Charade: More cuts to Social Security and Medicare Sunday, Dec 11 2016 

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

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Here are the players in the charade: The Republicans are the aggressive “Party of the Rich,” and the Democrats are the “go-along and just pretend to be the Party of the Poor.”

Here is the plot of the charade:

First Draft of the GOP’s Plan to Overhaul Social Security
The Fiscal Times, by Eric Pianin, December 11, 2016

A senior Republican House chairman has begun circulating a proposal that would make major cuts and changes to the Social Security system, a move to contravene in (sic) President-elect Donald Trump’s repeated vow to leave the retirement program for 61 million retirees and their families unscathed.

The comprehensive proposal — already generating Democratic outrage – would put in place a series of highly controversial measures long debated by the two parties.

Those measures include gradually raising the retirement age for receiving full benefits from 67 to 69 and adopting a less generous cost of living index than the current one.

The proposal would also inaugurate means testing by changing the benefits formula to reduce payments to wealthier retirees. It would also eliminate the annual COLA adjustments for wealthier individuals and their families.

The plan – drafted by veteran Rep. Sam Johnson (R-TX), chair of the House Ways and Means subcommittee on Social Security — includes some measures that might attract Democratic interest.

One would increase retirement benefits for lower-income workers and another would increase the minimum benefit for low-income earners who worked full careers.

However, Johnson’s call late last week for the start of a “fact-based conversation” about ways to fix Social Security and assure its long-term solvency drew immediate fire from House Democratic Leader Nancy Pelosi of California, who warned that Johnson’s approach, if adopted, would cut current benefits by a third or more.

“Slashing Social Security and ending Medicare are absolutely not what the American people voted for in November,” Pelosi said in a statement. “Democrats will not stand by while Republicans dismantle the promise of a healthy and dignified retirement for working people in America.”

The announcement was jarring to many Democrats coming on the heels of the Republicans vow to move swiftly next month to repeal the Affordable Care Act but without a replacement plan in hand.

House Speaker Paul Ryan (R-WI) and House Budget Committee Chair Tom Price (R-GA), have also signaled interest in pursuing major changes to Medicare and Medicaid.

Many fiscal conservatives and deficit hawks may applaud the Republicans coming to terms with major entitlement programs that will contribute to the long-term debt.

The Social Security trust fund — which spends about $918 billion a year in benefits to retirees and their families, as well as disabled workers – is not in any imminent danger. However, the Trustees Report in March warned that the fund will begin running out of money in 2034 when beneficiaries will begin to face a 21 percent benefit cut.

Democrats including presidential nominee Hillary Clinton and Sen. Bernie Sander of Vermont, meanwhile, advocated changes in the law that would greatly expand retirement benefits, especially for widows and others struggling to make ends meet, by raising the cap on the federal payroll tax that goes to fund Social Security.

Late last week, Rep. Tom Cole of Oklahoma, an influential House Republican, and Rep. John Delaney of Maryland, a moderate Democrat, renewed their support for a plan to create a bipartisan, 13-member panel to recommend to Congress ways to prevent the massive trust fund from running out of money and extending its solvency for another 75 years.

1. This entire article, together with the ongoing efforts of the Republicans and the tacit accommodation by the Democrats, is based on the Big Lie, the lie that federal taxes pay for federal spending.

The United States government, being Monetarily Sovereign, is the absolute ruler over its own sovereign currency, the dollar. The U.S. government never can run short of dollars. Even if all federal tax collections, including FICA, fell to $0, the U.S. could continue spending, forever.

And being sovereign over the dollar, it has absolute control over the dollar’s value (i.e inflation.) The U.S. government has the power to make one dollar equal to a pound of gold, a pound of lead or a pound of cabbage. That is the power of Monetary Sovereignty.

2. Therefore, the so-called “trust fund” cannot run short of dollars, any more than the “White House trust fund,” the “Supreme Court trust fund” or the “Congress trust fund”  could run short of dollars.

3. And in fact, there are no “federal trust funds.” They are accounting fictions designed for one purpose and one purpose only: To make you believe your benefits must be cut and your taxes increased.  Even without FICA, and even with benefit increases, Social Security and Medicare cannot become insolvent unless Congress wills it.

