GOP says, “Deficit spending grows the economy, so cut deficit spending.” Huh? Monday, Oct 9 2017 

Image result for escaping the prison
It takes only two things to keep people in chains:
The ignorance of the oppressed
and the treachery of their leaders.

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The GOP is telling you, “Deficit spending grows the economy, so cut deficit spending.” Huh?

No, really. That is exactly what they are saying.

And not only that, but they also are telling you, “While we’re cutting deficit spending and destroying economic growth, let’s also cut Medicare, cut Medicaid, and gut other social spending.

“And as the cherry on top of that, the Republicans want you to accept the idea, “We’re going to make more poor people pay more tax, and more rich people pay less tax.

I kid you not. This is what President Trump and the GOP are trying to sell to you, the American public. Sadly, some of the public might buy it.

‘Deficit’ no longer a dirty word for the GOP: Trump’s tax plan adds more than $2 trillion in red ink
By: Lisa Mascaro, Los Angeles Times, October 8, 2017

Not long ago, Paul D. Ryan stood before charts and graphs as the House Budget Committee chairman like a new Ross Perot, promoting an austerity plan that slashed taxes and spending, and warning of the dangers of deficits.

“The facts are very, very clear: The United States is heading toward a debt crisis,” he said then.

“We face a crushing burden of debt which will take down our economy — which will lower our living standards.”

As you who understand the realities of Monetary Sovereignty know, there is not, nor ever has been, a “debt crisis.” Nor is there a “crushing burden of debt,” and federal debt will not “take down our economy,” and it surely will not “lower our living standards.”

It is all part of the Big Lie, that federal finances are like personal finances, where debt actually can be a problem.

For the federal government and for federal taxpayers, federal debt is no problem at all.

The reasons you seldom are told:

1. Federal “debt” actually is nothing more than the total of deposits in T-security accounts, very much like bank savings accounts. The government could pay off the entire “debt” (deposits) tomorrow, simply by transferring the dollars that exist in those accounts, back to the checking accounts of the T-security holders. No new dollars or taxes needed.

Paying off the federal debt would be a simple money transfer, exactly like your bank transferring dollars from your savings account to your checking account.

2. The federal “debt” results from federal deficit spending, which in itself grows the economy, because: GDP = Federal Spending + Non-federal Spending + Net Exports. 

Thus, it is mathematically impossible for the economy to grow without federal deficits.

And not just deficits, but increased deficit growth leads to economic growth. The graph shows deficit growth. Even declining deficit growth leads to recessions (vertical gray bars),  and increased deficit growth cures recessions.

In fact, increased deficit growth is the method by which the federal government brings us out of recessions.

It cured the “Great Recession” of 2008, just as deficit spending for WWII cured the Great Depression.

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.

Now as House speaker, the Wisconsin Republican is undergoing a role reversal, championing President Trump’s tax plan, which promises massive tax cuts for corporations and to some extent individuals — and which experts say will add some $2 trillion to the nation’s red ink over the next decade.

It’s a sizable shift for Ryan, and he’s hardly the only one. The Republican majority, which swept to power just a few years ago in part by warning of then-President Obama’s run-up of debt, now plays down concern over deficits.

Economic growth must take priority, many Republicans say, and will ultimately take care of worries about red ink.

Get it? Even the GOP admits that deficit spending causes economic growth.

Let this be a lesson to the pusillanimous Democrats, who didn’t have the courage to support Bernie Sanders’s  “Medicare for All” because it would have added to the deficit.

You have to hand it to the GOP. They have the guts to push something they have campaigned against, solely to reward the rich with tax breaks.

Asked recently whether he had gone to the “dark side,” Ryan offered a reply that sounded like something a Democrat might have said to justify spending more on repairing roads and bridges or putting additional resources into schools.

“If this results in giving us a faster economic growth, that will help us reduce our debt,” he said in a CBS interview.

“You have got to have tax reform to get faster economic growth,” he added. “Faster economic growth is necessary for us to get our debt under control.”

No, a Democrat would not have said it. At least no Democrat I know. The little snowflakes would have been hiding under their desks, mumbling something about increasing taxes on the rich.

And yes, deficit spending not only will provide “faster” economic growth; deficit spending is what provides virtually all economic growth.

And again, no. You do not want to debt “under control,” if that means reducing the debt. To grow the economy, you must have deficit spending. Period.

