rich, impoverishing the middle and poor, and establishing a dictatorship.
As the COVID-related scarcities disappear, Arrington desperately continues to ignore the reality that inflation is ebbing, and with it, go Trump’s chances in the 2024 election.
Setting aside the question of what impact, if any, its massive spending had on inflation, the IRA contains an array of atrocious provisions.
“If any?” Weren’t you just claiming it caused inflation?
The measure’s tax increases on businesses large and small undermine American competitiveness, dampen economic growth, and reduce U.S. employment – now at its highest rate since October of 2021.
Yes, Mr. Arrington, employment is at a very high rate. And it didn’t happen by accident. It’s the result of the Biden administration’s policies. And as for “dampening economic growth,” have you looked at the data?
The economic growth is higher than ever in U.S. history. Arrington claims it has been “dampened.”
The share of working-age Americans with jobs is thehighest it’s been since 2001,fewer people than expected have been filing for unemployment, and thelayoff rate is lowcompared to history.
And that’s before the Fed’s highly anticipated rate cuts, which should boost the economy further. (Lisa Ryan, Insider Today.)
Employment as a percentage of the population is near historic highs,
Whose bright idea was it to expand Obamacare subsidies for the wealthy, needlessly providing billions in taxpayer dollars directly to large health insurance companies?
Or to hand out hundreds of billions of dollars in wasteful tax breaks to green energy corporations?
It’s not just that these new subsidies will cost three times as much as originally projected. It’s that these green energy giveaways have heaped enormous cost on Americans already struggling to pay their bills.
The above paragraphs promulgate the lie that federal spending is funded by federal taxes. As we’ve said, all federal spending is financed by new-dollar creation. Federal taxpayers fund nothing. The Monetarily Sovereign federal government has no use for taxpayer dollars.
Even the most “wasteful” federal spending you can imagine still benefits the economy by adding to GDP. Remember that formula: GDP = Federal Spending + Nonfederal Spending + Net Exports.
To add insult to injury, this completely partisan bill, peddled as inflation-reducing, funneled $80 billion to expand the Internal Revenue Service (IRS), including the hiring of 87,000 new enforcement agents which will result in more audits for middle- and low-income families.
More fear-mongering from the right wing.
The $80 billion allocated to the IRS through the Inflation Reduction Act targets high-income earners, large corporations, and complex partnerships.
Audit rates for individuals earning less than $400,000 annually won’t increase.
The focus is on ensuring that wealthy individuals and entities pay their fair share of taxes while improving customer service and modernizing technology.
And that is why the Republicans, the party of the rich, hate the IRA. It will collect from the rich, not “middle- and low-income families.” It will help to narrow the income/wealth/power Gapbetween the rich and the rest.
Shortly after Joe Biden assumed the presidency in 2021, the Congressional Budget Office (CBO) forecasted that the federal government would spend $5.3 trillion in Fiscal Year 2024. After more than three years of unbridled spending from the Biden-Harris administration, that figure has ballooned to more than $6.8 trillion—an increase of 29.4 percent—or nearly $216,000 per second.
In other words, federal spending will add more than 6.8 trillion growth dollars to the U.S. economy.
In fact, the deficit has more than doubled, our interest payments on the debt have tripled, and we have a higher level of indebtedness than we did during World War II.
All that spending, which costs taxpayers nothing, has grown the economy. Without that federal spending (i.e., money creation), we would be in a permanent depression.
When deficit spending growth (blue line) decreases, we have recessions (vertical gray bars), which are cured by increased deficit spending.
Meanwhile, CBO expects federal revenue will total $538 billion more this year than it forecast three years ago. Had the Biden-Harris White House not led Democrats in Congress to increase spending, the federal budget would be nearing balance.
While “balanced budgets” are good for you and me and even for state and local governments—we are all monetarily non-sovereign—they are an economic disaster for the federal government.
A “balanced” federal budget, meaning no new dollars would be created, would cause the nation to fall into the worst depression since the 1930s.
Mr. Arrington continues to spew abject ignorance about the Monetary Sovereignty of our federal government.
But the federal government increased spending by three dollars for every dollar of additional revenue, and, as a result, this year’s budget deficit will likely be $1 trillion or 100% larger than anticipated when Biden first took office.
That’s an additional $1 trillion of economic growth.
It gets worse. The Biden-Harris administration’s policies have increased the cumulative, ten-year federal budget deficit by $11.6 trillion.
Make that $11.6 trillion of economic growth.
Legislation enacted during Biden’s presidency added $4.8 trillion to the deficit. Executive actions imposed unilaterally by the president—that is, without congressional approval—added another $2 trillion. And even more maddening, spending-induced interest rate hikes increased projected net interest costs by $4.8 trillion over ten years.
Apparently, it isn’t enough for the Biden-Harris administration that the federal government is currently set to spend a projected $84.9 trillion for the coming decade. No, they believe we just can’t get by with spending anything less than $86.6 trillion!
It’s difficult to know whether Mr. Arrington is truly ignorant about federal finances or intentionally lies. He complains that Biden wants to add 86 trillion growth dollars to the economy.
All those “shocking” figures actually benefit the American economy. The more deficit spending by the federal government, the richer we become.
And that’s just the financial side. It doesn’t include all the benefits those dollars will buy for us.
SUMMARY
Federal taxes do not fund federal spending. All federal spending is financed by new money creation, which costs taxpayers nothing. Even if the federal government collected $0 taxes, it could continue spending trillions forever.
Federal spending does not cause inflation, which results from shortages of key goods and services. Instead, federal spending prevents and cures inflation by preventing and addressing the shortages.
The shills for the Republican party hate federal spending that benefits the middle- and lower-income groups because those benefits narrow the Gap between the rich and the rest. Benefits to you make the rich less rich.
So they confuse Monetary Sovereignty with monetary non-sovereignty, i.e. federal spending with non-federal spending, to get you to vote against benefits for you.
They never complain about tax breaks for the rich, only about spending that benefits the rest of us.
Now, as the economy emerges triumphantly from the COVID-induced inflation/recession, and the Democrats’ spending is the proven catalyst for that recovery, the MAGA Republicans are reduced to spreading fear via lies about federal finances.
Rodger Malcolm Mitchell
Monetary SovereigntyTwitter: @rodgermitchellSearch #monetarysovereigntyFacebook: Rodger Malcolm MitchellMUCK RACK: https://muckrack.com/rodger-malcolm-mitchell; https://www.academia.edu/
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The Sole Purpose of Government Is to Improve and Protect the Lives of the People.
#Monetary Sovereignty - Mitchell 