The Chicago Tribune, a mighty newspaper having substantial resources for information-gathering, repeatedly promulgates the “Big Lie” in economics — the lie that because U.S. federal finances are just like state/local government finances, business finances, and personal finances, the federal deficit must be cut and/or taxes increased to “pay for” it all.
In truth, federal finances have almost nothing in common with the finances of other entities, not even the finances of Germany, France, Italy, et al.
Here are some excerpts from a Tribune editorial dated 7/19/2021:
Spend-borrow-repeat will be the ‘debt’ of usMark Lennihan/AP National governments worldwide — ours in the forefront — have fought the pandemic and its side effects with borrowed money. Much of this new debt will fall not only on today’s children and grandchildren, but also on our descendants not yet born.
Wrong: “Today’s children and descendants not yet born” will not pay for any part of the so-called “debt,” just as you have not paid anything for the $25 trillion already accumulated.
It’s not debt. The misnamed “debt” is nothing more than the total of deposits into Treasury Security accounts, which resemble bank safe deposit accounts.
The government never touches those accounts, except to deposit interest, and the “debt” easily is paid off simply by sending the money back to the depositors. No tax dollars ever are involved.
So we were concerned if not surprised by a Wall Street Journal news story headlined “Governments world-wide gorge on record debt, testing new limits.” The Journal reports: “The U.S. government is on course for a budget deficit of $3 trillion for the second year in a row.”
The deficit (the difference between taxes and spending) is not a real deficit. Federal taxes have no relationship to federal spending; all federal taxes are destroyed immediately upon receipt.
When you pay your federal taxes, you take dollars from your checking account (which is part of the M1 money supply), and you send them to the federal government, where they are destroyed. That is, they cease to be part of any money measure. They cease to exist.
The federal government does not use your tax dollars to pay its bills. It creates new dollars, ad hoc.
Even if the federal government collected zero taxes, it still could continue spending forever. The main purpose of federal taxes is to control the economy. The government taxes what it wishes to discourage, and it gives tax breaks to what it wishes to encourage.
We mention this as our government’s Internal Revenue Service delivers the first of several child tax credit payments to single parents earning up to $95,000, and to couples earning up to $170,000. Meanwhile, Senate Democrats say they intend to pass a sweeping social, educational and environmental package they price at $3.5 trillion. A trillion of anything befuddles many Americans, journalists included. The temptation is to toss one’s fidgety hands in the air and mutter that these debts belong not to us individual Americans but to a faceless federal government.
That last paragraph is true. The misnamed “debt” is just a notation on the federal government’s books. It is completely unrelated to individual Americans or to taxes.
No one is liable for paying off the federal “debt,” which is paid off by returning dollars already in the T-security accounts.
Ah, problem already. That government is essentially a big checking account with a standing army; it collects and spends tax dollars.
Wrong. Although the government does collect tax dollars, it does not spend tax dollars.
It has the unlimited ability to create new dollars and that is what they use when paying their bills.
No one has said it better than former Fed Chairman Alan Greenspan:
Absolutely correct.
The U.S. government uniquely is Monetarily Sovereign — it is sovereign over the U.S. dollar. It can create as many as it pleases at any time it pleases, for any purpose it pleases, and give them any value it pleases.
As our national debt rises daily toward $29 trillion, the government’s perpetual printing of new dollars threatens to cheapen the currency. In short, we — or our progeny — have to repay every dollar now being lent to Washington by China and other buyers of U.S. bonds.
Mark Lennihan, the author of the editorial, publishes two errors in one paragraph. “Cheapen the currency” refers to inflation. Lennihan is claiming that the rising national “debt” (deposits into T-security accounts) causes inflation.
He is wrong. The “debt” has risen, in the past 80 yearsfrom about $40 billion to about $25 trillion (depending on who’s counting), a gigantic increase. But in those 80 years, inflation has been modest.
The red line is federal debt growth. The green and blue lines are different measures of inflation.
Further, being Monetarily Sovereign, the federal government retains absolute control over the value of the dollar. It can change the value at will, as it has done many times in the past, the most recent being in 1971.
Maybe the accumulation of debt continues indefinitely without consequence. Or maybe critics cited by the Journal are right to warn that our spending is excessive, “risking an overheated economy and a lasting rise in inflation and interest rates.”
