The doofus science Tuesday, Aug 21 2018 

Image result for bernanke and greenspan

It’s our little secret. Don’t tell the people we don’t need their tax dollars.

Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”

St. Louis Federal Reserve: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e.,unable to pay its bills.

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What is there about economics that every doofus sitting on a bar stool, thinks he is an expert, and entitled to voice loudly his doofus opinions about federal financing?

And why does every said doofus, whose interest in economics has not progressed beyond buying the daily Lotto scratch-off, think he understands the effects of federal trade deficits and federal budget deficits. (Attention all doofusi: They are different.)

And why does an equally uninformed columnist, whose professed forte is political philosophy and baseball (yes baseball), and definitely not the science of economics, continue to confound himself and his readers, by conflating federal finances with personal finances?

Here, for instance, are excerpts from an article by the above-described George Will:Image result for george will

Do economic expansions die of old age (the current one began in June 2009), or are they slain by big events or bad policies?

What is known is that all expansions end. God, a wit has warned, is going to come down and pull civilization over for speeding.

When He, or something, decides that today’s expansion, in its 111th month (approaching twice the 58-month average length of post-1945 expansions), has gone on long enough, the contraction probably will begin with the annual budget deficit exceeding $1 trillion.

How prescient. “All expansions end, and “God or something” will do it. Did you know that? Are you stunned by these brilliant words?

And when the expansion ends, what does that have to do with the deficit exceeding $1 trillion? Nothing.

Equally meaningless: The expansion also will end with a U.S. population above 330 million and with the rich even richer than they are now. So?

The president’s Office of Management and Budget projects that the deficit for fiscal 2019, which begins in six weeks, will be $1.085 trillion. This is while the economy is, according to the economic historian in the Oval Office, “as good as it’s ever been, ever.”

Wow, the deficit will be $1,085 trillion, and the economy is “as good as it’s ever been, ever.” What does that tell us about the deficit?

The deficit (red line) has gone up and up, especially to cure recessions (vertical bars), while the economy (GDP) has grown and grown, too.

What is the connection between federal deficit spending and the economy? Doofuses don’t realize that federal deficit spending adds growth dollars to the economy, which is why the government increases deficit spending to get us out of recessions.

Federal deficit spending is stimulative.

Doofuses also don’t know this formula: GDP = Federal Spending + Non-federal Spending + Net Exports. Federal deficit spending increases the first two of the three right-side terms of the equation.

Continuing with George Will’s article:

Another hardy perennial among economic debates concerns the point at which the ratio of debt to GDP suppresses growth: Within a decade, the national debt probably will be 100 percent of GDP and rising.

As Irwin Stelzer of the Hudson Institute says, “If unlimited borrowing, financed by printing money, were a path to prosperity, then Venezuela and Zimbabwe would be top of the growth tables.”

Here’s the scary part:

“Irwin Stelzer is a Senior Fellow and Director of Hudson Institute’s John LeeEconomic Policy Studies Group. Prior to joining Hudson Institute in 1998, Stelzer was Resident Scholar and Director of Regulatory Policy Studies at the American Enterprise Institute.

He also is the U.S. economic and political columnist for The Sunday Times (London), a contributing editor of The Weekly Standard, and a member of the Advisory Board of The American Antitrust Institute.”

This guy, with all his background, is hopelessly clueless about how a Monetarily Sovereign nation, with a functioning government, operates.

He thinks the U.S. borrows (it doesn’t), and that the federal government finances this non-existent borrowing by printing money (it doesn’t), and finally that the U.S. is in any way similar to Venezuela and Zimbabwe (it isn’t).

The word “borrow” refers to obtaining money in order to spend or save. When you borrow, you do that to spend or save the money you borrow.

But, the U.S. creates money, ad hoc, by spending.  And it does not save money.  Having the unlimited ability to create dollars, it has no need to save dollars.

The misnamed federal “debt” isn’t money the Monetarily Sovereign federal government needs or uses. It is dollars that are deposited by investors (and never touched) into T-security accounts. To pay off those accounts, the government merely sends those dollars back to the account owners.

And, when Seltzer mentions Venezuela and Zimbabwe, he is talking about hyperinflation,  which is not caused by money “printing.”

