The suckers love being lied to. There’s one born every minute. Friday, Mar 29 2019 

Oh, how the suckers love being lied to.

Trump reverses position on Great Lakes restoration
By Todd Spangler Detroit Free Press

Facing a potentially tough re-election effort in Michigan next year, President Donald Trump returned to Grand Rapids on Thursday, promising to fund a Great Lakes restoration program that his administration has threatened to cut the last three years.

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Trump told the crowd that he has “always” supported the Great Lakes.

Making it sound as though he was restoring money that had been taken away by someone else — when it was his administration that proposed to eliminate or virtually end the $300 million Great Lakes Restoration Initiative. 

“I’m going to get, in honor of my friends, full funding of $300 million for the Great Lakes Restoration Initiative, which you’ve been trying to get for over 30 years,” he said.

“It’s time.”

Oh, yes, suckers. I tried to take away what you already had, and now that a few of you have caught on to my bullshit, I won’t take it away. Instead I’ll tell you it’s a gift from me.

And you’ll believe me, just like you suckers always do

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You suckers will believe me, just like my three wives did.

It was the second major reversal for the administration on Thursday:

On his way to Michigan, facing bipartisan backlash over the budget plan to cut $18 million in funding for the Special Olympics, Trump said he would restore that funding after Education Secretary Betsy DeVos spent several days being pilloried for the move.

Hey, suckers, it was all Betsy’ fault for doing exactly what I told her to do.

Gee Betsy, I hope it’s not too uncomfortable under that bus. It is, after all, your job to take the blame for my lies, isn’t it?

Trump has also taken heat for a budget that cuts Medicare, a program the president had steadfastly promised not to touch.

Of course, I want to cut Medicare. What did you think? Did you suckers really buy into my bullshit? Wow, you really are even more stupid than I thought.

Let me explain it, even though you still won’t get it: I want to cut Medicare, Obamacare, Social Security, and all poverty aids, to make you financially desperate. 

Then, my wealthy business owner pals and I can pay you peanuts, and force you to work into your 80’s — maybe even longer — because I won’t let you save enough to retire.

My old trick was to screw immigrants out of their wages, but screwing you legally is much better — less hassle.

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My best buds

But you’re so stupid, all I have to do is say, “Socialism, socialism,” and you’ll vote against your own best interests.

Meanwhile, I’ll make millions in personal deals with the ultimate socialists, Vladimir Putin, Kim Jong-un and that rich Saudi prince, whatever his name is.

Thankfully, I don’t have to worry about you figuring this out. There’s a sucker born every minute.

Remember, I’m your savior, honest Donald J. Trump. I would never lie to you.

As told to:

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell

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The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

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

2. Federally funded medicare — parts a, b & d, plus long-term care — for everyone

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

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

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

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

9. Federal ownership of all banks

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

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

MONETARY SOVEREIGNTY

 

Translating the absurd. Does having less money make the nation wealthier? Tuesday, Mar 26 2019 

The Mueller /Barr report did not cover: Trump’s secret taxes, excusing Nazis and white supremacists, the fake Trump Foundation, the fake Trump University, paying Stormy Daniels et al, groping women, obstruction of justice, loving dictators Putin and Kim, phony loans from Deutsche Bank, Donald Trump, Jr., Jared Kushner, inauguration committee, emoluments, security clearances, 10,000 lies, Trump’s refusal to testify under oath, nepotism, secret Saudi deals, campaign expenses, Trump Tower Moscow, secret meetings with Putin, and the GOP’s trying to keep the “exonerating” report a secret.

So, now that all those things are forgotten by the press, by the public and especially by the GOP, we can return to the federal budget.

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Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

The following is yet another misleading article, meant to make you think the Monetarily Sovereign federal budget is like your monetarily non-sovereign household budget.

(The idea is to get you to accept reductions in such federal benefits as Medicare, Medicaid, Social Security and other aids important to the non-rich.)

A translation of each section follows immediately after the section.

February’s Budget Deficit Was the Largest in American History
The feds are $234 billion in the red. Looking for hope? Sen. Mike Enzi has some ideas.
Eric Boehm, Mar. 25, 2019

The Treasury announced Friday that the federal government spent $234 billion more than it brought in during February, breaking the record for the largest monthly budget deficit.

Translation: In February, the federal government added more stimulus dollars to the U.S. economy than ever — $234 billion in economic stimulus.

Barack Obama’s Treasury Department set the previous record in February 2012 , with a deficit of $231 billion.

At that time, President Obama anticipated $1 trillion annual deficits for the rest of the decade 

Translation: Barack Obama’s government set the previous record in February 2012, by pumping $231 into the economy, which was necessary grow the economy after the Great Recession of 2008.

