The most ridiculous article you will read this week. The religion of politics.

Here are excerpts from the most ridiculous article you will read this week, and that is saying a lot these days.

White House asks Congress to pass emergency funding for disaster aid, Afghan resettlement as well as spending bill to avert shutdown
Administration officials also asked Congress to pass a short-term spending bill to avoid a government shutdown in October.
By Jeff Stein

The White House budget office on Tuesday sent Congress an “urgent” spending request asking for tens of billions of dollars in natural disaster relief and Afghanistan resettlement funding as the administration tries to respond to both emergencies.

Magician Archetype - Channeling Power in the Light & Shadow
Believe what I tell you.

The White House is asking for $14 billion in aid to respond to natural disasters that occurred before Hurricane Ida, as well as $6.4 billion to pay for the ongoing relocation of tens of thousands of Afghans who partnered with the U.S. during the war in Afghanistan.

The administration anticipates that another $10 billion will have to be approved in disaster relief for Hurricane Ida as well.

As part of the request, White House Office of Management and Budget Acting Director Shalanda Young called for Congress to approve a short-term extension in government funding so that there isn’t a partial government shutdown on October 1..

OK, I get it. Congress should examine how money is used.

And though I can’t say whether $14 billion is the right amount for previous disasters, or whether $6.4 billion is right for protecting the people who helped and believed us, or whether $10 billion is right for reducing the suffering caused by Hurricane Ida, I can say this:

  1. The initiatives themselves are worthwhile
  2. The government has infinite money
  3. It’s better to err on the side of “too much” rather than too little.

There is no downside to spending “too much,” even if some of it is “wasted,” because government spending, even wasted spending, stimulates (by formula) GDP growth, and costs taxpayers nothing.

{Federal taxpayers don’t fund federal spending. Federal taxpayers don’t fund anything.)

So the same Republicans who voted for Trump’s tax cut for the rich, joined by a couple of self-proclaimed “moderate” Democrats, who “work across the aisle,” will prance and preen and pretend to be so concerned about taxpayers.

They will demand that everything be cut by 30%, and later, will blame Biden for not doing enough. Gotcha!

Breitbart and FOX will wring their hands and cry crocodile tears for the Americans who are suffering and for the Afghans who are suffering, though, in today’s bifurcated world, no one seems really to care about anyone else’s suffering.

It’s all self-serving righteousness performed on the world’s biggest pulpit.

But the most ridiculous part is the phony threat of a government shutdown.

As the upcoming game of “pretend chicken” plays out, the Republicans will huff and puff their fake fiscal integrity; the Treasury and the Federal Reserve will institute fake “extreme efforts” to keep America from falling into bankruptcy; fingers will point in all directions; and the stock market will crash long enough for the smart-money guys to pick some cheap fallen fruit.

Then, miraculously and heroically, accommodation will be reached; the phony debt ceiling once again will be lifted and rescheduled for six months hence; and the stock market dutifully will provide quick profits to those who weren’t fooled by the blather.

All will self-congratulate for saving America from the potential disaster they themselves created, and the economically uneducated voters will go on believing what they always have been told: The Big Lie that federal finances are just like personal finances so the federal debt must be reduced.

It’s like a football game in which the politicians are the players, and the people are the football. Everyone gets their kicks.

The White House’s request for short-term funding needs comes as it works on unrelated legislation for an approximately $3.5 trillion budget deal that Democrats are seeking to shape this month in Congress.

That sweeping package would overhaul the social safety net, authorize new climate change programs, raise taxes on corporations, and achieve a number of other Biden administration priorities.

If overhauling the social safety net included 100% free healthcare for every American, plus Social Security for every American, that would be the greatest use of federal financial power in the past century — perhaps ever.

Sadly, that won’t happen. Not even close. The rich don’t want it because of Gap Psychology, and the public doesn’t know the government can do it all without raising taxes.

Anyway, as everyone knows, the poor are a bunch of lazy takers, who deserve their misfortune, so why help them? Right?

