MAGA Marco shows his ignorance for the world to see

I wrote to Sen. Marco Rubio, reminding him that the U.S. federal government, being Monetarily Sovereign, cannot unintentionally run short of dollars.

During Iowa visit, Marco Rubio won't say if he's running for president

Thus, no federal government agency can run short of dollars unless that is what Congress and the President want. Here is the response I received. It indicates MAGA Marco either is ignorant about federal finance or is lying. I vote for both.

Dear Mr. Mitchell:

Thank you for taking the time to express your thoughts regarding the future of Social Security and Medicare.

Understanding your views helps me better to represent Florida in the United States Senate, and I appreciate the opportunity to respond.

Except, he doesn’t understand my views and/or doesn’t care about representing Florida or the United States. He is a weak and willing (and usually absent) tool of the extremist GOP.

Social Security and Medicare are critical pieces of the retirement security safety net for seniors. In 2023, more than 66.2 million Americans currently receive Social Security benefits of some form.

As currently structured, however, these programs are going bankrupt, and Congress must work to protect and reform them so that they can fulfill their promises to future retirees.
Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.” Alan Greenspan: “There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.” Alan Greenspan: “The United States can pay any debt it has because we can always print the money to do that.” 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.” Quote from former Fed Chairman Ben Bernanke when he was on 60 Minutes: Scott Pelley: Is that tax money that the Fed is spending? Ben Bernanke: It’s not tax money… We simply use the computer to mark up the size of the account.

The federal government can and should fund Social Security just as it funds the military, the Senate, the House, SCOTUS, the White House and almost every other federal agency — by simply paying their bills.

Social Security began in 1935 as a social insurance program primarily for widows, orphans, and those living past the current average life expectancy. These benefits are funded by taxes on the wages of all American workers, called payroll taxes, which are automatically withheld each payday.

No, the benefits are not funded by taxes. The federal government destroys all tax dollars it receives. It pays its bills by creating new dollars ad hoc.

In 1950, 16.5 workers were paying in for every beneficiary receiving payments. Today, that ratio has fallen to 2.8 workers for every beneficiary and will continue to decline for the foreseeable future.

Wrong. Those FICA taxes are destroyed upon receipt. Workers do not pay for benefits.

According to the non-partisan Congressional Budget Office (CBO), the Social Security program is now running permanent deficits due to this declining ratio and a growing number of disabled individuals.

According to the Social Security Administration, benefits will only be fully payable until 2033. At that point, the Social Security Trust Fund will only be able to meet 77 percent of scheduled benefits.

The government can pay benefits forever. These scare tactics are solely for the rich who wish to widen the Gap between themselves and those below them on the income/wealth/power scale.

Medicare, created in 1965, is currently running deficits as well. Its solvency must be addressed to protect current and future generations of Americans.

Medicare, an agency of the Monetarily Sovereign federal government, cannot become insolvent unless Congress and the President want it to.

According to the CBO, total Medicare spending was $747 billion in 2022. By 2033, Medicare spending will be $1.6 trillion.

Though Congress has known about these problems for years, it has chosen not to address them straightforwardly with the American people.

Congress can “address the problem” simply by paying Medicare’s bills.

I will continue to highlight the need to reform this critical program in a responsible manner to ensure future generations have Medicare and Social Security in old age.

Marco’s idea of “reform” is to cut benefits and/or increase taxes. The “solutions” the rich want, so the income/wealth/power Gap will be widened.

Social Security should also be reformed to reflect the different kinds of economic insecurity Americans face in the 21st century.

For example, my New Parents Act of 2023 (S.35), which I reintroduced on January 24, 2023, would offer paid parental leave to new parents by allowing the option to use a portion of their Social Security benefits after the birth or adoption of a child.

This is a tacit benefits-cutting measure. The federal government should pay, not Social Security benefits.

They then would have the option to delay retirement by the benefit taken or receive a proportionate reduction in monthly retirement benefits for the first five years of retirement.

The rich always look for ways to reduce retirement benefits, so the poor will be forced to work forever.

