–Bribery, secrecy and the Big Lie. How each day we lose more of our freedom.

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

Mitchell’s laws:
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which ultimately leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive, and the motive is the gap.
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We repeatedly are told our government keeps secrets from us to protect us from our enemies.

Nothing could be further from the truth. For the most part, our enemies either already know these secrets, and/or the secrets are not important to our security.

The universal purpose of government secrets is to protect the government from us. Few politicians would keep their jobs if we knew what they really were doing.

OpEdNews Op Eds 8/22/2014
The U.S. government’s creeping war on journalists
By David Sirota

As states move to hide details of government deals with Wall Street, and as politicians come up with new arguments to defend secrecy, a study released earlier this month revealed that many government information officers block specific journalists they don’t like from accessing information.

The news comes as 47 federal inspectors general sent a letter to lawmakers criticizing “serious limitations on access to records” that they say have “impeded” their oversight work.

Reason Magazine has reported a 114 percent increase in Freedom of Information Act rejections by the Drug Enforcement Agency since President Obama took office.

The National Security Agency has also issued blanket rejections of FOIA requests about its metadata program.

And the Associated Press reported earlier this year that in 2013, “the government cited national security to withhold information a record 8,496 times — a 57 percent increase over a year earlier and more than double Obama’s first year.”

(Even at the city level),in Chicago, for example, officials in Mayor Rahm Emanuel’s administration rejected a request for documents about an opaque $1.7 billion fund, some of which has flowed to the mayor’s political donors. Officials said it would take too much staff time to compile the data and that therefore the request was “unduly burdensome.“

Remember Rahm Emanuel? He honed his secrecy skills in the Obama administration. I urge you to read the entire article.

Then, consider Edward Snowden:

NSA leaker Edward Snowden asks to extend Russia asylum
By Greg Botelho, CNN

He leaked secret information about U.S. spying programs. You didn’t know the NSA was spying on you and your family in violation of the Constitution, taking incredible amounts of information about you, your friends, those with whom you make contact every day of your life.

Had the government asked, you would have denied permission for that intrusion into your privacy. It didn’t ask. It just took. And you only now are aware of it, thanks to Snowden, which makes him an enemy, not of America, but of the politicians.

According to Presidential hopeful, Hillary Clinton:

“I think he is a poor messenger for the message that he’s trying to take credit for. I think he could have provoked the debate in our country without stealing and distributing material that was government property and was of some consequence.”

“Stealing government property”? That’s the “grave” offense for which he is being hounded worldwide by government agencies? Exactly what “government property” did he steal? Your personal information, which Mrs. Clinton now considers “government property.”

And of what “consequence”? We never have been told exactly what harm Mr. Snowden is supposed to have caused. The only “harm” that has been documented is: He lifted a rock and many embarrassing secrets about illegal government activity slithered out.

Mrs. Clinton’s comment tells us much about what kind of President she hopes to be. Following President Obama’s false claims of “transparency,” she will be our next secrecy President.

Read this article about government secrets:

Constitutional Black Out
13 Things the Government is Trying to Keep Secret From You
by BILL QUIGLEY

“We believe most Americans would be stunned to learn the details of how these secret court opinions have interpreted…the Patriot Act. As we see it, there is now a significant gap between what most Americans think the law allows and what the government secretly claims the law allows.

This is a problem, because it is impossible to have an informed public debate about what the law should say when the public doesn’t know what its government thinks the law says.”

The Government falsely assured the US public in writing that privacy protections are significantly stronger than they actually are, and Senators who knew better were not allowed to disclose the truth

The paranoia about secrecy of surveillance is so bad in the House of Representatives that an elected member of Congress was threatened for passing around copies of the Snowden disclosures which had been already printed in newspapers worldwide

For secrecy to be effective, there must be false dangers from which we are told we must be protected by secret means. And of course, this secrecy requires giving up our liberties. Today’s false “dangers” include:

1. Criminal and contagiously diseased foreigners massively flooding across our borders. We need more police, “stopping and frisking,” not only at our borders, but throughout America.
2. Black and brown domestic criminals steal our jobs and can be controlled only by our privately owned guns, aggressive police and harsh punishments
3. Muslim terrorists lurking in every neighborhood, who wish to behead us, and whom only our secret police can control.
4. Russians who wish to conquer us and who can be controlled only by our powerful military and spy organizations.
5. Federal social spending on the criminal poor, which causes inflation, rampant unemployment and future poverty for our children. It must be cut.

Create enough fear and loathing, and the populace will do anything and question nothing. The politicians want frightened, docile voters.

And that brings us to the Big Lie. As readers of this blog know, the Big Lie is a composite lie, composed of several lies, including:

1. Federal finances are the same as personal finances (per President Obama)
2. Taxes and taxpayers pay for federal spending.
3. The federal government, Social Security, Medicare, SNAP (food stamps) and other agencies all are “broke” (to quote John Boehner), so taxes must be increased and/or benefits reduced.

