Hey, wait. Is $2 trillion supposed to be bad??

You always know what you’re going to get from Breitbart: Extreme right-wing red meat for those hypnotized by Donald Trump.Trump's American Carnage - Transcript | FRONTLINE

According to Wikipedia:
Breitbart News Network is an American far-right syndicated news, opinion, and commentary website founded in mid-2007 by American conservative commentator Andrew Breitbart, who conceived it as “the Huffington Post of the right”.

Its journalists are widely considered to be ideologically driven, and some of its content has been called misogynistic, xenophobic, and racist by liberals and many traditional conservatives alike.

The site has published a number of conspiracy theories and intentionally misleading stories.

Breitbart News aligned with the alt-right under the management of former executive chairman Steve Bannon, who declared the website “the platform for the alt-right” in 2016.

In 2016, Breitbart News became a virtual rallying spot for supporters of Donald Trump’s 2016 presidential campaign.

The company’s management, together with former staff member Milo Yiannopoulos, solicited ideas for stories from, and worked to advance and market ideas of, neo-Nazi and white supremacist groups and individuals.

After the election, more than 2,000 organizations removed Breitbart News from ad buys following Internet activism campaigns denouncing the site’s controversial positions.

If you’re misogynistic, xenophobic, and racist, you’ll love Breitbart. If you fall for conspiracy theories and intentionally misleading stories you’ll be an avid reader of Breitbart.

That said, the following Breitbart article makes some interesting points:

Today’s Top Stories From the Breitbart News Desk – Alex Marlow & John Carney
Breitbart News Network

President Biden on Wednesday released the outline of his enormous $2 trillion tax and spending bill. It comes wrapped in the packaging of an infrastructure bill, but only a fraction of the bill is for rebuilding infrastructure as it is commonly understood.

Virtually all large bills passed by Congress contain a variety of laws, some of which do not match the ostensible “main purpose” or title of the bill. This is the norm that Breitbart is trying to spin into a crisis.

It gives politicians nightmares because it forces them to vote for things they don’t like in order to vote for things they do like.

A benign bill to aid widows and orphans may also contain a paragraph supporting wife-beating. The politician can vote against widows and orphans or for wife-beating. Either way will subject him to criticism from across the aisle.

This Hobson’s choice is, however, a fact of politics. It gives the opposition something to carp about.

By some estimates, the corporate tax hikes are three times the size of the 2017 corporate tax cuts. They would return the U.S. to the highest statutory rate in the developed world. The OECD average is 23.59 percent.

Yet corporate America—which has become increasingly vocal on leftwing issues—has barely objected.

The CEO of Delta feels free to attack Georgia’s voter integrity laws but has not spoken up against this enormous tax hike.

Breitbart attempts to create hypocrisy when there is none. The Georgia voter laws have nothing whatsoever to do with federal tax hikes.

The real hypocrisy is that Breitbart even compares them, and in the same sentence.

There are at least three reasons for this silence.

One, our biggest corporations do not pay the statutory rate. That’s for the suckers with small businesses and without armies of lawyers and lobbyists.

Second, corporate executives are rewarded for outperforming other executives. So long as everyone’s tax rate moves in the same direction, there’s not much to object to. In fact, high taxes with lots of loopholes are best for corporate leaders.

Importantly, there is so much spending in this bill that it easily dwarfs whatever paintax hikes might inflict. There is $174 billion to subsidize electric vehicles and the related charging infrastructure, more than enough to buy off the compliance of automakers.

The deeper purpose of this bill is to remake the economy, with the government playing a much larger role in almost every aspect of business and employment.

Giving corporations tax cuts (which is what the GOP did during the Trump administration) is overall financially the same as the federal government buying more goods and services from the private sector.

In either scenario, the entire economy as a whole receives more net income, courtesy of the federal government. The difference lies in which part of the economy receives the money, i.e. the rich or the poor.

Breitbart does not want you to realize that it approves of giving money to the rich while deriding payments that help the poor. 

As the Wall Street Journal explained, the spending program “would reverse Reagan-era tacit understanding that public sector is less efficient than the private in allocating resources.”

Big government, in short, is not just back—it’s going to be everywhere if this bill passes.

The notion that big business is more efficient than big government, is a widespread belief that never has been substantiated. 

From an organizational standpoint, businesses have a profit motive, and governments have an election motive. Businesses function to increase profits and executive compensations, while government agencies function to accomplish the agencies’ goals and politicians’ re-elections.

The profit motive and election motive both compel actions in direct conflict with “efficiency”  and with honesty.

Big businesses and big government are composed of people, each of whom has their own desires, fears, and motives, that may not directly align with the presumed motives of the business or government agency.

There is nothing implicitly wrong with a big nation having a big government. “Big” is not a disadvantage, whether referring to businesses or governments.

In fact, even the term “big” has different definitions, depending on the context.

“Big” can mean number of employees. “Big” can mean amount of income. “Big’ can mean amount of spending.

For instance, in 2020:

Facebook had about 58,000 employees, revenue of $86,billion and net income of $29 billion.

General Motors had about 155,000 employees, revenue of $122 billion, and net income of $6 billion.

Which company is bigger?

When talking about “big government,” are Breitbart and others who lean Libertarian, concerned about the number of employees or the amount of spending?

In truth, they should be concerned about neither.

Presumably, the fear related to “big government” should be about an overpowering, ruthless, lying, dictatorial government, that is concerned only with the welfare of the rich, and cares nothing for the middle-classes and despises the poor (Think Trump). 

But that has nothing to do with the number of government employees or with the amount of government spending. It has to do with the quality of leadership and with the laws they pass.  