4. This is not a case of ignorance by either party.  Both understand full well, the facts of Monetary Sovereignty. Stephanie Kelton, who teaches Monetary Sovereignty at the University of Missouri, Kansas City, was on Bernie Sanders’ staff, and was the chief economist for the Senate Democrats.

Yet you do not hear Bernie Sanders, or any other Democrat, much less a Republican, admitting that all this concern about federal agency insolvency is a charade.

Interestingly, the people who know finances best, occasionally have admitted the truth:

From Ben Bernanke when, as Fed chief, when he was on 60 Minutes:
Scott Pelley: Is that tax money that the Fed is spending?
Ben Bernanke: It’s not tax money… We simply use the computer to mark up the size of the account.

And here is a statement from the St. Louis Fed:
“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.”

And Alan Greenspan:
“The United States can pay any debt it has, because it always can print more money.”

That last sentence about “credit markets” really means, “Not only does the government not depend on taxes; it doesn’t depend on borrowing.”

And here come the Democrats, the tacit accommodators.

How the Democratic and GOP Platforms Clash Over Social Security Reform
By Eric Pianin, July 27, 2016

The new Democratic national platform includes a substantial increase in the average benefits to seniors while requiring wealthier Americans to pay a much larger share of the overall cost.

The platform, heavily influenced by Sanders, who calls it the “most progressive” in the party’s history, in close collaboration with Hillary Clinton’s camp, rejects any notion that Social Security should be restructured to prevent a cash crisis or a federal debt crisis.

Instead, the newly minted campaign document would extend the Social Security trust fund’s solvency 50 years or more by lifting a cap on the payroll tax to force wealthier Americans to assume a much larger share of the program’s cost.

It would also increase average monthly benefits to seniors and recast cost-of-living adjustments to make it more advantageous to seniors with substantial medical expenses.

Sounds great, right? Sounds fair. More benefits to seniors and the rich paying more.

Not so fast. A little trick is buried in there. Notice that the Democrats do not deny that Social Security (and by extension, Medicare) could become insolvent. No, they still subscribe to the the Big Lie. 

Well, O.K., but still they want the rich to pay more. That should count for something, shouldn’t it?  Yes . . . except the rich run America, so it’s not going to happen.

Remember all those speeches the Clintons give — those speeches for which they are paid upwards of $200,000 plus lodging, transportation, and dinner, for two hours of work. These speeches were not made in front of poor people who want rich people to pay more.

And as for all those millions upon millions of campaign contribution dollars, they came from rich people, who are accustomed to a healthy return on their investments.

So what is going on here? It’s simple.  Remember Obama’s hoped-for “Grand Bargain,” in which he wanted to give away the store to the Republicans — i.e., unnecessarily cut spending on Social Security and Medicare and cut the debt?

It was all part of a Grand Ploy, in which the Republicans ask to totally screw the middle class and poor, and the Democrats ask only partly to screw the middle-class and poor. Then they get together in a “bipartisan agreement.”

(“Bipartisan” is a popular Washington word meaning: “It must be great because we all agreed on the amount to screw you. Our Party takes the credit for the good parts and the other Party gets the blame for the bad parts.”)

In a “bipartisan” agreement both parties get together and (wink, wink) agree to put on a charade for the public. Then they produce the document their financial supporters, the rich, really want.

Every time you see or hear the word, “bipartisan,” know this: The poor and middle are about to be screwed.

“Democrats are proud to be the party that created Social Security, one of the nation’s most successful and effective programs. Without Social Security, nearly half of America’s seniors would be living in poverty,” the platform document states.

“We will fight every effort to cut, privatize, or weaken Social Security, including attempts to raise the retirement age, diminish benefits by cutting cost-of-living adjustments, or reducing earned benefits.”

Except that is exactly what the Democrat, Obama, tried to do with his Grand Bargain and all during his administration: Cut, privatize, or weaken Social Security, including attempts to raise the retirement age, diminish benefits by cutting cost-of-living adjustments, and/or reducing earned benefits.”

