Yes, there is a simple, straightforward way to reduce violent crime. Really.

It takes only two things to keep people in chains:
.

The ignorance of the oppressed
and the treachery of their leaders.

——————————————————————————————————————————————————————————————————————————————————————————–

Last July, we published,Gap Psychology at work. Why reducing crime does not require fighting crime.

As readers of this blog know, “Gap Psychology“ describes the human desire to distance oneself (widen the Gap) from those who are poorer, and to come closer to those who are richer.

Without the Gap, no one would be rich; we all would be the same. And the wider the Gap, the richer the rich are. Thus the prime interest of the rich is not just to make more money, but more importantly, to widen the Gaps below them.

Gap Psychology is manifested in many ways, from segregated neighborhoods, to private schools, to membership clubs, designer clothes, expensive cars, jewelry, mansions, etc.

Each is designed to help the richer separate themselves, physically and emotionally, from those who are poorer. The reverse also is true: For instance, wearing expensive jewelry allows the wearer to “come closer” to those who are richer. That is the other phase of Gap Psychology.

Gap Psychology is maintained by certain, basic beliefs, including the false narrative that poorer people are fundamentally less moral,  less intelligent and lazier than those who are richer.

More crime, especially violent crime, occurs in poor neighborhoods. This fact leads to two partial solutions for violent crime (“Partial,” because there are no total solutions for social problems):

  1. Attack violent crime directly with more police, tougher treatment by police, stricter laws, and harsher penalties, or
  2. Reduce the number and population of poor neighborhoods.

#1 is the partial solution of choice for the right wing. President Trump has advocated this approach.

#2 is the partial solution of choice for the left wing.

Which approach is more humane, more moral and more likely to reduce violent crime?

Why Inequality Predicts Homicide Rates Better Than Any Other Variable
Posted on January 2, 2018 by Yves Smith regarding Maia Szalavitz, a neuroscience journalist.

According to the World Bank, a simple measure of inequality predicts about half of the variance in murder rates between American states and between countries around the world.

When inequality is high and strips large numbers of men of the usual markers of status – like a good job and the ability to support a family – matters of respect and disrespect loom disproportionately.

Inequality predicts homicide rates “better than any other variable”, says Martin Daly, professor emeritus of psychology and neuroscience at McMaster University in Ontario.

This includes factors like rates of gun ownership (which also rise when inequality does) and cultural traits like placing more emphasis on “honor” (this, too, turns out to be linked with inequality). “

About 60 [academic] papers show that a very common result of greater inequality is more violence, usually measured by homicide rates,” says Richard Wilkinson, author of The Spirit Level and co-founder of the Equality Trust.

The introduction to the “Ten Steps to Prosperity” (below) reads:

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

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

Just over half of murders are set off, not by a robbery, a love triangle, drugs, domestic violence or money, but simply the sense that someone had been dissed.

Harold Pollack, co-director of the University of Chicago Crime Lab, agrees. “If you foreclose [mainstream] opportunities for respect, status and personal advancement, people will find other ways to pursue those things.”

Obviously, potential murderers don’t check the local Gini Index – the most commonly used measure of inequality that looks at how wealth is distributed – before deciding whether to get a gun.

But they are keenly attuned to their own level of status in society and whether it allows them to get what they need to live a decent life. If they can’t, while others visibly bask in luxury that seems both impossible to attain and unfairly won, those far from the top often become desperate.

To paraphrase Bill Clinton, when he pointed out the most important issue in America, “It’s the Gap, stupid.”

Yes, widening the Gap by enriching the rich and impoverishing the poor also provides the most common motivation for violent crime.

What’s less known is that in most countries, most of the victims are male. Since inequality is common worldwide, killings related to status predominate – and men kill those whom they see as rivals.

All types of homicide are much less common in the egalitarian Scandinavian countries than in the US. But disputes over male status are so much lower in such countries that while in the US, 77% of victims are male, only 50% are in the Nordic nations.

“What’s fallen out is all this male macho stuff,” Daly says. Although inequality can also affect rates of crimes like robbery or burglary, its effect is most clearly seen in the way it murderously magnifies beefs.

One irony is that violent crime in the poor areas begets the belief that the poor do not “deserve” government assistance — that helping the “takers” only encourages sloth.

This belief, together with Gap Psychology provides the rich with a justification for cutting social benefits like Social Security, Medicare, poverty aids, education aids, etc.

The recent, stunning rise in inequality in America started in 1979, with the top 1% capturing 54% of all the increase in income between that year and 2007. Between 2009 and 2013, the 1% took 85% of income growth and the situation has only worsened since.

