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

Mitchell’s laws:
●Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

●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.
============================================================================================================================================================================================

How smart are you citizens of Kentucky? Here’s a test for your spleen.

Los Angeles Times
Michael Hiltzik

Senate Minority Leader Mitch McConnell (R-Ky.), who is facing a stiff reelection challenge this year, has stuck to his stated determination to repeal the Affordable Care Act if his party takes control of the Senate in the next election.

This is a curious and delicate position for McConnell to hold, because his home state is one of the shining beacons of the ACA’s rollout. The Kentucky health insurance exchange, Kynect, is enormously popular among Kentuckians. Some 527,000 residents have signed up for qualified health plans or Medicaid, which the state expanded.

Much of the credit belongs to Democratic Gov. Steve Beshear, so don’t expect much acknowledgment from McConnell. Still, the extent to which McConnell twisted facts and figures on the ACA during his debate Monday with challenger Alison Lundergan Grimes amazed knowledgeable observers, perhaps none more than Charles Gaba, proprietor of the indispensable ACASignups website.

So Gaba sat down to fact-check every misstatement. He identified 13 uttered during about a five-minute discussion of the ACA, plus about 14 “questionable/confusing statements by either him or the moderator.”

Many of the misstatements — heck, call them lies, as Gaba does — are part of discredited Republican attacks on the ACA going back years; what’s shocking is that McConnell is still hauling them out.

–McConnell dismissed Kynect as (just) “a website.” It’s not; it’s a full-featured exchange that has delivered coverage to more than a half-million Kentuckians.

–McConnell denied Grimes’ assertion that Kynect had served more than 500,000 residents. Gaba assumes he’s subtracting the residents who obtained Medicaid coverage through Kynect. Gaba: “People on Medicaid apparently don’t count as human beings.”

–McConnell claimed the Congressional Budget Office “estimates 2.5 million jobs would be lost” because of the ACA. This is a lie. As Gaba points out, the CBO said the law would allow up to 2.5 million workers to leave their jobs or retire. This is because it eliminates “job lock,” which tied workers to otherwise unwanted jobs because that was the only way they could get health insurance.

–People are “paying more for less” and hospitals are facing more “uncompensated care.” Misleading and wrong on both counts. The rate of premium increase for 2015 under the ACA is averaging 6%, and in many states much less — compared with average increases in the individual market of 10% a year before the ACA. And the new rates are almost always for better coverage. Hospital uncompensated care costs will be $5.7 billion less this year than they would have been without the ACA, a 16% drop from last year.

–McConnell: “They don’t want to tell you” how many people got insurance via Kynect after having their old policies canceled. He’s implying, of course, that most Kynect enrollees already had insurance. He’s wrong: Seventy-five percent of all Kynect enrollees were previously uninsured.

McConnell’s performance demonstrates nothing but pure partisan cynicism. He’s the senior U.S. senator from a state whose experience with Obamacare has been an unalloyed positive, benefiting more than a half-million constituents.

Yet he’s campaigning to cut them off, dooming many of them to a return to a condition in which health insurance could be denied, cut off or pitched beyond their capacity to pay, all at the whim of the insurance industry.

The people of Kentucky, being intelligent, will to see through McConnell’s obvious lies, and send this career politician to the retirement he so richly deserves. Right?

Democratic ads off the air in Kentucky Senate race

FLORENCE, Ky. (AP) — The Democratic Senatorial Campaign Committee has stopped running TV ads in Kentucky’s U.S. Senate race, a severe blow to Alison Lundergan Grimes in her challenge to Republican leader Mitch McConnell.

The committee’s decision in Kentucky was in strong contrast to its activities in other states with pivotal Senate races. Democrats continued to spend freely in Iowa, Georgia, North Carolina and several other states as they tried to blunt a Republican drive to gain a Senate majority in midterm elections.

Grimes was heavily recruited by Democrats to challenge McConnell, but her support eroded in recent polls under the weight of attacks by McConnell and his allies. While McConnell has been plagued by low approval ratings, he has sought to turn the election into a referendum on President Barack Obama, who is even more unpopular in the state.