And lest you think the Big Lie is told only by elected politicians:

Medicare and Social Security Worse than They Look: Trustees
By Rob Garver, July 22, 2015

The Medicare and Social Security trust fund trustees reported on the long-term solvency of the country’s two largest entitlement programs on Wednesday, and as usual, provided projected insolvency dates for the various funds under their supervision.

Medicare, it turns out, has enough in its Hospital Insurance Trust Fund to continue paying benefits at current levels until 2030, when it will run dry.

After that, dedicated tax revenues under current law would allow the program to pay out only 86 percent of scheduled benefits.

Its other major funds, which cover Part B and Part D, are projected to remain solvent indefinitely because they are funded automatically, but they are becoming increasingly costly.

Note the little weasel words, “under current law.” Very simply, this means that current law requires Medicare (and Social Security) to spend no more than the tax dollars dedicated to Social Security and Medicare.

This does not mean FICA taxes pay for Social Security and Medicare. It merely means that someone adds up tax dollars received in one column, and SS  and Medicare dollars spent in another column, and compares the two columns.

If the 2nd column is bigger than the first, they are supposed to cut spending.

This arbitrary law has nothing to do with affordability or solvency. It is just an arbitrary column comparison that could be changed tomorrow.

It just as well could read that SS and Medicare are allowed to spend no more than double, or triple, or ten times the amount of taxes received. Congress and the President have total control over that law.

And what is that little thing about Part B and Part D are projected to remain solvent indefinitely because they are funded automatically”?

Here is what that includes:

1. Funds authorized by Congress
2. Premiums from people enrolled in Medicare Part B (Medical Insurance) and Medicare prescription drug coverage (Part D)
3. Other sources, like interest earned on the trust fund investments

Forget #’s 2 and 3. The important one is #1, Funds authorized by Congress. Congress has the unlimited power to authorize funds to support Medicare parts B and D, as well as Part A

As there are no limits to what Congress can authorize, the Big Lie is exposed for what it is: A great big lie.

Bottom line: The United States of America, being Monetarily Sovereign, never can run short of its own sovereign currency, the dollar. Thus, no agency of the USA can run short of dollars, unless Congress and the President wish it.

There is absolutely no honest reason why Medicare and Social Security benefits should be reduced and/or taxes increased.

In fact, Medicare and Social Security should be provided free to you and to every other man, woman, and child in America. (See Steps #2 and #3 in the Ten Steps to Prosperity, below).

Do this now, while you’re thinking about it.  Contact both of your Senators, your Representative, and the President, and tell them you know the truth. You know the U.S. cannot run short of dollars, and there is no reason to cut benefits or increase taxes.

Tell them that unless they admit this publicly, and make it part of their personal platform, you will vote for their opponent in the next election.

Don’t be like the people who fail to vote, and then complain about how things are run. Contact your politicians, now, and expose the charade.

Rodger Malcolm Mitchell
Monetary Sovereignty

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the rich and the rest.

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 AN ANNUAL ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

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

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and 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 CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be 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

–The cost of ignorance goes up, again: Social Security version Thursday, Jul 23 2015 

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

Mitchell’s laws:
•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.
•The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
•The single most important problem in economics is
the gap between rich and poor.
•Austerity is the government’s method for widening
the gap between rich and poor.
•Until the 99% understand the need for federal deficits, the upper 1% will rule.
•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

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You regular readers of this blog know that ignorance of economics created the disaster now known as the euro. You know the euro nations voluntarily surrendered the single most valuable asset any nation can have: Its Monetary Sovereignty.

Because of their economics ignorance, the whole of the eurozone either is, or soon will be, suffering from austerity, i.e the loss of income, jobs, health care, education, housing — in short, the loss of a decent lifestyle that government is supposed to help provide.

Greece may be the most extreme example currently, but not the only and not the last.

We may shake our heads at the ignorance of people who would allow their government to surrender its most valuable asset, but we needn’t feel too superior. Despite the fact that the U.S. federal government retains its Monetary Sovereignty, and therefore cannot run short of dollars, we allow it to act as though it were monetarily NON-sovereig

We allow the government to husband its dollars like some penurious miser, straight out of Dickens.