Daly says that no one knows what time lag to expect between a rise in inequality and a rise in murder – but if it does take a few decades, this could be the start of a troubling trend, not a blip.

The greater irony is that Donald Trump took advantage of the widening Gap, by promising the poor he would “drain the swamp,” “bring back jobs,” and get “fairer treatment” for America by “making America great, again,” none of which he even has tried to do.

In fact, the ill-fated GOP health care bills were aggressive Gap-widening efforts, and the recently passed, GOP tax bill is the ultimate Gap-widening program. 

Stanford historian Walter Scheidel, wrote that historically, the only way high inequality has been flattened has been through catastrophe: disease, famine, world war, societal collapse or communist revolution.

This is where we now are being led, where the poor are blamed for being poor and for experiencing the inevitable violence that results from poverty vs. plenty.

In summary, if you wish to reduce violent crime, the best way is to help lift the poor and middle, not just to jail them.

Or, you can endure catastrophe.

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

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

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

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

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

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

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

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

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

MONETARY SOVEREIGNTY

 

Federal debt is too high; no it’s not; oops, yes it is . . . uh, wait.

It takes only two things to keep people in chains:
.

The ignorance of the oppressed
and the treachery of their leaders.

——————————————————————————————————————————————————————————————————————————————————————————–

If this year’s news has you confused about whether or not the federal “debt” was too high, is too high, or soon will be too high, you are not alone. The politicians want you to be confused.

As U.S. budget fight looms, Republicans flip their fiscal script
Reuters December 31, 2017

WASHINGTON (Reuters) – The head of a conservative Republican faction in the U.S. Congress, who voted this month for a huge expansion of the national debt to pay for tax cuts, called himself a “fiscal conservative” on Sunday and urged budget restraint in 2018.

In reality, the GOP, “Party of the Rich,” doesn’t have a fundamental objection to a “high” debt.

And in that, they are correct. The “high” federal debt merely is the total of deposits in Treasury security accounts.  These deposits can come from foreign investors, domestic investors, or from the Federal Reserve.

If no one wished to invest in federal T-securities, the Federal Reserve could buy them all, or not buy any. The federal government does not need anyone to deposit in T-security accounts.

The deposits in T-securities, the so-called “debt,” have no adverse effect on the U.S. economy.

To some degree, these deposits actually have a positive effect, because they force the federal government to pump additional interest dollars into the economy, and those dollars are economically stimulative.

In keeping with a sharp pivot under way among Republicans, U.S. Representative Mark Meadows, speaking on CBS’ “Face the Nation,” drew a hard line on federal spending, which lawmakers are bracing to do battle over in January.

Meadows was among Republicans who voted in late December for their party’s debt-financed tax overhaul, which is expected to balloon the federal budget deficit and add about $1.5 trillion over 10 years to the $20 trillion national debt.

For years, the GOP has decried the federal “debt” (deposits) as being “unsustainable,” until last year they unanimously voted for a budget that will add $1.5 trillion to the debt.

Suddenly debt became O.K., and now that the bill has passed, just as suddenly the GOP, once again, will find the “debt” a terrible threat

President Donald Trump and his Republicans want a big budget increase in military spending, while Democrats also want proportional increases for non-defense “discretionary” spending on programs that support education, scientific research, infrastructure, public health and environmental protection.

“The (Trump) administration has already been willing to say: ‘We’re going to increase non-defense discretionary spending … by about 7 percent,'” Meadows, chairman of the small but influential House Freedom Caucus, said on the program.

Both parties know the debt is no threat to the economy or to taxpayers, but both want to appear fiscally prudent by claiming to be debt haters.

“Eventually you run out of other people’s money,” Meadow said.

By “other people’s money,” Meadows means “taxpayers’ money.” But that is part of the Big Lie, that federal taxes fund federal spending. They don’t.

Federal taxes do not fund federal spending.

Image result for hiding behindThe politicians hide the truth that federal taxes (unlike state and local taxes) pay for nothing.

The moment the Treasury receives your tax dollars, those dollars disappear from any money supply measure.

They no longer are part of such money measures as M1, M2, M3, L, etc. Thus, those federal tax dollars simply are destroyed.

There are two ways dollars are created and two ways dollars are destroyed:

Dollars Created:
1. All lending
2. Federal deficit spending

Dollars Destroyed
1. Loans repaid
2. Federal taxation

Even if all federal taxes, and all federal borrowing, were reduced to $0, the federal government could continue spending forever. (This isn’t true of state and local governments, which do use tax income to pay their bills.) 

