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It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders..
Here we go again. Your test of ignorance repeats on March 16th. Will you pass or fail?
Imagine this. You belong to a sect. The leader has just told you the world is about to come to an end. He tells you the world is a “ticking time bomb.”
You are required to give him all your clothes and other belongings and to follow him, naked, up to the top of the mountain to await Armageddon. So you dutifully do as you are told. You give the leader everything, including your clothes, and up the mountain you trudge.
And there you sit. All night.
And nothing happens.
So the next morning, you walk back down, and at the bottom, you try to rebuild your life.
But, the next year, your leader again tells you the world is about to end, and this time he really means it. So again you give him everything you own, and again you climb up that mountain, and again you await the Armageddon.
And for the second year in a row, nothing happens. And again you climb back down and try to restart your life.
Now, for a third year, the sect leader tells you the world really, truly is about to end and you should repeat the process, because this time it is absolutely for certain.
So the question is this:
How many years will you allow yourself to be fooled before you realize the sect leader either is lying or doesn’t know what he is talking about?
Will three years be enough? Or will you continue to believe him for five years, before realization sinks in? Or will it take you ten years of failures to see the truth?
What about 15 trips up that mountain? Will that be enough? Or heaven forbid, twenty years of failure?
How many years will the leader be able to sucker you? Thirty years? Forty years? Will you give him all your stuff fifty times?
What will it take? Sixty times? Are you that dense? Is anyone that dense?
What about seventy years? It’s getting pretty ludicrous, isn’t it — for someone to be cheated seventy years in a row? Surely, no one could be that ignorant.
Well, what about 77 years? Seems impossible, doesn’t it, for someone to hear the same prediction 77 years in a row, to see that prediction fail 77 years in a row, and still continue to believe?
Even Charlie Brown wouldn’t be so stupid as to believe Lucy’s football trick 77 times.
Yet, here you are, still believing. For, way back in 1940, 77 years ago, you were told the federal debt was a “ticking time bomb,” and you believed it, then.
Sept 26, 1940, New York Times: Deficit Financing is Hit by Hanes: ” . . . unless an end is put to deficit financing, to profligate spending and to indifference as to the nature and extent of governmental borrowing, the nation will surely take the road to dictatorship, Robert M. Hanes, president of the American Bankers Association asserted today. He said, “insolvency is the time-bomb which can eventually destroy the American system . . . the Federal debt . . . threatens the solvency of the entire economy.”
And the next 20 years, year after year, you were warned about the debt threat. It was a “ticking time bomb.” And you believed. For 20 years — and beyond:
Feb 11, 1960, New York Times: Mueller Assails Rise in Spending: The enormous cost of various Federal programs is a time bomb, threatening the country’s fiscal future, Secretary of Commerce, Frederick H. Mueller warned here today “. . . the accrued liability is a ticking time bomb. Some day someone will have to pay.”
Then forty years and counting — and still you believed:
Oct 4, 1983 Evening Independent – The United States and the developed world face a “ticking time bomb” because of the huge foreign debt involving loans to Third World nations
Oct 26, 1983, David Ibata: “ . . . home-building officials called for a commission to propose ways to trim the $200 billion federal deficit. The deficit is a ‘ticking time bomb‘ that probably will explode in the third quarter of 1984,’ said Fred Napolitano, former president of the National Association of Home Builders.
The drumbeat continued. Incredibly you continued to fall for the lie, as your leader’s warning after warning proved to be like the boy who cried “Wolf,” and nothing happened.
But, still you didn’t learn. And still you allowed the leader to cheat you. Crazy, isn’t it?
Feb 21, 1984, James Warren: “‘We now hear from them (the Reagan administration) that deficits don’t cause high interest rates and inflation,’ AFL-CIO President Lane Kirkland said. ‘If that’s the case, we’ve suddenly discovered the horn of plenty and should stop worrying and keep borrowing and spending. But I don’t believe it. It’s a time bomb ticking away.”
January 12, 1985, Lexington Herald-Leader (KY):The federal deficit is “a ticking time bomb, and it’s about to blow up,” U.S. Sen. Mitch McConnell, a Louisville Republican, said yesterday.
Feb 17, 1985, Los Angeles Times: We labeled the deficit a `ticking time bomb‘ that threatens to permanently undermine the strength and vitality of the American economy.”
