Your Social Security and Medicare will be cut. You’ve been warned. Sunday, Feb 4 2018 

It takes only two things to keep people in chains:

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

================================================================================

Why are these guys laughing?

Image result for Trump and ryan

“Can you believe it? We admit we’ll cut their Social Security, Medicare, Medicaid and every other social program, and they still vote for us!”

Trump’s Startling Plan to Kill Social Security in Second Term
By: Ryan Davis

The new tax plan aimed at restoring larger amounts of wealth to corporations and wealthy individuals — an estimated $1.6 trillion will be added to the national debt.

The Republican authors of the bill have been quiet on their plan to fix the deficit, but the consensus is Social Security, Medicare, and Medicaid “reform.”

As readers of this site know, the so-called national “debt” is not really a debt. It is no burden on the federal government or on taxpayers. It properly should be called “deposits,” for that is exactly what it is: Deposits in Treasury security accounts.

Seventy-seven years ago a total of $40 Billion was deposited in T-security accounts, and we the people were told those deposits were a “ticking time bomb.”

Today, those deposits total $15 Trillion, and that time bomb still is ticking and we still receive the same false warnings.

The purpose of those false warnings is to make you believe the federal debt is “unsustainable,” and must be cut, so that you will agree to completely unnecessary Social Security, Medicare, Medicaid, etc. cuts.

The GOP, “the party of the richest 1%” is just itching to cut benefits to the 99%. They can hardly wait.

One anonymous Republican lawmaker had a lot to say about the process of “entitlement reform.”

“Entitlement reform always takes leadership at the presidential level, and it also takes — by the way, real reform takes bipartisanship. If we’re worried about the debt in 10 years, when we get serious about entitlement reform, then I’ll know we’re serious about the debt.”

Not only is the “debt” not a debt, but “reform” isn’t reform. It’s cuts, pure and simple. But doesn’t the word “reform” sound oh, so much better?

Trump allegedly wouldn’t want to go after Social Security (or Medicare and Medicaid) until the first day of his second term – if he actually were elected a second time – because he made a very big promise that he wouldn’t. Here is the content of a tweet from Trump’s personal Twitter account on May 7, 2015:

“I was the first & only potential GOP candidate to state there will be no cuts to Social Security, Medicare & Medicaid.

Trump wants to wait to break his promise so he can keep you in the dark until the election is over.

He knows you won’t like giving up your money so the rich can get richer, but that is exactly what he wants to do: Take dollars from your pocket and put more dollars in their pockets.

“We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Paul Ryan said.

Now that Trump, Ryan and the rest of the GOP have voted to enrich the already rich, they suddenly have begun to “worry” about the mythical debt.

Before the vote, it was no problem at all. Now it has become a huge problem that only your money can solve (Please don’t ask the rich for any money.)

Washington Post: Today, only about 24 percent of workers at midsize and large companies have pension coverage, and that number is expected to continue to fall as older workers exit the workforce.

In place of pensions, companies and investment advisers urge employees to open retirement accounts. The basic idea is workers will manage their own retirement funds, sometimes with a little help from their employers, sometimes not.

Once they reach retirement age, those accounts are supposed to supplement whatever Social Security might pay. (Today, Social Security provides only enough for a bare-bones budget, about $14,000 a year on average.)

Trump, Ryan and the rest of the GOP feel that an annual stipend of $14,000 is too much for you and should be “reformed” either by cutting the annual payout or by starting it later.

The trouble with expecting workers to save on their own is that almost half of U.S. families have no such retirement account.

Of those who do have retirement accounts, moreover, their savings are far too scant to support a typical retirement. The median account, among workers at the median income level, is about $25,000.

According to the Government Accountability Office. “Traditional pensions have become much less common, and individuals are increasingly responsible for planning and managing their own retirement savings accounts.”

The GAO further warned that “many households are ill-equipped for this task and have little or no retirement savings.”

The GAO recommended that Congress consider creating an independent commission to study the U.S. retirement system. “If no action is taken, a retirement crisis could be looming,” it said.