The public also doesn’t understand that climate change is an extinction-level event we are leaving for our children and grandchildren to cope with, so why take any action now to reduce CO2? Let the Chinese do it first.

The Republican’s sole (fake) concern is with unborn children; they have no interest in children already born, and especially no interest in poor children already born. So they march around, displaying huge photos of fetuses, which in reality are the size of your thumb, and worry not about the fate of those unfortunate women and their subsequent babies.

It’s all God’s will.

The Democrats are so busy wallowing in the nobility of their causes, they can’t bring themselves to dare tell the truth about federal finances, or to actually play the politics game.

So they will enjoy continuing to be righteous losers, despite owning a majority of the total voters. After winning the last Presidential election by seven million votes, the Dems brilliantly have managed to position themselves as Congressional underdogs.

Meanwhile, the universally despised Donald Trump, after leading and losing an election, the swing state of Georgia, and a rebellion against American democracy, continues to be a GOP torch-bearer, because really, what else do they have?

The administration’s request for more funding for the Afghanistan relocation and disaster relief programs is likely to provoke substantial (fake) debate in Congress, where Republicans have hammered the White House for its handling of the withdrawal to end the war.

The majority of the $6.4 billion requested by the White House will go principally to fund processing sites for relocating tens of thousands of people in Afghanistan who partnered with the U.S. during the two decades of war there.

Of the $6.4 billion, the biggest chunk is for the State Department and Department of Defense relocation process for allies from Afghanistan and support for them to help them integrate into American life.

Another substantial amount of funding would go to United States Agency for International Development for Afghans at risk in the regions.

Administration officials said Tuesday the request would help plans for resettling as many as 65,000 Afghans who are expected to arrive in the U.S. by the end of September, as well as up to 30,000 Afghans expected to arrive in the U.S. over the next 12 months.

The Republicans, who blasted Biden for not extracting perhaps a hundred Americans and thousands of our Afghan partners to the tender mercies of the Taliban, soon will blast Biden for wanting to resettle the many thousands he was able to extract.

Trump will claim they all are terrorists, criminals, rapists, and unaffordable leaches on the economy, whose children might vote Democrat in future elections. If that sounds familiar, it’s what he said about Mexicans and Muslims. The plot never changes; only the cast of characters changes.

“The operation to move out of danger and to safety tens of thousands of Afghans at risk, including many who helped us during our two decades in Afghanistan, represents an extraordinary military, diplomatic, security, and humanitarian operation by the U.S. government,” Young’s letter said.

“We urge Congress to appropriate $6.4 billion to enable the success of this multifaceted, historic mission,” she wrote.

As soon we will hear that “Biden wants to import terrorists” (those same people the GOP pretended to feel so sorry for), we’ll enjoy the grandstanding about the money needed to conduct the vetting to filter out terrorists.

The disaster aid — likely more than $20 billion when the damages from Hurricane Ida are factored in — would help the administration respond to Hurricane Laura and Hurricane Delta, as well as droughts, wildfires, and flooding in other parts of the country.

Administration officials said on a call with reporters that climate change is creating more severe storms and disasters that are impacting a growing number of Americans.

One innocently might imagine disaster aid would be a no-brainer for Republicans. After all, the most hurricane damage occurred in “red” states.

But, the wildfire damage mostly occurred in blue states, and as Donald Trump has told us, global warming is a Chinese hoax, and wildfires are due to poor forest management, which could be prevented by raking the forests (and perhaps with a dose of hydroxychloroquine?)

So, the politics require that anything — ANYTHING –Biden wants to be opposed by the Trump-subservient GOP, no matter how seemingly beneficial.

In short, the entire article is political theater, It’s religious miracles and magic, performed by political clergy to entertain, the masses. But sadly, instead of being entertained, the masses think the whole thing is real.

The people not only believe, but passionately believe, as there is a direct, but inverse, correlation between intelligence and belief in the supernatural.

As this all plays out, prior to next year’s elections, just sit back and enjoy the show. Remember that none of it is real and no one is saying what they mean.

It’s all a put-on, to keep you contributing to your political religion of choice, and returning to the chapel for the holiday elections.