At a time when working families are being left behind, and childbirth rates are falling, it is essential to realign our economic policies in support of American families. S.35 would not raise taxes or expand bureaucracy and would not change the long-run balance of the Social Security Trust Fund.

The so-called “Trust Fund” is a bookkeeping fiction. No dollars are stored in any federal “trust fund.” The so-called trust funds simply are records of contributions that have nothing to do with the ability to pay for benefits.

It is an honor and a privilege to serve you in the United States Senate. As your United States Senator, I will keep your thoughts in mind as I consider these issues and continue working to ensure America remains a safe and prosperous nation.

Yeah, right. Blah, blah, blah. I’m sure he has us in his thoughts and prayers and is working day and night for us. Does anyone want to buy a bridge from this guy? Rodger Malcolm Mitchell Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

……………………………………………………………………..

The Sole Purpose of Government Is to Improve and Protect the Lives of the People.

MONETARY SOVEREIGNTY

Inflation: To find the cure, look first at the cause

It’s axiomatic that if you wish to prevent and cure something, you first should learn the causes, and then address them.

Elements in the federal government seem to believe that the current inflation is caused by too-low interest rates and too-high government spending. Thus, we have the Fed raising rates and Congress enacting debt ceilings (spending ceilings).

Neither of these efforts is directed at the real cause of inflation: Shortages. In fact they both make the situation worse.

Raising interest rates and enacting debt ceilings both are recessionary. The government seems to believe inflations should be cured by recessions.

Perhapsour leaders never have heard of “stagflation,” a stagnant economy together with inflation.

The Fed claims its raising of interest rates will “help cool an overheated economy,” which is another term for slowing Gross Domestic Product growth, i.e., causing a recession.

Debt ceilings are directly intended to slow GDP growth because GDP is measured, in part, by federal spending.

GDP = Federal Spending + Nonfederal spending + Net Exports

**A graph of GDP changes (blue) vs inflation. Where the lines separate or cross, you see a lack of correspondence.**

Compare this graph with the one below, inflation vs. oil prices (which correspond closely to oil supplies).

**The price and supply of oil (violet) closely parallels inflation.**

Reducing oil prices, which would entail increasing availability or declining usage, would be significant steps in curing inflation.

The government has distributed oil from America’s oil reserves and encouraged renewable energy use. Inflation has moderated. But oil is not the only scarce item causing inflation. Consider workers.

Axios AM By Mike Allen · Aug 27, 2023
America’s worker-shortage crisis

Wherever you look, America faces acute worker shortages in some of its vital occupations — teachers, bus drivers, cops, plumbers, electricians, carpenters, surveyors, pilots, air traffic controllers, and more.

Some of the highest-stakes workplaces — hospitals and prisons — are also severely short-staffed.

Why it matters: Understaffing in these industries goes beyond inconvenience, with dire potential consequences for public health and safety, Axios’ Emily Peck reports.

And a shortage of workers leads to inflation from two causes:

1. To acquire workers, America’s industries must raise salaries, translating into higher prices.
2. The shortage of workers leads to a scarcity of products and services, which also translates into higher prices.

The Fed’s repeated interest rate increases will do nothing to alleviate the acute worker shortages, and the need to increase salaries, both of which lead to higher prices, and the scarcity of products and services.

The causes are demographic, economic, and social.

Americans are getting older, meaning fewer younger people of working age.

Add the tight labor market — unemployment in the U.S. is deficient — and there simply aren’t enough workers in the U.S. to meet demand.

Most drugs come to America this way, not via immigrants.

Americans opted out of government jobs after the COVID shock, even as the private sector rebounded.

Even with workers opting out of government jobs, there still aren’t enough private-sector workers.

Yet the government, especially the Republicans, pay to erect high walls at our border, then pay more to guard those walls.

Then, they pay more to house and protect the people caught after climbing the walls.

And all this supposedly is to stop the traffic of drugs most of which come in via legal crossings — planes, boats, the mail, and regular border crossings.

According to U.S. Customs and Border Protection statistics, 90 percent of heroin seized along the border, 88 percent of cocaine, 87 percent of methamphetamine, and 80 percent of fentanyl were caught trying to be smuggled in at legal crossing points.