[See a more complete list at: Which of these myths do you believe? A test of your knowledge.]

The purpose of the Big Lie is to widen the income/wealth/power Gap between the rich and the rest.

Federal deficit spending benefits the not-rich far more than it benefits the rich. The Big Lie is an attempt to convince you that federal deficit spending is harmful, and that austerity (i.e. deficit cutting) somehow protects you and your children from some awful, future consequences.

In summary, the rich control the politicians, the media and the university economists. The politicians are controlled via bribery in the form of campaign contributions and promises of lucrative employment later. The media are controlled via ownership. The university economists are controlled via contributions to their universities from those like the Koch brothers et al, who influence course content and teaching.

And the politicians control the populace via secrecy and the Big Lie.

So long as we continue to believe and vote for politicians who promote secrecy and the Big Lie, the income/wealth/power Gap will widen and we will be slaves to the rich.

Bribery, secrecy and the Big Lie: This is how each day, we and our children lose more of our freedom, our power and our American dream.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here)
10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

—–

10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
Two key equations in economics:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports

THE RECESSION CLOCK

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

–The Fed continues to cure our anemia by bleeding us with leeches

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

The U.S. dollar is both the lifeblood and the measure of our economy. Gross Domestic Product (GDP) is a dollar measure. The equation, GDP = Federal Spending + Non-federal Spending + Net Exports is a dollar measure.

Federal government deficit spending (Spending – Taxing) adds dollars to the economy, which helps grow the economy. The euro nations have had difficulty recovering from the Great Recession, because they practice a more extreme form of austerity (reduced deficits) than does the U.S.

Five years ago, this blog published “The low interest rate/GDP growth fallacy.” Here are a few excerpts:

The Fed raises interest rates to fight inflation. To fight recession, the Fed does the opposite. It cuts interest rates.

This may sound logical except for one, very small detail. The opposite of inflation is not recession. The opposite of inflation is deflation. So doing the opposite of what you would do to counter inflation makes no sense when trying to counter a recession.

We could have a recession with deflation. We could have a recession with inflation, which is called “stagflation.” The history of Fed rate cuts, as a way to stimulate the economy, is not a good one.

Declining interest rates correspond with declining GDP.

Why does popular faith hold that cutting interest rates stimulates the economy? Because popular faith views only one side of the equation. But, for each dollar borrowed a dollar is lent. $B = $L.

Cutting interest rates does cost borrowers less. A business might be more likely to borrow if interest rates are low than when they are high. Further, consumers buying on terms are more likely to buy when borrowing is less costly.

But, when interest rates are low, lenders receive less money. And who are the lenders? Businesses and consumers.

You are a lender when you buy a CD or a T-bond, or put money into your savings account. When interest rates are low, you receive less money, which means you have less money to spend on goods and service — which means less stimulus for the economy.

The Fed has not learned from experience, but stubbornly adheres to the popular faith that interest rate cuts stimulate the economy.

I urge you to read that 2009 post before continuing. It serves as background for the article I saw today:

Yellen: Job-Market Shifts Complicate Interest Rate Decision
The Associated Press

Federal Reserve Chair Janet Yellen’s remarks to an annual Fed conference in Jackson Hole, Wyoming, offered no signal that she’s altered her view that the economy still needs Fed support from ultra-low interest rates.

Yellen repeated language the Fed has used at its last meeting that record-low short-term rates will likely remain appropriate for a “considerable time” after the Fed stops buying bonds to keep long-term rates down. The Fed’s bond buying is set to end this fall.

The Fed chair noted that while the unemployment rate has steadily declined, other gauges of the job market have been harder to evaluate and may reflect continued weakness. These include high levels of people who have been unemployed for more than six months, many people working part time who would like full-time jobs and weak pay growth.

Translation: The patient has been suffering from anemia since 2008. We’ve been drawing his blood and applying leaches, but still he has anemia. The only solution is to keep bleeding the patient with leeches.

This false belief about low interest rates, along with Congress’s ongoing campaign to reduce federal deficit spending (aka “austerity,”) which also limits money supply growth) has been responsible for our current economic troubles.

The moral of the story, according to the Fed, is: If something does not work, never has worked and never can work, keep doing it, again and again and again. Never admit you were wrong in the first place.

Just keep drawing blood out of the economy, and hoping that in some unknown way, its current anemia magically will cure.

Rodger Malcolm Mitchell
Monetary Sovereignty

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THE RECESSION CLOCK

Vertical gray bars mark recessions.

#MONETARYSOVEREIGNTY

–If you’re poor, the government knows what’s best for you.

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

Poor people who receive aid from the government are stupid and don’t know what’s good for them — at least not as well as the government does. Right?