Grimes’ campaign has been outspent by McConnell and his network of super PACs by tens of millions of dollars.

The Democratic Party ads went off the air as scheduled after Monday, at the end of a two-week period. At the same time, the Kentucky Opportunity Coalition, the super PAC supporting McConnell, launched yet another $1.2 million TV ad buy on Tuesday that again connects Grimes to Obama.

The choice is this, for you Kentuckians: If you really, really hate President Obama, you can vent your spleen by voting for McConnell. Of course, you will lose your ACA, with no plausible alternative being proposed.

And no matter for whom you vote, you will lose Obama, who will be out of office in two years.

Bottom line question: Would you rather that your spleen be vented, or would you prefer your spleen to have good health care?

It will be interesting to see the results of this test.

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

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
——————————————————————————————————————————————

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

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

Mitchell’s laws:
●Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

●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.

According to her bio: “Megan McArdle is a Bloomberg View columnist who writes on economics, business and public policy. She is the author of “The Up Side of Down.” McArdle previously wrote for Newsweek-the Daily Beast, the Atlantic and the Economist. She founded the blog “Asymmetrical Information.” She has a bachelor’s degree in English literature from the University of Pennsylvania and an MBA from the University of Chicago.”

What her bio doesn’t say is that she is a dedicated deficit hawk, continually preaching what has become known as the Big Lie — the supposed dangers of deficits for a Monetarily Sovereign government.

That, of course, is akin to preaching the dangers of scoring for a football team.

Readers of this blog may have seen our Oct 12 2013 post, “The Recession Clock ticks; the recession draws closer” It contains the same graphs that appear at the bottom of this page, demonstrating that reductions in deficit growth repeatedly lead to recessions.

And those recessions repeatedly are cured by increases in deficit growth. It’s a pattern common to the last nine recessions.

The reason is quite clear: Gross Domestic Product = Federal Spending + Non-federal Spending + Net Exports.

To reduce the deficit, one either must cut spending or increase taxes (The later reduces non-federal spending). So by simple algebraic formula, deficit reduction cuts GDP growth.

Keep that in mind as you read, Megan Mcardle’s latest article in Bloomberg:

Don’t Care About the Deficit? Now You Should

I’ve said it before and I’ll say it again: Outside a few lonely hawks, no one cares about the budget deficit — at least, not as long as they have any chance of getting some tax cut, or some spending, that they favor.

Liberals were huge budget hawks in 2007, outraged about the George W. Bush deficit that was, by that point, running a little more than 1 percent a year. Fast-forward to 2014, when the Bush tax cuts have been partially repealed, helping President Barack Obama to slash the budget deficit to its lowest point in his administration — 4 percent — and the left is curiously uninterested in deficit reduction.

Meanwhile, the Republicans who couldn’t be bothered with the deficit as long as it was going to fund tax cuts have suddenly rediscovered their inner accountants. Should the presidency flip parties, so will the outrage, with depressing predictability.

I don’t mind Megan rewriting history, but at least she should make it somewhat plausible. The Tea/Republicans — the party of “No” — have been preaching austerity during President Obama’s entire administration. This isn’t a “sudden rediscovery.”

Unfortunately, as a new Bloomberg News article suggests, in the near future, we may not be able to afford the luxury of not caring. Congressional Budget Office projections currently show the deficit beginning to grow again in 2016, just in time for the presidential election.

By 2019, it’ll be above its historical average, where it will stay until the end of the forecast window — and that historical average is itself a bit high, as it includes the post-war record deficit of the Obama administration, which ran close to 10 percent for several years.

Note the assumption that “Deficits Are Bad,” without the slightest attempt to provide evidence. (The reason, of course: There is none.)

If the growth in health-care costs continues to moderate, that may help a bit, but mostly, the rising cost of health care is not the problem. The problem is the rising number of aging citizens who will require Social Security benefits, Medicare and, eventually, Medicaid to pay for their nursing homes.

For the next decade or so, it is demographics, not compound cost growth, that will account for most of our budget problems.