Paul Ryan and his fellow Republicans already have studied the U.S. retirement system and they have concluded that you, the 99% receive too much, while the richest 1% receive too little.

Simply keep this in mind:

  1. The federal government cannot run short of its own sovereign currency, the dollar.
  2. That means, even if all federal tax collections fell to $0, the government still could pay all its bills, forever. There is no “debt crisis” or “ticking time bomb.” The so-called “debt” never will be paid by you or by your children.
  3. Not only is there no reason to reduce Social Security, Medicare, or Medicaid et al, but there even is no reason to take FICA from your paycheck.

Bottom line: You have been warned. The GOP has told you exactly what they plan to do to you. You can’t claim you didn’t know.

If you still are foolish enough to vote Republican, you deserve what they will do you.

You can prevent it. Don’t cry later.

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

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

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

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

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

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

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

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

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

MONETARY SOVEREIGNTY

Fake News comes at us from all sides Monday, Jan 29 2018 

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

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

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

The word of the past year is “fake.” President Trump calls everything with which he disagrees, “fake news,” and ironically, though not unexpectedly, he and the White House are the primary sources of “fake news.”Image result for coming from all directions

Sometimes it seems as though we are being bombarded with fake news coming at us from all directions, even from the most respected sources.

James C. Capretta is a resident fellow and holds the Milton Friedman Chair at the American Enterprise Institute (AEI), where he studies health care, entitlement, and US budgetary policy, as well as global trends in aging, health, and retirement programs.

Mr. Capretta wrote an article that was published by the American Enterprise Institute, ” . . . a public policy think tank dedicated to defending human dignity, expanding human potential, and building a freer and safer world.”

Given Mr. Capretta’s background, and that of the publisher, the article is stunning in the degree of misinformation — the “fake news” — it provides.

Image result for debt clock

Fake news. Your family does not owe the so-called “debt.”

Immediately, you notice a photo of the ridiculous, misleading “debt clock.”

This serves as a warning that the article is absolutely going to be filled with fakery.

But it only gets worse and worse. Begin with the title of Mr. Capretta’s article, “The coming challenge of servicing our national debt.

The federal government’s “debt” is nothing more than the total of deposits in T-security (T-bill, T-note, T-bond) accounts. When you purchase a T-security (aka “lend to the government”), you instruct your bank to take dollars from your checking account and deposit them into your T-security account.

There, your dollars remain. Prior to maturity, there never is a time when the dollars in your T-security account are removed. It always contains the dollars you put in, plus any interest dollars the federal government adds.  You can check your account balance any time, night or day, and your money always will be there.

To pay you back, when your T-security matures, the federal government returns your money, plus interest. The government takes the dollars from your T-security account and sends them back to your bank, to be re-deposited into your checking account. No tax dollars are involved.

No one’s family is liable for anything. The dollars that exist in the T-security “debt” accounts are returned.

The federal government has the power to pay off the entire “debt” today, if it chooses, simply by sending existing dollars from T-security accounts back to the checking accounts of T-security owners.

Now, let us see what Mr. Capretta writes. Here are some excerpts:

As the economy heats up, the federal government’s borrowing costs are set to soar.

The most recent budget projections from the Congressional Budget Office (CBO) show the government’s annual interest payments on federal debt more than doubling over the next decade — from 1.5 percent of GDP in 2018 to 3.1 percent of GDP in 2027.

Higher borrowing costs threaten to make the government’s already daunting fiscal challenges even more intractable.

The U.S. government, unlike state and local governments, is Monetarily Sovereign.  As such, it has the unlimited power to create its own sovereign currency, the U.S. dollar.

The very first dollars, created 240 years ago, were created from thin air by laws that were created from thin air.

So long as the federal government doesn’t run short of laws it never can run short of dollars. In fact, the ad hoc method by which it creates dollars, is to pay creditors:

The federal government sends instructions, not dollars, to the creditors’ banks, instructing the banks to increase the balances in the creditors’ checking accounts. When the banks do as instructed, brand new dollars instantly are created and added to the money supply.

Paying federal bills actually creates new money.