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

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THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

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 Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all
  4. Free education (including post-grad) for everyone
  5. Salary for attending school
  6. Eliminate federal taxes on business
  7. Increase the standard income tax deduction, annually. 
  8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
  9. Federal ownership of all banks
  10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

A good news, bad news, good news, bad news tax story

First, the news, a short article from the May 14, edition of THIS WEEK Magazine:UM-Dearborn College of Business on Twitter: "In April, IRS agents spent the day on campus teaching students. The education and training program, called the Adrian Project, was a daylong simulation of a

President Biden wants to beef up the IRS budget significantly, said Jeff Stein in The Washington Post.
Biden is looking to increase the Internal Revenue Service’s budget by $80 billion over the next 10 years, with the money going toward increasing “the number of agents and giving the IRS new tools and technology to execute collections and crack down on avoidance” by the wealthiest families.
The White House says the extra boost could “raise as much as $700 billion,” helping pay for an expansive child-care and education plan.g
The IRS has lost roughly 18,000 full-time positions since 2010, “with the number of auditors falling to lows unseen since the 1950s.”
The head of the IRS told a Senate committee this month that tax cheats cost the government as much as $1 trillion a year.

In the above news, the good news snippets are: “beef up the IRS budget significantly,” and “increase the Internal Revenue Service’s budget by $80 billion,”  That’s $80 billion growth dollars going into the economy, together with more employment (perhaps 18,000 positions?) for agents.

Additional good news: “increasing the number of agents.” That’s 18,000 more employed Americans. More good news:  “tax cheats cost the government as much as $1 trillion a year.” That’s $1 trillion a year that is not being taken from the economy.

Yet even more good news: The desire to “crack down on avoidance by the wealthiest families.” That would help narrow the Gap between the rich and the rest, which helps address the biggest problem in economics.

The bad news is: “raise as much as $700 billion.” That means $700 billion growth dollars would be removed from the economy, dramatically cutting into Gross Domestic Product.

The additional bad news is: “ . . . helping pay for an expansive child-care and education plan. Helping pay for child-care and education is good news, but the bad news is that Biden and friends actually believe (or claim to believe) federal taxes pay for those benefits.

In claiming federal taxes pay for federal spending, Biden essentially has set the stage for falsely claiming the government “can’t afford” to pay for benefits to the public. It’s all part of the Big Lie that provides the rich, who run America, with a ready excuse for not supporting such benefits as Medicare for All, Social Security for All, college for all, etc.

The Big Lie is the perfect Gap Psychology tool to widen the Gaps between the have-more and the have-less.

In Summary: Unlike state/local taxes which pay for state/local government spending, federal taxes do not fund federal spending.

The federal government pays for its spending by creating new dollars, ad hoc. It has the unlimited ability to create its own sovereign currency.

Unlike state/local taxes, which immediately are returned to the economy as part of the money supply via deposits into bank checking accounts, federal taxes are destroyed upon receipt.

The sole purpose of federal tax collection is to control the economy by taxing what the government wants to discourage and giving tax breaks to what the government wants to encourage.

Oh, and there is one other purpose: To fool you into believing that certain benefits to you are “unaffordable,” because the federal debt supposedly is “unsustainable.” It’s all a feature of the Big Lie.

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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. The most important problems in economics involve:

  • Monetary Sovereignty describes money creation and destruction.
  • Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

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 Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps: Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all
  4. Free education (including post-grad) for everyone
  5. Salary for attending school
  6. Eliminate federal taxes on business
  7. Increase the standard income tax deduction, annually.
  8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
  9. Federal ownership of all banks
  10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

 

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

MONETARY SOVEREIGNTY

 

 

How the Big Lie in economics seriously impacts your life, today and will again, tomorrow.

The Big Lie in economics is: Federal taxes fund federal spending.
The Big Lie sometimes is stated, “Our children and grandchildren will have to pay for today’s federal deficits and debt.”