All hyperinflations are caused by extreme shortages, usually shortages of food, and only after the hyperinflations have begun do countries respond with money creation. That is what happened to Venezuela and Zimbabwe, et al.

In all our history, through wars, recessions, depressions, a multitude of  Presidents, and economic misrepresentations about deficits and debt, the U.S. never has had a hyperinflation. But still, the doofuses compare us with Zimbabwe.

Our federal “debt” went from $40 billion in 1940 to $16 trillion today — a 40,000% increase — and inflation remains near the Fed’s annual goal of 2.5%.

Blue line: Federal “debt.” Red line: Consumer price index. Where’s the hyperinflation?

Having learned nothing from history or economics, the Henny Pennys continue running in circles, shouting, “Unsustainable.”

In short, a columnist who doesn’t understand economics quotes someone else who doesn’t understand economics. The result: A steamy brown pile of bull excrement.

Jay Powell, chairman of the Federal Reserve, says fiscal policy is on an “unsustainable path.”

And there it is, the old “unsustainable” debt BS, again. It also is The fake ‘debt time-bomb,’ still ticking after 78 years.” 

Click the link and you’ll read the 78 years of false claims that our federal deficit and debt will destroy the U.S. as we know it.

Wrong for 78 years; wrong today; wrong tomorrow. But the Henny Pennys, having no shame, still are at it.

A recent International Monetary Fund analysis noted that among advanced economies “only the United States expects an increase in the debt-to-GDP ratio over the next five years.”

The IMF seems to be telling us that the U.S. will have the worst economy among advanced economies, over the next five years. Do you believe that?

The debt/GDP ratio is absolutely, positively, 100% meaningless. Zero, zip, zilch. The size of my underwear has more economic meaning than does that ratio.

  1. The debt/GDP ratio does not indicate the federal government’s (unlimited) ability to pay its bills.
  2. The debt/GDP ratio does not indicate future recessions, depressions or stagflations.
  3. The debt/GDP ratio does not indicate future inflations or deflations.
  4. The debt/GDP ratio does not indicate stock market advances or regressions.
  5. The debt/GDP ratio does not indicate a damn thing. Period.

The federal government could pay off all its T-bills, T-notes, and T-bonds tomorrow, if it chose, simply by returning the dollars that then currently exist in those T-bill, T-note, and T-bond accounts.

Oh, did I mention that, contrary to Will’s article, the U.S. ratio already is above 100%.

Seemingly, George Will didn’t realize that.  He also didn’t realize Japan’s ratio is above 250%. By Mr. Will’s reckoning, Japan should have become Venezuela and Zimbabwe, long ago.

One would hope that a nationally published columnist and a professional economist, would at least look at the facts, rather than just writing intuitive nonsense.

Publicly held U.S. government debt has tripled in a decade.

From left to right, (the politicians have)  had a permanent incentive to run enormous deficits — to charge, through taxation, current voters significantly less than the cost of the government goods and services they consume, and saddling future voters with the cost of servicing the resulting debt after the current crop of politicians have left the scene.

The line, “charge, through taxation, current voters significantly less than the cost of the government goods and services they consume” is a demonstration of consummate ignorance.

Unlike state and local taxation, federal taxation does not fund government goods and services. The federal government funds government goods and services by creating its sovereign currency, ad hoc — a currency of which it never can run short.

Even if the federal government didn’t collect a single penny in taxes, it has the power to continue spending, forever.

Compare the U.S.’s Monetarily Sovereign situation with that of monetarily non-sovereign Greece:

The next steps for Greece now that its bailout is ending 

Greece’s exit from eight years of international bailout programmes on August 20 will be a defining moment in its emergence from the depths of austerity. But government and business acknowledge that this is just a milestone.

The end of the bailout does not end Greece’s commitments to its international creditors.

One of the most significant is that, in exchange for a major debt relief deal in June, the country needs to sustain a primary surplus — a measure of its budget balance that excludes debt payments — of 3.5 per cent of gross domestic product a year until 2022.

Failure would bring the risk that some debt relief could be withdrawn.