“Big government” is a phony bogeyman used by Libertarians and the right-wing attempt to scare voters into accepting less service from the federal government.

In that vein, we bring you this headline from the Libertarian site, REASON:

“Infrastructure projects that are paid for by users, not by federal taxes, can be a big boost to the economy.” by By Adrian Moore, April 1, 2021

Someone should mention to Mr. Moore, that “paid for by users” adds no stimulus money to the economy, and federal taxes, which deplete the private sector’s money supply, pay for nothing.

But infrastructure projects that are paid for by federal spending add stimulus dollars to the economy, and therefore are indeed an economic boost.

This is no reason why $2 trillion may be too much to add to the economy, and it very well may prove to be too little.

Rodger Malcolm Mitchell Monetary SovereigntyTwitter: @rodgermitchellSearch #monetarysovereignty Facebook: Rodger Malcolm Mitchell 

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THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.The most important problems in economics involve:

  • Monetary Sovereignty describes money creation and destruction.
  • 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. 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

Here is what economic ignorance causes

Here is what economic ignorance causes.

The Post-Coronavirus Unemployment Crisis Could Last for Years, Economists Say

Economists expect the U.S. to suffer its largest-ever contraction this quarter and the unemployment rate to soar to a post-Depression record, followed by a recovery that will be moderate and drawn out.

All economists? Some economists? A few economists?

The recovery may be “moderate and drawn out” only because the federal response has been moderate and drawn out.

The stock market alone lost $1.4 trillion in just one week. This doesn’t count all the other weeks this year, and it doesn’t count all the business and personal losses.

And Congress and the President think $2 trillion will prevent a depression?? Really?

Gross domestic product will plummet an annualized 25% from April through June after a smaller setback in the first quarter and the jobless rate will hit 12.6%, the highest since the 1940s, according to the median forecasts in Bloomberg’s monthly survey of 69 economists.

Gross Domestic Product (GDP) = Federal Spending +Non-federal Spending +Net Exports.

Therefore, the more the federal government spends, the faster will GDP grow.

Add a trillion dollars in federal spending and GDP will rise by a trillion dollars. Straight algebra.

Federal spending also stimulates non-federal (private sector) spending, which further increases GDP.

Sadly, our federal government does not acknowledge it is a Monetary Sovereign. It has the unlimited ability to create U.S. dollars at no cost.

Greenspan quote.png

Instead, it follows the right-wing, Tea Party / Libertarian formula of spending the least it can, under the circumstances, because of irrational fears about deficits and “big” government.

Then to exacerbate the problem, the politicians continue with petty, political arguments about precisely where each dollar is to go.

The downturn looks likely to be deemed as the first recession since 2007-2009 by U.S. business-cycle arbiter National Bureau of Economic Research. The second half of the year will see a resumption of growth, according to the survey, though economists say the deck is stacked against a snap-back.

The Fed is expected to keep interest rates near zero until the first half of 2022.

The low-interest-rate myth continues. The popular belief is that low interest rates are economically stimulative because they make borrowing cheaper.

But low interest rates have a negative side: They reduce the amount of interest the federal government pays on its Treasury Securities, i.e. the amount of interest money the government pumps into the economy. This reduction directly cuts GDP.

The blue line is the fed funds (interest) rate. The red line is GDP growth, year-to-year.

As the above graph demonstrates, high interest rates correlate with high GDP growth and low rates correlate with low GDP growth.

As interest rates trended up, through 1980, the GDP growth trended up. Then, as interest rates trended down, the GDP growth rate trended down.

The green line is federal interest payments growth, year-to-year.

The above graph is similar to the previous graph except it shows total interest paid rather than interest rates. The result essentially is the same.

On average, the more interest the federal government pays, the more GDP grows.

“Even if the economy starts to re-open in mid-May, more than 20 million Americans will have lost their job with the economy likely having contracted around 13% peak-to-trough, more than three times deeper than the global financial crisis,” James Knightley, chief international economist at ING Financial Markets, wrote with his forecast submission.

“It will be a gradual re-opening of the economy, so a return to ‘business as usual’ is many months away.

Throw in crippling financial losses and a legacy of defaults and it means we estimate U.S. economic output won’t return” to the late-2019 peak until mid-2022 at the earliest, Knightley said.

People “lose their jobs” because companies cannot afford to maintain payroll. As the companies run short of money, their people run short of money. When consumers run short of money, they buy less, so more companies run short of money, in a self-strengthening helix descending to depression.

To cut the helix, the government must give (not lend) money to businesses and to consumers.

“Crippling financial losses and a legacy of defaults” are symptoms of a lack of money.

See the commonality? The overarching problem facing the economy is a shortage of money — which the federal government could solve with sufficient deficit spending.

Bernanke quote.png

The U.S. federal government has a massive built-in advantage, that if used properly, would eliminate recessions and depressions. Unlike state and local governments and unlike euro-nation governments, the U.S. government is Monetarily Sovereign.

It has the unlimited ability to create U.S. dollars and to give those dollars any value it chooses.

There is no excuse for a company to fire people because it has run short of payroll dollars if the government simply will provide per-employee financial support.

There is no excuse for “crippling financial losses” if the government will pump dollars into the economy.

We are at war with our financial enemies: Recession and depression. The U.S. government has an ultimate weapon to use against these enemies: Monetary Sovereignty.

Instead, it chooses to fight with sticks and stones — little sticks and tiny stones. And it leaves the battle to the monetarily non-sovereign states, counties, and cities. The army has departed the battlefield, leaving the women and children to fight empty-handed.

The government is in a war against the enemies, recession

As a result, we will lose the war, and the American people will suffer.

Needlessly.

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

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

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

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