The Big Lie is told, and believed, for one simple reason: Most people do not understand the differences between federal government (Monetarily Sovereign) finances and all other (monetarily non-sovereign) finances.

You, your business, your state, county, and city all are monetarily non-sovereign.

When you want to spend, you need a source of money, which for local governments mostly is taxes and borrowing.

By contrast, the federal government is Monetarily Sovereign.

When it wants to spend, it neither needs nor uses any source of money.

It creates new money by paying creditors, exactly the opposite of what you personally are accustomed to.

Although the federal government collects tax dollars, it no longer needs to.

That change occurred in August, 1971, when President Richard Nixon, in the greatest act of his Presidency, took us off a gold standard.

The purpose of that change was to remove limits on the federal government’s ability to create money. Since that date, the federal government has not used tax dollars to pay for anything.

Contrary to popular wisdom, federal taxpayers are not “on the hook” for federal deficits (which in fact are private sector surpluses) or for federal debt (which is nothing more than deposits in accounts at the Federal Reserve Bank).

You or your grandchildren do not owe the federal deficit or debt, and you never will pay for them. Period.

The sole purpose of tax dollars has been to regulate the economy, by taxing what the government wants to limit and by giving tax breaks to what the government wants to encourage. The federal government could eliminate all federal tax collections, and still continue spending, forever.

That said, please read the following excerpts from an article that appeared in the March 18, 2021 edition of the Chicago Tribune:

We don’t need Biden’s infrastructure binge
Steve Chapman, a member of the Tribune Editorial Board

Donald Trump did many bad things as president, but he deserves a smidgen of credit for what he didn’t do: go on an infrastructure spending binge.

He vowed that under him, our roads, bridges and waterways would be “the envy of the world.” He said that in 2016 and was still saying it in 2020. But his main achievement was to make “infrastructure week” a source of hilarity.

Now President Joe Biden is hoping to do what Trump didn’t do, and he has support from such divergent groups as the AFL-CIO and the U.S. Chamber of Commerce.

During his campaign, he made gaudy promises to “transform” our transportation networks, “revolutionize” railroads and urban transit, and upgrade water systems, broadband, bike lanes, home weatherization and just about anything else you could think of. Biden could make the Pledge of Allegiance an infrastructure issue.

His price tag for all this? Two trillion dollars. His plan to pay for it? Unspecified.

The two trillion dollars would be created by the federal government, then distributed as growth dollars to the private sector.

Biden would pay for it exactly the same way the federal government pays for everything: It creates dollars, ad hoc.

Specifically, to pay any bill:

The federal government creates instructions from thin air, then sends those instructions (in the form of a check or wire transfer) to the creditor’s bank, instructing the bank to increase the creditor’s checking account balance by a specified amount (“Pay to the order of _______“)

When the bank clicks a computer key to increase the numbers in the creditor’s checking account, this instantly creates brand new dollars that are added to the nation’s money supply, in a segment known as “M1.”

The bank then balances its books by clearing the instructions through the Federal Reserve, which always approves federal instructions.

By formula, increases to the nation’s money supply increase economic growth (Gross Domestic Product = Federal Spending + Non-federal Spending + Net Exports). Federal government spending increases the nation’s money supply. State and local government spending does not.

No tax dollars are involved at any point in this transaction. The whole process is paid for by newly created dollars.

The White House has indicated a preference for tax increases on the wealthy and corporations. When asked recently how she and her fellow Republicans would react to that idea, Sen. Susan Collins reportedly “burst out laughing.”

Sadly, Biden and his minions disseminate the Big Lie that federal taxes fund federal spending.

Why? The real purpose of the Big Lie is to convince you, the public, that the federal government’s ability to provide benefits to you is limited. This is to keep you from asking for free Medicare for All, free College for All, support for local governments to cut local taxes — indeed for any benefit to the not-rich.

The very rich, who run America, are motivated by “Gap Psychology, the desire to get richer by distancing oneself from those who have less wealth. The rich pay politicians (via political contributions and promises of jobs afterward), university economists (via lucrative jobs and contributions to universities), and the media (via ownership and advertising dollars) to disseminate the Big Lie.