Social Security disability fund to run dry next year.

The 11 million Americans who receive Social Security disability face steep benefit cuts next year, the government said Wednesday, handing lawmakers a fiscal and political crisis in the middle of a presidential campaign.

The trustees who oversee Social Security and Medicare said the disability trust fund will run out of money in late 2016. That would trigger an automatic 19 percent cut in benefits, unless Congress acts.

The average monthly benefit for disabled workers and their families is $1,017.

Think of it. A disabled person, too ill to work, receives a pittance: $1,017, to support his/her family. But that is too much for the politicians.

The typical beneficiary would see a reduction of $193 a month.

“Today’s report shows that we must seek meaningful, in some instances even urgent, changes to ensure the program is on stable ground for future generations,” said Jo Ann Jenkins, chief executive officer of AARP.

AARP, which supposedly helps seniors and other Social Security beneficiaries, spreads the Big Lie, that taxes fund federal spending.

It’s a lie, because even were FICA to be eliminated, the federal government could continue funding Social Security benefits, forever.

Just as the U.S. federal government never can run short of its own sovereign currency, the dollar, agencies of the federal government never can run short of dollars, unless Congress wills it.

In more bad news for beneficiaries, the trustees project there will be no cost-of-living increase in benefits at the end of the year. It would mark only the third year without an increase since automatic adjustments were adopted in 1975.

Separately, about 7 million Medicare beneficiaries could face a monthly premium increase of at least $54 for outpatient coverage. That works out to an increase of more than 50 percent — for outpatient coverege.

Day by day, month by month, the middle- and lower-income groups are squeezed, just as in Greece, and for no good reason.

The annual report card on the financial health of Social Security and Medicare shows that the federal government’s largest benefit programs are feeling the strain of aging baby boomers as they both approach milestone anniversaries.

“The strain” is another way of saying that more people are growing older, and they need the kind of help a 1st rate government is supposed to provide. Why else would we have a government?

There was some good news in the report: The trustees said Social Security’s retirement fund has enough money to pay full benefits until 2035, a year later than they predicted last year. At that point, Social Security will collect enough in payroll taxes to pay about 75 percent of benefits.

Medicare’s giant hospital trust fund is projected to be exhausted in 2030, the same date as last year’s report. At that point, Medicare taxes would be enough to pay 86 percent of benefits.

The Big Lie continues — the pretense that like you and me (who are not Monetarily Sovereign), the government can run short of dollars to pay its bills. It cannot.

Advocates for seniors say that gives policymakers plenty of time to address both programs without cutting benefits. But some in Congress note that the longer lawmakers wait, the harder it gets to address the shortfall without making significant changes.

Nonsense. It’s not hard at all. Simply acknowledge the federal government’s ability to support Social Security at any desired level, and while making that admission, get rid of the worst tax in U.S. history: FICA.

There is an easy fix available for the disability program: Congress could shift tax revenue from Social Security’s much larger retirement fund, as it has done in the past.

President Barack Obama supports the move. And acting Social Security Commissioner Carolyn Colvin said shifting the tax revenue “would have no adverse effect on the solvency of the overall Social Security program.”

There would be no adverse effect, simply because the U.S. government has the unlimited ability to support Social Security.

But why will Congress not admit this simple truth? Here’s the clue:

Republicans say they want changes in the disability program to reduce fraud and to encourage disabled workers to re-enter the workforce.

In January, Sen. Rand Paul, R-Ky., suggested that a lot of slackers are on disability. Paul, who is running for president, joked that half the people getting benefits are either anxious or their back hurts.

And there you have it. The Republican party of the rich, spreads the cruel lie that disabled people are fraudulent fakers and slackers, who need to be “encouraged” to re-enter the workforce.

Note the simpering laughter of Republican Rand Paul, slandering those unfortunate, disabled people. As if life weren’t difficult enought for them, a liar like Paul has to heep on the scorn. This is the kind of cruelty to the afflicted one has come to expect from Republicans. 