The nation’s debt load has topped the eye-popping level of $20 trillion.

More misdirection by the debt liars. They say $20 trillion, to make it sound more terrifying. But $6 trillion of that is money the government owes itself. The right pocket owes the left pocket.

So on top of lying about the effects of federal debt, the debt liars lie about the amount of the debt.

For Trump, who routinely leveraged borrowing to expand his real estate empire and declared on the campaign trail that he loved debt, a tax plan that expands the government’s deficit may be no problem.

It actually was worse for Trump personally, because personal finances are not like federal finances. Trump could (and did) run short of dollars to service his debt (at least four times).

But the federal government never has, and indeed cannot, run short of dollars.  Never.

During a recent White House meeting, Trump boasted to lawmakers from the tax-writing House Ways and Means Committee that the country’s economic growth could hit 4%, 5%, even 6% under his tax plan, which administration officials say would more than cover lost revenue and even reduce the deficit.

Think about it. Increasing the debt will increase economic growth, so decreasing the debt will decrease economic growth.  Why would anyone want that?

But, the lawmakers asked, what if growth isn’t so strong — most mainstream economists doubt it will be — what’s Plan B for making up the deficit shortfall?

What exactly is a “deficit shortfall”? Anyone?

Central to the GOP plan are tax cuts that slash the corporate rate. Some deductions would be eliminated and the standard deduction would be doubled, in hopes of simplifying the code and broadening the base of taxpayers.

The term “broadening the base of taxpayers” is GOP code for, “make more poor people pay more taxes.” That is, and always has been, the Republican goal — to widen the Gap between the rich and the rest.

“Republicans spent years pretending to care about the deficit when it came to making cuts to middle-class priorities, but the minute it came to handing tax breaks to the rich, that all went out the window,” said Sen. Patty Murray (D-Wash.).

Well, the GOP is the party of the rich, after all.  What did you expect?

GOP Director of the Office of Management and Budget Mick Mulvaney said. “We need to have new deficits…. If we simply look at this as being deficit-neutral, you’re never going to get the type of tax reform and tax reductions that you need to get to sustain 3% economic growth.”

Read his comment carefully. Even Republican Mulvany admits that deficits (via tax reductions) are necessary for economic growth.

Treasury Secretary Steven T. Mnuchin has said growth from the tax cut would be as much as $2 trillion, enough to pay for the cuts and start paying down deficits.

It gets crazier and crazier. Mnuchin, like Mulvaney, admits that tax cuts (which create deficits) will cause economic growth, but as soon as we achieve that growth, we should eliminate the deficits that caused the growth.

Congress repeatedly has shown, even under Republican control, that it has been unable to impose the kind of draconian reductions to Medicare, Medicaid and other safety-net programs called for in Ryan’s budgets.

In other words, to eliminate the deficits that caused economic growth, we need “draconian reductions to Medicare, Medicaid, and other safety net programs.”

So, if the GOP budget succeeds, we’ll have a double disaster: Reduction in economic growth along with reductions in Medicare, Medicaid, etc.

At the same time, Republicans are under great pressure to deliver on taxes, to have something to show for their hold on Congress and the presidency.

Translation: “Pass something, no matter how stupid and damaging, to show we know how to govern.”

Does it get any more ridiculous than that?

Every year since 1940, the debt liars have referred to the debt as a “ticking time bomb.” Back in 1940, the federal debt was $40 Billion. Today, 77 years later, it is $14 Trillion — a 35,000% increase, and that so-called “time bomb” still is ticking — and the debt liars still are lying.

For how many years must a liar be wrong before the public understands that the liar is lying? Isn’t 77 years enough?

Bottom line: The GOP says, “Deficit spending grows the economy, so cut deficit spending, and while we’re at it, cut Medicare, cut Medicaid, cut other social spending, and make the poor pay more tax and the rich pay less.”

That’s the GOP plan, folks. Do you like it?

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

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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

Six examples of how the media brainwash you. Sunday, Apr 30 2017 

STwitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

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It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders.
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In just one, short article, the March 31 edition of THIS WEEK Magazine demonstrates how the media are complicit in the brainwashing of America.

First, it quotes Eugene Robinson of The Washington Post:

If the budget plan President Trump released is any guide, his new goal is to make the nation “dumber, dirtier, hungrier, and sicker.” Predictably titled “America First,” this brutal document calls for a 9 percent boost in annual defense spending, paid for with deep cuts to almost everything else.

