Donald Trump may have, as he claims, “a very good brain,” but way too many of his comments originate in his gut.
He is all over the place, a former Democrat, now a Republican, but at odds with the Republican Party. He is so unfocused he needs a Vice Presidential candidate to “explain what Trump really meant.”
That said, like the proverbial stopped clock, which is right twice a day, he may have some good ideas that mainstream economists would be well to examine.
Chicago Tribune: Trump’s economic proposals were split between traditional GOP policies, like rolling back taxes and easing federal regulations, scrapping trade pacts and pouring new money into railways, highways and other infrastructure.
Trump’s plans left many economicst skeptical, as did the absence of detail on how he would pay for his proposals.
Rolling back federal taxes is a good idea if it is done from the bottom up, to narrow the Gap between the rich and the rest. Unfortunately, it’s unlikely to work that way, as his previous proposals aided the rich more than the non-rich.
Easing federal regulations is a terrible idea that caused the Great Recession of 2008. It allows the money barons to set the rules — the sharks in charge of the bathing beach.
Scrapping trade plans is a bad idea — and overly simple solution, made to appeal to simpletons. We can’t leave American trade rules in the hands of the big corporations, but trade plans are needed. They should be designed to ease trade while benefitting the lower income groups.
Deficit spending on infrastructure is more than a great idea; it is an absolute necessity. Those arguing against this spending are arguing for the rusting and destruction of America.
But the key problem comes with the phrase, “how he would pay for his proposals.” It is a version of the “Big Lie” (the lie that federal taxes are needed to fund federal spending.)
The federal government, being Monetarily Sovereign, can pay for anything, and do it without collecting taxes. That is what being Monetarily Sovereign means.
All decent economists are well aware that asking how the federal government would pay for spending, is almost like asking how the Pacific Ocean will supply salt water (except that our Monetarily Sovereign federal government has a greater ability to supply dollars than the Ocean’s ability to supply salt water).
Trump also promised a major buldup of the military at an unspecified price, and he has vowed to resist pressure by fellow Republicans to curb Social Security and Medicare, a pledge he did not mention Monday.
Building the military not only protects our interests but stimulates the economy. Complaining about terrorists, while cutting defense spending, is like complaining about mosquitos while cutting holes in the screens.
The right-wing desire to “curb” Social Security and Medicare is a disgrace. It would impoverish millions of Americans for no reason at all. Neither Social Security nor Medicare could run short of dollars, unless Congress and the President wished it.
“It can’t add up is the bottom line,” said Roberton Williams, a senior fellow at the Urban-Brookings Tax Policy Center, and nonpartisan think tank.
Translation: “Nonpartisan” always means: Being neither Republican nor Democrat, but doing exactly what the rich want done, and saying exactly what the rich want said.
And “add up” means: “We hope you’ll believe the Big Lie that federal spending is funded by federal taxing. In that way, we can give you phony excuses to prevent the government from helping close the Gap between you and the uber-rich.”
He initially proposed simplifying individual income tax rates with three brackets — 25 percent, 20 percent and 10 percent. Trump increased those Monday to align with House Republican plan that calls for rates of 33 percent, 25 percent and 12 percent.
Prior to those changes, a Moody’s Analytics report concluded that Trump’s economic agenda would thrust Americans into a lengthy recesslion, create “very large deficits” and burden the country with “a much higher debt load.”
Trump is far more liberal than the Republican leaders, who want the 99% less wealthy / less powerful Americans to pay as much tax as possible.
The 33% tax rate on the rich is fake; no rich person pays the highest rate. That’s what tax shelters, tax havens, and tax dodges are for.
The biggest tax shelter for the “not-rich” is the 401K plan, which is taxed at the highest form of income rate, as soon as money is taken out. (Even if your 401K investments have long-term capital gains, which normally are taxed at a low rate [for the rich] you will be taxed at the higher rate when you take the money.)
And then we come to Moody’s, one of the three credit rating agencies that rated worthless securities AAA, which helped cause the Great Recession of 2008. Thank you Moody’s. Why anyone believes anything they say, is a mystery.
“Very large deficits” are the method by which the federal government grows the economy. “A much higher debt load” means much higher investments in T-security accounts at the world’s safest bank.
Neither federal deficits nor federal debt are a burden on the government, on taxpayers or on anyone else. The government cannot run short of its own sovereign currency.
In summary, Moody’s comments are as diametrically wrong as it is humanly possible; Trump, as wrong as he is, is much closer to being correct.
Bottom line: Trump has no coherent economic plan, and what little plans he offers are riddled with inconsistencies and false assumptions.
Nevertheless, Trump’s inconsistent and false plans are closer to reality than the gigantic, humongous lies of the Republican Party, the Urban-Brookings Tax Policy Center, and Moody’s.
When you’re farther from reality than Donald Trump, wow, that is saying something.
Rodger Malcolm Mitchell
Ten Steps to Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich afford better health care than the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:
Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012
Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefiting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be an good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.
The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.