When the government runs a surplus, guess who runs a deficit. Right. The public. This is just another way of describing the austerity that already has destroyed Greece’s economy.

Government surpluses lead to depressions and recessions, by taking money out of the private sector:

1804-1812: U. S. Federal Debt reduced 48%. Depression began 1807.
1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.
1997-2001: U. S. Federal Debt reduced 15%. Recession began 2001.

The above article contained this graph:

Euro nations’ citizens are excessively taxed because the euro nations are monetarily non-sovereign. They do not have a sovereign currency. They cannot stimulate economic growth except by going deeper and deeper into debt. Debt is a burden on monetarily non-sovereign governments and their citizens.

Not only are euro citizens overly-taxed but:

The government is speeding up foreclosures and auctions of repossessed property.

Bankers still expect the process to take as much as a decade. One said: “We are hitting our current targets on reducing non-performing loans but there is still a long way to go.”

Excessive taxation. Austerity. Foreclosures. Repossessed property. For as much as a decade. This is what the people of the euro can look foreward to, and this is exactly what our American economics doofuses wish you to suffer.

The crooked bankers get rich, while the taxpayers suffer.

There are penalties for ignorance, and those who do not wish to understand Monetary Sovereignty will pay those penalties, just as the euro nation people are.

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

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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
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.

MONETARY SOVEREIGNTY

Translating the code in a news article Saturday, Jun 30 2018 

It takes only two things to keep people in chains:Image result for pickpocketing

The ignorance of the oppressed

And the treachery of their leaders

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Humans love codes.  Language is a form of code.

The word “red” is not red. The word “happy” is not happy. They are codes.

We even use code for code. The phrase “That’s great,” may mean something is great, or being sarcastic, may mean something is terrible.Image result for code

Go to your thesaurus, and you will see that virtually every word has multiple meanings, depending on context, which is a common attribute of codes.

Codes can be used to inform or deceive. Since our media and our politicians are notable code users —  the better to fool you — I’ll present you with a short example — the better to educate you.

Here are excerpts from an article that means exactly the opposite of what it purports to say. I offer a translation so you can see the true meaning:

Kudlow, others differ on deficit estimates
By Jeff Stein The Washington Post

WASHINGTON — President Donald Trump’s top economic adviser said Friday that the federal deficit is “coming down rapidly,” contradicting estimates by nonpartisan analysts, Congress’s official scorekeeper and a branch of the White House.

Translation: WASHINGTON — President Donald Trump’s top economic adviser said Friday that the federal government will add less money to the economy, contradicting estimates by partisan analysts, Congress’s official scorekeeper and a branch of the White House.

Larry Kudlow, director of the White House’s National Economic Council, said on Fox Business that stronger economic growth was creating enough new tax revenue to bring down the deficit.

Translation: Larry Kudlow, director of the White House’s National Economic Council, said on Fox Business that stronger economic growth was taking enough tax dollars from taxpayers’ pockets and from the economy to bring down the deficit.

“The deficit — which was one of the other criticisms (of the GOP tax law) — is coming down, and it’s coming down rapidly,” Kudlow said. “It’s throwing up enormous amounts of new tax revenue.”

Translation: “The economy’s surplus — which was one of the other criticisms (of the GOP tax law) — is coming down, and it’s coming down rapidly,” Kudlow said. “It’s taking enormous amounts of money from taxpayers and the economy.”

It’s hard to know where Kudlow is getting his numbers from.

Translation: We know exactly where Kudlow is getting his numbers from: The Trump administration.

The deficit from January through April was $161 billion, according to Treasury, up from $135 billion at the same point last year.

Translation: From January through April, the federal government pumped $161 stimulus dollars into the economy, up from $135 billion at the same point last year.

It will deteriorate further, since the Treasury collects a large amount of tax revenue in April when taxes are due for most.

Translation: The economy will be stimulated further, since the Treasury takes a large amount of money from the economy in April when taxes are due for most.

Kudlow may have been referring to a Congressional Budget Office report earlier this week that said the long-term deficit would be smaller than its estimate in 2017, partly because of revised downward estimates of health care spending.

Kudlow may have been referring to a Congressional Budget Office report earlier this week that said the government would add fewer dollars to the economy than its estimate in 2017, partly because of revised downward estimates of health care benefits to the public.