If federal debt caused inflation the two lines should essentially be parallel. As you can see they are nowhere near being parallel. There is no relationship between federal debt and inflation.
The accumulation of debt has continued without consequence for 80 years, despite repeated (and wrong) warnings from debt fear-mongers. Inflation has been modest — close to the Fed’s 2% annual target.
Which raises a question we hope Illinoisans will direct to their members of Congress: When does necessary spending on pandemic relief mutate into optional spending on the desirable but unaffordable?We argue that unchecked cycles of spend-borrow-repeat eventually enfeeble any nation. That may not happen while interest rates are as low as today’s. But those rates — the relentless cost to taxpayers of carryingso much debt — now are likelier to rise than to fall.
Nothing is “unaffordable” for the federal government. It has infinite money. The author is confusing federal finances with personal finances or state/local government finances.u
Federal taxpayers have not and will not “carry” any of the federal debt. Tax dollars are destroyed upon receipt. They do not fund the debt.
Thus far in the pandemic, global securities markets happily support all of our borrowing; because of its prosperity, America is a safe haven for investors.
The federal government, having the infinite ability to create dollars, never borrows.More confusion by the author of the editorial.
But as Robert Rubin, the treasury secretary under President Bill Clinton, warned in a 2018 op-ed published in the Tribune: “The European financial crisis that began in early 2010 shows how markets can ignore unsound conditions for a long time — until they don’t. For many years, Greeksovereign bonds traded at virtually the same yields as their German counterparts, which made no sense. Then, when the bond markets suddenly focused on the fiscal problems plaguing Greece and the other weaker countries, interest rates spiraled into crisis.”
Astoundingly, the treasury secretary did not understand the differences between a Monetarily Sovereign government (the U.S.) and monetarily non-sovereign governments (euro nations, Greece, Germany, Italy et al)
Greece, Germany and all the other euro nations do not have the ability to create their sovereign currency at will. Like you, and me, and our cities and states, they do not have a sovereign currency. They use the euro, which is the sovereign currency of the European Union, not of any individual nation. (It’s similar to the way American states are not sovereign over the dollar.)
All of us can run short of money. The U.S. government cannot. Anyone who does not understand the difference, does not understand economics.
Many Tribune readers are smarter than their government: Chastened by the Great Recession in which the inability to pay mortgage debt cost people their homes, Americans have attacked private-sector debt even as their politicians raised public-sector debt.
Again, Mr. Lennihan demonstrates a shocking ignorance of economics. He confuses personal (monetarily non-sovereign) finances with federal (Monetarily Sovereign) finances. It is amazing that he receives such a nationwide platform to spew such nonsense.
A classic example of citizens taking to heart the admonition, “Don’t try this at home.”To reiterate arguments you’ve read here before: We write often about debt in part to counteract the popular (and in Illinois, political) tendency to see borrowed money as free manna that somebody else will worry about, someday. The truth is that, whether it’s enforced or nominally forgiven, someone always pays.
The admonition, “Don’t try this at home” is correct, because “home” is not Monetarily Sovereign.
Since it’s not real debt, but rather it’s deposits, no one pays. However, the federal government always pays its creditors — with newly created dollars.
When America’s debt inevitably grows too onerous for taxpayers to bear or global investors to tolerate, expect a furious blame game: Why did our politicians let this happen?
America’s debt is not borne by taxpayers. If it were, the debt could not have reached $25 trillion. It already would have been “borne.”
The “blame game” only will occur if we have a recession, which would be caused by too little deficit spending.
We voters didn’t demand that spending not exceed revenue, that debt not be allowed to pile up like snow atop a mountain. A long line of presidents and Congresses have talked about preventing the avalanche. But we voters have let them get by on that lip service alone.
When spending doesn’t exceed revenue, we have recessions if we are lucky, and depressions if we are not lucky.
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.
A growing economy requires a growing supply of money. If the money supply shrinks, or even grows too slowly, we have recessions or depressions.
Their greatest sin thus far is abject failure to reform the debt-manufacturing entitlement programs such as Medicare (whose hospital coverage trust fund is projected by its trustees to run dry in 2026) and the Social Security retirement fund (projected as empty in 2034).
Finally, toward the end of his editorial, Mr. Lennihan reveals the true purpose of his Big Lie:He wants to cut the benefits that would go to the masses.