Trump is proposing a stagggering 31% cut in funding to the Enviromental Protection Agency and would also deeply slash funding for foreign, aid, medical and scientific reserach and anti-poverty programs, eliminating funding for National Public Radio, the Corporation for Public Broadcasting and the National Endowment for the Arts.

Image result for children pollution

Pollution and climate change don’t create jobs

No, those deep cuts to programs that improve your life and the lives of middle and lower income people, will not “pay for” anything, nor will they “create jobs,” as Trump claims.

Unlike state and local governments, the federal government is Monetarily Sovereign, meaning it never can run short of its own sovereign currency.

Even if tax collections fell to $0, the federal government could continue spending, forever.

The article then quotes Ed Rogers of the Washington Post:

“Spending cuts are always painful, but what choice do we have when every man, woman, and child in the nation is currently on the hook for $166,000 of our $19 trillion national debt.

“The reality is that we just can’t afford to keep spending at the rate that we are.”

That was 100% BS.

Not only can the federal government afford to spend as it has been, it can afford to spend far more. We have documented this lie about unaffordability since 1940, and it never changes.

We always are told “can’t afford” to keep spending at our current rate, but somehow, though we spend even more, we keep affording it.

The people of America are not liable for any of the so-called federal “debt.” Have you noticed any bill collectors coming to your door, to ask you for your $166,000 share?

Then there was the quote from Stephen Moore in Spectator.org:

“He (Trump) wants to surgically remove trillions of dollars of wasteful spending. The pushback from those groups, the welfare state, and the liberal media has already begun.”

Note the words, “welfare state.” Those are code for Social Security, Medicare, Medicaid, and other aids to the middle and lower income groups. Trump, being rich, disdains those groups (despite his phony pandering to coal miners).

The “liberal media” refers to anyone who wants to help the non-rich, a crime in the eyes of the rich.

Trump knows that the only way to “surgically remove trillions of dollars from (so-called) wasteful spending” is to gut social programs — or gut the military, on which he wishes to lavish more billions.

And the next bit of brainwashing comes from Nick Gillespie, in Reason.com:

“Overall federal spending will still come in around $4 trillion, with nearly the same deficit: $559 billion. Worse, for those of us who actually care about our spiraling national debt, Trump’s  budget does nothing to curb spending on Medicare, Social Sercurity, and the other entitlement programs, which everyone knows are where the real money is.”

The so-called “spiraling national debt,” actually is the total of deposits in T-security accounts at the Federal Reserve Bank. These bank deposits are not a burden on the federal government or on taxpayers. Never have been; never will be. The federal debt scare is a fake.

Sure, we in of the upper 1% income group want to cut your Medicare, your Social Security, and your other entitlement benefits. Isn’t that what you want, too? 

And yes, that’s where the real money is, so how will the conservatives cut the budget without cutting your benefits?

Always remember, budget cuts (aka “austerity”) mean cuts to the private sector (aka “the economy.”) Always.

Now, we move on to the quote from the WashingtonExaminer.com editorial.

“The goal of the budget is not to wipe out the deficit. Nor is Trump saying that medical research is a bad thing, or that children should go hungry”

“Wipe out” the deficit? More weasel words. The goal of the right wing is to reduce the deficit, though yes, some of the more extremist would like to wipe it out altogether. But, deficit spending is the federal government’s method for growing the economy.

Cutting the deficit to grow the economy is like applying leeches to cure anemia.

And, uh, excuse me, if Trump cuts medical research budgets and the budgets for providing food to children, what exactly does he expect to happen?

“He’s just establishing the conservative principle that some activities are better handled by the private sector, or by a level of government closer to the individual.”

The phrase “better handled by the private sector” means privatizing — the 1%’s method for reaping big profits.

We often have written about privatization, for instance: I smell the meat a’cookin’. The new privatization scam.”  Anytime you hear a politician recommend turning some job over to the private sector, you can be sure he is salivating over unregulated, risk-free profits.

And that “level of government closer to the individual” means state and local government, which being monetarily non-sovereign, usually are cash strapped and must pay for services with increased taxes.

By contrast, the federal government is Monetarily Sovereign, so never can be cash strapped, and never needs to increase taxes. It doesn’t need taxes at all; the federal government creates dollars, ad hoc, by paying bills.