We are told that our highways and bridges are falling apart from lack of investment and that upgrading them will not only create jobs but boost our economic productivity.

But the Reason Foundation, which issues a detailed report each year on the nation’s highways, found that the percentage of urban interstates rated in poor condition was lower in 2018 than a decade earlier.

Likewise with rural interstates. For other major rural highways, just 1.23% were in bad shape in 2018.

The foundation’s most recent report found that “the general quality and safety of the nation’s highways has incrementally improved as spending on state-owned roads increased by 9%, up to $151.8 billion” compared with the previous year.

The Reason Foundation is a libertarian organization that opposes virtually all government spending. Their research results tend to be slanted in that  direction.

Nevertheless, even the possibility that our roads and highways may be in less bad condition, does not indicate the federal government should not improve them. Americans live longer today than they did years ago. So should the government not have paid for the CORONA virus vaccine?

And what about those jobs infrastructure work creates?

Bridges? Notes Brown University economist Matthew A. Turner in The Milken Institute Review, “There were more bridges in good condition and fewer crumbling bridges in 2017 than in 1992.” Mass transit? The average age of public transit buses has declined during that period. 

As always with the Big Lie, one simple point is missed. When the states fix roads and bridges, state taxpayers must take dollars from their pockets to pay for these repairs.

When the federal government pays, it puts new dollars into the private sector.

Then we come to the faux moral excuse for the Big Lie:

Even if the United States needs more investment in particular areas, that doesn’t mean the federal government should pick up the tab. The great majority of infrastructure assets are owned by state and local governments, and it’s their constituents who would gain the most from resurfacing roads or bolstering bridges.

If they are going to reap the economic benefits of such investments, shouldn’t they be willing to pay for them?

Yes, shame on you for wanting the federal government, which has infinite money, to pay, when you, who have limited money should want to pay, that is, if you are a good person. Right?

The purpose of that kind of reasoning is to pit one part of the public against the other with a “Why should I pay for his roads?” kind of reasoning.

In fact, they seem to be unwilling. The Center on Budget and Policy Priorities reports, “State and local infrastructure spending as a share of gross domestic product is at its lowest point since the early 1980s.”

Apparently, the author believes state and local taxes are too low. After all, the only place the state governments can find the money for infrastructure repair is via taxes, so when states are “unwilling,” it merely means their taxes are too low.

But the fact that these governments don’t want to use their own money doesn’t mean they won’t be happy to use cash that falls out of the sky.

That’s the political beauty of federal infrastructure packages: The benefits are obvious to people getting new projects, but the costs are invisible.

The author doesn’t realize it, but his “falls out of the sky” intended pejorative, actually comes close to the truth. The federal government, creates dollars from nothing, as it always has — just as it created the very first dollars, when America began.

Where does the author think the first dollars came from? In the late 1770s, there existed zero dollars. Ten years later, there were millions. Where did they come from if not from “out of the sky,” i.e. created from thin air by laws (which also are created from thin air) passed by the federal government?

The timing of this push is also awkward, because the COVID-19 catastrophe creates so much uncertainty about how we will live, work and travel going forward.

“I’m not sure that at this time we want to be pouring concrete or buying equipment until we see how much of this shakes out for a year or two,” University of Chicago economist Allen Sanderson told me.

“Shakes out”? Does Sanderson believe roads will not need to be fixed? Does he believe public transportation will become obsolete? And how long is this “shake-out” period? Will we know something more next year, so don’t fix roads for a year?

Or will we have to wait a decade to learn what our long-term needs will be?

Of course, the University of Chicago economists are notorious for not understanding the differences between Monetary Sovereignty and monetary non-sovereignty, so Sanderson’s remarks, though totally wrong, are not unexpected.

Under Trump, “infrastructure week” went nowhere, time after time. But it could be that one thing worse than an infrastructure push that fails is an infrastructure push that succeeds?

No, Mr. Chapman, the one thing worse than an infrastructure push that fails is a columnist who, knowing nothing about Monetary Sovereignty, always tells his readers, “Now is not the time to spend.”

