“A well-regulated Militia, being necessary to the security of a free State, the right of the people to keep and bear Arms, shall not be infringed.”
Now that the Supreme Court, in its great wisdom, has decided that the first thirteen words of the 2nd Amendment, unlike every other word in the Constitution, are useless, meaningless, and to be ignored, we can get on with the job of arming every man, woman, and child with high-powered weapons.
Thank goodness, we can count on these guys to protect America.
There are scores of armed groups, with thousands of members who identify themselves as “militias,” though they are not “well-regulated,” as the useless and meaningless words in the Constitution demand.
From the look of those heavily-armed, “militia” people, perhaps the Supreme Court might have second thoughts about ignoring the well-regulated phrase.
But, I’m sure these guys will come to your defense if the crazy libs force you to receive Medicare, Social Security, and unemployment benefits.
Health Care Spending Is Out of Control Health insurance doesn’t just protect people from financial ruin. It insulates them from individual decisions about price and service quality.
PETER SUDERMAN | FROM THE AUGUST/SEPTEMBER 2019 ISSUE of REASON
Health care in America costs too much because we pay for it the wrong way. And it’s all but certain that we’re going to continue doing so for a very long time.
The crux of the problem is third-party payment, or, as most people think of it, insurance.
The crux of the health care problem in America is insurance??? Americans would be better off if there were no health care insurance???
Pass me another swig of snake oil.
Health insurance doesn’t just protect people from financial ruin. It insulates them from individual decisions about price and service quality.
Those decisions become invisible, outsourced to a middleman—either a private insurer or a federal program—while the patient whose health is at stake is removed from the equation. The result is a system where prices are inscrutable, if they can even be called prices at all.
More spoiler alert: Suderman’s premises are:
Health insurance is bad for America because it relieves you of an impossible task: Shopping for the best and also least expensive hospitals, doctors, nurses, etc. (He later will contradict this nonsense in his own article)
Employees are the ones who actually pay too much for health care insurance when it is provided “free” by businesses. (He doesn’t actually say this, but he should have. It’s the one thing to which I would have agreed.)
Federal taxpayers and the federal government can’t afford to pay for the increasing cost of Medicare. (This demonstrates his colossal ignorance of Monetary Sovereignty and federal financing).
The dominance of third-party payment is almost entirely a result of two policy decisions that have warped the nation’s health care system for decades.
The first was the decision to allow employers to provide fringe benefits, including health coverage, tax-free. This created an incentive for employers to provide more expansive and more expensive coverage.
It made an extra dollar in salary, which would be subject to taxes, worth less than an extra dollar in benefits, which did not incur taxes.
Apparently, Suderman would prefer that employees and employers pay taxes on health care payments, which would reduce the number of companiesthat would pay for it, and the number of peoplewho would receive it.
These reductions would benefit America how? He never says.
The result is that most private insurance is provided through employers, and it tends to be reasonably comprehensive, covering everything from ordinary doctor visits to foreseeable surgeries to truly catastrophic events.
Ooooh, “reasonably comprehensive” health care insurance. This is a bad thing, how? Suderman never says. Apparently, he thinks you should have insurance that won’t pay for . . . what?
Because employers and insurers manage the costs for everything, patients have little incentive to shop based on prices or quality, which can be difficult to determine anyway.
In addition, employers typically pay a large share of the monthly premium, meaning that tens of millions of people are kept ignorant about not only the cost of medical services but the true price of the insurance itself.
Here is where he contradicts his own premise. How many people are capable of intelligently shopping for health care based on prices and quality, which Suderman admits “can be difficult to determine anyway”?
If doctor “A” may be a less skilled diagnostician than doctor “B,” but also is less costly for some procedures, but not for others, by what intelligent criteria can a layperson measure dollars vs. quality of care?
Taking price out of the equation simplifies the task for the average person. Only the very rich can afford to say, “I want the best, no matter the cost.”
As for the rest of us, are we would be left to say, “I can’t afford the best health care, so I’ll settle for the surgeon with the shaky hands.”
Seemingly, that is what Suderman wants for you.
The second policy decision was the introduction of Medicare (and, to a lesser extent, Medicaid) in the 1960s.
Medicare expanded a system of government-run third-party payment to seniors, who, for understandable reasons, consume an outsized share of health care services.
The result was a huge new revenue stream for the health care industry, which rapidly reorganized itself around extracting funds from the program—which is to say, from American taxpayers—by any means possible.
Apparently, Suderman thinks Medicare is a bad thing, because it provides “a huge new revenue stream for the health care industry.” The fact that it happens to provide affordable medical services for the elderly is not really a consideration to Suderman.
And there it is again, the ignorance of federal financing. After all these years of promulgating misinformation, Suderman hasn’t learned that state taxpayers fund state spending, and local taxpayers fund local spending, but federal taxpayers do not fund federal spending.
(The federal government is Monetarily Sovereign. State and local governments are monetarily non-sovereign.)
Suderman’s ignorance about this basic fact is pitiful.
In the first year alone, average daily charges for U.S. hospitals shot up by 21.9 percent, according to professors Ted Marmor of Yale and Jon Oberlander of the University of North Carolina at Chapel Hill.
The rate of growth of physician fees more than doubled in the year between the law’s passage and Medicare going into effect.
During the first five years of the program’s existence, reimbursements through the program grew by 72 percent, while enrollment grew by just 6 percent.
And still, America is short of doctors, nurses, and hospital space. But Suderman wants to cut doctor, nurse, and hospital compensation. That should help America.
Better yet, cut Suderman’s compensation, and pay doctors and nurses more. We need more doctors and nurses, and fewer writers that spread disinformation.
In their recent book, Overcharged: Why Americans Pay Too Much for Health Care (Cato), Silver and Hyman argue that the U.S. health system is best understood not as a means of delivering the best possible care but as a system for funneling as much money to health care providers as possible.
Medicare, they note, will pay for countless expensive in-hospital tests and treatments for a dying individual but not less expensive palliative care offered in that same individual’s home.
Suderman not only wants less money for doctors, nurses, and hospitals, but less for tests and treatment of “dying individuals.” (“We’re cutting off your treatments, Mr. Jones. You’ll be dead in a month, anyway, so this will just make it come a bit sooner. We hope you don’t mind.”)
And yes, the government should pay for palliative home care, just as it pays for hospice (though Suderman probably would complain about that, too, because he complains about all federal spending).
There are few meaningful checks on doctor reimbursements under the program; fraud and waste are pursued after the fact (if at all), which means doctors can always be assured of payment.
Wrong. Medicare and all private insurance companies do place limits on doctor reimbursements. In fact, Medicare’s limits are too low. Suderman surely knows this, so why does he claim otherwise?
Suderman claims your doctor is a wasteful fraud. Apparently, most doctors are, if Suderman says so.
He doesn’t like it that your doctor is “assured of payment.” Better that your doctor should have to sue or beg for payment??
The tax carve-out for employer-sponsored insurance pushes people into more comprehensive coverage, which increases overall demand for health care services, which makes health care providers more money.
If there is anything that angers Suderman, it’s people like you receiving the same “comprehensive coverage” he has.
And having such good care makes you go to the doctor when you aren’t even sick, right? Because you love getting stuck with blood test needles, and enduring digitals, just for the fun of it.
Suderman, who probably has comprehensive coverage, doesn’t want you to understand that overall demand increases when earlier programs were substandard.
It was as if the system was designed with only one goal in mind—maximizing not health or patient satisfaction but the amount of money Americans spend on health care.
The fiscally ruinous results speak for themselves.
Yes, the fiscally ruinous results of not having comprehensive care, have greatly been reduced by health care insurance. Apparently, Suderman believes only rich people deserve comprehensive care.
Silver and Hyman note that the Surgery Center of Oklahoma, a clinic that posts prices online and focuses on patients who pay cash, charges less than $20,000 for a knee replacement; the average price paid across the country is $57,000.
Uh, Peter, who are the people who can afford to pay $20,000 cash for a knee replacement? That’s right, the rich. They are the ones who trot to the Surgery Center of Oklahoma for the best care.
And what happens to the people who can’t afford $20,000 cash? Presumably, the Surgery Center of Oklahoma turns them away.
Fortunately, most people have that health care insurance you so despise.
And, the others just limp along on bad knees.
Direct payment by quality-conscious consumers is an effective way of bringing down costs and total spending. Which is exactly why it will never happen at scale.
No, direct payment by consumers won’t happen because it already has been tried, here and everywhere.
It’s called, “doing without insurance.”
Heading into the 2020 election, Democrats have proposed multiple ways of expanding Medicare, including pushing Medicare for All, a single-payer system in which the government finances nearly all health care services in the United States.
Right. And what exactly is wrong with that? Suderman never says.
The failed 2017 (Republican) effort to “repeal and replace” Obamacare would have left much of its infrastructure, including most of its spending, in place.
“ . . . Left much of its infrastructure (and) most of its spending in place“??? What the hell is Suderman talking about? He has zero idea about what would be “left in place.” He’s just babbling ignorance.
And what spending would be “left in place”? Spending by whom? Surely not by the government. It’s the spending that the GOP wants to cut.
The best hope for change is very bleak indeed. Medicare is racing toward a predictable fiscal crisis. The program’s actuaries predict it will be insolvent in 2026, able to pay only about 89 percent of its bills. That percentage will drop below 80 percent in the coming decades.
The system as it exists today, in other words, is unsustainable. It simply can’t go on like it is—and if Congress continues to do nothing, it won’t
And then we finish off with the old “federal spending is unsustainable” lie. It’s the same lie that Suderman and those of his ilk have been telling since 1940 –even before he was born.
The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.
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:
It takes only two things to keep people in chains:
The ignorance of the oppressed
And the treachery of their leaders
……………………………………………………………………………………………………………………………………………. Quotes: Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”
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.”
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. In this sense, the government is not dependent on credit markets to remain operational. Moreover, there will always be a market for U.S. government debt at home because the U.S. government has the only means of creating risk-free dollar-denominated assets.”
Alan Greenspan (Re. Social Security solvency): “There’s nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.”
The CRFB (Committee for a Responsible Federal Budget) was formed in 1983. For the past 38 years, they have been telling the same old story, namely that the federal deficit and debt are too high — really, really, really too high.
But while that myth . . . uh, story, remains the same-old, same-old, year after year, there is another story they conveniently have omitted: What does it mean for the deficit and debt to be high — really, really high? Why should we care?
Does it mean the federal government is running short of dollars?
Does it mean the federal government will be unable to pay its debts?
Does it mean your taxes need to rise?
Does it mean the economy will suffer because of the federal debt?
Does it mean the federal debt will cause hyperinflation?
Does it mean no one will want to buy Treasury securities?
You might think that after 38 years, the CRFB would be ready, willing, and able to provide data to answer such questions. But amazingly, during those 38 painfully wrong years, the CRFB never even attempts to answer.
They just keep repeating the myth that the deficit and debt are too high. The CRFB seems to believe that if they repeat a lie often enough, they can get people to believe it.
Here are excerpts from the sorry and ongoing saga of CRFB, the paid mouthpiece for the rich:
Congress and the president have been on quite the borrowing binge over the past few months — from multiple rounds of tax cuts to smashing through the budget caps. Meanwhile, talk of paying for these budget-busting policies has just about disappeared.
Immediately, MacGuineas jumps into the phony “paying for” theme. Why is it phony? Because the federal government, unlike state and local governments, uniquely is Monetarily Sovereign.
Being Monetarily Sovereign, the federal government created the very first dollars out of thin air, by creating laws out of thin air. And ever since that time, 240 years ago, the federal government has continued to create dollars out of thin air.
U.S. dollars are not physical things. They are balance sheet notations, and the federal government owns the balance sheets.
Monetarily non-sovereign, state and local government can’t do this. Nor can businesses. Nor can the euro nations. Nor can you and I. The public’s confusion between Monetary Sovereignty and monetary non-sovereignty, is what helps the CRFB promulgate its myth.
But, in fact, as both former Fed Chairmen Alan Greenspan and Ben Bernanke admit, the federal government, uniquely cannot run short of its own sovereign currency, the dollar(which answers questions #1, and #2, above).
Given that the federal government has the unlimited ability to create its own sovereign currency, it neither needs nor uses tax dollars to pay its bills.
In fact, even if all federal tax collections fell to $0, the federal government could continue to spend dollars, forever, simply by creating more dollars (which answers question #3, above).
So, why does the federal government levy taxes? Federal taxation mostly is a relic of our gold and silver standards — those years when the federal government voluntarily surrendered its unlimited ability to create dollars.
Taxation also is an economic control device to reduce certain activities — for instance sin taxes on cigarettes, gasoline, and liquor. Unlike state & local taxation, federal taxation does not fund its spending.
Finally, the rich, who own the federal politicians, do not want you to know that federal spending is not limited by debt or dollar supply.
Continuing the CRFB article: Instead of the sensible conversation that starts with: “If something is worth doing it is worth paying for,” we have been hearing from our leaders: “Don’t worry, this will pay for itself,” and, “This is too important to have to pay for.”
Welcome to the world of free-lunch economics.
By “pay for itself,” many of our leaders try to make you believe something like: “Increased deficits will cause increased income, which will cause increased tax collections, which in turn, will reduce deficits, leading to lower tax collections.”
The CRFB is right. The whole notion that increased deficits can cause reduced deficits is nutty. The idea leads to a ridiculous endless circle, in which high deficits would beget low deficits, which presumably would again beget high deficits.
Thus, it logically and mathematically is impossible for deficit spending ever to “pay for itself” — impossible and wholly unnecessary for a Monetarily Sovereign government.
More to the point, however, the CRFB never acknowledges that increased deficits actually result in economic growth.
Deficit spending grows the economy by putting dollars into consumers’ pockets, which is why when deficit growth decreases we have recessions, and when we have recessions, deficit growth cures them.
The CRFB never mentions this fact, though that answers question #4, above. The economy does not suffer because of federal debt; it thrives.
Continuing the CRFB article: Just this week, we learned that budget deficits are now projected to be $12.4 trillion over the next 10 years — an increase of $2.3 trillion since 10 months ago.
The milestones of trillion-dollar deficits about to return and become permanent, the debt reaching the size of the economy in just over a decade, and annual interest payments increasing by $600 billion over the decade are signs this new school of economics is not putting us on a smart path.
Why are “trillion-dollar deficits” a problem? The CRFB never tells you, principally because they aren’t a problem — not for the federal government and not for taxpayers. No, your grandchildren never will pay the U.S. federal debt, just as you have not paid the debt accumulated for the past seventy years.
(Deficits are a problem for monetarily non-sovereign state and local governments, and for you and me, but the CRFB doesn’t want you to understand the difference.)
And as for question #5 above, do not believe the scaremongers, who tell you deficit spending will cause a Zimbabwe, Weimar Germany hyperinflation (which the U.S. never has had in all its 240-year history).
This graph shows the huge increase in federal debt compared to our modest increase in inflation.
(Aside: Hyperinflations historically have not been caused by deficit spending. They are caused by shortages. Zimbabwe’s was a shortage of food. Germany’s was a shortage of gold. Deficit spending often has been a government’s bad response to hyperinflation, not a cause.)
Continuing the CRFB article: In just a little over a decade, our debt could be the highest it has even been compared to the overall economy. The current record was set just after World War II. The difference here, though is there is no world war. No recession. No depression. Unemployment is low. Growth is strong.
There is no need for stimulus and no rationale to rack up such a huge tab during stable times and already historic levels of debt.
Apparently, Ms. MacGuineas doesn’t realize that she has just admitted the truth:
“The highest debt it has even been” and “historic levels of debt” have brought us “no recession, no depression, low unemployment and strong growth.”
So Ms. MacGuineas, please remind us again why you wish to reduce the debt.
Continuing the CRFB article: Instead, at this point in the business cycle, we should be running surpluses (remember that quaint concept?) to be prepared for the next emergency. But there is zero talk of changing course.
Not only are federal surpluses a “quaint concept,” but they are an economically suicidal concept. 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.
1997-2001: U. S. Federal Debt reduced 15%. Recession began 2001.
Why have federal surpluses repeatedly led to economic failures? Because federal surpluses require either higher taxes and/or lower federal spending. In short, federal surpluses take dollars out of consumers’ pockets, which depresses the economy.
It’s really a simple and straightforward concept, which the CRFB wishes to obfuscate. Don’t fall for it.
Continuing the CRFB article: Sure, there is the empty idea of voting on a balanced budget amendment. If people were serious, this would be a reasonable idea for discussion.
Many details would need to be worked out, like escape hatches for recessions and emergencies, and balancing restraints on spending and revenue.
If a balanced budget was a “reasonable idea,” why would it need “escape hatches for recessions and emergencies?”
Hers is a tacit admission that a balanced budget cannot grow the economy, and whenever a balanced budget causes economic stagnation (which it always has), we need to “escape” from the balanced budget.
Escape how? By running federal deficits — by pumping dollars into the economy — and the bigger the deficits, the faster the recovery.
Continuing the CRFB article: Our fiscal hole is now so large that balance is a long, long way off, and it is better to focus on more credible goals. But come on, in this context, the balanced budget amendment is a total joke.
Here, we agree with MacGuineas. The balanced budget amendment is a total joke, because it would cause the greatest depression in American history, with no way out, no “escape hatch.”
Continuing the CRFB article: Voting to require balancing the budget without putting out a budget that does indeed balance is still looking for that free lunch.
MacGuineas never explains “free lunch,” but we’ll try to help her. A “free lunch” is what the rich receive whenever deficit reduction plans are put forth. The rich always make sure to escape the pain, while the poor and middle-income groups suffer.
Continuing the CRFB article: Our debt is projected to increase by almost 20 percentage points over the next 10 years. Spending on health, retirement and interest alone will double in dollars, and entitlement reform is long overdue.
During the next 13 years, our nation’s major trust funds for highways, Medicare hospital insurance and Social Security will run out of full funding. If Congress had addressed this problem 10 years ago, revenue and benefit changes would have been much smaller.
And here, the CRFB reveals its true motive: On behalf of the rich, the CRFB wants to cut Medicare, Social Security, and all other social programs (aka “entitlement reform”).
(The Gap is what makes the rich, rich. Without the Gap, no one would be rich; we all would be the same. The wider the Gap, the richer they are.)
Continuing the CRFB article: Even today, changes can be phased in. But if we wait a few more years, the choices are much more difficult. Instead, this fiscal situation has been made dramatically worse by the large, irresponsible, unpaid-for tax cuts.
Taxes are “paid for” by taxpayers. But, who pays for tax cuts? Answer: The federal government which, being Monetarily Sovereign, neither needs nor uses tax dollars.
Continuing the CRFB article: Free-lunch economics appears poised to do major damage to our economy, slowing growth, increasing the chances of some type of crisis and starving the nation of the resources and flexibility to meet new challenges — from the threat of recession to grappling with artificial intelligence and the future of work.
Let’s examine the above nonsense paragraph. MacGuineas claims deficit spending “slows economic growth.” But how does pumping more dollars into the economy — the thing the government does to cure recessions — slow economic growth? It doesn’t.
And how does adding dollars to the economy “starve the nation of resources and flexibility to meet new challenges”? It’s all ridiculous.
Finally, if one wishes to “grapple with artificial intelligence (AI),” we must provide a source of income for people who have lost income to AI. Federal deficit spending, not tax increases, are needed.
Continuing the CRFB article: Policymakers have dug themselves into quite the hole. Our historic and unsustainable debt cannot be fixed with more tweaks and gimmicks.
What is “unsustainable” about the debt? It consists of deposits plus interest. The deposits are paid off with dollars already in the accounts, and the interest is paid by a government that has the unlimited ability to create dollars.
So, “unsustainable,” a word the CRFB often uses to describe the deficit and debt, is a lie, a Big Lie.
And then finally MacGuineas repeats the real purpose of the CRFB:
Continuing the CRFB article: It will take a big deal including new discretionary spending caps, a real plan to fix our entitlement programs and changes to bring in more revenues. Fairy dust, wishful thinking and free-lunch economics won’t get us there.
The real purpose of the CRFB is to facilitate cutting “entitlement” programs — Medicare, Social Security, Medicaid, aids to the poor, aids to education.
The CRFB wants to cut the programs that help narrow the Gap between the rich and the rest. That is the fundamental purpose of the CRFB.
Let’s end with a mention of question #6: Does it (a large debt) mean no one will want to buy Treasury securities?
As we already have discussed, the federal government does not need to sell T-securities — at least not to fund spending. And even if the federal government did need to sell T-securities, and in the remote possibility that no one wanted to buy them, the Federal Reserve has the power to buy them — in fact, it already has, many times.
“Back in March 2009, Mr. Ben Bernanke told CBS News’s Scott Pelley that the Fed was printing money to fund an earlier bond-buying program.
“It’s not tax money. The banks have accounts with the Fed, much the same way that you have an account in a commercial bank.
“So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed.
“It’s much more akin to printing money than it is to borrowing.”
The Federal Reserve, an agency of the federal government, the bank where other federal agencies maintain accounts, has the unlimited ability to “use the computer to mark up the size of the account that they have with the Fed.”
That is how the federal government creates dollars. It uses the computer to mark up accounts. It can do this endlessly if it chooses.
So think about it. If you could use your computer to create unlimited dollars simply by marking up your bank account, at any time, and in any amount you chose, would you worry about debt? Wouldyou need to borrow? Would you need to ask anyone for dollars?
Of course not. And that is why the CRFB is a fountain of lies — lies that hurt America, just to widen the Gap between the rich and the rest.
The federal government is not running short of dollars.
The federal government always will be able to pay its debts.
Your taxes do not need to rise.
The economy will not suffer. because of the debt.
The debt will not cause hyperinflation.
It does not mean no one will want to buy Treasury securities.
Continuing the CRFB article: Maya MacGuineas is the president of the Committee for a Responsible Federal Budget and head of the Campaign to Fix the Debt.
MacGuineas should be ashamed of damaging America by telling such monstrous lies, but apparently, a nice salary can be convincing.
The most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-lesses.
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:
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.
Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
There is something of a rule in problem-solving that questions beginning with “How” are to be preceded by a thorough examination of questions beginning with “Should.” President Bush II failed to do that when he asked his advisors questions like, “How do we fight a war in Iraq and Afghanistan” and “How do we arrest Saddam Hussein.” The correct questions were “Should we fight a war in Iraq and Afghanistan” and “Should we arrest Saddam Hussein.”
A football coach does not begin with “How can we increase our passing yardage?” He begins with “Should we increase our passing yardage?” A company does not begin with, “How can we increase the number of our stores?” It begins with a thorough examination of “Should we increase the number of our stores?”
Sadly, President Obama, Congress, the media and the old-line economists work feverishly to answer the question, “How can we reduce the federal deficit?” They believe a thorough examination of “Should we reduce the federal deficit?” is unnecessary. They already “know” the answer, despite massive evidence to the contrary.
When you ask the wrong question, you find the wrong answer. Congress and the President can’t agree on an answer, because the question is wrong. It’s akin to asking, “How should we sail a ship without falling off the edge of the world?”
The correct question is, “Should we reduce the federal deficit?” Many people give perfunctory, knee-jerk answers, such as, “The deficit is not sustainable” or “Our children will pay for it.” But no answers have been based on the one, overriding, undeniable fact:
Federal deficits = net non-federal saving
Cut deficits and you cut saving. Cut saving and you cut economic growth. Cut economic growth and you enter recessions and depressions and the unemployment that accompanies them. The facts are that simple and undeniable. But, the President and members of Congress do not work from facts; they work from what each believes is common sense.
Common sense consists of beliefs most people consider obvious and sound, things “everyone knows.” Yet, your common sense may be different from my common sense, because it is affected by our different personal experiences, as well as by analogy, religion, social mores, history, logic, teaching, folklore, aphorisms, leaders and every form of information transfer, all of which vary from person to person.
The earth must be flat, not round, else the oceans would pour out. Nothing can be in two places at the same time – except in Quantum Mechanics. Running fast does not make your watch run slower – except in Relativity. If a roulette wheel lands on red five times in a row, it is more likely to land on black the next spin. Common sense.
Because common sense does not require research, it allows for fast decisions and is powerfully built into our genes. We have great difficulty departing from our common sense beliefs, because they are evolutionarily valuable. We experience and use common sense every day of our lives. We do not need research to tell us to avoid walking blindly into a street or reaching into a fire. Anyone who intentionally does these things is a “fool.”
So powerful is common sense, we angrily consider all those who depart from of our visions of common sense to be fools. Here are examples of common sense for most Americans:
1. Debt is a burden on the debtor; the more debt, the greater the burden. Debtors can be forced into bankruptcy by creditors.
2. A deficit is worse than a surplus. Outgo requires income. Taxes and borrowing pay for government spending.
3. Everything has a cost and a limit. Nothing can be created from nothing. Nothing goes on forever. There is no such thing as a free lunch. No pain; no gain. If it sounds too good, it is.
4. The greater the supply, the less the value. “Printing” money causes inflation. You can have too much of a good thing.
5. Dollars are real and scarce. They can be held, stored and moved.
Every one of these common sense beliefs either is always false or often false, when applied to the U.S. federal government, because:
1. Federal debt is not a burden. Unlike state and local governments, the federal government cannot be forced into bankruptcy (except by Congress). It can service any debt of any size, any time.
2. Federal deficits stimulate the economy while surpluses cause recessions and depressions. The federal government, being Monetarily Sovereign, neither needs nor uses taxes or borrowing to pay its bills.
3. The federal government creates money by marking up the bank accounts of creditors, in a cost-free, pain-free, limit-free process. To the federal government, money is a “free lunch.”
4. Increasing the supply does reduce value, unless demand increases more. Money demand is increased by interest rates. Since we went off the gold standard, there has been no relationship between federal deficit spending and inflation.
5. Dollars have no physical reality. They are nothing more than numbers in bank accounts. Even dollar bills are not dollars; they are receipts or titles for dollars. Dollars are not scarce to the federal government.
These truths are counter to intuition, counter to common sense and counter to the beliefs of most Americans, yet they are truths, nonetheless.
Very soon, Americans will face the cold reality of recession or depression, caused by Congress’s and the President’s following their “common sense,” rather than economic fact. Federal spending for Social Security, Medicare, Medicaid, and many other vital federal services will decline. We will suffer “invisible” pain from the loss of scientific and medical research, declining infrastructure, a weaker military, poorer schools, less food and drug inspection, and worse investment protections. Our standard of living will decline. Unemployment will worsen. Destitution will increase. Our children and our grandchildren will lead meaner lives. Their futures will be impoverished.
And most Americans will not realize what has been done to them.