But it made clear that deficits are still set to rise in the near and long term.

“(T)he federal budget deficit, relative to the size of the economy, would grow substantially over the next several years, stabilize for a few years, and then grow again over the rest of the 30-year period,” the CBO said, projecting that deficits as a percentage of the economy would rise from 3.9 percent in 2018 to 9.5 percent in 2048.

Translation: But it made clear that the federal government will add more dollars to the economy and to your pockets in the near and long term.

“(T)he additional dollars, relative to the size of the economy, would grow substantially over the next several years, stabilize for a few years, and then grow again over the rest of the 30-year period,” the CBO said, projecting that federal input of dollars as a percentage of the economy would rise from 3.9 percent in 2018 to 9.5 percent in 2048.

Commenting specifically on the 2017 tax law, the CBO said it would increase deficits by $1.27 trillion over the next decade.

Translation: Commenting specifically on the 2017 tax law, the CBO said it would increase the amount of money going into the economy, and decrease the amount of money taken from you, by $1.27 trillion over the next decade.


Consider the irony:

Kudlow, who toils for Trump, wants you to believe that the government will add fewer dollars to the economy, and steal more dollars out of your pockets — and that supposedly is a good thing.

But the reality is that the current budget projections have the federal government adding more growth dollars to the economy, while taking fewer dollars from you — and Kudlow tries to deny it, when he should be boasting about it.

The simple fact is:

Larger economies have more money in them than do smaller economies, so to grow — to go from smaller to larger — an economy must have more money.

The federal government is an important source of the money that is necessary to grow our economy. When the federal government “deficit” spends, proportionately fewer dollars are taken from you, and more dollars are spent on benefits for you.

That is why reductions in federal deficit spending lead to recessions, which always are cured by increases in deficit spending.

Declines in deficit growth lead to recessions (vertical gray bars).

Worse yet, the total elimination of deficit spending (disingenuously called a “surplus”) leads to depressions:

1804-1812: U. S. Federal Debt reduced 48%. Depression began 1807.
1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.

In the Kudlow article, the misleading code word is “deficit.” Look it up and you will see such hateful synonyms as: loss, shortfall, arrears, default, deficiency, inadequacy, insufficiency, lack, paucity, scantiness, and shortcoming.

No one loves “deficits.” But what Kudlow doesn’t tell you is that a federal deficit is a surplus for you.

The greater the federal deficit, the more money coming into the economy and into your pockets, and that is a very good thing, indeed.

Another common, misleading code word is “debt,” which means one thing when applied to people, and something altogether different when applied to the federal government.

Both “deficit” and “debt” are misused code words designed to scare you into taking dollars from your pocket and receiving fewer federal benefits. It’s what the very rich want.

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

MONETARY SOVEREIGNTY

The debt “bomb” and Rachel Maddow. Not you too? Say it isn’t so Thursday, Apr 12 2018 

It takes only two things to keep people in chains:
The ignorance of the oppressed

Image result for in chains

Rachel, not you, too?

and the treachery of their leaders.

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http://bit.ly/2Hj8EHG

Perhaps I have a strange sense of humor, but I cannot help but laugh at the repeated “time bomb” references to our federal misnamed “debt.” (It’s not the kind of debt people think of. It actually is the total of deposits in T-security accounts.)

Years ago, we published the article, Federal Debt: A ‘ticking time bomb“.  It showed that in the 71 years from 1940 through 2011, the federal “debt” (deposits) repeatedly was called a “ticking time bomb” by the media, the politicians, the economists, and members of the public who believed what the experts said.

In 1940, the federal “debt” was $40 Billion dollars.  If you click the above link you will see that because of the “time bomb,” horrible things were just about to happen.

Any minute now. Look out! Duck, the sky is falling. Here it comes!

By 2011, the “debt” (deposits) had grown to $10 Trillion, at which time we were in the midst of huge economic growth, fueled by massive deficit spending, growth that continues today.

During that period, we published “From ‘ticking time bomb’ to ‘looming collapse,” an article that quoted the experts claiming the federal debt (deposits) continued to be a threat to America well into 2017.  By then, the so-called “debt” had grown to $15 trillion.