The rich love it when the middle and the poor have to pay more state and local taxes, because that widens the Gap between the rich and the rest.

And finally, we come to a more subtle bit of brainwashing, courtesy of Doyle McManus in the LATimes.com:

“With Congress in Republican hands, Trump has a golden opportunity to downsize federal spending and make it more efficient.

No reason is given for why the word’s most powerful nation, a nation of 340 million people, needs a smaller government, while its underfunded cities, counties, and states should spend more.

And what is there in Trump’s suggestions that would make the government more efficient?

There, in just four paragraphs, THIS WEEK Magazine has used six quotes to brainwash you into believing federal finances are like state and local government finances, and like your finances.

If you want to know what federal finances really are like, read, Does the U.S. Treasury really destroy your tax dollars?

THIS WEEK wants you to believe the federal government can’t afford to pay for services that are valuable to you.

Meanwhile, know this: Anyone advocating federal deficit/debt reduction, or privatization, or shifting costs from the federal government to the states, is trying to scam you like a Nigerian prince.

Don’t believe them, and for heaven’s sake, don’t vote for them.

Or, you simply can send your money to that Nigerian prince.

Rodger Malcolm Mitchell
Monetary Sovereignty

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THE RULES

•All we have are partial solutions; the best we can do is try.

•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money no matter how much it taxes its citizens.

•The more federal budgets are cut and taxes increased, the weaker an economy becomes..

•No nation can tax itself into prosperity, nor grow without money growth.

•Cutting federal deficits to grow the economy is like applying leeches to cure anemia.

•A growing economy requires a growing supply of money (GDP = Federal Spending + Non-federal Spending + Net Exports)

•Deficit spending grows the supply of money

•The limit to federal deficit spending is an inflation that cannot be cured with interest rate control. The limit to non-federal deficit spending is the ability to borrow.

•Until the 99% understand the need for federal deficits, the upper 1% will rule.

•Progressives think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

•The single most important problem in economics is the Gap between the rich and the rest.

•Austerity is the government’s method for widening the Gap between the rich and the rest.

•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

MONETARY SOVEREIGNTY

You understand The Big Lie. You just don’t know it, yet. Wednesday, Jul 13 2016 

The Big Lie in economics is:

Federal Taxes Fund Federal Spending

Unlike state and local governments, whose taxes do fund spending, the federal government is Monetarily Sovereign. It has total sovereignty over the dollar. It can create as many dollars as it wishes, any time it wishes.

You read and hear the Big Lie almost every day.

Each time someone asks “Who’s going to pay for that?” when discussing a federal program, they express the Big Lie. The answer to their question is: The federal government will pay for it by creating dollars, ad hoc.

Obamacare is based on the Big Lie because it requires people to pay the federal government for services. The federal government neither needs nor uses such payments.

The Big Lie hides the fact that all federal tax dollars are destroyed upon receipt.

The federal government “has” no dollars. Rather it sends instructions to banks (in the form of checks or wires), telling the banks to increase the balances in checking accounts. When the banks do as instructed, dollars are created.

The concept, “federal taxes destroy dollars,” is counterintuitive and difficult to explain, particularly since state and local taxes do not destroy dollars. At first blush, the average person cannot imagine why the federal government taxes, if it destroys tax dollars.

(The reasons are psychological, and allow the government to control the citizenry by rationing services.)

Interestingly, I’ve found that everyone knows federal taxes destroy dollars, without knowing they know it.

Here’s the essence of a conversation I had just yesterday, with a friend:

RM: Federal tax dollars are destroyed as soon as they are received by the government.

Friend: No they aren’t. They are spent by the federal government. Taxes are how the government pays for spending.

RM: Do you think the federal government can run out of dollars?

F: No, the government always can print more dollars.

RM: If that is the case, the federal government doesn’t need to tax. It could stop taxing tomorrow and simply create the dollars it needs.

F: But that would cause inflation.

RM: Why would the end of federal taxation cause inflation?

F: Because if the government simply printed dollars, the dollar supply would go up, which would cheapen the dollar, and that’s inflation.

RM: So what you’re saying is: Federal spending causes inflation by increasing the dollar supply, and federal taxes prevent inflation by reducing the dollar supply.

F: Yes.

RM: Which shows you understand that federal tax dollars are destroyed upon receipt. If they still existed, they wouldn’t offset federal spending, and couldn’t prevent inflation.