Here is Doctor Rand Paul, who grew up in luxury. He received his medical degree from the renowned Duke University School of Medicine. His father also was a doctor, a U.S. Congressman, who ran for President three times. This is the privileged Rand Paul who sneers at the poor, the aged and the disabled, from his lofty perch on high.

If the retirement and disability funds were combined, they would have enough money to pay full benefits until 2034, the trustees said.

Or, the federal government simply could pay the benefits.

The Medicare premium increases would affect Part B, which provides coverage for outpatient services.

For about 70 percent of beneficiaries, premium increases cannot exceed the dollar amount of their Social Security cost-of-living adjustment, or COLA. Because no COLA is currently expected for next year, increased costs of outpatient coverage would have to be spread among the remaining 30 percent.

Translation: The Monetarily Sovereign federal government is running out of money, but the disabled and the poor have plenty of money. So cut federal spending while forcing the people who can afford it least, to pay more.

Why does the government get away with it? Because the electorate is ignorant of economics reality. The people have been brainwashed into believing the federal government can run short of dollars, and/or that any increases in federal spending will cause a Zimbabwe-esque hyperinflation (another part of the Big Lie.)

Just as the Greek people suffer for their economics ignorance, so to do we Americans suffer for ours.
Rodger Malcolm Mitchell
Monetary Sovereignty

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Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

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

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

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

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

#MONETARYSOVEREIGNTY

–Has the IMF admitted the obvious? Close, but no cigar. Thursday, Jul 16 2015 

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

Mitchell’s laws:
•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.
•The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
•The single most important problem in economics is
the gap between rich and poor.
•Austerity is the government’s method for widening
the gap between rich and poor.
•Until the 99% understand the need for federal deficits, the upper 1% will rule.
•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

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In a speech ten years ago, I said, “Because of the Euro, no euro nation can control its own money supply. The Euro is the worst economic idea since the recession-era, Smoot-Hawley Tariff. The economies of European nations are doomed by the euro.”

Since that date, this blog repeatedly has said, in various ways, “For the euro nations, long term survival requires one of two, and only two, events:”

“1. Adopt some form of a sovereign currency, and become Monetarily Sovereign
or
2. The EU give (not lend) euros to its member nations as needed (i.e. political merger).

And now late, to the party, comes the International Monetary Fund:

The I.M.F. Is Telling Europe the Euro Doesn’t Work

The International Monetary Fund’s memo on Greek debt sustainability, explain(s) why the I.M.F. cannot participate in a new bailout program unless other European countries agree to huge debt relief for Greece, has provided the “Emperor Has No Clothes” moment of the Greek crisis, one that may finally force eurozone members to either move closer to fiscal union or break up.

The I.M.F. memo amounts to an admission that the eurozone cannot work in its current form.

It took them all these years to admit the obvious — that monetarily non-sovereign nations (nations that cannot control their money supply) must have income — money coming from outside their borders — in order to survive long term.

You are monetarily non-sovereign. You must have income in order to pay your bills, long term. You can drain your savings for a while, but eventually your savings will run out.

Businesses are monetarily non-sovereign. Long term, they must have income. They too, can drain their savings, but only for a while.

Cities, counties and states are monetarily non-sovereign. Long term, they must have income, too. Taxes won’t suffice, for taxes are not income. They are a drain on citizens’ savings.

For cities, counties and states, income can take three forms:
1. Net exports of goods and services
2. Tourism
3. Payments from a higher government (Cities receive from counties and states; states receive from a Monetarily Sovereign federal government)

When a nation takes on the euro, it surrends the single most valuable asset any nation can have: Its Monetary Sovereignty.

More valuable than natural resources, population or education, Monetary Sovereignty allows a nation to buy anything and to pay any bill.

One might have hoped that at long last, the IMF finally will have admitted this most basic of all economics facts.

It lays out three options for achieving Greek debt sustainability, all of which are tantamount to a fiscal union . . .

Yes, a fiscal union, like a United States of Europe.

But just as we hoped to believe the IMF has begun to say the obvious, it disappoints us:

. . . an arrangement through which wealthier countries would make payments to support the Greek economy.