That’s a 50% growth in just six years, and still no explosion. The sky remained intact and America’s prosperity continued (though the Gap between the rich and poor also grew — that’s another story.)

If the first 71 years of wrong predictions were amusing, the next six were absolutely hilarious.  Sadly, the black comedy has not ended.

Just today, one of my favorite TV commentators, Rachel Maddow, broadcast a piece titled, “Paul Ryan legacy gives lie to Beltway’s deficit hawk mythology.”

“Rachel Maddow shows how the Beltway media spun up an elaborate myth about Paul Ryan as a budget hawk focused on reducing spending and debt.

Ryan announced his retirement two days after the CBO announced a record deficit resulting from the budget Ryan oversaw.”

Rachel criticized Ryan, who devoted his entire career, his entire raison d’etre as the Speaker of the House, for announcing his retirement with the claim that he had succeeded in what he wanted to do.

She rightfully scoffed at the notion of success by failure, but what she failed to mention is that by failing to keep his promises, Ryan helped America grow. 

If you go to the above link, and watch Rachel’s show, you’ll see she doesn’t understand that deficit spending is stimulative.

Money growth is absolutely, positively necessary for economic growth, and federal deficit spending, which is reflected in the so-called federal “debt,” provides money growth.

Yes, it was a case of ignorance succeeding, and Ryan probably still doesn’t understand it, but federal deficit spending has grown the economy, and cuts to federal spending have cut economic growth.

And today, even my beloved Rachel has joined the chorus of ignorance — or humor, depending on your perspective.

I can understand the boobs of Fox and Friends not getting it. When Sean Hannity is one of your top personalities, you know you have problems.

But Rachel? My Rachel Maddow? Oh Rachel, say it isn’t so.

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

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

The 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 (Economic Bonus)) 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.

———————————————————————————————————————


MONETARY SOVEREIGNTY

The persistence of myths: The federal “debt” myth Tuesday, Apr 10 2018 

It takes only two things to keep people in chains:
The ignorance of the oppressed Image result for in chainsand the treachery of their leaders.
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Some myths will not die. You can throw facts at them, stomp on them, refute them, and still they persist, like weeds in an untended lawn.

Here are excerpts from an article that ran in the Bozeman Daily Chronicle, describing one such myth: The federal “debt” myth.

Budget office projects growing deficits and massive debt during Trump administration
By Cathleen Decker Los Angeles Times (TNS) Apr 9, 2018

WASHINGTON — Propelled by the GOP tax-cut plan and increased government spending favored by both parties, the nation’s deficit will top $1 trillion by 2020 and its debt burden within a decade will approach rates not seen since the aftermath of World War II, the Congressional Budget Office said Monday.

Fact: There is no “debt burden” —  no burden on the government and no burden on future taxpayers —  simply because what is described as federal “debt” actually is the total of deposits in Treasury security accounts — very similar to savings accounts.

The dollars used to make those deposits remain in those accounts until the T-securities (T-bills, T-notes, T-bonds) mature, at which time the dollars are returned to the depositors, the owners of those T-securities.

(If ever you ask the Treasury, “How much is in my T-bond account?” you will be told the number of dollars that remain in your account. These are the minimum dollars you will receive when your account matures.)

The dollars are not removed from the accounts, because the U.S. federal government is Monetarily Sovereign. It has the unlimited ability to create its own sovereign currency, the dollar, at the touch of a computer key.

Thus, it has no need to borrow your dollars. Instead, the government simply is providing a safe place for people, companies and businesses to store dollars and earn interest. This safe storage facilitates demand for the dollar.

(By contrast, when cities, counties, and states issue bonds, the money is used. These governments are monetarily non-sovereign. They do not issue dollars as their sovereign currency, so do not have the unlimited ability to create dollars.)

The national debt will rise from nearly $16 trillion at the end of 2018 to almost $29 trillion by 2028, the nonpartisan office said.

“The bigger the debt, the bigger the chances of a fiscal crisis,” CBO Director Keith Hall warned Monday, noting that debt as a percentage of the gross domestic product in 2028 will be the highest since 1946.

