Tag: eliminate FICA

–Playing politics with your life, your health and your finances

The debt hawks are to economics as the creationists are to biology. Those, who do not understand monetary sovereignty, do not understand economics. Cutting the federal deficit is the most ignorant and damaging step the federal government could take. It ranks ahead of the Hawley-Smoot Tariff.
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Rep. Fred Upton(Republican) said, “If we pass this bill with a sizable vote, and I think that we will, it will put enormous pressure on the Senate to do perhaps the same thing.” “This bill” is the attempt to repeal the health care bill. He went on to say, “But then, after that, we’re going to go after this bill piece by piece.”

So, he expects to fail in his attempt to repeal the entire bill, but then he will try to gut it. If he is successful in either attempt, here is what will happen to you:

–Your children may be denied health insurance because they have a pre-existing condition.
–Your insurance company might put a ceiling on the claims you can submit, during your lifetime.
–You can be charged extra for an emergency room visit to a hospital not in your insurance company’s network.
–You will lose coverage of your children through age 26.
–Your coverage can be cancelled if you get sick.
–When you are a senior, you will not receive free screening for cancer, the biggest killer of Amercians.
–Millions of Americans will lose insurance coverage.

And other bad stuff too numerous to mention.

So why do the Republicans want to do this to the American public? Four reasons:

1. Through time, this bill will gain in popularity, and become known as a signature Democratic initiative, on a par with Social Security, Medicare and the civil rights bills. Since most recent Republican initiatives have been to go to war with Iraq based on a lie, deport undocumented aliens and the Bush tax cuts, the Republicans are desperate either to come up with something great or to destroy whatever the Democrats do. They need an issue, and this is all they can think of (Heaven forbid they come up with something beneficial to the lives, health and finances of the general public.)

2. The stated belief the “individual mandate” is onerous or illegal, in that you can’t penalize people for not buying something. Really? Try driving in my state, Illinois, without buying significant amounts of liability insurance. Try buying anything without paying the retailer sales tax. (And unless you think this is just a tax, it isn’t. The retailer actually makes a profit on it, because he pays against total sales, while he receives a rounded up amount from each sale.) True, the self-styled “originalists” on the Supreme Court may rule against it, because it does not meet their right wing agenda, but this will just open the door to a single payer option, which the right wing will hate even more.

3. Pandering to the Tea Party. Unfortunately for the Republicans, the bloom is going off the Tea Party rose, and soon Sarah Palin and the rest of the gang will be remembered laughingly in the same terms as the infamous “Know Nothing” party, which the Tea Party closely resembles. See: Know Nothing party

4. The bill is “too costly” or “unsustainable” or will force tax increases on taxpayers. Those who have read the posts on this blog have learned that taxpayers do not pay for spending by a Monetarily Sovereign government, taxes will not need to be increased, there is nothing that is unsustainable for the federal government, and all the talk about affordability is utter nonsense. If you have not read the posts, you can begin with: Introduction and work your way forward.

Although I have spend most of my life voting Republican (because I didn’t like the “tax” part of the Democrats’ tax ‘n’ spend policies), I find myself drifting leftward, partly because of the mean-spirited, hate filled, ultra-political beast the Republican party has become. So it will be entertaining to watch the Republicans try to destroy one of the great human initiatives in American history. Yes, the health care bill is not perfect. I’ll repeat that: The health care bill is not perfect. But it’s an excellent start toward doing what any great nation must do – protect its citizens – whether against foreign invaders, poverty, illiteracy or sickness. It’s the reason we have a government.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind me of the guy whose house is on fire. A neighbor runs with a garden hose and starts spraying, but the fire continues. The neighbor wants to call the fire department, which would bring the big hoses, but the guy says, “Don’t call. As you can see, water doesn’t put out fires.”