Federal finances are different from state/local government finances. It is the difference between Monetary Sovereignty and monetary non-sovereignty.

Meadows was among Republicans who voted in late December for their party’s debt-financed tax overhaul, which is expected to balloon the federal budget deficit and add about $1.5 trillion over 10 years to the $20 trillion national debt.

“It’s interesting to hear Mark talk about fiscal responsibility,” Democratic U.S. Representative Joseph Crowley said on CBS.

Crowley said the Republican tax bill would require the United States to borrow $1.5 trillion, to be paid off by future generations, to finance tax cuts for corporations and the rich.

“This is one of the least … fiscally responsible bills we’ve ever seen passed in the history of the House of Representatives. I think we’re going to be paying for this for many, many years to come,” Crowley said.

Crowley, too, promulgates the Big Lie.  The Big Truth is:

  1. The federal government never is forced to borrow, and indeed, does not borrow. It has the unlimited ability to create dollars, which it does, ad hoc, every time it pays a creditor.
  2. Future generations will not “pay for” federal “borrowing” (i.e. deposits in T-security accounts). Those accounts will be paid off by transferring the dollars already in the accounts back to the checking accounts of the T-security holders.

Republicans insist the tax package, the biggest U.S. tax overhaul in more than 30 years, will boost the economy and job growth.

If the tax package does cause a $1 trillion increase in federal deficit spending, it will stimulate the economy by adding dollars to the economy.

The problem is that though the total economy will grow, the way the tax bill is structured, it will boost the rich at the expense of the rest. It will widen the Gap.

House Speaker Paul Ryan, who also supported the tax bill, recently went further than Meadows, making clear in a radio interview that welfare or “entitlement reform,” as the party often calls it, would be a top Republican priority in 2018.

In Republican parlance, “entitlement” programs mean food stamps, housing assistance, Medicare and Medicaid health insurance for the elderly, poor and disabled, as well as other programs created by Washington to assist the needy.

That is the GOP goal: To help their wealthy backers by widening the Gap between the rich and the rest.

The “Gap” is what makes the rich rich. Without the Gap, no one would be rich. (We all would be the same.) And the wider the Gap, the richer they are. So cutting benefits to the middle- and lower-income groups, make the rich richer.

Democrats seized on Ryan’s early December remarks, saying they showed Republicans would try to pay for their tax overhaul by seeking spending cuts for social programs.

The author means the Republicans would try to “pay for” increased deficits by cutting social programs. But that is not correct. Nothing pays for increased deficits. The government pays for its financial obligations by creating new dollars, not by taxes or spending cuts.

To pay a creditor, the federal government sends instructions (not dollars) to the creditor’s bank, instructing the bank to increase the numbers in the creditor’s checking account. When the bank does as instructed, brand new dollars are created.

In summary:

  1. Both parties know the federal “debt,” (deposits) are not “unsustainable” or paid for by future generations.
  2. Both parties also know federal deficit spending stimulates economic growth by adding dollars to the economy.
  3. And both parties know that deficit reduction leads to recessions, while recessions are cured by increased deficit spending.
  4. The difference between the parties is the GOP’s desire to make the rich richer, at the expense of the poor, while the Democrats wish to improve the lives of the poor at the expense of the rich.

Both tell the Big Lie (that federal taxes fund federal spending) to further their own political agenda.

Declines in deficit growth cause recessions (vertical gray bars), while increases in deficit growth cure recessions.

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

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

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

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

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

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

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

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

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

MONETARY SOVEREIGNTY

Federal Reserve Bank of St. Louis admits federal “debt” is not a real problem

It takes only two things to keep people in chains:
.

The ignorance of the oppressed
and the treachery of their leaders.

——————————————————————————————————————————————————————————————————————————————————————————–

The Committee for a Responsible Federal Budget (CRFB), that notorious disseminator of economic fabrication, published yet another “Henny Penny, sky is falling” article about the federal debt.

But this time, they inadvertently referenced an article by the St. Louis Federal Reserve Bank that revealed the truth. (Oops!)

First, let’s introduce the Big Lies, after which we’ll get to the Federal Reserve Bank of St. Louis admits federal “debt” is not a real problem admission.

The CRFB article is titled: “Marc Goldwein: Debt Matters Even More After Tax Bill’s Passage, DEC 20, 2017
(Marc Goldwein is the Senior Vice President and Senior Policy Director for the Committee for a Responsible Federal Budget.)

His article is filled with charts and graphs “proving” what no one is arguing about: The so-called federal “debt” and the federal deficit are increasing.

Why should we be concerned? Here’s what Goldwein says:

With an aging population and rising health costs, debt is already rising unsustainably.