But if not now, when? Ever?

Steve Chapman blogs at http://www.chicagotribune.com/chapman.
schapman@chicagotribune.com, Twitter: @SteveChapman13

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.

The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

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 Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all
  4. Free education (including post-grad) for everyone
  5. Salary for attending school
  6. Eliminate federal taxes on business
  7. Increase the standard income tax deduction, annually. 
  8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
  9. Federal ownership of all banks
  10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

Social Security and Medicare Funds Face Insolvency, Report Finds

It’s old news, fake news, and a lie — a “Big Lie.” But it demonstrates why the public is so confused and misinformed about federal financing.

Image result for national enquirer fox newsThis following came from the venerable and venerated New York Times, but the article is as accurate as an article in Breitbart, Fox News, or the National Enquirer.

Social Security and Medicare Funds Face Insolvency, Report Finds By Alan Rappeport, economic policy reporter, who covers the Treasury Department and writes about taxes, trade and fiscal matters, April 22, 2019

WASHINGTON — The financial outlook for Medicare and Social Security, two of the nation’s most important social safety net programs, remains precarious, threatening to diminish retirement payments and increase health care costs for Americans in old age, the Trump administration said on Monday.

An annual government report on the status of the programs painted a dire portrait of their solvency that will saddle the United States with more debt at a time when the economy is starting to cool and taxes have just been cut.

Let’s get this straight. The NY Times incredibly is being as honest as Breitbart, Fox News,  and the National Enquirer.

But, the U.S. federal government cannot become insolvent. That is 100% impossible.

Who says so? How about:

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

Image result for greenspan
Greenspan

Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”
St. Louis Federal Reserve: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.

Since the U.S. federal government cannot become insolvent, no agency of the federal government can become insolvent, unless the federal government wishes it.

Social Security and Medicare are agencies of the federal government. Therefore, neither Social Security nor Medicare can become insolvent unless the federal government wishes it.

And as far as “saddling the United States with more debt,” the scare-mongers have been shoveling this manure for at least 80 years (See: “It is 2019, and the phony federal debt “time bomb” still is ticking.“)

Neither the United States nor U.S. taxpayers are “saddled” with even one cent of federal “debt.” The misnamed “debt” is nothing more than the total of deposits into Treasury security accounts. These accounts are paid off, not with federal tax dollars, but rather by simply returning the contents of those accounts to the account holders. No “saddle” there.

The NY Times editors surely know this. So why do they scare-monger a lie? Why did they publish the “Big Lie”? There is a reason, which we will discuss.

According to the report, the cost of Social Security, the federal retirement program, will exceed its income in 2020 for the first time since 1982. The program’s reserve fund is projected to be depleted in 16 years, at which time recipients will get smaller payments than they are scheduled to receive if Congress does not act.

Meanwhile, Medicare’s hospital insurance fund is expected to be depleted in 2026 — the same date that was projected a year ago. At that point, doctors, hospitals and nursing homes would not receive their full compensation from the program and patients could face more of the financial burden.

The so-called “reserve fund” is an accounting fiction. It is not a fund and it is not held in reserve. It merely is a record showing the difference between FICA and spending. It’s just a piece of information about the difference in two numbers; it does not reveal anything about the government’s ability to pay for things.

The U.S. government is Monetarily Sovereign, and so has the unlimited ability to create its own sovereign currency, the U.S. dollar. Even if all FICA collections totaled $0, the federal government could pay infinite Social Security benefits, forever.

An infinite account cannot be “depleted.”

The article continues:

“Lawmakers should address these financial challenges as soon as possible,” the trustees of the program wrote.

“Taking action sooner rather than later will permit consideration of a broader range of solutions and provide more time to phase in changes so that the public has adequate time to prepare.”

There are no trustees because there is no trust. It is just an accounting record, that has none of the qualities of a trust. (See: Fake federal trust funds and fake concerns)

The above makes the naive and false assumption that federal (Monetarily Sovereign) financing is the same as personal (monetarily non-sovereign) financing.