And by the way, this isn’t true of state and local taxes, which are deposited in banks.  Dollars exist only when they are circulating in the economy. The federal government has no dollars. It destroys every dollar it receives.

The fact that the federal government not only has no need for taxes, but actually destroys tax dollars upon receipt, is the single most important concept in all of economics.

It is the foundation of Monetary Sovereignty. It is what makes the Ten Steps to Prosperity (see below) possible.

Not understanding why the Big Lie (Federal Taxes Fund Federal Spending) is in fact, a lie, has led to the euro disaster. It’s why many states, counties, and cities teeter on the edge of financial disaster, while the federal government never has any difficulty paying its bills.

It’s why the UK was wise in retaining its pound, and not surrendering to the euro.

It’s why many states, counties, and cities teeter on the edge of financial disaster, while the federal government never has any difficulty paying its bills.

In short, everyone believes federal tax dollars are destroyed upon receipt. They just don’t know they believe it.

To claim that eliminating federal taxes would cause inflation is simply another way to say federal taxation destroys dollars.

It’s the first big step toward understanding economics.

Rodger Malcolm Mitchell
Monetary Sovereignty

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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 afford better health care than 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 AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) 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 benefiting 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 CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from 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 corporate taxes would be an 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

The human cost of following the rich: Cutting Social Security Sunday, May 29 2016 

If you are not rich, the rich do not care about you. Nor do they care about your children and grandchildren. Nor do they care about poverty and hardship. As a group (and yes, there are some exceptions), they care solely about relative status, i.e. the Gap between the rich and the rest.

Without the Gap, no one would be rich, and the wider the Gap, the richer they are.

These are the people who will follow the rich by voting to cut Social Security. Look closely. Are you in there?

monetary sovereignty

A vote for billionaire Donald Trump is a vote to cut Social Security:

Trump Supports Cutting Social Security From A ‘Moral Standpoint:’ Report
The presumptive GOP presidential nominee has been saying the opposite on the campaign trail.
05/28/2016; Daniel Marans, Reporter, Huffington Post

Donald Trump supposedly told House Speaker Paul Ryan (R-Wis.) he supports cutting Social Security but will not admit it publicly because it would hurt his election chances, according to a report in Bloomberg BusinessWeek.

(Trump) reportedly made the comments during a May 12 meeting with Ryan aimed at mending ties between the two top Republican leaders, Bloomberg reported.

“From a moral standpoint, I believe in it,” Trump said of cutting Social Security. “But you also have to get elected. And there’s no way a Republican is going to beat a Democrat when the Republican is saying, ‘We’re going to cut your Social Security’ and the Democrat is saying, ‘We’re going to keep it and give you more.’ ”

Translation: For the rich, “morality” is cutting benefits to the non-rich.

“Morality” also is lying to the non-rich about one’s intentions, because lying to the ignorant masses is no worse than lying to your dog. They don’t care. No matter what you say, they just follow you around, wagging their tails.

Ryan, who repeatedly criticized Trump before the mogul effectively secured the GOP nomination, has made proposing dramatic reductions in the popular social insurance programs a defining feature of his congressional career.

Trump policy advisor Sam Clovis had already appeared to reverse course on May 11, indicating that Trump would be willing to consider cuts as president.

Of course, what Trump reportedly said to Ryan is consistent with what he told Fox News host Sean Hannity back in 2011: “Things have to be done, but it has to be done with both parties together,” Trump said at the time. “You can’t have the Republicans get too far ahead of this issue.”

Translation: “Things have to be done,” means, “We have to cut benefits to the poor, the middle-classes and the elderly.”

“. . . get too far ahead . .. ” means “We need to sneak it through so we don’t get the blame.”

“It is really clear: Donald Trump would 100 percent go along with the Republican donor class position of cutting Social Security,” said Alex Lawson, executive director of Social Security Works, a group that promotes benefits expansion. “He openly says he will lie to the people about it because he knows that the people are against it.”

“In his eyes the ‘moral’ thing to do is to steal people’s hard-earned benefits and not talk about it,” Lawson added.

Prediction: When asked about this Trump will “Do The Trump”:

  1. Deny it (“That’s not what I said. Do you have a tape? I’ll look into it. That’s not my voice. That doesn’t sound like my voice.”)
  2. Change the subject (Hillary’s Emails will cost us more than any cuts to Social Security. My wall will reduce the number of people who illegally receive Social Security. There’s a lot of fraud in Social Security; we have to cut the fraud.”)
  3. Lie (I will not cut Social Security. I will expand Social Security. I love poor people. I employ many poor people. Some of my best friends are poor people. I never promised not to cut Social Security.)