What then are the “daunting fiscal challenges” for a government that never can run short of money, and in fact, creates new money by the very act of paying bills?

From 2009 to 2016, the government ran a cumulative deficit of $7.3 trillion.

The $7.3 trillion deficit is supposed to shock you. Consider this: Back in 1940, the federal debt was $40 billion. At the time it was referred to as “a ticking time bomb.”

Every year thereafter, media “experts,” economists, and politicians called the federal debt “a ticking time bomb.” Today, the federal debt is $15 trillion  — a gigantic 37,500% increase —  and that “time bomb” hasn’t exploded.

The pundits have been wrong for 78 years, yet they still bemoan the debt.

At the end of 2016, federal debt reached 77 percent of annual GDP — up from 39 percent at the end of 2008.

This too is supposed to shock you, though:

a Debt/GDP ratio, for a Monetarily Sovereign nation, is meaningless.

Wikipedia says, “A low debt-to-GDP ratio indicates an economy that produces and sells goods and services sufficient to pay back debts without incurring further debt.”

But if debt doesn’t matter, as is the case with Monetarily Sovereign governments, then the Debt/GDP ratio has no significance. Consider a few typical Debt/GDP ratios:

Japan 240%
Canada 100%
United States 75%
India 55%
China 20%
Russia 13%
Libya 10%

Which nations are more likely to be unable to pay their bills? Which nations have the strongest economies? What does the Debt/GDP ratio tell you?

In 2008, the federal government made $253 billion in net interest payments on debt that was $5 trillion at the end of fiscal year 2007, for a 5 percent average interest rate on the debt. The government made only $240 billion in interest payments in 2016, although the debt had more than doubled to $13.1 trillion at the end of fiscal year 2015, for a 1.8 percent average interest rate.

It’s hard to know what point Mr. Capretta thinks he is making, but the more the federal government pays in interest, the more stimulus dollars it pumps into the economy.

As monetary stimulus ends, and interest rates move toward more normal levels, the federal government will be required to pay higher rates on the funds it borrows.

That’s a good thing. The more federal “debt,” and the higher the interest rates, the more stimulus the private sector receives. I don’t think Mr. Capretta understands this basic fact.

But even a partial normalization of interest rates would dramatically increase federal costs, making it even more difficult for policymakers to get the nation’s fiscal house in order.

The nation’s “fiscal house” (Does this mean federal debt??) always is “in order.” It was “in order” in 1940 when the debt was $40 billion; it is “in order” today when the debt is $15 trillion; it will be “in order” years from now, when the debt is many trillions higher.

Moreover, the added interest expense on the debt is likely to far exceed the added revenue from stronger economic growth.

Above, Mr. Capretta writes what has become known as “The Big Lie” — the fake news that federal spending is funded by federal taxing. While state and local taxes do fund state and local spending, federal taxes do not fund federal spending.

Even if all federal tax collections fell to $0 — all FICA, all payroll taxes, all business taxes, all sales taxes, all luxury taxes, all taxes — even then, the federal government could continue spending, forever.

The federal government was able to borrow liberally over the past decade on the cheap, thereby masking the severity of the nation’s fiscal problems. As interest rates rise, the full scale of the budgetary challenge will be more visible.

The federal government, having the unlimited ability to create dollars, has no need to borrow dollars, and indeed, does not borrow. It accepts deposits in T-security accounts, some of which actually are owned by an agency of the federal government, the Federal Reserve.

And now folks, what follows is the fundamental purpose of the Big Lies about federal finances:

The purpose of the Big Lie is to widen the Gap between the rich and the rest.

The keys to limiting future deficits and debt are gradual changes in spending on the major entitlement programs, to lower their costs over the medium and long term.

Social Security and Medicare should be modified for future entrants to encourage longer working lives, more reliance on private savings in retirement, and greater efficiency in how health services are delivered to patients.

Yes, the goal is to cut Social Security, cut Medicare, cut Medicaid, cut poverty aids, cut anything that benefits the lower-income groups, while giving tax breaks to the rich.,

Why do the media, the politicians, and the economists promulgate the Big Lie? A few might be ignorant of the facts, but most are bribed by the rich, who what the Gap widened.