Food Stamps’ $80 Billion Mystery
AUG 19, 2014, By James Greiff

Imagine a government program that has exploded in size, is the subject of bitter partisan haggling and spends almost $80 billion a year in secret. The program in question is food stamps, the Supplemental Nutrition Assistance Program (SNAP), which now are used by one in six Americans.

The U.S. Department of Agriculture opposed telling the public which businesses get all that money. Taxpayers deserve to know how their money is spent, although fraud is estimated by the Government Accountability Office at about 1 percent.

Ooooh, 1 percent fraud. And what exactly is that “huge” fraud?

. . . an investigation into claims that beneficiaries received cash from retailers instead of food.

Oh, no! Poor people receiving cash? How awful! (Actually, I’m not sure why it’s awful, but it surely must be.)

While it is good governing for the public to know how the government spends, it isn’t taxpayer money the government is spending. The government creates dollars, ad hoc, by spending. No tax dollars involved. Not one SNAP dollar comes out of your or my pocket.

What might the food-stamp information tell us? At a minimum, we would get confirmation that they make up a large part of the sales of some of the country’s biggest retailers, such as Wal-Mart Stores Inc.

Not really vital public information, is it? Are other businesses required to disclose who their customers are or even the categories of their customers?

But wait, we now arrive at the most important part — the nanny-state implications:

If the data were public, watchdogs and the news media could ferret out retailers that do an inordinate amount of food-stamp business, perhaps because they permit misuse of the benefits.

A number of food activists think the Agriculture Department should go further and disclose what products are purchased. Food stamps can be used to buy almost anything, with the exception of tobacco and alcohol and a short list of nonfood goods such as pet food, soap, household supplies and some prepared foods.

Really? The government doesn’t allow poor people to buy soap with SNAP benefits? Well, thank goodness for that!

That leaves the entire universe of junk food, which is responsible in large measure for the U.S. obesity epidemic. Obtaining product information might help public-health officials persuade lawmakers to adopt reasonable prohibitions on food-stamp use.

“Reasonable” prohibitions? Is that like, “You’re poor, so no Coca Cola or potato chips for you. Those kinds of foods are just for people who have earned them”?

The (SNAP) cards could be programmed to help the USDA glean valuable data on what recipients are buying. With that, the government could develop a “do-not-sell” list that retailers could incorporate into the product codes that are scanned at the point of sale.

See, it’s like this: If we, the government, simply banned all the foods we, in our infinite wisdom, felt were bad to eat or drink, there would be riots in the street. But we can do it to you poor people, because . . . well because you have no clout. Your political contributions are next to nothing, which means you are next to nothing.

It might steal some of the rhetorical heat from those who think too many people on food stamps are living high on the taxpayer’s dime.

Oh right, those people with SNAP cards really are living in mansions and driving Mercedes. Out of the 50 million people using SNAP, there must be at least a hundred rich ones.

Bottom line, this is just the tip of the contempt iceberg, in which the poor are viewed with disgust, and every negative label is attached to them: Stupid, lazy, dirty, sneaky, criminal, immature, dangerous — so that they must be controlled on a short leash, as this comment on the article indicates:

People are more willing to help if they feel the person truly needs help. When they are buying lobsters and you’re buying chicken…well, it doesn’t make you feel sorry for them, does it?

When the aid is supposed to only last 3 years, but the government stops enforcing that, well, it makes me care less. When immigrants teach other immigrants how to game the asset rules, you know its become a profession and not a temporary means of helping someone up.

Oh, the hatred. This is the new America, where it’s now cool to find a good excuse for not helping the poor, and what better excuse is there than, “They don’t deserve help.”

In reality, most of the poor are poor because of some failure by the government. For instance, here is a verbatum comment about the article:

“As a dfcs employee i see both sides of the issue, but what troubles me more is the fact that the workers like myself who work for the state and have college degrees are being paid so little that the majority of coworkers receive food stamps!…the system is f-ed up!!!”

These are the working poor, you know, those “lazy” people, many of whom work much harder than the lucky plutocrats. Apparently, these lazy poor are too stupid to know what to eat.

If the government were to institute the “10 Steps to Prosperity” (below), we’d have far fewer poor and far fewer excuses needed for not helping them.

Meanwhile, we all can take comfort in knowing that the government is telling the poor what they can and cannot eat, and even whether they are allowed to bathe.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARYSOVEREIGNTY

–The vast difference between the real Effect and the supposed Purpose of federal taxation

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

Today, Philip Pilkington, one of the chosen few who understands Monetary Sovereignty, published a marvelous article, Taxation, Government Spending, the National Debt and MMT that appeared in the Naked Capitalism blog.

I’ll give you a few excerpts, but I urge you to click the link and read the article in its entirety.