“Unsustainable” is the CRFB’s favorite word. You’ll see it in most of their articles.

Yet despite my frequent requests for clarification, no one at the CRFB will say what exactly is “unsustainable” about the so-called “debt” (which actually is the total of deposits in T-security accounts, similar to bank savings accounts.)

In 1940, the “debt” was $40 Billion. Then, and continuously since, it has been described as a “ticking time bomb, (i.e. unsustainable.) Today, that “unsustainable” debt has risen to $14 TRILLION — a gigantic 36,000% (that’s thirty-six thousand percent) increase, and that old time bomb still is a’tickin’, and the CRFB still is handwringing about its “unsustainability.”

“High and rising levels of debt slow economic growth . . .”

As always, with CRFB statements, there is zero evidence that rising levels of debt “slow economic growth.” Quite the opposite, in fact.

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

Recessions tend to come on the heels of reductions in federal debt/money growth (See graph, below), while debt/money growth has increased when recessions were resolving.

Reductions in federal debt growth lead to inflation

Recessions repeatedly come on the heels of deficit growth reductions, and are cured with deficit growth increases. That’s what took us out of the “Great Depression” and the “Great Recession.”

“High and rising levels of debt reduce fiscal space . . .”

We think by “fiscal space,” Goldwein means that the U.S. government can run short of its own sovereign currency, the U.S. dollar. This is so patently false that he should be ashamed, but I suppose his salary soothes any shame.

That 35,000% growth of the debt is ample proof that the “fiscal space” claim is a fraud.

“High and rising levels of debt erode generational equality.”

High and rising levels of debt are what pay for Social Security, Medicare, Medicaid, aids to education, anti-poverty efforts and all the other social programs that narrow the Gap between the rich and the rest.

It’s the debt Henny Pennys who foster generational inequality.

“High and rising levels of  debt prevent thoughtful policymaking.”

No, actually, its the CRFB’s nonsense that prevents thoughtful policymaking.

“And debt cannot sustainably grow faster than the economy, meaning any tax cuts or spending hikes allocated to today’s votes will ultimately be paid for by younger and future generations.”

Now that the debt has grown 35,000% and reached $14 trillion, we continue to wait for younger generations to pay for it.

That never will happen, because the so-called debt (deposits) are not paid for by taxes.

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

O.K., now that we have slogged once again, through the CRFB’s nonsense, we can look at how the Federal Reserve Bank of St. Louis admits federal “debt” is not a real problem.

The admission came in an article titled, What Is the Outlook for the Federal Budget?,
Tuesday, October 10, 2017, published by the St. Louis Federal Reserve Bank, and written by Senior Economist, Fernando Martin.

Fernando M. Martin
Fernando Martin

After a series of graphs and statements about the horrid dangers of rising debt, Martin provides us with a tiny paragraph of truth, almost unnoticeable ending his the thicket of statistics:

“However,” he added that if another big adverse shock hits the U.S. economy, this outlook might change for the worse.

“Even in this case, the U.S. has the advantage of issuing debt in its own currency, so outright default (as in Greece) is not a likely outcome, though inflation might be (as was the case during and immediately after World War II),” he concluded.

Get it? The U.S., being Monetarily Sovereign, has the advantage of issuing debt in its own currency, so it cannot run short of dollars.

THE U.S. FEDERAL GOVERNMENT, UNLIKE STATE & LOCAL GOVERNMENTS, AND UNLIKE YOU AND ME, CANNOT UNINTENTIONALLY RUN SHORT OF DOLLARS.

What are the implications of issuing debt in your own currency, so not running short of dollars? Contrary to the CRFB’s scare articles:

  1. No amount of debt is “unsustainable.” (We already have proved that with our 35,000% debt increase, that easily has been sustained.)
  2. High and rising levels of debt slow cannot “slow economic growth.” On the contrary, increasing debt is the federal government’s method for stimulating the economy.
  3. High and rising levels of debt do not “reduce fiscal space.” Fiscal space is the ability to spend. The federal government has the unlimited ability to spend as Martin acknowledged.
  4. High and rising levels of debt do not “erode generational equality.” Quite the opposite. Cutting debt results in cuts to benefits for the middle- and lower-income groups.
  5. Federal debt can sustainably grow faster than the economy and has been doing that for many years.
  6. High and rising levels of debt are the result of thoughtful policymaking.

And so the entire Henny Penny handwringing is all about inflation, the inflation that “high and rising levels of debt are sure to cause” — except for one minor truth: For the past ten years of extraordinary debt increases, the inflation has averaged below, the Fed’s target of about 2.5%.