Megan wants you to believe there are “problems,” apparently because you are supposed to believe our government can run short of dollars. The fact that a Monetarily Sovereign government cannot run short of its own sovereign currency does not seem to disturb Megan any more than facts in general bother her.

With the Fed expected to begin tightening next year, and our demographic pressure beginning to press harder, the deficit may once again show up as an issue in the 2016 election. And it will certainly show up as an issue for the next president, who is going to have to make painful spending cuts — or tax increases — if they want room in the budget for any new initiatives.

“Room in the budget”?? Megan seems clueless about the difference between federal financing and personal financing. You and I need “room” in our budgets. So do businesses, state governments and local governments. We all are monetarily non-sovereign. None of us has a sovereign currency.

But the federal government has infinite “room” in its budget, for the simple reason: It has the infinite ability to create the dollars to pay its bills.

Those moves will be unpleasant, unpopular and unwillingly undertaken. The days when Democrats could promise to fund everything with tax hikes on a handful of rich people, or Republicans could promise to handle it all by cutting welfare fraud and foreign aid, are now officially at an end.

But, as readers of this blog know, federal taxes (unlike state and local taxes) do not fund government spending. Even if federal taxes fell to $0, the federal government could continue spending, forever.

All of this leaves us with but two possibilities: Either Megan Mcardle is truly ignorant of economics or she is being paid to be willfully ignorant.

Who would want her to be willfully ignorant? Answer: The rich. They are the ones who want those federal deficit cuts.

Most deficit spending benefits the non-rich more than the rich, so deficit cutting widens the Gap between the rich and the rest. The Gap is what make the rich rich, and the bigger the gap, the richer they are.

Now let’s see. Megan works for Bloomberg. Who owns Bloomberg? Is that guy rich?

Hmmm . . . .

Anyway, I don’t think Megan is ignorant. But she may be willful.

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

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
——————————————————————————————————————————————

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

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

Mitchell’s laws:
●Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

●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.
==================================================================================

Humans are notorious for not taking precautions against adverse eventualities, but reacting only to adverse actualities. Governments especially are prone to this malady.

Consider Ebola:

Wikipedia: The disease has a high death rate: possibly up to 90%. It typically occurs in outbreaks in tropical regions of Sub-Saharan Africa. Between 1976, when it was first identified, and 2012, fewer than 1,000 people a year have been infected. The disease was first identified in the Sudan and the Democratic Republic of the Congo.

Four decades had passed, and nothing was done about a disease with a 90% death rate. So long as it was confined to Africa, there was no consideration of the possibility that eventually it could migrate here.

Now it has migrated, and suddenly, “unexpectedly,” Ebola has become a problem — and the problem is magnified by our lack of foresight.

Ebola Vaccine Would Likely Have Been Found By Now If Not For Budget Cuts: NIH Director
Posted: 10/12/2014 9:30 pm EDT

BETHESDA, Md. — As the federal government frantically works to combat the Ebola outbreak in West Africa, and as it responds to a second diagnosis of the disease at home, one of the country’s top health officials says a vaccine likely would have already been discovered were it not for budget cuts.

Dr. Francis Collins, the head of the National Institutes of Health, said that a decade of stagnant spending has “slowed down” research on all items, including vaccinations for infectious diseases. As a result, he said, the international community has been left playing catch-up on a potentially avoidable humanitarian catastrophe.

“NIH has been working on Ebola vaccines since 2001. It’s not like we suddenly woke up and thought, ‘Oh my gosh, we should have something ready here. Frankly, if we had not gone through our 10-year slide in research support, we probably would have had a vaccine in time for this that would’ve gone through clinical trials and would have been ready.”

Money, or rather the lack of it, is a big part of the problem. NIH’s purchasing power is down 23 percent from what it was a decade ago, and its budget has remained almost static.

In fiscal year 2004, the agency’s budget was $28.03 billion. In FY 2013, it was $29.31 billion — barely a change, even before adjusting for inflation. The situation is even more pronounced at the National Institute of Allergy and Infectious Diseases, a subdivision of NIH, where the budget has fallen from $4.30 billion in FY 2004 to $4.25 billion in FY 2013.