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–More “Constitutional” phony baloney from the Tea Party

The debt hawks are to economics as the creationists are to biology. Those, who do not understand monetary sovereignty, do not understand economics. Cutting the federal deficit is the most ignorant and damaging step the federal government could take. It ranks ahead of the Hawley-Smoot Tariff.
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Each day I become more convinced that being a member of the Tea Party is a litmus test for childishness. Back in April, I wrote the post “What does the Tea Party want?” in which I explored some of the truly inane pronouncements by this group. It is an amazing attribute of the human species that anything sober and logical (Monetary Sovereignty) will be rejected by a large group, but anything outrageously juvenile (Lady Gaga) will be revered by an even larger group.

In the earlier post, I commented not only on the Tea Party’s adoration of such sages as Sarah Palin and Christine O’Donnell, but it’s hopelessly confounding message:

Unfortunately for Tea Party “logic,” they not only want lower taxes, but lower deficits and less government. At the same time, they want a stronger army, better schools, federal supervision of banks and other financial firms, better roads, defense of our borders, less crime, more guns, defense against terrorism, safer food, better retirement, better unemployment insurance, police, health care, rescue from hurricanes and other disasters, more jobs and a better environment.

I reminded readers that what the Tea Party wants costs money, the money they don’t want the government to spend. But now that bit of TP logic has been superceded by the next puerile demand, to which the eagerly submissive GOP has agreed. Not only must the House of Representatives waste an hour or a day listening to someone read the U.S. Constitution aloud (“Now follow along, children. See Spot jump.”), but every new bill must contain a statement by the lawmaker who wrote it citing his constitutional authority to enact the legislation.

Puleeze. The most contentious bill passed by Congress – hated by the TP – already contains such a statement, and that hasn’t prevented two judges from ruling one way and a third judge from ruling the other. What is called the “Individual Mandate” of the Patient Protection and Affordable Care Act already includes these sentences:

The individual responsibility requirement provided for in this section (in this subsection referred to as the requirement) is commercial and economic in nature, and substantially affects interstate commerce . . . In United States v. South-Eastern Underwriters Association (322 U.S. 533 (1944)), the Supreme Court of the United States ruled that insurance is interstate commerce subject to Federal regulation.

Well, I guess that should satisfy the TP.

The problem is that the Constitution was written 200+ years ago to address problems of the time, and must be interpreted to address today’s problems. And while “originalist” Justices Antonin Scalia and Clarence Thomas claim to have special insight into the original intent of the Constitution framers, they don’t, they don’t even try, and anyway, why should anyone want that?

The Supreme Court has nine members rather than just one, because the Constitution, like the Bible, is either vague, outdated or repeatedly misconstrued concerning almost all we wish to know. Every Justice has pledged to obey the Constitution, yet seldom do we see a 9 – 0 decision. Does this mean some Justices intentionally disobey the Constitution every business day?

Reality check: The true issue is not whether a law obeys or disobeys the Constitution, but rather, whether the sponsors are Democrats or Republicans (aka TP sycophants). But that bit of truth does not perturb the TP members, who live in a magical world of dreams, where all wishes come true, even (especially?) those that are self-conflicting.

It seems our Representatives prefer time-wasting, populist, pandering nonsense, to actually learning about, and coming to grips with, real problems, which is why the recovery has been so slow, and why millions of Americans have no jobs, no homes, no health insurance and no retirement.

What next from the Guns ‘n’ God Group? A rule that the House must stand and recite the Pledge of Allegiance every day?

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind me of the guy whose house is on fire. A neighbor runs with a garden hose and starts spraying, but the fire continues. The neighbor wants to call the fire department, which would bring the big hoses, but the guy says, “Don’t call. As you can see, water doesn’t put out fires.”

–When will the economy recover?

The debt hawks are to economics as the creationists are to biology. Those, who do not understand monetary sovereignty, do not understand economics. Cutting the federal deficit is the most ignorant and damaging step the federal government could take. It ranks ahead of the Hawley-Smoot Tariff.
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At long last, when will the economy recover? Wait a minute. Look at this graph:

graph 1

Considering that the data only goes through September, 2010, one easily can infer that the economy already has recovered. Yes, the stock market has not recovered, but that could be good news. It could mean it still has plenty of recovery left in it.