Here, Hall expresses two myths in one short paragraph:

  1. No matter how large the debt, it never causes a fiscal crisis. Quite the opposite. When the Monetarily Sovereign U.S. encounters a fiscal crisis — a war, a recession, a depression — the federal government combats that crisis with increased deficit spending, which increases the so-called “debt.”

  Thus, curing a fiscal crisis demands a debt increase, rather than a debt increase causing a crisis.

2. There is no relationship between Gross Domestic Product and federal “debt.” GDP is all domestic spending in any one year; the “debt” is the net total of outstanding T-security deposits made within the past 30 years.

Further, the “debt” is not paid off with GDP; it is paid off by the deposits that exist in T-security accounts. The Debt/GDP ratio is the classic apples-and-oranges comparison.

3. In truth, we aren’t sure what sort of “fiscal crisis” Mr. Hall means, but the U.S. government never can run short of dollars, so if Hall’s “fiscal crisis” refers to the government’s ability to pay off any obligations denominated in dollars, the U.S. can’t inadvertently have such a crisis.

To demonstrate the lack of relationship between the debt/GDP ratio and the health of an economy, here are some recent national ratios. See if you can answer a simple question about them:

Russia 14%
Libya 17%
Iran 35%
Canada 99%
United States 105%
Singapore 112%
Japan 253%

The question: Based on Debt/GDP ratios, can you tell which economies are healthiest and which are in a “fiscal crisis”?

Of course you cannot. The Debt/GDP ratio is the least meaningful number in all of economics though it is quoted frequently.

He said that the expansion of debt was particularly troublesome during a time of economic growth, rather than in response to a recession, such as after the 2008 financial collapse.

“We’re quite a few years off a recession and we have very high deficits,” Hall said.

Right. When we have a recession, the federal government deficit spends to grow the economy.

Why? Deficit spending grows the economy by adding dollars to the economy, and deficit reduction shrinks the economy by reducing the number of dollars added to the economy.

Hall understands this, yet he still promulgates the “fiscal crisis” myth.

The new CBO report said the shortfall will now hit $12.4 trillion over the span ending in 2028, after breaking the $1 trillion mark in 2020. That’s three years earlier than expected, because of the tax cut and spending plans.

Why is the increase in T-security deposits referred to as a “shortfall” when there is no shortfall? The federal government, being Monetarily Sovereign, cannot run “short” of dollars.

Neither Republican congressional leaders — who railed against President Barack Obama’s deficit spending — nor Trump, who once vowed to balance the budget, had any immediate comment on the report.

Balancing the budget would cause a recession or a depression:

U.S. depressions tend to come on the heels of federal surpluses.
1804-1812: U. S. Federal Debt reduced 48%. Depression began 1807.
1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.

While deficit growth cures recessions, reductions in deficit growth lead to recessions.

 

Reductions in federal debt growth lead to inflation

Vertical gray bars are official recessions. Declines in deficit growth (blue line) lead to recessions, which are cure by increases in deficit growth.

 

The CBO also confirmed earlier estimates that despite Republican promises that the tax cuts would pay for themselves through economic growth, the plan would actually increase the deficit about $1.9 trillion over 11 years.

That’s 1.9 trillion stimulus dollars (less foreign spending) that will be pumped into the U.S. economy. This will grow the economy.

Ironic, isn’t it, that the one good thing the GOP Congress and President Trump have accomplished — increasing federal deficit spending — is the only thing Trump doesn’t boast about.

Democrats said the report rebuked Republicans’ claims to be fiscal conservatives.

“In their craven haste to give corporations and the wealthiest 1 percent massive tax breaks, Republicans saddled our children and grandchildren with trillions of dollars of debt,” House Minority Leader Nancy Pelosi of California said in a statement.

Here, Pelosi joins in the lie. Our children and grandchildren will not pay one penny of the “debt.”

Federal taxes do not pay for the federal deposits; in fact, federal taxes pay for nothing. They cease to be a part of any measure of the nation’s money supply, as soon as they are received. Functionally, taxes are destroyed upon receipt.

(Think about it. There is no way to measure the number of dollars the federal government has. If you own a dollar-creating machine, how many dollars do you have? Either zero or infinite, depending on how you wish to count.)