In short, we are creating our shortage of workers because of a drug smuggling myth, and perhaps more importantly, because of xenophobia, while we complain about inflation.

Some of these high-stakes shortages are about wages. Government jobs, including teaching and law enforcement, typically can’t raise pay high enough to compete with businesses.

Will higher interest rates solve the wage problem? The government could help enormously by eliminating FICA, a vast, unnecessary employment cost. In our Monetarily Sovereign government federal taxes don’t pay for benefits.

What workers and businesses pay to FICA should instead be paid to the workers.

Further, another business cost could be eliminated with federally funded Medicare for All, leaving even more financial room for wages.

Some problems are about working conditions: Employers trying to fill in-person, high-stress roles compete with jobs offering more flexibility, including remote work.

Rather than paying for the health care insurance perk, businesses would be better able to pay for improved working conditions and more employees, to relieve stress on current employees.

And some of them are about skills: There are only so many people with a ton of expertise creating AI programs, for example. That’s the problem in nursing, too.

The federal government could and should fund universities and educational programs teaching AI and nursing. These would do far more to fight inflation than recessionist interest rate increases.

Nurses should receive federal tax benefits or supplements.

A lack of qualified workers in AI and manufacturing threatens to slow productivity and growth in areas where the U.S. is otherwise poised for giant leaps.

That’s a problem for companies in those sectors and the broader economy.

More professionals are needed in deep learning, natural language processing, and robotic process automation, the Financial Times reports.

The federal government could fund free education in the above areas.

Parents are feeling the labor squeeze on multiple fronts:

Schools nationwide are understaffed, crying for more teachers, bus drivers, and social workers.

The government should use income tax laws to control these shortages by giving special tax breaks or subsidies to people in those areas.

Child care: Parents often can’t find or afford it. That can cause them to stay on the sidelines of the labor force — making the worker shortage much worse.

A shortage of air traffic controllers is contributing to an increase in near-miss collisions, the New York Times reports.

Police departments have faced mass early retirements fueled by plummeting morale.

According to administration data, prisons have the same issue: 21% of correctional officer positions were unstaffed in federal prisons last fall.

Many younger workers have shunned the building trades of their parents. After waning for 30 years amid the zest for college prep, the high-school shop class is making a comeback.

The federal government should fund tax breaks or supplements for people learning and working in the above shortage areas.

And/or the government could support research and development of more automation in some industries where this would reduce the need for workers.

The bottom line: Demographic reality means labor shortages are likely with us for the foreseeable future.

Translation: Inflation will likely be with us for the foreseeable future, which means those unnecessary, harmful interest rate hikes could continue.

Three things could change that: a surge in immigration … a surprise flood of sidelined women into the workforce … or a recession that drives down employee demand.

The surge of immigration could occur if the ignorant, absurd restrictions we place on immigration and citizenship were to end.

What possible benefit is there for America to make immigration and citizenship so difficult and time-consuming?

Women would enter the workforce if childcare were federally funded and laws about equality of pay were enforced.

A recession is unnecessary, though probably inevitable, despite our federal government’s Monetary Sovereignty.

SUMMARY

The federal government has all the tools to end the shortages, particularly the labor shortage, that inflates our prices and slows economic growth.

It merely needs to use those tools and forget about the self-defeating interest rate increases, the purposes and effects of which are to recess our economy.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

……………………………………………………………………..

The Sole Purpose of Government Is to Improve and Protect the Lives of the People.

MONETARY SOVEREIGNTY

The case against Monetary Sovereignty

At long last, Monetary Sovereignty is being derided in some universities. In science, derision can be the first step toward acceptance. Here are a few excerpts from one typical article, together with my comments:

Rethinking Monetary Sovereignty: The Global Credit Money System and the State Published online by Cambridge University Press: 29 August 2022 Steffen Murau and Jens van ’t Klooster

Abstract We propose a new conception of monetary sovereignty that acknowledges the reality of today’s global credit money system.