Several Democratic lawmakers have in fact introduced legislation that would increase NIH funds to $46.2 billion in 2021. But there is no indication that such a bill will move forward any time soon.

World health suffers from a combination of inherent human inertia plus politicians who have been bribed by the rich to cut federal spending (The purpose: To widen the Gap between the rich and the rest.)

Although the Tea Party and Republicans are most at fault, some greedy Democrats have joined the “cut-the-budget” brigade. There even is a blog that refers to the federal government pejoratively as “the leviathan,” in a cynical effort to portray it as a malevolent monster.

Consider the possibilities if the rich had not decided to limit federal spending:

‘Extraordinary’ race for Ebola vaccine
By Mick Krever, CNN, updated 7:54 AM EDT, Wed October 8, 2014

“This is, frankly, extraordinary,” Adrian Hill of the Jenner Institute at Oxford University said. “We are trying to do in a few months something that might typically take 10 years. We’ve had accelerated reviews of all our applications, regulatory and ethical approvals, and so on.”

“And we’re now trying to proceed so quickly that if things go well, by the end of the year, this vaccine might actually be being used in the three affected countries in West Africa.”

He said that the vaccine has been shown to be “really quite remarkably protective” in studies on monkeys at the National Institutes of Health in the U.S.

Given sufficient funding, disease prevention and cures can be accelerated. If we have the will (and the dollars), we find a way.

Will the budget cutters continue to disseminate the Big Lie, that the federal government is running short of dollars? Will they continue falsely to claim that federal spending will cause hyperinflation?

How much evidence will be necessary before the public understands the motive of the budget cutters: To widen the Gap between the rich and the rest.

There is yet another lesson Ebola teaches us. It concerns the habitual carelessness of our healthcare system.

HAI Prevalence Survey

The CDC healthcare-associated infection (HAI) prevalence surveyExternal Web Site Icon provides an updated national estimate of the overall problem of HAIs in U.S. hospitals.

Based on a large sample of U.S. acute care hospitals, the survey found that on any given day, about 1 in 25 hospital patients has at least one healthcare-associated infection.

There were an estimated 722,000 HAIs in U.S acute care hospitals in 2011. About 75,000 hospital patients with HAIs died during their hospitalizations. More than half of all HAIs occurred outside of the intensive care unit.

Estimates of Healthcare-Associated Infections Occurring in Acute Care Hospitals in the United States, 2011

Major Site of Infection Estimated No.
–Pneumonia 157,500
–Gastrointestinal Illness 123,100
–Urinary Tract Infections 93,300
–Primary Bloodstream Infections 71,900
–Surgical site infections from any inpatient surgery 157,500
–Other types of infections 118,500

Estimated total number of infections in hospitals 721,800

This massive infection rate is carelessness. This is lack of concern, lack of systems, lack of supervision, lack of responsibility by our health care providers.

The nurse, Nina Pham, took basic precautions while treating Ebola-stricken Liberian national Thomas Eric Duncan at a Dallas hospital. Now she is the first person to have contracted the deadly virus in the United States.
There are few details that are known about what might have gone wrong.

On Monday, Dr. Tom Frieden, director of the CDC, told reporters that it’s still unknown how the infection occurred, only that a “breach in protocol” for treating a patient happened.

What doctors wear to treat Ebola patients Nurse: CDC Ebola guidelines ‘not enough’ Nurse’s friend: She’s very devoted CDC: We have to rethink Ebola protocols.

Frieden said state and federal health officials are re-examining those protocols, including the removal of protective gear after contact with an Ebola patient and if it might be helpful to spray virus-killing solution on workers as they leave an isolation unit. He said Monday that the nurse is “clinically stable.”

Despite more than 700 thousand hospital-caused infections per year, the medical establishment was smug and satisfied. Ebola is much less communicable than many other infections, but now that health care providers are at risk, the smugness is gone. Now, they must “re-examine protocols.”

More than 700 thousand infections every year didn’t cause a re-examination of protocols. Those infections were “only” to patients. Perhaps now, one sick nurse will scare the community into taking hospital infection rates seriously.

And those are the questions:
Will the lessons of Ebola be learned by the budget cutters?
Will the lessons be learned by the health care community?

Does anyone care?

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

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
——————————————————————————————————————————————

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

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

Mitchell’s laws:
●Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

●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.
==========================================================================================================

Despite the misguided hand-wringing of the debt hawks, we repeatedly have recommended that the federal government pay for grades K-16 and beyond (Step #4 in the “Ten Steps to Prosperity.”) See: “How to eliminate college student loan debt.”

The fundamental purpose was not debt relief, but educational. Poor kids have difficulty paying for college. Even scholarships and other benefits don’t suffice. America need to educate all its children, not just the rich.

Because poor families need income, they often discourage their children from attending college, preferring them to find jobs. That is why we also recommend Step #5: “Salary for attending school.”

In summary, there are at least five reasons why the federal government should pay for K-16 and beyond:

1. Being Monetarily Sovereign, the federal government can afford such payments far better than can the states and cities, which currently pay for K-12. Paying for K-16 and beyond, would remove a huge burden from the states and cities, allowing them reduce local taxes (which mostly are regressive) and use tax dollars for local needs: Infrastructure, police and fire, etc.

2. Help improve the quality of education, by attracting better teachers, principals and superintendents.

3. Increase upper high school and college attendance by poor students.

4. Reduce the Gap between the rich and the rest.

5. Eliminate the disastrous student loan program.

This last is the subject of an article in Reason.com:

Student Loan Debt Skyrockets—and So Do Delinquencies
J.D. Tuccille|Oct. 6, 2014

Last week, President Obama boasted, “We’ve helped more students afford college with grants, tax credits, and loans, and today, more young people are graduating than ever.”

What he didn’t add is that “we’ve” also piled a growing load of crippling debt on young college student that they’re increasingly unable to bear.

As Ericka Davis writes for the Federal Reserve Bank of Dallas, “Over the past decade, student debt has skyrocketed and delinquency rates have nearly doubled to levels much higher than for other consumer lending products.”

In 1983, average tuition, fees, room and board at private, nonprofit colleges added up to $18,143 in 2013 dollars. This year, that number has risen to $40,917.

Clearly, the need for tuition money has increased dramatically, while:

Starting pay for recent college graduates has definitely not kept pace. Lots of recent college grads are underemployed, many in gigs that don’t require the degree they have yet to pay for.

Part of the problem is that student loans, unlike all other loans, are not based on credit or ability to repay.

As Ericka Davis writes for the Federal Reserve Bank of Dallas:

*”Student loans are often originated when borrowers earn little income.
*”Many borrowers have only a vague idea of their future earnings potential and ability to repay.
*”Borrowers can defer payment of unsubsidized loans while enrolled in college, which results in an even larger debt burden.
*”And many borrowers do not understand the structure and repayment options associated with student loans.
*”Moreover, with the exception of certain programs or an undue hardship petition or death, student loans are rarely forgiven.”

Large loans to people who have no current income and an unknown future income, no collateral, a deferred payment schedule, misunderstood terms and no discharge in bankruptcy — what could possibly go wrong with that??

While deliquencies in all other loans are on the decline, student loan deliquencies have been rising.

Since 2008, 30 year olds with student loans have, on average, seen their credit scores slide relative to 30 year olds free of such debt. That means add-on financial problems across their lives, in addition to the load they carry.

Those owing student loans are burdened their entire lives, even after they somehow manage to pay off their loans.

The Fed report says “more research” is needed of the growing debt problem.

Oh, gimme a break. “More research”? There is no way to make this pig look like a swan.

You probably will hear about “refinancing” and “easier terms” and all sorts of Band Aids on cancer, but the only solution is to give everyone — rich and poor — the same shot.

That is why we have had free K-12 education for decades. We just need to make K-16 and beyond, similarly free.

Typically, the government will try every wrong solution, before it finally is dragged to the right solution: Free schooling for all.

Why not?

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

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
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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