Democrats warned that Republicans may next try to slash Social Security and Medicare in an effort to pare back the deficit they’ve made worse.

Some House Republicans have floated the idea of a balanced budget amendment, which would require huge cuts to discretionary programs and those that support older and sick Americans.

It is unlikely to pass the Senate.

Yes, that is the usual GOP plan: Cut social spending for the poor and middle-income groups, and give more to the rich.

“From Day One, the Republican agenda has always been to balloon the deficit in order to dole out massive tax breaks to the largest corporations and wealthiest Americans, and then use the deficit as an excuse to cut Social Security and Medicare,” said Senate Democratic leader Charles E. Schumer of New York.

Right. The fact that many poor and middle-income people vote Republican is proof that H.L. Mencken was correct when he wrote:

“No one in this world, so far as I know — and I have searched the records for years, and employed agents to help me — has ever lost money by underestimating the intelligence of the great masses of the plain people. Nor has anyone ever lost public office thereby.”

Democrats, however, contributed to the deficit’s additional rise by supporting the March spending measure, which gave Republicans higher military spending and Democrats a boost in domestic funding.

Increased deficit spending is economically stimulative.

The CBO estimated that by 2027 the national debt would comprise 88.9 percent of the gross domestic product, just below the level at which economists say its load would harm the economy.

Any economists who say that are damn fools.

The CBO is the nonpartisan agency charged with delivering independent analysis of the economy, budget bills and other legislation.

Being supposedly “nonpartisan” does not mean they know what they are talking about.

Last year, congressional Republicans and the Trump administration criticized the CBO as lacking credibility after it delivered negative assessments of GOP health care bills.

Historically it has been considered a dependable source of fiscal predictions, even as legislators have ignored its increasingly heated warnings about the national debt.

The CBO has been reasonably accurate in predicting the amount of deficits, but is completely incompetent regarding the effect of those deficits.

Trump has routinely ignored the debt and deficit when it has come to advancing programs that are popular among his voters.

During the campaign he advocated protecting numerous expensive programs — including Social Security and Medicare — and never explained how he would finance them.

Contrary to popular myth, Social Security and Medicare are not paid for by FICA taxes. They are paid for by federal spending. Even if FICA were eliminated (which it should be) the government could continue paying benefits, forever.

While the report offered Democrats substantial ammunition in a campaign year, it offered the president some limited good news.

The average economic growth will rise 0.7 percentage points as a result of the tax plan, and about 1.1 million jobs will be added, the report said. That, in turn, will also boost the gross domestic product.

Huh?  All those warnings about the supposed negative effect of increased “debt,” and now we are told economic growth will increase, jobs will be added, and GDP will grow.

Strikingly, the CBO report underscored how the options ahead for legislators and the president are narrowing.

Over the next 10 years, for example, Social Security spending will rise to 6 percent of GDP and health care costs to 6.6 percent — both the outgrowth of the retirements of baby boomers and factors whose curtailment would be politically difficult.

The options have not changed.

Since it is functionally impossible for the U.S. federal government ever to run short of its own sovereign currency, the government always has the same payment options.

Social Security and Medicare payments benefit the economic growth. The federal government simply funds these programs without any tax increases.

But they do not represent the fastest-growing segment of federal spending. That would be interest on the debt, which will double to 3.1 percent of GDP over the next 10 years.

“Interest on the ‘debt’ (deposits) are dollars that stimulate economic growth.

Bottom line:

  1. The federal deficit is necessary for economic growth.
  2. The federal debt is the total of deposits, similar to saving account deposits.
  3. The Debt/GDP ratio is meaningless.
  4. The GOP wants to cut benefits to the poor and middle, while increasing benefits to the rich. 
  5. Most politicians, most of the media, and most economists are lying to you because they have been bribed by the rich. The politicians are bribed with campaign contributions and promises of lucrative employment. The media are bribed with advertising dollars and owners’ money. The economists are bribed with university contributions and employment in “think tanks.”

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

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

The 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 (Economic Bonus)) 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.

———————————————————————————————————————


MONETARY SOVEREIGNTY

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