The media are bribed by advertising dollars and by ownership. The politicians are bribed by campaign contributions and by promises of lucrative employment later. The economists are bribed by university contributions and by lucrative jobs in think tanks.

This post began with the statement, “Sometimes it seems as though we are being bombarded with fake news coming at us from all directions.” Well, here’s another bit of fake news, this time from Mary Wisniewski in the 1/29/17 Chicago Tribune:

The long-promised Trump plan to rebuild the nation’s roads, bridges, and other public works could finally be released in the next few weeks — the president is expected to tout his program in Tuesday’s State of the Union address, and more details may come in February.

Everyone likes better roads and water systems, but many Republicans will balk if a gas tax hike is needed to pay for it, and Democrats have expressed doubts about what they see as its over-reliance on local government and private dollars.

Our Monetarily Sovereign government neither needs nor uses taxes to pay for anything, nor does it need or use local governments and private dollars.

The federal government pays for everything by creating brand, new dollars, ad hoc. 

How to fund the program is the big unanswered question, both on the local and the federal side, noted Frank Manzo, policy director for the Illinois Economic Policy Institute, a nonpartisan think tank whose members include representatives from the construction industry.

“The devil is in the details …” said Manzo in an interview. “The actual funding side is going to be very difficult and even more difficult in the wake of a tax reform plan that will result in fewer resources for government spending, let alone infrastructure projects.”

Complete nonsense, just mere repetitions of the Big Lie. It comes at you from all directions.

The Trump plan wants 25 percent of the total appropriation to go to rural infrastructure programs, and requires that no individual state can receive more than 10 percent of the amount available.

See the illogic? States are monetarily non-sovereign. Dollars are not their sovereign currency. They do not have the unlimited ability to create dollars.

The federal government is Monetarily Sovereign. Dollars are its sovereign currency. It does have the unlimited ability to create dollars.

Yet the federal government wants the states to pay 90% of the infrastructure cost. Absolutely insane.

The administration has not said where the federal portion of the money would come from, other than unidentified budget cuts.

Another possible source is an increase in the federal gas tax, which has been 18.4 cents a gallon since 1994 and finances the Highway Trust Fund. Illinois’ gas tax is 19 cents and has not been raised since 1991.

In only two short paragraphs: Three misleading statements.

  1. The “unidentified budget cuts” already have been identified by the GOP. They would come from Medicare, Social Security, and other social benefits
  2. The increase in the federal gas tax not only is unnecessary, and would not fund any spending, but it is a regressive tax, falling most heavily on the 99%, thereby widening the Gap between the rich and the rest.
  3. There is no “Highway Trust Fund.” Federal Trust Funds (Social Security Trust Fund, Medicare Trust Fund, etc.) all are bookkeeping fictions. There can be no purpose of a trust fund for an entity having the unlimited ability to create dollars.

Illinois Congressman Dan Lipinski, the senior Illinois member on the House transportation committee, said relying on public-private partnerships, also known as PPP, has a limited usefulness.

It can work for toll roads because a private investor can get back his money, but would not work for projects like transit and rural roads, which benefit the people who use them but do not provide a source of income for investors, Lipinski said in an interview.

There is no use for a PPP, when one of the partners, the federal government, has the unlimited ability to pay for it all.

Another concern of Democrats is that the administration will find the $200 billion in federal money by taking it out of other infrastructure programs — robbing Peter to pay Paul, when Peter does not have much, to begin with.

Taking dollars out of “other infrastructure programs” does not pay for anything.

Ken Simonson, chief economist with the Associated General Contractors of America, said his organization has long supported indexing fuel tax rates for inflation and also trying to find other funding sources for road building including the broader use of tolls and legislation to allow states to do more public-private partnerships.

Mr. Simonson is an economist, who should know better. Federal fuel taxes do not pay for anything (though state and local fuel taxes do pay for state and local spending).