At that time, President Obama anticipated $1 trillion annual private sector surpluses for the rest of the decade —almost identical to the projections offered by Donald Trump in his 2019 budget proposal, delivered earlier this month..

That Obama budget was roundly criticized by Republicans in Congress, who railed against the president’s “failure to control spending.”

Obama’s record deficit helped organize Republican policymaking around plans to cap spending growth and balance the budget.

The Republican Congress slowed the growth in government spending and as a recovering economy boosted tax returns.

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

Translation: That Obama budget was roundly criticized by Republicans in Congress, who railed against the president’s “failure to impose austerity on the economy.” 

Obama’s record money creation helped organize Republican policymaking around plans to cap economic growth by balancing the budget. 

The Republican Congress slowed money growth, which starved the recovering private sector of dollars.

The current record-high deficit is largely the fault of the same Republicans who once attacked Obama for spending too much.

Translation: The current record-high private sector is largely the success of the same Republicans who once attacked Obama for giving the private sector too much.

According to an analysis from the nonpartisan Committee for a Responsible Federal Budget, about 60 percent of this year’s expected deficit is the result of policies—mostly last year’s huge increase in spending that shattered those Obama-era budget caps—put in place by current legislators and signed by the current president.

Translation: According to an analysis from the extremely partisan Committee for a Responsible Federal Budget, about 60 percent of this year’s expected economic growth is the result of policies—mostly last year’s huge increase in spending that shattered those Obama-era growth caps—put in place by current legislators and signed by the current president.

They can’t blame a recession. They can’t blame Obama. After years of solid if not mind-blowing growth, the budget deficit should be shrinking, not expanding.

Failing to fix the budget now will have consequences for years to come.

Over the next 30 years, Social Security and Medicare are expected to run a combined $100 trillion deficit.

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St. Louis Federal Reserve: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e.,unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.

Translation: They can’t credit the recession. They won’t credit Obama. After years of solid if not mind-blowing growth, the stimulus should be expanding, not shrinking.

Failing to increase the budget now will have consequences for years to come.

Over the next 30 years, Social Security and Medicare are expected to run a combined $100 trillion deficit, that the federal government can and should pay for.

If you’re looking for a glimmer of hope, it might be found in the budget plan recently released by Senate Budget Committee Chairman Mike Enzi (R–Wyo.).

Translation: If you’re looking for a flash of terror, it might be found in the budget plan recently released by Senate Budget Committee Chairman Mike Enzi (R–Wyo.).

Enzi’s budget is supposed to reduce the deficit by $538 billion over five years by cutting spending—and also, alas, by projecting probably unrealistic economic growth in the next half-decade.

Translation: Enzi’s budget is supposed to reduce the economic stimulus by $538 billion over five years by cutting spending—and also, alas, by projecting probably unrealistic economic growth (because of Enzi’s disastrous austerity) in the next half-decade.

His proposal includes cuts to Medicare and Medicaid, which make up more than 60 percent of the federal budget in a single year.

Enzi’s proposal is a serious attempt to bring the deficit back under control, even though it would not balance the budget.

Translation: His proposal includes cuts to Medicare and Medicaid, which make up more than 60 percent of the federal budget in a single year. The rich always look for ways to cut benefits to the middle classes and the poor.

Enzi’s proposal is a serious attempt to widen the Gap between the rich and the rest, even though it might not completely destroy the middle- and poorer classes. 

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In Economics, everything devolves to Monetary Sovereignty and Gap Psychology.

  1. Economics studies the relationships among wealth, money, and human psychology.
  2. Monetary Sovereignty studies a money issuer’s power over the money it issues.
  3. Gap Psychology describes the human desire to widen the Gap below you on any economic or social measure, and to narrow the Gap above you.

The very rich control American politics. They never stop trying to widen the Gap between them and you.

Essential to that effort is convincing you of the lies that federal “debt” (deposits into T-security accounts) and “deficits” (private sector surpluses) are a threat to the U.S. economy and to future taxpayers.

The rich want you to accept the false notion that your federal benefits should be cut.

So long as their misstatements work, they will continue to promulgate those lies, and indeed, your benefits will be cut.

Only when you first understand the facts, and then protest the lies, will you be safe from the rich.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell

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

The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

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

2. Federally funded medicare — parts a, b & d, plus long-term care — for everyone

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

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

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

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

9. Federal ownership of all banks

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

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

MONETARY SOVEREIGNTY

 

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.

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Why are these guys laughing?

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“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

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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

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

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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

 

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