Jan 5, 1987, Richmond Times – Dispatch – Richmond, VA: 100TH CONGRESS FACING U.S. DEFICIT ‘TIME BOMB‘
November 28, 1987, The Dallas Morning News: THE TICKING TIME BOMB OF LONG-TERM HEALTH CARE COSTS A fiscal time bomb is slowly ticking that, if not defused, could explode into a financial crisis within the next few years for the federal government and our nation’s elderly. The ticking bomb is the growing cost of long-term care.
October 23, 1989, FORTUNE Magazine: A TIME BOMB FOR U.S. TAXPAYERS The government guarantees millions of mortgages, bonds, deposits, and student loans. These liabilities, now twice the national debt, are growing fast.
By now there had been forty years, then fifty years of dire predictions, and still nothing. Will you ever wake up to the truth? Or are some people destined to be chumps?
May 1, 1992, The Pantagraph – Bloomington, Illinois: I have seen where politicians in Washington have expressed little or no concern about this ticking time bomb they have helped to create, that being the enormous federal budget deficit, approaching $4 trillion and growing now at an annual rate of $400 billion per year.
October 28, 1992: Ross Perot: “Our great nation is sitting right on top of a ticking time bomb. We have a national debt of $4 trillion. Seventy-five percent of this debt is due and payable in the next five years. This is a bomb that’s set to go off and devastate our economy and destroy thousands of jobs.
Dec 3, 1995, Kansas City Star: Deficit is sapping America’s strength. Concerned citizens. . . regard the national debt as a ticking time bomb poised to explode with devastating consequences at some future date.
October 1, 2004, Bradenton Herald: A NATION AT RISK: TWIN DEFICIT A TICKING TIME BOMB: Lawmakers approved Bush’s request without cutting federal spending by a penny, thereby fattening the country’s projected record deficit of $422 billion by another $145 billion next year.
May 31, 2005, Providence Journal, Defusing the Medicare time bomb, Some lawmakers see the Medicare drug benefit for what it is: a ticking time bomb, set to wreak havoc on the budget and shoot future tax rates sky-high.
April 5, 2006, NewsMax.com, “We have to worry about the deficit . . . when we combine it with the trade deficit we have a real ticking time bomb in our economy,” said Mrs. Clinton.
Dec 3, 2007, USA Today: US debt: $30,000 per American. WASHINGTON (AP): Like a ticking time bomb, the national debt is an explosion waiting to happen.
September 24, 2010, Email from the Reason Alert: ” . . . the time bomb that’s ticking under the federal budget like a Guy Fawkes’ powder keg.”
July 7, 2011, Washington Post, Lori Montgomery: ” . . . defuse the biggest budgetary time bombs that are set to explode as the cost of health care rises and the nation’s population ages.
By now, it’s seventy years. The same warnings; the same lies; the same failures. And still you don’t get it. Good grief, what will it take?
To support the lies, the U.S. imposed upon itself a “debt ceiling,” the effect of which either is laughable or sad, for we have been exceeding that phony “ceiling” almost every year for 1oo years, but still argue about it repeatedly.
And because you continue to believe the lies, you encourage the lies:
2/10/16: Daily Bell: “Obama’s $4.1 Trillion Budget Is Latest Sign of America’s Looming Collapse”
11/ 11/2016 David Stockman: National debt is ticking time bomb: Former Reagan Budget Director David Stockman on the need to rein in America’s mounting debt.
Today, we reach the 77th anniversary of that Sept 26, 1940 New York Times “ticking time bomb” article, and you have learned nothing.
Lucy still pulls the football away, and you still kick at air. Still the fool. Still believing.
Looming Debt Limit Divides Trump’s Treasury and Budget Chiefs
by Saleha Mohsin, January 25, 2017
Treasury Secretary nominee Steven Mnuchin and Trump’s choice to head the Office of Management and Budget, Mick Mulvaney, face their first joint test in the run-up to March 16, when debt-limit suspension period expires. Failure to agree means investors in the world’s deepest debt market may grow uneasy about the potential of a U.S. default.
A U.S. default? Has the ignorance come to this, where federal “debt” is so misunderstood, the world fears a default?
