Tag: eliminate FICA

–How the Republican strategy won

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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If the Democrats take a beating this coming election, as is predicted, they have only themselves to blame. The Republicans want the economy to stay weak, giving them the opportunity to remove the recession blame from President Bush and to hang it on President Obama. So they have directed their efforts toward reinforcing the myth that federal deficits are bad, the federal debt is worse, and anything that is not austerity is worst of all.

This wonderful, though cynical strategy guaranteed a weak recovery, hurting the Democrats, while hurting the American people, worse. But hey, who cares about that?

The Democrats, rather than educating the public about federal finance, allowed the Republicans to stigmatize any recovery effort that required deficit spending. Either through ignorance or spinelessness, they fell right into the Republicans’ trap, thereby guaranteeing not only a continuation of economic weakness, but a loss this coming Tuesday. They now suffer, and we the people, suffer, though most of the people don’t know why.

The only thing that can create a recovery is deficit spending, the more the better, but the Democrats never tried to get that message across. They even agreed with the Republicans about the evils of federal debt. Talk about slashing your own throat.

The Republicans have succeeded. Deficit spending has been too little, too late, as I predicted way back in Letter dated April, 2008. The Democrats struggled to spend while not spending, the Republicans threatened to filibuster everything that smacked of deficit, the Democrats cowered in terror, and the economy languished.

What should the Democrats have done? Simple. Tell the truth. Rather than believing the voting public is too stupid to understand facts, the Democrats should have instituted a two-year educational program, starting immediately after the Obama election. Yes, at first the public would have rejected the counter-intuitive ideas that deficit spending is absolutely necessary for growth, our children and grandchildren will not pay for federal spending, and inflation is not a serious threat. But over time, these fact-based ideas would seem less radical, more acceptable and ultimately, desirable, because well . . . they’re fact-based.

That would have allowed the Democrats to improve Social Security, enhance Medicare, provide universal health care, save the economy and win the election. Oh well, there’s another election in two years. Maybe the Democrats will smarten up or “courage-up” in time.

On second thought, doubtful.

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

No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind 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.”

–Easy money for debt hawks.

The debt hawks are to economics as the creationists are to biology.

O.K. boys. It’s time to put up or shut up.

The Concord Coalition is a self-proclaimed “non-partisan, grassroots organization dedicated to educating the public about the causes and consequences of federal budget deficits, the long-term challenges facing America’s unsustainable entitlement programs, and how to build a sound foundation for economic growth.” Their web site http://www.concordcoalition.org/ asks for donations.

The Committee for a Responsible Federal Budget – http://crfb.org/ – publishes articles like: “How To Avoid a Debt Doomsday,” and writes, “Creditors could lose faith and pull their money from the United States. Interest rates would spike, causing interest payments to grow. The government would be forced to borrow more, which would push rates even higher. The endgame would be a vicious debt spiral and another recession.” They too ask for donations.

As you have seen from my previous post, “How to make a million. No kidding,” Warren Mosler (Mosler) said “it is an indisputable fact that U.S. Government spending is not operationally constrained by revenue and will give $100 million of his own money to pay down the Federal deficit if any Congressman or Senator can prove him wrong.” O.K., he said Congressman or Senator, but I’m sure Warren will be glad to extend the offer to any debt-hawk who can show that Social Security is “going broke” as so many claim, or that FICA supports Medicare and Social Security, or that the federal debt is “unsustainable.”

Back in July, I offered ($1,000 ) for the same kind of proof, but I guess I’m a piker, and no one has taken me up on it. Warren is offering the big bucks.

Just think. $100 million dollars, debt-hawks, and all you need do is prove what you have been preaching all these years. You’ve been begging for donations and here is your chance. I urge all my readers to go to any debt-hawk web site – you know, the ones publishing those ridiculous debt clocks and claiming the government can’t afford this or that, or saying we need austerity, or debt reduction or some other suicidal action — and urge these folks to come up with the proof. And if they don’t, I guess we’ll all know that what they are selling is a load of BS.

Speak up, boys. My book is called FREE MONEY, but this offer is easy money, and the money is waiting for you. Warren is waiting. I’m waiting.

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

No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind 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.”

–England is doomed; it doesn’t know it is monetarily sovereign

The debt hawks are to economics as the creationists are to biology.

Back in 2005, I said, “The Euro is the worst economic idea since the recession-era, Smoot-Hawley Tariff. The economies of European nations are doomed by the Euro.” I said that because the euro, or specifically the rules surrounding the euro, transformed a group of monetarily sovereign nations into helpless, monetarily non-sovereign nations.

These were nations that thirty years earlier had rejected the straightjacket of the gold standard, only to adopt the straightjacket of the euro standard. One EU nation, England, was wise enough to reject the euro. It still uses the pound sterling. So England is the only monetarily sovereign EU nation.

Alas, England has forgotten why it rejected the euro, and now has begun to act as though it were monetarily non-sovereign. Here is the headline for today’s article in the Washington Post, by Rebecca Omonira-Oyekanmi: “British budget cuts to include nearly 500K job losses”

The article says, “The measures announced by Chancellor of the Exchequer George Osborne will span four years and include an average cut of 19 percent in central government departments’ budgets, an $11 billion reduction in welfare spending and an increase in the pension-eligibility age to 66. The government acknowledged that 490,000 public-sector jobs would be lost over the four years as result of the cuts.”