For the federal government, there are no “financial challenges” that need “solutions.” And while the author of the article claims benefits will need to be cut or taxes increased, the public should not be prompted to “prepare” for those unnecessary changes.

It is all the “Big Lie.

Some Republicans sought to take credit on Monday for the fact that the news was not worse while also calling for changes to the programs.

“Following historic reforms to America’s tax code, this strong economy has strengthened these important programs, but today’s reports remind us of a fact we have known for far too long: Medicare is going broke and Social Security is not solvent,” Representative Kevin Brady, Republican of Texas, said in a statement.

Either Rep. Brady either is incredibly ignorant about economics, or he is an incredible liar. Pick one. There are no other alternatives.

The United States will not become insolvent, and for the same reasons, neither Medicare nor Social Security will go broke, unless a bribed Congress forces that to happen. 

Lawmakers have been struggling to come to grips with a solution for the country’s eroding entitlement programs, which have for years been at the center of a political tug of war between Republicans and Democrats.

No. Lawmakers have been struggling to find more ways to continue fooling the public. It’s been a struggle because arguing against plain facts always is difficult.

Mr. Trump was initially resistant to calling for cuts to the programs, but his budget proposal last month did just that. The request, which is being ignored by Congress, proposed shaving $818 billion from projected spending on Medicare over 10 years.

Completely unnecessary.

It also called for $26 billion less on Social Security programs, including a $10 billion cut to Social Security Disability Insurance, which provides benefits to disabled workers.

Well, of course, Mr. Trump wanted to cut Social Security and Medicare, two programs that benefit the middle classes and the poor. Isn’t that what the GOP always wants to do?

And of course, the GOP Congress passed tax cuts that mostly benefitted the rich. Isn’t that also what the GOP always wants to do?

The problem is not that the GOP, the party of the rich, wants unnecessarily to gut programs that benefit the non-rich. The problem is that the Democrats, supposedly the party of the middle- and lower-income groups, go along with the fiction of federal insolvency. 

“That fact that we now can’t guarantee full benefits to current retirees is completely unacceptable, and it should be cause enough for every policymaker to rally around solutions to restore solvency to those programs,” said Maya MacGuineas, the president of the Committee for a Responsible Federal Budget.

“Certainly we should be focused on saving Social Security and Medicare before we start promising to expand these programs.”

She added that “now isn’t the time for partisan bickering — we need solutions.”

Just as Wayne LaPierre, of the National Rifle Association (NRA) is a mouthpiece for gun manufacturers, Maya MacGuineas, of the Committee for a Responsible Federal Budget (CRFB) is a mouthpiece for the very rich.

The rich in America, and all over the world, for that matter, never are satisfied. They want to become richer and richer. To become richer, you must widen the income/wealth/power Gap between you and those below you on any economic scale.

It isn’t sufficient that your income increases if the incomes of those below you increase even more. Without the Gap, no one would be rich; we all would be the same.

It is the Gap that makes you rich, and the wider the Gap, the richer you are.

This is known a “Gap Psychology,” the desire to distance yourself from those below and to approach those above.

So the rich bribe your three main economic information sources — the media,  the politicians, and the economics professors — to tell you the Big Lie, that federal spending is funded by federal taxes rather than by money creation.

–The rich bribe the media via advertising dollars and media ownership.
–The rich bribe the politicians via political contributions and promises of lucrative employment after they leave office.
–The rich bribe the economics professors via contributions to universities and with jobs at think “tanks.”

The public accepts the Big Lie because it equates to personal experience, where personal spending is funded by personal income.

One day, perhaps within your lifetime, the general public will learn that federal taxes do not fund federal spending, that the federal government and its agencies cannot become insolvent, and that social programs can and should be funded for the benefit of all America.

It will have to begin with a moral billionaire, a moral politician, or a moral economist who has both the money and the influence to promulgate the truth, and to have it accepted.

Waiting.

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

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The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

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 Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone

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

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

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

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

9. Federal ownership of all banks

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

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

MONETARY SOVEREIGNTY