Why? Because that is what the very rich, who really run America, want.
It’s called Gap Psychology, the desire to distance oneself from those below. The rich are rich only because of the Gap. If there were no Gap, no one would be rich; everyone would be the same. And the wider the Gap the richer are the rich.
To widen the Gap, the rich bribe the media (via ownership and advertising dollars). They bribe the politicians (via campaign contributions and promises of lucrative employment, later.) They bribe the economists (via university endowments and promises of employment with “think tanks.)
So as members of Congress and President Joe Biden ponder a massive expansion of social, educational and environmental spending, we have a request:Whatever the final shape of your package, pay for it rather than borrow for it. Because given how you’ve behaved — especially since the pandemic struck — your binge of spend-borrow-repeat will be the debt of us.
Fear, not Mr. Lennihan, it all will be paid for in exactly the same manner as always. No, the federal government will not borrow its own sovereign currency. It will create new dollars, ad hoc.
Now we have a request: Stop disseminating the Big Lie, either by ignorance or intent.
If you don’t understand Monetary Sovereignty, read up on it before writing anything more.
If you do understand it, and still are spreading the Big Lies, retire immediately in ignominy. You don’t deserve to have any of your work published.
Rodger Malcolm Mitchell
Monetary SovereigntyTwitter: @rodgermitchellSearch #monetarysovereigntyFacebook: Rodger Malcolm Mitchell
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THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.
Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:
Ten Steps To Prosperity:
The U.S. federal government has all the tools it needs to control the value of the U.S. dollar.
You can have it all. We all can have it all. Nothing prevents it other than our own ignorance.
How is your imagination? Imagine a world in which:
We have no poverty
We have is no violent crime
We all can afford the best health care
We all can afford as much, and as fine an education as we wish
There is no air, water, or land pollution, nor shortages of pure water
Global warming does not exist
Our entire infrastructure is kept current
Our government is run to benefit all of us, not just the very rich
We actually do have the power to create this paradise on earth. We can have it all.
Background: The Problem Begins With Poverty
Money is not the root of all evil. Lack of money is.
Have you noticed that street crime — robbery, burglary, assault, murder, rape, shoplifting, drug-pushing — is most prevalent in impoverished neighborhoods? Of course, you have.
Before becoming a resident of Florida this year, I lived 60+ years north of Chicago, in what locally is known as “The North Shore.” It includes mostly upscale, “bedroom” communities, one of which is Wilmette, Illinois, where I lived.
Wilmette home prices are not only among the most expensive in Illinois, but Wilmette real estate also consistently ranks among the most expensive in America.
Wilmette is a decidedly white-collar village, with fully 94.76% of the workforce employed in white-collar jobs, well above the national average. Overall, Wilmette is a village of professionals, managers, and sales and office workers.
Wilmette is home to many people who could be described as “urban sophisticates”. Urban sophisticates are people who are both educated and wealthy, and thus tend to be older, richer, and more established than young professionals.
“Urban sophisticates” is not just about being educated and well-off financially: it is a point of view and state of mind, one that you might call ‘urbaneness’. But such people can and do regularly live in small towns, suburbs and rural areas, as well as in big cities. They read, support the arts and high-end shops, and love travel.
Do you have a 4-year college degree or graduate degree? If so, you may feel right at home in Wilmette. 83.23% of adults here have a 4-year degree or graduate degree, whereas the national average for all cities and towns is just 21.84%.
The per capita income in Wilmette in 2018 was $87,576, which is wealthy relative to Illinois and the nation. This equates to an annual income of $350,304 for a family of four.
Can you visualize Wilmette?
Google “Murder in Wilmette,” and you might possibly find a half dozen references from the past 50 years. Here is what violent crime looks like in Wilmette, in Illinois, and in the whole United States.
Get the picture?
What is the fundamental difference among Wilmette, Illinois, and the U.S., which can account for the massive differences in crime rates, education rates, and home prices?
Money.
No people are born murderers, rapists, robbers, burglars, and attackers. But lacking money, people are far more likely to grow up as street criminals.
And please spare yourself the anecdotes about impoverished kids who ultimately became pillars of society. Yes, there are plenty of them, and somewhere in their lives occurred fortuitous events that led to their achievements.