And so it goes. Fake news from all sides. It’s no wonder the public believes the Big Lie that spending by our government, having the unlimited ability to create its sovereign currency, relies on federal taxes.

It doesn’t take much thought to realize that is a ridiculous proposition. It’s as ridiculous as saying that if the U.S. passes laws, it’ll have to ask the public for some laws, before any more are passed.

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

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

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

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

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

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

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

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

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

MONETARY SOVEREIGNTY

 

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.

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

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

There is one thing the GOP is doing right, and they even don’t talk about it. Monday, Mar 6 2017 

Twitter: @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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There is one big thing the Republicans are doing right (no pun intended), and not only don’t they talk about it, some of them may not even realize it:

IRS income tax audits plummet as agency faces budget cuts
Christian Science Monitor, Ben Rosen, March 6, 2017

Americans filing income tax returns this year can worry less about being audited, after the Internal Revenue Service said budget cuts and a reduced staff are to blame for it auditing the fewest number of people in 13 years in 2016.

The lower number of audits the IRS performed in 2016 – down 16 percent from the year – are part of a six-year trend started by Republicans in Congress.

After they took control of the House and Senate in the 2010 elections, Republicans shrunk the agency’s budget from $12.2 billion to $11.2 billion last year, citing the IRS alleged singling out conservative political groups for extra scrutiny when they applied for tax-exempt status in the 2010 and 2012 elections.

The Republicans hate federal taxes, as well they should. Unlike state and local tax dollars, which are recirculated through the economy, federal tax dollars are removed from the money supply the instant they are received.Image result for sucking dollars

By definition, federal taxes (i.e.sucking dollars from the economy) reduce Gross Domestic Product, and that is why federal taxes are recessionary. (GDP=Federal Spending + Non-federal Spending + Net Exports)

So the Republicans are right to cut IRS funding, as a way to reduce tax collections. It makes economic sense.

But the IRS Commissioner, not a part of the controversy, says the cuts are costing the federal government between $4 billion and $8 billion a year in uncollected taxes.

“We are the only agency if you give us more people and money, we give you more money back,” John Koskinen told the AP.

Translation: “If you give us more money, we will remove more dollars from the economy. Give us enough dollars and we will give you a depression.”

In the face of budget of cuts, the IRS lost more than 17,000 employees since 2010, nearly one-fifth of its total staff. This includes the loss of nearly 7,000 enforcement agents.

Losing employees does exacerbate unemployment. But collecting more taxes is really bad for the economy.

Republican lawmakers have defended the IRS cuts, mentioning the alleged mistreatment of conservative groups.

“Go look at all the areas where they’ve wasted money, mismanaged taxpayer resources,” said Rep. Jim Jordan (R) of Ohio. “Not to mention the fact that, you know, one of the reasons we went after them so hard is they did target people for their political views.”

See, it’s like this:

We, the GOP,  tell you that more taxes should be collected (to balance the budget) even though this isn’t true.

But, we’ll overlook what we tell you is good for the economy because we are angry at the IRS. So there!

We cut the IRS budget because they picked on conservatives, even though we want more taxes to “pay for” additional military spending. (O.K., federal taxes don’t pay for anything, but you don’t know that.)

So here is what we plan to do. We’ll cut spending for Social Security and Medicare benefits, because the rich don’t care about those, and we’ve convinced you the federal government is running short of dollars.

We also will cut spending for Medicaid, ACA, and all benefits for the poor, because the rich don’t collect those, either, and again, you think the federal government can run out of its own sovereign currency.

And we’ll cut tax ratesbecause the rich pay the highest rates, and because we know federal taxes don’t pay for anything. (We also will create more loopholes for the rich, because they give us lots of money.)

And you, the public, will go along with all this because we have brainwashed you into believing federal taxes are necessary to fund federal spending, and the rich supposedly are the “makers” while the poor are the “takers.”

If you go along with the GOP’s “reverse Robin Hood” (take from the middle and poor, and give to the rich), you are going to love the next four years.

Rodger Malcolm Mitchell
Monetary Sovereignty

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ECONOMICS 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.

•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.

•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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