As you will see, most of the criticism of Monetary Sovereignty (MS) has to do with the fact that the focus is on a nation’s own finances. A Brief (and Fascinating) History of Money | Britannica

A Brief (and Fascinating) History of Money | Britannica

In one sense, this criticism is warranted because every nation affects, and is affected by, the finances of other countries. But while predicting the effects of our government spending can be daunting, including other nations in the mix adds many levels of complexity. It can be akin to predicting next year’s traffic accidents at one city corner by including each car model’s auto sales last year, in each other city, everywhere. It is faux attempt at precision when an economist does not even acknowledge that MS government taxes don’t fund MS government spending.

Today, the concept is predominantly used to denote states that issue and regulate their currency. We reject that Westphalian understanding of monetary sovereignty.

The words “predominantly” and “states” may indicate the writers Murau and van ’t Klooster aren’t aware that MS refers exclusively (not predominantly) to entities (not only “states”) that issue and regulate their own currencies. The term “Westphalian” refers to what happens in one’s own country without consideration of other countries.

Instead, we propose a conception of effective monetary sovereignty that focuses on what states can do in the era of financial globalization.

The conception fits the hybridity of the modern credit money system by acknowledging the crucial role of central bank money and money issued by regulated and unregulated shadow banks.

These institutions often operate “offshore,” outside a state’s legal jurisdiction, making monetary governance more difficult.

Monetary sovereignty consists of the state’s ability to effectively govern these different segments of the financial system and achieve its economic policy objectives.

We agree that vast amounts of money are created and spent offshore of any nation. Even the mighty United States dollar is only a small part of the world’s economy. We also agree that vast amounts of money are created by non-federal entities within the U.S., as witnessed in the formula for Gross Domestic Product: GDP =Federal Spending + Nonfederal Spending + Net Exports. Finally, we agree that the world’s economy profoundly affects the U.S. economy. But today’s economists are ill-prepared to play 3-dimensional chess against multiple opponents. Until quantum computers are programmed to evaluate all the inter-nation effects of every monetary event worldwide, a good start would be to consider the intra-nation impact of a nation’s governmental spending. In short, MS tells quite a bit about how U.S. federal spending can provide benefits to the American public.

Even though monetary sovereignty remains an important reference point in academic discourse and international politics, it has repeatedly been declared dead throughout the past decades.

How did MS supposedly die? Because of:

“Creeping dollarization, globally active megabanks, asset managers, hedge funds global bond markets and the realpolitik of the IMF and the World Bank, cryptocurrencies, stablecoins, shadow banking instruments, and Basel’s Bank for International Settlements.”

This merely states the obvious. No nation is an island unto itself. The MS government does not have absolute control over GDP, inflation, deflation, poverty, unemployment, productivity, education, etc. Similarly, no person is an island unto himself. To deride MS for not providing absolute financial control is like criticizing someone for improving his financial position, though he can’t consider everyone else’s efforts. And here we arrive at the following evidence for ignorance about MS:

Lacking the ability to control money within their borders, states have increasing difficulties raising taxes and funding critical expenditures.

In what sense, if any, can states still be described as monetary sovereigns?

Apparently, the authors, not understanding MS, do not realize that:

MS nations have no difficulty “raising taxes” should they so choose, and
MS nations neither need nor use tax money to “fund critical spending.”

Today, the concept of monetary sovereignty is typically used in a Westphalian sense to denote the ability of states to issue and regulate their own currency.

This understanding continues to be the default use of the term by central bankers and economists in fields ranging from modern monetary theory to international political economy and international economic law.

As we argue in this article, the Westphalian conception of monetary sovereignty makes it unsuitable for the realities of financial globalization.

Sadly, the rest of the rather long-winded article is devoted to debunking a claim no one is making: That other currencies don’t exist, and that a MS government can control the financial effect of these other currencies. The article brushes past the fact that government spending moves a country in specific directions despite the effect of other currencies. So yes, an MS government can fight poverty by giving people money and by paying for things. An MS government can support industries, medical care, the infrastructure, the environment, the sciences, education, and a host of other benefits. Then, after all the sound and fury, comes the conclusion that MS really isn’t dead. No MS still lives; just the definition supposedly is wrong.