Not coincidentally, this is the solution many economists have been telling European officials is the only way to save the euro — and which northern European countries have been resisting because it is so costly.

The three options laid out by the I.M.F. would have different operations, but they share an important feature: They involve other European countries giving Greece money without expecting to get it back.

No, no, no.

Where would the “other European countries” obtain the euros they would be expected to give to Greece and the other impoverished euro nations? Answer: They would have to give less to their own citizens.

To save the euro, a failed concept, the IMF has proposed a sure-to-fail concept: Monetarily non-sovereign nations supporting other monetarily non-sovereign nations, requiring austerity for all.

The rich people who run Europe are not satisfied with enslaving some of Europe’s citizens. They have hatched a plan to enslave all of Europe’s citizens, even those in nations that, to date, have avoided recession and depression.

The troika [European Commission (EC), the European Central Bank (ECB)and the International Monetary Fund (IMF)] together are Monetarily Sovereign. They have the unlimited ability to create euros.

They have the unlimited power to give (not lend) euros to member nations, thus growing the economies of those nations.

Already having impoverished much of the eurozone, the IMF proposes enslaving the entire eurozone.

One of the debt relief options proposed by the I.M.F. is “explicit annual transfers to the Greek budget,” that is, direct payments from other governments to Greece, which it could use to make its debt payments.

A second option is extending the grace period, during which Greece would be relieved of the obligation to make interest or principal payments on its debt to European countries, through the year 2053 — at the expense of Greece’s creditors, most of which now are other European governments.

The third option floated by the I.M.F., (is) a cancellation of a portion of Greece’s debts (to other nations).

The memo makes clear what the real cost to Europe of continued eurozone membership for Greece is: If European governments want to keep Greece in, they’re going to have to put up a lot of money in one non-loan form or another, money they will give Greece that they never get back.

The entire concept is ludicrous. Greece is deeply in debt. Its money supply has been drained.

Greece cannot pay its debt out of income, because it has no net source of income, and being monetarily non-sovereign, it cannot create euros.

The IMF “solution”: Force other monetarily non-sovereign nations to drain their own money supplies.

In short, rather than trying to make all euro nations rich, the IMF proposes to make all euro nations poor.

It is a concept that even the uneducated would realize is stupid . . . except for one thing: The troika is not stupid. They know exactly what they are doing.

The goal is power. By impoverishing more euro nations, the troika (the only entity with the unlimited power to create euros) increases its own relative power.

Why settle for just the Greek people crawling and begging for food, clothing and housing, when one can have all Europeans on their knees, at your mercy?

It is a cruel plan devised by cruel people, who have seized on the opportunity to conquer Europe, not by force of arms, but by force of money — a bloodless coup that will dominate a continent.

Is it any wonder that the thought of Greece, freeing itself from the chains of euro-austerity, had the troika in such a panic.

Unfortunately, the government of Greece seems to have failed its own people, and sold them into slavery.

The Greek people voted to free themselves. They voted against austerity. They tried.

Close. But no cigar.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
——————————————————————————————————————————————

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

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

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

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

#MONETARYSOVEREIGNTY

–Why the right wing is like my Toffee. Wednesday, Jul 15 2015 

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

Mitchell’s laws:
•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.
•The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
•The single most important problem in economics is
the gap between rich and poor.
•Austerity is the government’s method for widening
the gap between rich and poor.
•Until the 99% understand the need for federal deficits, the upper 1% will rule.
•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

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

Years ago, a Shetland Sheep dog (Sheltie) named Toffee lived in my house. Those of you familiar with Shelties know they are small dogs, and unlike most small dogs, they are of very mild temperament.

I never have heard of a Sheltie biting anyone, and even a growl would be most unSheltie-like.

Shelties are shepherding dogs, and as with most shepherd dogs, they are known to be intelligent. In fact, the Border Collie, a close relative, may be the smartest dog of all.

Despite his mild manner, Toffee barked, in his laughable, high-pitched little yips, but only when the doorbell rang. Though most dogs bark at the door, we wondered wondered why Toffee did.