And yes, unemployment still is a big problem:

But that could be a good thing, too (although not for those who are unemployed.) A high level of unemployment mitigates against inflation. The government could continue to use its infinite spending ability and not be concerned it was causing inflation. For instance, FICA could be eliminated, as it should be, rather than the tentative, temporary step now taken. And the standard deduction could be raised, also as it should be. And Social Security benefits could be increased, and Medicare could be expanded, again as they should be.

And interest rates have stayed way down:

graph 3

And that’s another good thing, because it means the Fed has plenty of room (not that “room” really is needed) to raise rates if inflation should rear its ugly head.

There are plenty of leading indicators one might explore, but these graphs give me cause for optimism, if only the federal government will seize the moment.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind me of the guy whose house is on fire. A neighbor runs with a garden hose and starts spraying, but the fire continues. The neighbor wants to call the fire department, which would bring the big hoses, but the guy says, “Don’t call. As you can see, water doesn’t put out fires.”

–News: China must control inflation, exports and GDP growth. But how?

The debt hawks are to economics as the creationists are to biology. Those, who do not understand monetary sovereignty, do not understand economics. Cutting the federal deficit is the most ignorant and damaging step the federal government could take. It ranks ahead of the Hawley-Smoot Tariff.
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On December 17, 2010 Columnist Michael Schuman published an online article saying:

Chinese inflation hit 5.1% in November, the fastest clip since the pre-crisis boom months of 2008. Though much of the increase is in food (up 11.7% from a year earlier), the inflationary pressures are spreading to more aspects of the economy.

By hiking interest rates, the central bank would be increasing the interest burden on borrowers. That, in turn, could intensify a bad loan problem at China’s banks that many economists believe is an inevitable result of the lending boom.

So the Chinese have instead turned to an old favorite, price controls on certain staple foods.

Inflation is the loss in value of money compared to the value of goods and services. The cure for inflation is to increase the value of money and/or to decrease the value of goods and services.

The later is difficult for any government to accomplish, other than with price controls. Sadly, price controls have serious defects. They lead to reduced supply, while allowing demand to increase, which invariably causes pent up demand and black markets.

A second approach is for the government to buy, store then mete out supplies of oil, when prices rise. Because oil is the prime mover of inflation, this can be an effective anti-inflation plan, if the government has the discipline to do it. The plan falls apart when the government becomes reluctant to part with any of its suddenly-more-precious oil.

In all, increasing the value of money seem to be the best prevention/cure for inflation. That can be accomplished by decreasing the supply of money or by increasing the demand for money. Reduced government spending or increased taxation can reduce the supply. However, reducing the money supply not only leads to recessions and depressions, but involves very slow, uncertain and cumbersome processes.

In addition to the difficulty of knowing how much to increase taxes or to reduce spending, the even more difficult question is which taxes to increase and/or which spending to decrease. By the time politicians finish debating and voting on these highly political questions, the situation either may have passed or more likely, worsened appreciably.

Preventing/curing inflation requires agility and incremental response, for which interest rate modification is ideal. Raising interest rates can be done instantly and in tiny increments. It increases the demand for money, which increases the value of money – perfectly anti-inflationary.

China’s reluctance to strengthen its currency probably is tied to its false belief it must continue to build its export business, which relies in part on the weakness of the yuan. The function of exports is to bring money into an economy, but China, being Monetarily Sovereign does not need additional money coming in from outside its borders. It has the unlimited ability to create money.

China also may subscribe to the popular belief that low interest rates stimulate its economy. American history shows this belief to be false. See: Low interest rates do not help the economy. China also may believe high rates increase business costs, and so actually could foster inflation. However, in America at least, high rates have not corresponded with inflation. (See Item 12,) probably because interest is a minuscule part of most companies’ costs..

The Chinese government has the ability to be its nation’s own best customer. It does not need to rely on exports. This is a fact for all Monetarily Sovereign nations. China has the means to prevent/cure its inflation by raising interest rates. It needs only to understand its own powers.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind me of the guy whose house is on fire. A neighbor runs with a garden hose and starts spraying, but the fire continues. The neighbor wants to call the fire department, which would bring the big hoses, but the guy says, “Don’t call. As you can see, water doesn’t put out fires.”