Being Monetarily Sovereign, the U.S. government has the unlimited power to fight inflation (i.e increase the value of the dollar) at will.

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

In Summary:

Even the St. Louis Federal Reserve Bank has admitted (though reluctantly, because they too spread the “unsustainable debt lie) that federal debt is not a problem — not a problem for the government, not a problem for the economy, and not a problem for taxpayers.

On the contrary, federal deficit spending adds spending dollars to the economy, and so, is necessary for economic growth.

An economy cannot grow without a growing money supply.
GDP = Federal Spending + Non-federal Spending + Net Exports.

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

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

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

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

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

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

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

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

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

MONETARY SOVEREIGNTY

Voting for the GOP? You either are rich or a fool – or both. No exceptions.

It takes only two things to keep people in chains:
.

The ignorance of the oppressed
and the treachery of their leaders.

——————————————————————————————————————————————————————————————————————————————————————————–

If you still back Donald Trump and the rest of the “Party of the Rich,” you either are rich or a fool – or both. There are no exceptions.

Here’s why:

Trump, Real Estate Investors Get Late-Added Perk in Tax Bill
By Lynnley Browning and Benjamin Bain
December 18, 2017, 4:58 PM EST

Lawmakers scrambling to lock up Republican support for the tax reform bill added a complicated provision late in the process — one that would provide a multimillion-dollar windfall to real estate investors such as President Donald Trump.

James Repetti, a tax law professor at Boston College Law School, said: “This is a windfall for real estate developers like Trump.”

As you may remember, Trump swore the new tax bill would not benefit him, personally. If you believed him, you either are rich or a fool – or both. No exceptions.

Last month, during a speech in St. Charles, Missouri, Trump took pains to tell his audience that the tax-overhaul bill would hurt him personally. “This is going to cost me a fortune, this thing,” he said. “Believe me.”

On Sunday, White House Deputy Press Secretary Lindsay Walters didn’t directly address questions about how the added provision would affect Trump or his son-in-law and adviser Jared Kushner, whose family business also has extensive real estate holdings.

You’ll notice that Trump said, “Believe me,” which is his normal postlude to a lie. Based on his history, if you believed him, you either are rich or a fool – or both. No exceptions.

And then there’s this:

The Republican tax bill got worse: now the top 1% gets 83% of the gains
In its last year, the bill raises taxes on more than 53 percent of Americans.
By Dylan Matthews, Dec 18, 2017

By 2027, more than half of all Americans — 53 percent — would pay more in taxes under the tax bill agreed to by House and Senate Republicans, a new analysis by the Tax Policy Center finds. That year, 82.8 percent of the bill’s benefit would go to the top 1 percent, up from 62.1 under the Senate bill.

And even in the first years of the bill’s implementation, when it’s an across-the-board tax cut, the benefits of the law would be heavily concentrated among the upper-middle and upper-class Americans, with nearly two-thirds of the benefit going to the richest fifth of Americans in 2018.

The analysis does not include an additional cost of the legislation: its repeal of the individual mandate, which the Congressional Budget Office estimates could cause as many as 13 million fewer people to have health insurance, reducing federal spending for poor and middle-class Americans’ health insurance by $338 billion over 10 years. That worsens the bill’s distribution for the poor and middle class.

If you plan to vote Republican next year, you either are rich or a fool – or both. No exceptions.

But it gets even worse:Image result for cut social security

Sen. Rubio tells a secret: After giving a tax cut to the rich, GOP will cut Social Security and Medicare
By Michael HiltzikContact Reporter

In a videotaped interview with two Politico reporters Wednesday, Sen. Marco Rubio (R-Fla.) said, “We have to do two things. We have to generate economic growth which generates revenue, while reducing spending.

That will mean instituting structural changes to Social Security and Medicare for the future.”

For one thing, economic growth at the moment is near a recent historical high; most serious economists don’t expect the GOP’s tax cuts for the rich and for corporations to have any significant further impact.

For another, even if one is cutting spending, that leaves open the question: which spending? Rubio’s argument that it has to be through cuts to Social Security and Medicare is GOP doctrine because it strikes at the middle and working classes and leaves the wealthy alone, cradling their huge tax cuts.

So not only has the “Party of the Rich” cut taxes for the rich, and not only have they also eroded Obamacare, which covers the poor, but they plan to cut Social Security and Medicare.

Did we mention that if you plan to vote Republican next year, you either are rich or a fool – or both? No exceptions.

So what are you going to do about it?

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

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

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

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

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

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

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

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

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

MONETARY SOVEREIGNTY