He was so tuned to the family, and so understanding of what we wanted, he generally he did only as he was trained to do, and simply didn’t bother to do what we didn’t train him to do — he was that obedient and sensitive to our desires (and perhaps lazy, too).

He never barked at anyone. And we never had trained him to bark at the door. After all, his yips wouldn’t have scared a mouse, let alone a burglar.

We finally realized he actually had been trained. Whenever we were away from home, and someone came to the door, he must have barked. And when no one answered, the person went away.

Toffee was mildly protective of the people who fed him, and of his territory, so he must have come to believe it was his barking that sent the stranger away.

And that is exactly how paranoid right-wingers (redundancy?) are being trained:

Texas Finally Chooses The Brave Souls Who Will Monitor The Military Takeover

Gov. Greg Abbott (R) had responded the most forcefully out of all the governors presiding over states where the training exercise, dubbed “Jade Helm 15,” was scheduled to take place by requesting that the State Guard monitor the exercise.

He made the request in April, just a day after more than 200 concerned residents of Bastrop, Texas peppered a U.S. Army spokesman with questions about whether “Jade Helm 15” was really a cover for the implementation of martial law.

Note to the 200 “concerned residents of Bastrop, Texas et al: Come on, folks. Get real. Even a cowboy with half a brain must realize that the federal government is not planning to impose martial law on your town, your county, your state or your nation.

The State Guard is expected to brief the governor’s office once a day, offering a review of the past 24 hours’ activity as well as a rundown of what’s scheduled to happen in the next 72 hours.

In his letter ordering the agency to monitor the exercise, Abbott called on the State Guard to ensure that Texans’ civil liberties were protected.

Oooohh, Texans’ civil liberties are in mortal danger, but thank heavens we have Governor Greg Abbott, along with the Texas State Guard, ready to battle the military of the United States.

And who is this organization, the State Guard, that will protect Texas from the U.S. Military?

As the Washington Post has pointed out, state-sponsored militias like the Texas State Guard (as opposed to the Texas Army National Guard) cannot be activated for federal missions and are generally called upon in emergency situations or for ceremonial activities..

State Guard volunteers train once a month without pay but do receive a free concealed handgun license and a daily stipend when activated for emergencies.

Get it, right-wingers? These are the guys who march in parades, lay sandbags in case of floods or help people out of houses crushed by tornadoes.

They train once a month, for no pay, and they get a free concealed handgun license. Wow! That sounds like a group who could defeat the military of the United States in a battle, doesn’t it?

Feel safer, now?

“It is important that Texans know their safety, constitutional rights, private property rights and civil liberties will not be infringed,” Abbott wrote.

“By monitoring the Operation on a continual basis, the State Guard will facilitate communications between my office and the commanders of the Operation to ensure that adequate measures are in place to protect Texans.”

“If a team member sees two Humvees full of soldiers driving through town, they’re going to follow them,” Eric Johnston, a Texas surveillance team leader, told The Houston Chronicle. “And they’re going to radio back their ultimate location.”

Eventually, the U.S. Military will finish its exercise and go away, which will allow the Texas State Guard to stop playing soldier and go home.

In all probability, brave Governor Abbott will tell his followers that it was the presence of the mighty Texas State Guard that prevented a takeover by the federal government.

Clearly, the U.S. Military must have realized it was overmatched and decided to retreat. What else could it be?

So like Toffee, my Sheltie, who never bit anyone, barked at anyone or even growled, but who was trained to believe his soft barking chased away dangerous strangers, so too will Texans believe their Governor and State Guard prevented the U.S. military from imposing martial law.

Whew! That was a close one.

After seeing how right wingers fear not only the U.S. Military, but black people, Mexicans, gay people, immigrants, poor people, Northerners and anyone not Christian (but not guns in the home), one wonders whether silly paranoia is a requirement for being a conservative.

Even Toffee had more common sense than that.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
——————————————————————————————————————————————

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

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

THE RECESSION CLOCK
Monetary Sovereignty

Monetary Sovereignty

Vertical gray bars mark recessions.

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

#MONETARYSOVEREIGNTY

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