Even, if federal “debt” were real debt, there would be no problem. The U.S. federal government, being Monetarily Sovereign, creates dollars ad hoc, every time it pays a bill.
To pay any invoice of any size, the government merely sends instructions to a creditor’s bank, instructing the bank to increase the total in the creditor’s checking account, by the amount of the invoice. The instant the bank obeys those instructions, new dollars are created.
The federal government never can run short of instructions or dollars.
That is how the government easily handles real debt, but the federal “debt” isn’t even real debt. The federal so-called “debt” actually is the total of deposits in T-security accounts at the Federal Reserve Bank.
Each time you “lend” to the federal government, you make a deposit in your T-security account. To pay you back, the Federal Reserve Bank merely transfers dollars from your T-security account to your checking account. It’s a transfer of existing dollars.
And that is why the Saleha Mohsin article is so ridiculous:
“Honoring the full faith and credit of our outstanding debt is a critical commitment,” Mnuchin said in written replies to senators’ questions for his nomination process. “My responsibility as secretary would be to pursue all means available to the Treasury to meet this commitment, including historic extraordinary measures that have been employed by necessity in the past.”
A crisis isn’t imminent. The Treasury Department can use extraordinary accounting measures to stay below the ceiling, possibly until the second half of this year.
Rather than “extraordinary accounting measures,” we should get rid of the foolish, meaningless debt ceiling. It has no purpose, whatsoever, other than to make you think federal spending should be reduced.
During the campaign, Trump said that if the economy were in a prolonged slump, he might push creditors to accept write downs on their government holdings.
President Trump demonstrates (pretends?) ignorance of the differences between federal (Monetarily Sovereign) financing and private (monetarily non-sovereign) financing.
Since the federal government never can run short of dollars, what is the purpose of forcing write-downs on creditors?
Former Treasury Secretary Jacob J. Lew wrote in the Harvard Journal on Legislation, “The responsible course for the new Congress would be to raise the debt limit without drama” or brinkmanship.
No, the responsible course would be to do away with the silly debt ceiling and stop pretending the federal government is short of its own sovereign currency, the dollar.
And if it wasn’t bad enough for you to have struggled up and down that mountain of ignorance, year after year for more than 77 years, while having learned nothing about federal financing, it gets even worse.
Arguing against federal deficit spending is the same as arguing against the growth of Gross Domestic Product (GDP), the prime measure of our economy. The reason: GDP = Federal Spending + Non-federal Spending + Net Exports.
So by definition, a cut to deficits is a cut to GDP. And indeed, reductions in deficit growth lead to recessions and depressions, while increases in deficit growth cure recessions and depressions.
Gray vertical bars are recessions
Now, for the 77th consecutive year, you are tested on your knowledge of federal financing.
You can see that federal deficit spending grows GDP, while the above graph shows that deficit growth is necessary to prevent and cure recessions. What have you learned?
For the 77th consecutive year, you are told the federal deficit and debt are too high — “ticking time bombs.” And for the 77th consecutive year, those time bombs have failed to explode. What have you learned?
In the next few weeks, you will be told the following lies:
- The federal deficit and “debt” are unsustainable “ticking time bombs” (though they have proven to be quite sustainable, and the “time bombs” never seem to explode).
- Deficit spending will cause hyper-inflations, like those in the Weimar Republic and Zimbabwe (though the U.S. never has had a hyper-inflation, and has absolute control over the value of the dollar).
- Federal agencies like Medicare and Social Security are headed for insolvency (though because the U.S. government is Monetarily Sovereign no federal agency can become insolvent unless Congress wills it).
- The debt ceiling requires us to cut social spending and to raise taxes (though the more federal budgets are cut and taxes increased — i.e. austerity — the weaker an economy becomes).
So the question is, “After 77 years of experience, what have you learned?”
Will you continue to believe the false prophets? Will you continue to give away your possessions to recessions and to cuts in social benefits? Will you continue to climb the mountain of lies, awaiting the Armageddon that never comes, then climb back down, poorer, but no wiser?
Or will you, at long last, tell the politicians, “Enough. I know the truth. You no longer can steal from me with your lies. I demand the Ten Steps to Prosperity (below). Now.”
Rodger Malcolm Mitchell
The single 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 (Guaranteed Income)) 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.