Osborne went on to say, “The cuts deal decisively with the largest budget deficit this House of Commons has ever had to face outside of wartime.”

Isn’t austerity wonderful? What a clever way to cure the recession: Destroy 500K jobs. But what choice do they have? As long as they mistakenly believe they are not monetarily sovereign, and so cannot afford budget deficits, they are required to cut spending and/or to raise taxes, both of which will send the English economy into a tailspin.

So England is doomed, because the debt-hawks have taken over.

In a similar vein, the debt-hawk Committee for a Responsible Federal Budget (what an ironic name), has posted a questionnaire titled “In Search of Fiscal Responsibility: Ten Questions to Ask the Candidates.” The ten questions boil down to one: Would you rather have a tax increase or have certain federal programs cut? I urge you to go to their site and see what your answers would be.

Of course, the questionnaire is based on their false premise that cutting the deficit will benefit the economy. If you write to their president, Maya MacGuineas, as I have many times, and ask, “What evidence do you have that the federal deficit is unsustainable, and the budget should be cut?, you either will receive no answer (likely) or you will be given non-sequitur answers like, “The deficit is a high percentage of GDP.” Try it yourself. Her Email is:crfb@newamerica.net

Meanwhile, watch England fall – unless it comes to its senses.

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

No nation can tax itself into prosperity. Those who say the stimulus “didn’t work” remind 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.”

–Elect me and I will build America

The debt hawks are to economics as the creationists are to biology.

Since this is the season for campaign promises, here are mine. When you elect me, I promise to: (O.K., I’m not running for office, but this is what I would do.)

Reform Congress

I will work to end the Senate filibuster rule. I find the notion of one person being able to thwart the will of Congress and the American people, and to prevent the appointment of federal judges and other federal personnel, to be repugnant. It’s a bad rule.
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Improve Social Security and Medicare

1. I will end FICA. This is the worst tax in America for reasons explained at FICA . Briefly, it’s a regressive tax that discourages hiring and discourages spending, and has no function. The federal government does not use FICA taxes.

2. I will reduce the retirement age back to 65 (early retirement at 62).

3. I will stop taxing Social Security benefits. Only a government mentality could pay people benefits, then tax the benefits. It makes as much sense to tax SS benefits as it would to tax Medicare benefits, i.e. no sense at all.

4. I will pay everyone, man or woman, married or single, who begins to claim benefits at age 65, the same Social Security benefit, regardless of prior earnings. Under the current system, the people who need benefits most are paid the least.

5. I will increase Medicare payments to doctors and hospitals to equal the current levels paid by private insurance companies. The current Medicare payment levels discourage doctors from accepting Medicare, and discourage young people from entering the medical profession.

6. I will include long-term care as part of Medicare. Current long-term care policies as too expensive for lower income people.

7. I will eliminate all “donut holes” and other similar limitations from Medicare Part D (drug coverage). I will cover all drugs, generic or branded, from day 1.
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Rescue the States, Counties and Cities

The primary reason the states, counties and cities are in such bad shape: They are not Monetarily Sovereign. Mathematically, inflation and population growth make long-term survival on taxes alone, impossible for any monetarily non-sovereign government. Such governments must have money coming in from outside, via exports and/or federal assistance. I will pay each state $10,000 per person in the first year, then $5,000 inflation-adjusted each year thereafter.
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Cut Income Taxes

I will cut income taxes from the bottom up. Each year, I will increase the standard deduction by $10,000. At the end of the first decade, the standard deduction would be $100,000, and the vast majority of taxpayers will file their taxes on a postcard. (This will impact charities, all of which except faith-based, should be supported by the government, anyway.)

I will eliminate business taxes. The economy is business. Taxing business = taxing the economy, exactly the opposite of what a growing economy needs.
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Support Education

I will pay all students a salary for the job of attending school. (See: Salary 1 and Salary 2 and Salary 3 ).
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Spend Liberally on Research and Infrastructure

I will offer federal support to a myriad of science research and development projects – medical, physical, military, energy – together with rebuilding our aging roads, bridges and dams. Under my watch, we will go back to the moon and on to Mars.
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Raise Interest Rates

If any debt hawks have read this far, they undoubtedly are foaming at the mouth about the federal debt being “unsustainable” (nonsensical for a monetarily sovereign nation) and inflation. There is no post-gold standard relationship between federal deficits and inflation, (See: Inflation) And federal deficit spending reduces unemployment (See: Unemployment ) there is a distant point, when federal spending could be sufficient to cause inflation. So, I will take peremptory action to increase the value of money, by increasing interest rates.

This will strengthen the dollar, providing us with more imports of better goods and services at lower prices. (See: Stronger dollar )

Higher rates also will be stimulative, as it will force the federal government to pay more interest on its debts, thereby adding money to the economy. See: Interest

On a related subject, I will increase FDIC to $1 million, to protect more Americans’ savings.

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So that’s a good start for my first year in office. What do you think? Do I have your vote?

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

No nation can tax itself into prosperity