The party of the rich is at it, again. Making life more difficult for the disabled. Wednesday, Dec 18 2019 

Do you support the GOP? If so, you must be very rich, very mean, and/or very stupid. Sorry, but there are no other alternatives.

As if life isn’t difficult enough for the disabled, the Trump administration wants to make it even more difficult — and for no good reason. That’s known as “Making America Great, Again” compassion.

While you read the following, keep in mind three facts:

  1. Contrary to popular belief, Social Security is not funded by FICA or any other taxes. Even if all FICA collections totaled $0, the federal government could continue paying Social Security benefits, forever.
  2. It isn’t the very rich who need Social Security benefits. They can fund all their financial needs personally. Social Security, and especially its disability benefits, are most needed by the middle-income and the poor.
  3. The GOP, the party of the rich, expends all its efforts toward widening the Gap between the very rich and the rest. Cutting Social Security, Medicaid, poverty aids, and other programs that help the not-rich, all are part of the GOP’s Gap-widening plan.
Image result for bernanke and greenspan

It’s our little secret. Don’t tell the people we don’t use their tax dollars.

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.”

Alan Greenspan: “Central banks can issue currency, a non-interest-bearing claim on the government, effectively without limit. A government cannot become insolvent with respect to obligations in its own currency.”

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 (borrowing) to remain operational.

Here are excerpts from two articles describing the latest GOP war on the less fortunate.

A National Disgrace’: Trump Proposes Social Security Change That Could End Disability Benefits for Hundreds of Thousands
Posted on December 17, 2019 by Yves Smith, (By Jake Johnson, staff writer at Common Dreams)

The public comments period on the proposed rule change to make it more difficult to remain eligible for Social Security disability benefitsis open till January 31, 2020.

It is so depressing to see how mean-spirited the US has become. First imposing more stringent and often impossible-to-meet work requirements for SNAP beneficiaries, and now this.

Activists are working to raise public awareness and outrage over a little-noticed Trump administration proposal that could strip life-saving disability benefits from hundreds of thousands of peopleby further complicating the way the Social Security Administration determines who is eligible for payments.

Alex Lawson, executive director of the progressive advocacy group Social Security Works, told Common Dreams that the rule change “is the Trump administration’s most brazen attack on Social Security yet.”

When Ronald Reagan implemented a similar benefit cut, it ripped away the earned benefits of 200,000 people,” Lawson said. “Ultimately, Reagan was forced to reverse his attack on Social Security after massive public outcry—but not before people suffered and died.

Patient advocate Peter Morley, who lobbies Congress on healthcare issues, called the proposal “a national disgrace.”The process for receiving Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) is already notoriously complicated, and the Trump administration is attempting to add yet another layer of complexity that critics say is aimed at slashing people’s benefits.

As The Philadelphia Inquirer reported last week, “those already receiving disability benefits are subject to so-called continuing disability reviews, which determine whether they are still deserving of compensation for an injury, illness, or other incapacitating problem as their lives progress.”

Currently, beneficiaries are placed in three separate categories based on the severity of their disability: “Medical Improvement Not Expected,” “Medical Improvement Expected,” and “Medical Improvement Possible.” People with more severe medical conditions face less frequent disability reviews.

The Trump administration’s proposed rule would another category called “Medical Improvement Likely,” which would subject beneficiaries to disability reviews every two years.

According to the Inquirer, “an estimated 4.4 million beneficiaries would be included in that designation, many of them children and so-called Step 5 recipients, an internal Social Security classification.”

Step 5 recipients, the Inquirer noted, “are typically 50 to 65 years of age, in poor health, without much education or many job skills [and] often suffer from maladies such as debilitating back pain, depression, a herniated disc, or schizophrenia.

Jennifer Burdick, supervising attorney with Community Legal Services in Philadelphia, told the Inquirer that placing Step 5 recipients in the new “Medical Improvement Likely” category and subjecting them to reviews every two years would represent “a radical departure from past practice.”

Lawson of Social Security Works said “Donald Trump and his advisers know that this will kill people, and they do not care.

The proposal, said Democrat Sen. Bob Casey, “appears to be yet another attempt by the Trump administration to make it more difficult for people with disabilities to receive benefits.

Boyle said the “changes seem arbitrary, concocted with no evidence or data to justify such consequential modifications.”

“This seems like the next iteration of the Trump administration’s continued efforts to gut Social Security benefits,” Democrat Rep. Brendan Boyle added.

The GOP endlessly tries to “save money,” by cutting benefits to the not-rich.  “Saving money” is unnecessary for a Monetarily Sovereign nation (which creates unlimited money at the touch of a computer key), but it is a bald-faced lie for a party that supports tax breaks for the rich.

Here is another commentary:

Trump administration proposes Social Security rule changes that could cut off thousands of disabled recipients
by Alfred Lubrano, Updated: December 12, 2019

The Trump administration is proposing changes to Social Security that could terminate disability payments to hundreds of thousands of Americans, particularly older people and children.

The new rule would change aspects of disability reviews — the methods by which the Social Security Administration determines whether a person continues to qualify for benefits.

Few recipients are aware of the proposal, which is open for public comment through January.

Critics of the plan liken it to the administration’s efforts to cut food stamps, among other entitlement programs, with insufficient information offered to explain curtailing benefits.

Social Security officials declined to comment. For years, Republicans have argued that Social Security benefits need to be reined in to save money.

The new rule, advocates for low-income Americans say, is just a way to push people off the disability rolls.

To the Republicans, any benefit to the not-rich is too much., They use words like “socialism,” or “unaffordable,” or “unsustainable,” or “promoting laziness,” or many other excuses for making the poor poorer and the rich richer.

There is not a single, valid reason to cut benefits to the disabled. In fact, a “great” America would increase benefits to these unfortunate, suffering people.

But despite red baseball caps and vague promises, this nation has moved a considerable distance from greatness, unless one counts being mean-spirited, hate-mongering, and serial lying as signs of greatness.

So yes, if you support the GOP and Donald Trump. you must be very rich, very mean, and/or very stupid.

There are no other alternatives.

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

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The most important problems in economics involve:

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

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

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

Ten Steps To Prosperity:

1. Eliminate FICA

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

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

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

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

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

9. Federal ownership of all banks

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

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

MONETARY SOVEREIGNTY

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.

Image result for trump laughing

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

Image result for trump crowd cheering

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.

Image result for trump loves dictators

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

 

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?

Image result for Trump and ryan

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Simply keep this in mind:

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

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

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

You can prevent it. Don’t cry later.

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

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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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