We propose considering monetary sovereignty as states’ ability to use financial governance tools to achieve economic policy objectives.

Monetary governance involves controlling pure public money, regulating private-public money, and managing private money within the state’s monetary jurisdiction.

Using “tools for monetary governance” is what all nations do, whether or not they are Monetarily Sovereign. The entire article boils down to an incorrect, inappropriate, meaningless definition of MS. The article does clarify that a nation pegging its currency to another currency is not MS, which seemingly has not been understood by someone, somewhere. Also (OMG!), euro nations are not MS! And that is it. I have given you the link (twice) to their article. Nothing in it changes the sad fact that:

Most economists don’t teach Monetary Sovereignty
Most economists don’t even understand Monetary Sovereignty.
Monetary Sovereignty is the foundation of economics, and if understood, taught, and applies, it could make for a better world.
Economics is where astronomy was during the popularity of the geocentric model, 2,500 years ago.

IN SUMMARY The main problem “exposed” by the article is that an MS government does not have absolute control over the results of its spending because other forms of money have offsetting effects. The government “only” has partial control. My concern is that the federal government’s infinite ability to spend is not understood by the masses because economists, journalists, and politicians have failed to provide that information. Thus, people have been led to believe many benefits to every man, woman, and child are not easily affordable for the federal government. So we continue to do without:

A comprehensive, no-deductible, no-cost form of Medicare, regardless of health
Long-term care
Social Security, regardless of age
College and post-grad for everyone who wants it
Reduced federal taxes, with support for state and local governments

The people have been led to believe these benefits require tax increases, are unsustainable, and would cause inflation. All untrue. Instead of informing their students and the populace, and providing solutions based on Monetary Sovereignty, the economists dither about the exact definition of MS, focus on what MS doesn’t do, and argue in esoteric terms about how many angels could dance on the head of a pin. As a result, the people live without easily provided benefits. Rodger Malcolm Mitchell Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

……………………………………………………………………..

The Sole Purpose of Government Is to Improve and Protect the Lives of the People.

MONETARY SOVEREIGNTY

Is money real? No.

Is money real? Let’s first define “real.” Then you decide.

A case could be made that nothing is “real” in that everything is constructed in our brains. René Descartes addressed that problem when he wrote, “I think, therefore I am.” (“cogito, ergo sum”).

It was the one statement he felt he absolutely could accept as accurate. He couldn’t know for sure that the earth, the seas, the stars, and the people were not illusions or dreams.

But since we are defining, we can define real as we choose, so let’s say that “real” means something most people accept as having a physical existence. In one way or another, it can be seen, felt, heard, smelled, tasted, or otherwise having a physical presence.

In that sense, many things we commonly deal with are not real. Numbers are not real. You cannot see, taste, feel, smell, or hear a number. What does the number 6 look like? Does it look like this?

Or like this: Six, SIX, √36, IIIIII, seis

Numbers are concepts or ideas with no physical existence.

In a similar vein, is a story or a novel real? No, a story can be told or written on paper or in a computer’s electrons, but the story itself is not physical. By our definition, that novel you are reading is not real, though the paper and ink are real.

A Complete Guide to Car Titles - CARFAX — **This is a representation of a title, not a title in itself.**

A car and house are real, but is the title to a car or house real? The paper and ink are real if the title is printed on paper. But the title is not real. That title exists not only in printed forms but in electronic form.

The printed form can be in a certificate or computer output, listing one or hundreds of titles.

The title is a legal concept that can exist in many forms and places.

Being a law, a title can exist in the records of one or more government agencies and in the electronic or paper files of a title insurance company, your attorney, or your own files.

You can see a car, but you cannot see a title. At best, you can see a representation of a title. If someone asks for an “original title,” they mean an original copy of a title.