. . . .an absolutely fascinating piece of writing called ‘Taxes For Revenue Are Obsolete,’ was written in 1945 by Beardsley Ruml, the director of the New York Federal Reserve Bank from 1937-1947. He also worked on issues of taxation at the Treasury during the war.

The article lays out the case that taxation should not be focused on revenue generation. Rather, Ruml argues, it should be thought of as serving other purposes entirely. He writes:

The necessity for a government to tax in order to maintain both its independence and its solvency, is true for state and local governments, but it is not true for a national government.

Two changes of the greatest consequence have occurred in the last twenty-five years, which has substantially altered the position of the national state with respect to the financing of its current requirements.

The first of these changes is the gaining of vast new experience in the management of central banks.

The second change is the elimiantion, for domestic purposes, of the convertibility of the currency into gold.

Ruml is making the same case that the Modern Monetary Theorists (MMTers) make: a country that issues its own sovereign currency and is unconstrained by a gold standard does not require tax revenue in order to fund spending.

This is because the central bank always stands by ready and able to buy any sovereign debt issued that might lead to the interest rate rising. Indeed, it does this automatically in the way that it conducts its interest rate policy. Ruml then outlines what taxation is really for in such a country.

What Taxes Are Really For
Federal taxes can be made to serve four principal purposes of a social and economic character:
1. As an instrument of fiscal policy to help stabilize the purchasing power of the dollar;
2. To express public policy in the distribution of wealth and income, as in the case of the progressive income and estate taxes;
3. To express public policy in subsidizing or penalizing various industries and economic groups;
4. To isolate and assess directly the costs of certain national benefits, such as highways and social security.

‘ ‘ ‘ taxing is never to be undertaken merely because the govenrment needs to make money payments. . . Taxation should be imposed only when it is desirable that the taxpayers shall have less money to spend, for example, when they would otherwise spend enough to bring about inflation.

The above is the essence, which you who understand Monetary Sovereignty, will find quite familiar. But again, I urge you to to read the article, which has additional informative commentary.

That said, I have one bone to pick with Mr. Ruml and Mr. Pilkington, and it’s a rather large bone. Both gentlemen discuss theoretical, academic effects of taxation, but both ignore the real, political purpose of today’s tax structure, which is: To provide the underpinnings for widening the Gap between the rich and the rest.

Consider Ruml’s point #2: (“To express public policy in the distribution of wealth and income, as in the case of the progressive income and estate taxes”) implies that taxes serve to narrow the Gap, while in fact, the opposite is true — for two reasons:

1. Middle-class salaried people pay FICA, high tax rates on salaries, plus many and various sales taxes and other state taxes, all adding up to an enormous percentage of their income — often approaching 50% when everything is considered.

By contrast, for the wealthy, FICA is collected only on a minuscule part of their income, taxes on capital gains and interest (from which the wealthy receive a majority of their income) are at low rates, and various “loopholes” are available only to the wealthy.

By clever manipulation, it can be realistic for an ultra rich to pay virtually no taxes at all, or very close to it.

2. Collecting taxes fools an uniformed public into believing federal government finances are like personal finances, thereby justifying austerity. Because austerity punishes the lower 99.9% far more than it punishes the upper .1%, austerity widens the Gap between the rich and the rest — and it is the Gap, more than absolute dollars — that the rich treasure most.

Thus, though Ruml and Pilkingon understand the mechanics of Monetary Sovereignty, they seem to believe our government leaders are ignorant of these facts. That is naive.

It is naive to believe that every President, the entire Council of Economic Advisers (composed of scores of professional economists), all 535 members of Congress, all media writers and the hundreds of university economists all are ignorant of the simple fact that federal financing is not like personal financing.

Why then did Rep. Boehner say, “Let’s be honest. We’re broke”? And why did President Obama say, “(My) budget asks Washington to live within its means . . . That’s what families do in hard times. And that’s what our country has to do, too”?

Why do all the media writers and most university economists proclaim that the federal deficit and debt are “unsustainable”?

They are paid by the upper .1% to widen the Gap.

The politicians are bribed by campaign contributions and promises of lucrative employment later. The media are paid by ownership. The universities are bribed by contributions to their various funds. Almost no one is willing to incur the wrath of the upper .1%, and lose precious dollars and jobs, by revealing that federal deficits are necessary, easily supportable, and can be non-inflationary.

No, it isn’t ignorance by our leaders that leads us to austerity, i.e increased taxation and reduced spending. It is greed by the upper .1% and by those whom they bribe, which leads inexorably to a the widening of the Gap.

It’s the Big Lie, and until we understand this, all the “education” in the world will not change things.

We must confront, challenge and accuse. We must throw into their faces, the word “bribery,” until the public grows angry enough to demand change. Nothing good will happen until then.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

—–

THE RECESSION CLOCK

Vertical gray bars mark recessions.

#MONETARYSOVEREIGNTY

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