    The Democratic party has adopted steadily more progressive positions on Social Security in recent years, arguing not only that the shortfall should be closed entirely through revenue increases — such as lifting the cap on earnings subject to Social Security taxes — but also that benefits should be expanded to address a growing retirement income deficit.

    Trump isn’t the only liar in Congress. Social Security benefits should be given to every man, woman and child in America, without “revenue increases.” In fact, FICA could be eliminated, entirely, and Social Security benefits still could be increased. (See Step #1 in the Ten Steps to Prosperity, below)

    Contrary to popular myth, and what you repeatedly have been told, FICA does not fund Social Security. Federal taxes do not fund federal spending. (State and local taxes fund state and local spending, but the federal government’s finances are different from state and local government finances.)

    The United States government cannot run short of its own sovereign currency. It is Monetarily Sovereign over the U.S. dollar. It creates dollars, ad hoc, by spending dollars.

    Both Democratic presidential front-runner Hillary Clinton and her rival Sen. Bernie Sanders (I-Vt.) support increasing benefits and have pledged that they will not cut the program.

    Bernie’s chief economics adviser is Stephanie Kelton, who understands Monetary Sovereignty, and is well aware that federal taxes do not support federal spending. She also is aware that the federal government never can run short of dollars.

    Presumably, she will advise Democrats on this, after the election, when it is safer to educate the masses.

    Meanwhile, those ignorant of economics, believe the politicians who tell them Social Security is going broke, and benefits must be cut, in order to “save” Social Security.

    Now go look in the mirror and ask yourself:

    1. Do I believe it will help “make America great again,” to cut Social Security benefits and to increase FICA collections?
    2. Do I believe it is in my own best interests to cut Social Security and to increase FICA collections?
    3. Do I believe the U.S. federal government is running short of dollars?
    4. Do I believe the politicians, economists and media writers, who tell me my benefits must be cut to save Social Security?
    5. Do I believe the Email I received from that Nigerian prince?

    If you answered “Yes,” to any of those questions, vote for Trump. If you’re going to be lied to and screwed, you might as well choose the best.

    Rodger Malcolm Mitchell
    Monetary Sovereignty
    ===================================================================================
    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 afford better health care than 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 AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) 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 EVERYONEFive 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 benefiting 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 CORPORATE TAXES
    Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
    Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from 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 corporate taxes would be an 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.
    ========================================================================================================================================================================================================================================================================================================

    10 Steps to Economic Misery: (Click here:)
    1. Maintain or increase the FICA tax..
    2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
    3. Cut federal employment in the military, post office, other federal agencies.
    4. Broaden the income tax base so more lower income people will pay.
    5. Cut financial assistance to the states.
    6. Spread the myth federal taxes pay for federal spending.
    7. Allow banks to trade for their own accounts; save them when their investments go sour.
    8. Never prosecute any banker for criminal activity.
    9. Nominate arch conservatives to the Supreme Court.
    10. Reduce the federal deficit and debt

    THE RECESSION CLOCK

    Recessions begin an average of 2 years after the blue line first dips below zero. A common phenomenon is for the line briefly to dip below zero, then rise above zero, before falling dramatically below zero. There was a brief dip below zero in 2015, followed by another dip – the familiar pre-recession pattern.
    Recessions are cured by a rising red line.

    Monetary Sovereignty

    Vertical gray bars mark recessions.

    As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

    ————————————————————————————————————————————————————————————————————————————————————————————————-

    Mitchell’s laws:
    •Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
    •Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.
    •The more federal budgets are cut and taxes increased, the weaker an economy becomes..

    •No nation can tax itself into prosperity, nor grow without money growth.
    •Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
    •A growing economy requires a growing supply of money (GDP = Federal Spending + Non-federal Spending + Net Exports)
    •Deficit spending grows the supply of money
    •The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
    •The limit to non-federal deficit spending is the ability to borrow.

    Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

    •The single most important problem in economics is the Gap between rich and the rest..
    •Austerity is the government’s method for widening
    the Gap between rich and poor.
    •Until the 99% understand the need for federal deficits, the upper 1% will rule.
    •Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

    MONETARY SOVEREIGNTY

     

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