Perhaps nature provided them with the necessary brains or brawn to succeed, despite the odds. Or some mentors took them under wing and provided them with the leadership to find success.
And yes, there are rich people who commit crimes, though most often of the white-collar variety. Scant exceptions do occur, but the relationship between poverty and crime, especially violent crime, cannot be denied.
I am as opposed to the proliferation of guns as anyone, but I now do not believe guns are an important cause of crime, though they are an important facilitator of crime (and an even more important facilitator of suicide).
I have come to the conclusion that America could enact the most draconian gun laws on the planet, and that would not solve our crime problems.
We are at the stage in which gun ownership is an addiction, similar to alcohol and drug addictions. The time long has passed when we legally could prevent gun ownership and usage, any more than we were able, via laws, to prevent alcohol ownership and usage during Prohibition, or prevent drug ownership and usage during the “War on Drugs.”
We once could have prevented the disease, but now we are too infected for a cure.
We simply cannot stop gun crime by using the brute force of prohibitive laws. That mule will not respond to the stick. At long last, we must learn to use the carrot — the federal government’s infinite ability to create dollars– and thus cure the poverty that is the root cause of violent crime.
Our primary problem is: People who are not impoverished resent the government giving to the poor. It’s a state of mind that each day is fostered by wealthy propaganda.
Additionally:
The U.S. federal government has the financial power to provide a generous form of Social Security to every man, woman, and child in America, instantly eliminating poverty.
The U.S government has the financial power to eliminate not only most federal taxes (including the onerous, regressive FICA tax), but importantly to reduce the need for state and local taxes — those sales and use taxes that disproportionately affect the less wealthy — by simply giving state and local governments money.
The U.S. government has the power to eliminate the financial impoverishment caused by lack of insured health care, simply by providing no-deductible, comprehensive Medicare for All.
The U.S. government has the financial power to provide schooling to all Americans who want it — grades K through advanced education, thereby not only reducing the costs of college, but by reducing the need for local K-12 school taxes.
The U.S. government has the financial power to reduce global warming by supporting not only net-zero energy use and production, but also by supporting carbon-removal technology usage, research, and development
The U.S. government has the financial power to support water recycling and desalination usage, research and development. There is plenty of water on earth, but too little is fresh, drinkable water, and we rapidly are reducing those supplies.
The U.S. government has the financial power to repair and modernize our infrastructure — our roads, bridges, dams, sewers, electric grid, telecommunication, tunnels, transportation, parks, beaches, etc.
Many of the above initiatives are being attempted by elements of local government and the private sector, all of which have limited funds,
But, for the federal government, money is unlimited and free, created at the touch of a computer key.
Will so much federal spending cause inflation? No, as we have demonstrated here, and here,and here, inflation is not caused by federal deficit spending. Inflation is caused by shortages of goods and services, and often can be cured by federal deficit spending to reduce shortages.
Will so much federal spending be a burden on future taxpayers? No, federal taxes do not fund federal spending. The Monetarily Sovereign federal government pays for its spending by creating dollars, ad hoc. The sole purpose of federal spending is to control the economy by taxing what the government wishes to discourage, and by giving tax breaks to what the government wishes to encourage.
(This is different from state and local government taxes which do fund state and local spending.)
Will so much federal spending be socialism? No, socialism is not funding; socialism is control.
Consider Social Security. It spends billions but it is not socialism. It doesn’t control. It merely funds. Similarly, Medicare has very little control over your medical services other than the amounts it funds.
It does not tell you what doctor to see, what hospital to visit or what medicines to take. It does not control what your doctor diagnoses or treats. Medicare does not fund every procedure, but it does not control your financial ability to have the procedure.
Being Monetarily Sovereign, the American federal government has the financial ability to create paradise on earth. We lack only the knowledge and the will to do it.
The populace has been led to believe slogans like “Too good to be true,” and “No such thing as a free lunch,” which replace facts with a world of disinformation and cynicism, making us surrender before we begin.
As for the will, the government is blocked by the very rich, whose “Gap Psychology” goal is to widen the Gap between the rich and the rest. No matter how rich they are, the rich seem always to want to become even richer, and that requires ever-widening the income/wealth/power Gap. — and that requires pushing down those who are not rich.
In Summary:
The more you experience life’s failures, the more you tend to believe cynically, that a perfect world cannot exist, and that attempts to create perfection are fruitless, wasteful, naive, and even harmful. You have grown to expect disappointment.
So, when you are told the U.S. federal government has the infinite power to create U.S. dollars, and do it without adverse side effects, your knee-jerk response is to deride the idea. Thus, the “too good to be true,” and “no such thing as a free lunch” responses.
Yet, when you are told the U.S. government has the infinite power to create laws, and that U.S. dollars are nothing more than legal creations, not physical creations, you may pause that knee-jerk response.
Just as a federal law can say anything the federal government wishes it to say, the U.S. dollar can be anything and worth anything the law says it is, i.e. anything at all.
Throughout American history, federal law has stated that U.S. dollars were worth varying amounts of silver and gold, a process one hopes finally will have ended in the Nixon year 1971. But the U.S. government could pass a new law stating that the U.S. dollar is worth anything at all — a 1-carat diamond, or a pound of salt, or a quart of pure water. The value of the dollar, i.e. inflation, is in the hands of the government.
Beginning in 1971, the government has allowed the U.S. dollar to “float,” i.e. to allow the public to decide the exchange rate (vs. other currencies) of the dollar.
For that reason, there now can be no real answer to the question, “What is a dollar worth?” You can express it only with regard to other currencies, whose worth is equally vague.
Because a dollar is, in reality, a debt owed by the U.S. government, its value, like the value of all debts, is determined by its collateral, and the full faith and credit of the debtor, the U.S government.
Without gold, (or even with gold), the real collateral for the U.S. dollar is the full faith and credit of the U.S. government — not our “spacious skies or amber waves of grain” — just our full faith and credit.
If you were to try to drill down below exchange value to find the “real” value of the U.S. dollar, you would have to determine the “real” value of the full faith and credit of the U.S. government, an impossible task.
All of the above is meant to show you the truly amorphous nature of the U.S. dollar. It is what the government says it is, and it is worth what the government says it is — and there is no limit to the number of dollars the government can create. The dollar is the offspring of the government’s laws.
In short, there is no limit to what the government can spend to purchase paradise.
Working together, we have all the tools we need to create our paradise.
This simple fact makes a mockery of the President’s and Congress’s “struggles” to pass spending legislation, against those who falsely claim the government cannot or should not spend so much money.
In addition to interest rate control, which affects the market demand for money, and Federal Reserve bond purchases and sales, the federal government can revalue or devalue the dollar, at will.
We created a Monetarily Sovereign federal government and gave it all the power it needs to make America a paradise on earth. It is not constrained by money. It has infinite money and infinite control over the value of its money.
Our world is constrained only by our intellect, our imagination, our will, and our honesty.Barring a meteor strike or the sun failing us, we always will have exactly the world we create for ourselves — exactly the world we deserve.
Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps: Ten Steps To Prosperity:
Background: The government is paying unemployed people only $300 per week, and (surprise, surprise) some people are reluctant to go back to work at jobs that will cost them money.
The purpose of the payments is to prevent families from falling into poverty, which would also help cause the entire economy to slide into poverty.
The payments themselves, though not enough in of themselves to prevent poverty, do benefit every American, rich or poor, by increasing GDP, narrowing the Gap between rich and poor, and preventing a more serious recession.
So what’s a government now to do about those unemployed people who won’t go back to work? It has several choices.
The government can do nothing different, and let the unemployment payments end at the allotted times. This is the “we’re afraid to do anything controversial, so we’ll do nothing” approach of timid politicians.
The government can stop all payments now. This is the “starve ’em ’til they beg for work” approach that businesses and primarily the GOP want.
The government can set a minimum pay requirement that is high enough to make returning to work financially advantageous. This is the “let businesses pay more because the government is going broke” approach.
The government can eliminate the unemployment necessity, and simply give all people a weekly or monthly stipend. This is the “Social Security for All,” progressive approach.
Calls to cancel pandemic-era unemployment benefits intensified this week as worries over a labor shortage gained steam, culminating in a crescendo on Friday after a wildly disappointing jobs report for April.
South Carolina and Montana announced plans before the report to end the jobless programs at the end of July, after weeks of local reports across the country recounted how restaurants couldn’t fill positions.
After the jobs report on Friday, the U.S. Chamber of Commerce announced its support of stopping the extra $300 in weekly unemployment benefits, citing worker shortages, while Sen. Roger Marshall (R-KS) introduced a bill to repeal the pandemic unemployment programs.
The Republicans are sure to favor the “starve ’em ’til they beg for work” approach.
The GOP is, after all, the Party of the Rich, and if there is one thing the rich hate it’s for the poor and middle-classes to have more money or power.
It’s all a reflection of Gap Psychology, a state of mind in which the rich wish to widen the Gap between them and the rest of America.
The Gap is what makes them rich (without the Gap, no one would be rich or poor), and the wider the Gap the richer they are.
Interestingly, many of the poor and middle, having been brainwashed by the rich, to favor punishing the poor and middle to favor the rich.
That too is part of Gap Psychology, the desire to come closer to those above you in the social structure, by agreeing with them.
Voting for a right-winger essentially says, “I admire rich people, and though I myself am not currently rich, I aspire to be rich, and in some twisted way, my voting against the poor moves me closer to being rich.”
“While there are certainly people that needed access to increased unemployment benefits during the heart of this pandemic, we should not be in the business of creating lucrative government dependency that makes it more beneficial to stay unemployed rather than return to work,” Marshall said in a statement on Friday.
While $300 per week is hardly “lucrative,” the U.S. Chamber of Commerce most definitely wishes to avoid a “government dependency” by creating a business dependency, in which people are so desperate they will take any job, even at starvation wages.
That is, rather than giving the government power over people’s lives, the U.S. Chamber wants business CEOs to have power over people’s lives.
As to which is the more benevolent rule might be subject to debate.
All the government wants is your vote and your acquiescence. The business CEOs want your sweat labor and your money. Which is more onerous?
What’s to blame for the disheartening job performance in April, though, has no consensus among economists.
After payroll gains missed by over 700,000 — 266,000 jobs were added last month versus estimates of 1 million — a firestorm on Twitter ignited among economists and analysts, who largely agreed that tightness in the labor market existed, but argued over the culprit.
The so-called “culprit” is quite obvious. Too many jobs pay too little.
Despite right-wing wishes, people are not stupid enough to accept a job paying $300 a week (or even a tad more), especially considering the kind of unpleasant jobs those generally are), when $300 are available for not subjecting oneself to unpleasant jobs ruled by unpleasant supervisors.
Complicating matters is that the jobs recovery is not occurring in a vacuum, but amid a public health crisis that introduces multiple variables.
While there is no single measure for workforce shortage, increased work hours and wages are considered some of the signs that indicate employers are struggling to fill jobs and the labor market is tightening, according to Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute.
Apparently, employers are not struggling enough to make their jobs more attractive, preferring to save money by letting the unemployed struggle.
“If employers really can’t find the workers that they need, they’ll respond by ramping up the hours of the workers,” Shierholz told Yahoo Money.
Rather than hiring more people at improved wages and working conditions, employers prefer to work people to death, even if this requires paying overtime wages.
One clue to unemployment is provided by a story that has been typical even well before COVID:
Pauline Rojas’ high school in San Antonio is open.
But like many of her classmates, she has not returned and has little interest in doing so.
During the coronavirus pandemic, she started working 20 to 40 hours per week at Raising Cane’s, a fast-food restaurant, and has used the money to help pay her family’s internet bill, buy clothes and save for a car.
Rojas, 18, has no doubt that a year of online school, squeezed between work shifts that end at midnight, has affected her learning.
Still, she has embraced her new role as a breadwinner, sharing responsibilities with her mother, who works at a hardware store.“I wanted to take the stress off my mom,” she said.
“I’m no longer a kid. I’m capable of having a job, holding a job and making my own money.”
“There are so many stories, and they are all stories that break your heart,” said Pedro Martinez, the San Antonio schools superintendent, who said it was most challenging to draw teenagers back to classrooms in his overwhelmingly Hispanic, low-income district.
Half of high school students are eligible to return to school five days a week, but only 30% have opted in.
Concerned about flagging grades and the risk of students dropping out, he plans to greatly restrict access to remote learning next school year.
And thus, the Gap between the rich and the rest widens, and it is the lower-income groups who help widen it, not only with their votes but with their personal life decisions.
We discuss, in Ten Steps to Prosperity (See below), this common, seeming paradox, of children and their families rejecting even free college, to work: (SeeStep 5. Salary for attending school.)
It demonstrates why unemployment is a multi-faceted situation, having disparate reasons that cannot be addressed by just one government action.
Lack of good schooling can doom otherwise bright children, our nation’s greatest asset, to lives of wasted potential and abject failure — a great loss to America and a threat to our international leadership. Returning to the original article:
Average hourly earnings for workers in labor and hospitality also increased to $17.88 in April, up from their pandemic low of $16.92 in July and are higher than their pre-pandemic level of $16.90 in February 2020, according to data from the Labor Department.
Some economists pointed to the increase as a sign that employers are competing with the enhanced unemployment benefits, specifically the extra $300 a week that the Chamber of Commerce said “results in approximately one in four recipients taking home more in unemployment than they earned working.“
What a disgrace for America: While corporations and their executive leadership pocket record salaries and perks, 25% of the workforce makes less than $300 a week!
Shierholz noted that the wage increases in some sectors may not be robust enough.
For instance, nonsupervisory workers in leisure and hospitality still make less than $21,000 a year after wage increases, according to Shierholz, or about $10 an hour.
“While there’s definitely signs of isolated and temporary tightness in the labor market,” Shierholz said, “a lot of the huge complaints that we’re seeing really are about businesses being frustrated that they can’t find workers at extremely low wages.”
If your business can’t survive even at slavery-level wages, you had better reassess your business model. Or maybe, just maybe, you should go out of business and not rely on poverty dependency to populate your workforce.
The number of women in the labor force fell by 64,000 in April, while the number of men increased by 493,000, Michael Madowitz, an economist at American Progress, pointed out to Yahoo Money.
“If there is a labor shortage, it’s all about women,” Madowitz tweeted on Friday after the jobs report.
Well, perhaps not exactly:
Scant difference between total unemployment (red) vs women unemployment (blue).
In Summary The purpose of a government is not to increase business profits or to maximize the wealth of the very richest among us.
Nor is the purpose of government to maximize employment.
The sole purpose of government is to protect and improve the lives of the people — all the people.
And since the majority is composed of people, whose lives most need improving — the poor and middle classes — government should focus on helping them rather than on punishing them for not accepting menial labor at starvation wages.
Unemployment is not a disease to be cured by punishing the victims, as the right-wing politicians wish.
Unemployment is a failure symptom of a Monetarily Sovereign government, despite having infinite financial assets, fails to use those asset to address in its primary purpose: To improve the lives of the people.
Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics. Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps: Ten Steps To Prosperity:
It is impossible to hate someone or something without feeling fear. Fear is the baseline emotion, the protective emotion, and hate is the response. Hate/fear is the evolutionary reaction to threat.
The “witches” of Salem were hated because they were feared. We have evolved to hate as a way to attack our fears.
Evolution has one goal: Survival.
But that goal is not the survival of you, an individual creature. It is not even the survival of your, the creature’s, family or species. It is survival of the life code — the DNA or RNA.
We merely are vessels for our life code, which is our real ruler. We are the fur-lined, armor-plated raincoat our DNA wears to protect it from the universe. It is not we who adapt to the life-threatening changes the universe throws at us; it is our DNA that creates the new, improved raincoat.
The universe is antithetical to life. What with the universe’s cold and heat, and its radiation-filled, explosive tendencies, the existence of life is rare and amazing. Yet, here we are.
And while life may lurk in other places than eath, we’ve yet to find it, despite all our efforts.
We have not even agreed on the definition of “life.” I suspect that if a definition is possible it will involve some sort of creation code, like the aforementioned DNA or RNA.
Fear is the essence of survival, but we hold it in low esteem. No one is admired for being a coward, though the fearful merely follow nature’s survival instructions. The dead hero has less chance to pass along his genetic code than does the live coward.
Seemingly then, one might think evolution points us toward being cowards. But the brave have one evolutionary advantage. They have the courage to experiment.
Evolution is a trial and error process, with trillions of trials, trillions of errors, and only a few successes. But those successes are the ones that survive against difficult and changing environments to sire the next generations of adaptations.
And if anything is admired less than the fearful it is the hater, though they are the same. A hater isa sheep in wolf’s clothing.
We do not fear the fearful — “disgust” comes closer — but we do fear the hater, thus returning his hatred.
It can be said that the most fearful, indeed most cowardly, people on earth are the hate-mongers: The Nazis, the “Proud Boys,” the white supremacists, QAnon, the boogaloo bois, et al.
Their mien is designed to intimidate, with tattoos, flags of hatred, fierce beards, military garb, guns, helmets — these are the shields behind which the cowards hide. And they never allow themselves to be alone.
They feel less fearful hiding in crowds of like-minded cowards.
As cowards always do, their leader cozies up to bullies: Putin, Kim, Duterte, and of course, the very rich. He wishes to be one of them, though they laugh at his efforts.
Their leader, so cowardly he invented “bone spurs” to stay out of the military, has been, of late, America’s leading hate/fear monger. He promulgates hate/fear everywhere: Immigrants, Mexicans, Muslims, gays, the Chinese, blacks, the “deep state,” left-wingers, the “swamp,” and all those who reveal the truths about him.
He specializes in hating the poor and powerless. He wasted the influence of his office trying to take the ACA healthcare program from the poor, and had to settle instead for a tax program that widens the income/wealth/power Gap between the very rich and the rest.
His politicians reliably oppose aid to the poor, falsely characterizing them as lazy takers who, if given even a pittance, will not wish to work or to improve themselves, but instead will loll about or commit crimes.
And that leads us to excerpts from the following article.
Poorer children struggled to access higher levels of education, even when their primary school results were high
Wealthier children with low test scores, conversely, were able to catch up to the rest of their classmates
The research incorporates information about education levels attained by the poorest 25% and the wealthiest 25% of participants at ages 8, 12, 15, 19 and 23.
The attainment gap between “high-promise” children from the top and bottom wealth quartiles widened during school, even with similar early test scores.
Wealthier children were far more likely to embark on all forms of tertiary studies, including university, technical colleges, and teacher training.
Even among students who finished secondary school with comparable levels of learning, the attainment gap between the rich and poor students remained significant, with wealthier students more likely to progress to higher education.
“What is clear is that these inequalities in higher education access have nothing to do with ability: This is about systems which are consistently failing poorer children,” says Dr Sonia Ilie, lead author and senior researcher at the Faculty of Education at Cambridge.
The reasons for poorer learning outcomes among poorer children include limited educational resources, limited support at home, and practical difficulties with school attendance.
The fear/hate mongers spread the lie that there are basic human differences between the poor and the rich. They falsely characterize the poor as lazy and lacking ambition.
The mantra is, “If you give them unemployment compensation or food or anything else characterized as ‘welfare,’ they won’t work.”
But your daily experience shows that the poor generally are forced to labor harder, at more difficult jobs than do the rich. And compared to the rich, for whom all doors open, the poor face constant barriers to improvement.
It’s not lack of character or ability that stymies the poor; it’s lack of opportunity.
In addition to spreading the BIG LIE that federal taxpayers pay for federal spending, the haters of the poor promulogate the notion that money is wasted on the poor.
The BIG LIE is the quasi-logical support for the fear/hatred that keeps the poor down.
And that is the connection between our two stories.
A lie cannot long survive without willing believers.
Fear-created hatred provides nourishment for the Big Lie that federal taxpayers pay for benefits to the poor.
Fear/hatred supports the belief that the poor deserve their poverty, and that belief provides justification to deny them support. It destroys our compassion. It justifies our cruelty. It is the basis for Gap Psychology, the desire to distance oneself from those below, and to near those above.
Fear/hatred is how, through the centuries, no much evil has been done in the name of Jesus Christ, who did not fear and did not hate, but preached only love. His most ardent followers have been, and remain, his most ardent deniers.
Your DNA does not care about your hate, fear, love, compassion, morals or beliefs. In the universe, there is no “care.” Your DNA is coldly and chemically practical. It creates your fear/hatred. You have no choice.
You are a dispensible fur-lined, armor-plated raincoat, to be tossed away when the weather changes.
Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics. Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps: Ten Steps To Prosperity:
Absolutely correct.
The U.S. government uniquely is Monetarily Sovereign — it is sovereign over the U.S. dollar. It can create as many as it pleases at any time it pleases, for any purpose it pleases, and give them any value it pleases.
#Monetary Sovereignty - Mitchell 