Now we come to the question, “Is money real.” Consider $10 (ten dollars). Amazon.com: 1907 Morgan Indian Head Ten Dollars Coin,Great American Commemorative Old Coins, Uncirculated Morgan Dollars,Discover History of USA Coins for Collectors (Gold) : Collectibles & Fine Art

How $10 dollar bill has changed through the years

Although the gold $10 coin is worth more in barter than the paper $10 bill, the two are worth exactly the same as money.

They both are titles to ten dollars.

So, where are the real dollars if the coin and bill are titles?

All U.S. dollars exist only as numbers on the books of the issuer of dollars, the federal government. And as we have seen, numbers have no physical existence. All numbers are nothing more than concepts.

American Maximum Speed Limit 65 Mph Road Sign Stock Illustration - Download Image Now - Number 65, Speed Limit Sign, Sign - iStock — **This is not a law. It is a representation of a law.**

Six houses, six cars, and six chickens differ; only their “sixness” is the same. Numbers are not physical, though they exist as concepts.

How did the dollar concept come into existence? They were created by laws, which also have no physical reality. You cannot see, hear, feel, taste, smell, or sense in any material way, a law.

You can read the representation of a law in a book of rules (of which there are many thousand), or you can hear the representation of a law from a judge or police officer.

You can see the representation of a law on a traffic sign. The law says you cannot drive faster than 65 (sixty-five) miles per hour.

You also can see a representation of the speed-limit law in law books.

But you cannot see the law itself.

Why is the non-physicality of laws and money important?

If something is physical, its creation relies on the availability of its material constituents. A government is limited in producing gold coins by the availability of gold.

Laws have no such limitations. They have no physical constituents. The federal government can create as many laws as it wishes, whenever it wishes.

And since dollars, which have no physical existence, are created by laws, which also have no physical presence, the federal government has the infinite ability to create dollars. If the federal government wished, it could pass endless laws making infinite dollars.

That power is known as Monetary Sovereignty. The federal government is the absolute sovereign over its creation, the U.S. dollar.

If you were a supplier to the federal government and sent them a bill for a trillion, trillion, trillion dollars, they could pay that bill instantly by passing a law and pressing a computer key.

Thus, the so-called federal debt is no burden on the federal government.

Claims that the federal debt must be limited or is “unsustainable” are ignorant at best and heinous lies at worst.

Similarly, no federal government agency (Social Security, Medicare, etc.) can run short of dollars unless that is what the Monetarily Sovereign U.S. government wants.

Then we come to the claims that Social Security and Medicare “trust funds” are on the brink of insolvency. I am too much of a gentleman to term claimers as dirty, rotten liars, so I’ll just leave it as “misguided souls who are spouting ignorance.” Better.

When I call these ignorant claims into question, I am greeted by throat-clearing, followed by the equally ignorant claim that “printing too much money causes inflation.”

First, we do not print money. As we have demonstrated, printed dollar bills are not money.

Second, most dollars are not represented by printed dollar bills.

And third, inflation is not caused by too much money; it is caused by scarcities of significant goods like oil, food, or services like shipping. Scarcities cause prices to rise. That is no revelation.

Governments can prevent/cure inflation by obtaining and distributing the scarce items — and this often requires more money creation, not less.

Our inflation was reduced not by the Fed’s interest rate hikes (which made products and services cost more) but by the government’s release of oil reserves and the financial support given to the manufacturers and shippers of scarce commodities.

The Fed wrongly is tasked with using recession as a tool against inflation. Congress and the President are responsible for reducing the shortages that cause inflation. They need only use their infinite dollar-creation ability to cure those shortages.

The pretense that the finances of our Monetarily Sovereign U.S. government are the same as the finances of monetarily non-sovereign state and local governments stands in the way of doing what a government should do: Improve and protect the lives of the people.

So, “Is money real?” No, if “real” means a substance, the availability of which is physically limited. But yes, if “real” includes concepts, ideas, laws, emotions, beliefs, preferences, and creativity.

Think of money as the Monetarily Sovereign government’s ability to imagine and fund a better world. No limits.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

……………………………………………………………………..

The Sole Purpose of Government Is to Improve and Protect the Lives of the People.

MONETARY SOVEREIGNTY

Share this:

Share this:

Share this:

Share this: