–Five reasons why we should eliminate school loans

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 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.
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Elizabeth Warren may be the best senator in Congress — or at least the most honest. Expect to see her attacked from both sides of the aisle.

She continues to castigate the Obama adminsitration (and she’s a Democrat!) for not punishing the crooked banks (all the big banks are crooked) for criminally defrauding millions of Americans out of trillions of dollars, while continuing to stuff their own pockets.

Naturally, Obama avoids this subject (as do the Republicans) like it were poop in the punch bowl. For politicians, the banks are too big (i.e. too big as contributors) to jail.

Recently Senator Warren and the New York Times have talked about student loans. The Times said:

Student Debt Slows Growth as Young Spend Less
By ANNIE LOWREY, Published: May 10, 2013

The anemic economy has left millions of younger working Americans struggling to get ahead. The added millstone of student loan debt, which recently exceeded $1 trillion in total, is making it even harder for many of them, delaying purchases of things like homes, cars and other big-ticket items and acting as a drag on growth, economists said.

Senator Warren said:

“Right now, a big bank can get a loan through the Federal Reserve discount window at a rate of about 0.75%,”

“But this summer, a student who is trying to get a loan to go to college will pay almost 7%. In other words, the federal government is going to charge students interest rates that are nine times higher than the rates for the biggest banks — the same banks that destroyed millions of jobs and nearly broke this economy.”

“Some may say that we can’t afford this proposal. I would remind them that the federal government currently makes 36 cents in profit on every dollar it lends to students. Add up all of those profits and you’ll find that student loans will bring in $34 billion next year.”

She’s beating the drum, but with the wrong stick.

The big debate in Congress is how much interest to charge students. And there are several complex, convoluted plans afoot. But, the federal government, being sovereign over the dollar, neither needs nor uses profits. It never can run short of dollars. It never needs to ask anyone for dollars — not you, not me, not China, not our students.

It is the U.S. states that are monetarily non-sovereign, so can and do run short of dollars. Nevertheless, they spend billions to support schools, grades K through 12.

For reasons buried in history, no American government supports grades 13+ — at least not full support.

So college attendance — which benefits all of America — has become a widespread hardship. According to the National Memo:

Massachusetts’ senior senator points out that the American public saved the big banks, which Attorney General Eric Holder admitted are “too big to jail.” A Bloomberg report suggests taxpayers offer an implied $83 billion subsidy to the biggest banks, with an implied guarantee in case of another financial crisis.

America’s total student loan debt now totals well over $1 trillion, leading to record defaults. Students stricken by the worst of the financial crisis are now badly in need of a bailout. And Senator Warren is one politician who has a plan to do that responsibly: Just treat students with the same generosity we offer the big banks.

What a concept: Treat America’s future as generously as we treat America’s criminals! (If only those kids were bigger political contributors.)

Anyway, I have a better idea, and it’s much simpler than anything Congress has talked about, — and better for America. For exactly the same reasons public elementary and high schools are free, public college should be free. If the monetarily non-sovereign states can support grades K-12, surely our Monetarily Sovereign government can and should support grades 13+.

And here is how we could do it: SIMPLY STOP LENDING ALL THAT MONEY FOR EDUCATION.

Just as private K-12 schools exist alongside of public schools, private 13+ universities can exist alongside of public 13+ universities.

For example, Massachusetts schools like Harvard, Boston University et al could remain private and continue to charge their high-and-getting-higher tuitions, while the five UMass campuses all would be free to every student at every grade level — 100% supported by the federal government.

Just as with grades k-12, those who prefer a private university education could continue to pay for it. Those who prefer a free university education, would have that option.

This would be bad news / good news for the private universities. The bad news is they would have to compete against “free.” The good news is they could feel less obligation to provide scholarships; de facto scholarships for all would be offered at thousands of public universities.

The news for America would be all good:

1. Less financial burden on the U.S. states, which currently provide partial support to state schools.
2. In a world where there is less need for physical labor and more need for educated labor, college education makes America more competitive.
3. Federal dollars, pumped into the economy, will stimulate economic growth.
4. Less financial stress on middle- and lower-income families, to pay for college.
5. Less financial stress on college students to pay for loans.

In the three posts titled, Salary for attending school, Salary for attending school: 2nd paper and Salary for attending school, III, we discussed the reasons for treating school attendance as a job that benefits America.

I suggest salaries would be the 2nd step, with the first step being federal financial support for public universities.

Given that monetarily non-sovereign city and county governments struggle to provide free K-12 education, I cannot imagine any good reason why our Monetarily Sovereign government, with no struggle at all, does not provide a free advanced education.

There is no magic line at grade 12, making it valuable to America while, grade 13 is not. Following food, shelter and health, the two most beneficial gifts we can give our children and our nation, are love and education.

It’s time to stop rationing either.

Rodger Malcolm Mitchell
Monetary Sovereignty

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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.

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

#MONETARY SOVEREIGNTY

–Holder clarifies: Banks not too big to jail. Or wait, maybe they are. Or not.

The National Memo reported that Attorney General Eric Holder made it crystal clear: Banks are not too big to jail.

Holder: Banks Are Not ‘Too Big To Jail’
May 15th, 2013, Jason Sattler

Attorney General Eric Holder told the House Judiciary Committee Wednesday that big bankers are not “too big to jail.”

O.K., that’s a relief. Now some criminals, people who have stolen billions, will be in jail alongside those other desperados: People who smoke pot.

But wait:

In March, Holder had told the Senate Judiciary Committee, “I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them.”

Responding to a question from Rep. John Conyers (D-MI) about his comment from March, Holder conceded again on Wednesday that such prosecutions may be too difficult . . .

Uh, oh. Maybe the criminal bankers are too big to jail.

But wait:

. . . but (Holder) stressed that “there’s no bank, there’s no institution, there’s no individual that cannot be prosecuted by the U.S. Department of Justice. Let me be very, very, very clear… banks are not too big to jail,” Holder added.

O.K., now we understand. Those criminal bankers are going to jail.

But wait.

The DOJ has not brought any criminal charges against the big banks since the financial crisis of 2008 forced taxpayers to bail them out.

Got it now. The banksters are too big to jail, but they’re not too big to jail, but they are too big to jail — especially when your boss has been bribed to give these crooks a pass. Simple?

Senator Elizabeth Warren (D-MA) sent a letter to the Justice Department earlier this week, calling for explanations into the settlements that have been made with the big banks.

“If large financial institutions can break the law and accumulate millions in profits, and if they get caught, and settle by paying out of those profits, they do not have much incentive to follow the law,” she wrote.

Liz, we love what you’re trying to do, but there are no “ifs” involved. President Obama has made sure large financial institutions can break the law and accumulate millions in profits, and when they get caught, they can settle by paying out of those profits. It’s called a “cost of doing business.

And yes, Mr. Obama has made sure these big-contributing, job-promising, Obama-Library-building .1%ers have zero incentive to follow the law. It’s called “gratitude” and “paying it forward.”

High priced speaking gigs coming soon to Barack, Michelle, Natasha and Malia.

Ka-ching!

Rodger Malcolm Mitchell
Monetary Sovereignty

P.S. And by the way, Obama Assets Valued Between $2.6 million And $8.3 million. How did a former “community organizer” and government employee accumulate that much money?

Just askin’.

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Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Medicare — parts A, B & D — for everyone
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here)
4. Long-term nursing care for everyone
5. Free education (including post-grad) for everyone
6. Salary for attending school (Click here)
7. Eliminate corporate taxes
8. Increase the standard income tax deduction annually
9. Increase federal spending on the myriad initiatives that benefit America’s 99%

#MONETARY SOVEREIGNTY

Are you enjoying your austerity?

Our Monetarily Sovereign government, which has the unlimited ability to create its sovereign currency (the dollar), has been bribed by the upper .1% income group (via campaign contributions and promises of lucrative employment later), to cut the number of dollars in the economy (also known as “austerity”).

The purpose of austerity is to widen the gap between the rich and the rest, as federal deficit spending benefits the 99.9% more than the .1%. The GINI ratio demonstrates this increasing gap.

The average American has been brainwashed by the politicians and the media and major universities (which are owned by the .1%) into agreeing that the number of dollars should be cut.

Here are excerpts from a pertinent article in the National Memo:

The Chilling Reality Of America’s Worsening Jobs Crisis
May 15th, 2013, Jim Hightower

More than a third of working-age Americans are either out of work or have given up on finding a job.

Also, last month’s hiring increase was almost entirely for receptionists, waiters, clerks, temp workers, car-rental agents and other low-wage positions with no benefits or upwardly mobile possibilities.

On the other hand, manufacturing — generally the source of good, middle-class jobs — did not add workers in April and has cut some 10,000 jobs in the last year.

Especially problematic was the continued rise in underemployment — people wanting full-time work, but having to take part-time and temporary jobs. Underemployment is also pounding college graduates. While they’ve been more successful than non-grads at landing jobs, they’re not getting jobs that fit their career goals or even require the degrees they spent money and time to obtain.

In May, another headline shouted: “Stock Market Soars.” It expressed delight that the Dow Jones Average topped 15,000 for the first time in its history.

Yet this index of Wall Street wealth gives a totally false picture of our nation’s true economic health. Yes, the privileged few are doing extremely well. But the workaday many are struggling — and falling further and further behind as the jobs market sinks steadily from mere recession down into depression.

The stock market is doing well because profits are up, and profits are up because employment costs are down.

President Obama hailed the news that unemployment dipped to 7.5 percent in April. This good-news dip was not due to a jump in job offerings, but to a bad-news labor market so weak and discouraging that more and more Americans are dropping out of it or never entering it.

More than a third of our working-age population is no longer even in the job market, and only 58.6 percent of us are employed. Put the opposite way, 41 percent of the potential workforce is not working — about 102 million people.

Our people are trapped in a jobs crisis that is sucking the economic vitality out of our nation, but our leaders refuse even to acknowledge it, much less cope with it.

Our leaders not only do not “cope” with it; they intentionally cause it. They have been bribed to widen the income gap. Destroying the middle- and lower-income groups is the best, fastest, easiest method.

In fact, corporate chieftains are deliberately exacerbating the crisis by hoarding trillions of dollars that ought to be rushed into job-creating expansions, and politicians keep adding to the casualties by gleefully eliminating the middle-class jobs of hundreds of thousands of teachers, firefighters, police and other valuable public employees.

Why would corporations “rush into job-creating expansions,” when they can make more profit by not hiring?

America’s middle class is burning to the ground, while Washington fiddles with nonsense and Wall Street feathers its own nest. It’s disgraceful.

America’s middle class is complicit in its own conflagration. Ask any of your friends whether the federal deficit should be reduced. Ask the unemployed whether the debt is too high. They will shout, “Yes!”

Average Americans have begged Congress and the President to reduce the supply of dollars in the economy, thereby demanding their economic suicide and the economic murders of their children.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

–Why, this year, you have a greater chance of losing your house and your life to fire.

When politicians speak of deficit reduction (austerity), they make it sound like a prudent financial policy. After all, doesn’t everyone want their deficits and debt reduced?

Never mind that the federal government, being Monetarily Sovereign, never can run short of dollars, and never can be unable to pay its bills. President Obama pretends not to understand the difference between Monetary Sovereignty and monetary non-sovereignty, so why should we care about the difference?

The same politicians neglect to mention what deficit reduction really means in terms of human hardship. This blog has run numerous posts describing these individual negative effects of federal deficit reduction — the destruction of the middle- and lower-classes, the starvation, the homelessness, the untreated illness.

Whenever such a post runs, we usually receive one or more comments from debt hysterics about our favoring “socialism” and “if socialism were so good, why is the economy struggling.”

This has been happening for years, and I despair of ever teaching the debt hysterics that socialism is NOT government spending (It’s government ownership). And while every nation is at least partly government owned, (i.e. partly socialist), our nation is mostly capitalist. So, I suppose their question should be, “If capitalism were so good, why is the economy struggling?”

(One debt hysteric even suggested that benefits to the poor should be cut, because those people simply will give the dollars to the rich, anyway. Yikes!)

And, of course, the answer is: Deficit reduction always, always, always reduces economic growth, leading to recessions and depressions.

Anyway, here is yet another negative consequence of deficit reduction, as described in the following excerpts:

Chicago Tribune
Wildfire risk runs high, but budget cuts mean fewer firefighters
By Wes Venteicher, Washington Bureau, May 13, 2013

WASHINGTON — The drought that caused record wildfires in California and other Western states last year is expected to persist through the summer, but fewer firefighters will battle this year’s blazes in other regions because of federal budget cuts, top federal officials said Monday.

The U.S. Forest Service will hire 500 fewer firefighters this year, the result of “line by line” budget reductions required by Congress, Agriculture Secretary Tom Vilsack said. The reduced staffing also means 50 fewer fire engines will be available, Vilsack said.

So if your house burns down, or your dog, cat or human loved ones die in a fire, at least you’ll have the satisfaction of knowing the politicians say they are being prudent.

Vilsack and Interior Secretary Sally Jewel said much of the West would face severe fire danger this summer.

California is expected to be the most imperiled of the dry Western states. The state this year has received only 25% of the rainfall that it received in the same period for 2012, National Interagency Fire Center fire analyst Jeremy Sullens said. Other states expected to be hit hard are Arizona, New Mexico, Oregon and Idaho, along with portions of other states.

Because of the danger California is in, the Forest Service does not plan to reduce hiring there, Harbour said. The reductions will more likely affect Eastern states, where the danger is less serious this year.

Translation: Although last year was a record fire year, and the danger to the Western states is even worse this year, there will be no increase in firefighter hiring. So the outcome will be much worse.

Things also will be worse out East, where we’ll see personnel reductions.

The Forest Service cut $50 million from a fire preparedness fund. When more firefighters have been needed, the Forest Service has shifted money out of accounts for things such as road maintenance, campgrounds, wildlife and range management programs.

I feel better already. Less fire preparedness, less maintenance of roads, campgrounds, wildlife and ranges, fewer fire fighters and fire engines. We don’t need those, anyway.

So add death-by-fire to the long, long list of austerity’s negative effects. You can put this right next to the list of deficit cutting benefits, which are . . . uh . . . well, exactly none.

Rodger Malcolm Mitchell
Monetary Sovereignty

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#MONETARY SOVEREIGNTY

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