Is Moody’s a criminal enterprise or just plain ignorant? Monday, Aug 22 2016 

I’ve written about Moody’s before. You may know Moody’s as one of the “Big Three” credit rating agencies that gave high grades to worthless securities, and helped start the Great Recession.

You also may know standard practice for rating agencies is to be paid by the businesses they rate, a clear conflict of interest and an open invitation to criminality.

And, if you are a regular reader of this site, you know that unlike cities, counties, states, euro nations, businesses, you, and me (all of which are monetarily NON-sovereign), a Monetarily Sovereign (MS) nation never can be forced into bankruptcy. Never.

A Monetarily Sovereign nation can pay any bill of any size at any time, simply by creating its money. For MS governments, ability to pay never is an issue. The only issue is willingness to pay. 

Thus, an MS credit rating cannot legitimately be based on the amount of indebtedness. If the MS nation is willing, it can pay any bill.

An MS nation, even with minimal debt, could be given a low credit rating, if it has a history of refusing to pay its bills.  But, an MS nation, even one with huge debt, should receive a high credit rating if it always pays its bills.

To summarize, the “Big Three” credit agencies have a history of mis-rating securities, being paid by the subjects of their ratings and, as you will see, probably not recognizing the fundamental differences between Monetary Sovereignty and monetary non-sovereignty.

Reader “elizabethharris001” brought to our attention, an article in the Jerusalem Post titled, “Moody’s warns Israel new budget could downgrade credit rating.” The article said, in part:

Credit rating agency Moody’s on Thursday warned that the 2017- 2018 state budget proposal could be a step toward undermining Israel’s solid A1 credit rating.

Israel has a “solid A1 credit rating,” because it always pays its bills, in full and on time.

Finance Minister Moshe Kahlon swept aside legal limits on spending increases and the deficit target in his budget proposal, which accommodated the many, expensive promises made in coalition deals.

The plan is expected to raise Israel’s debt-to-Gross Domestic Product (GDP) ratio, which fell below 65 percent in the past year.

This will have no effect on Israel’s ability or willingness to continue paying its bills, in full and on time.

“The rating or outlook could come under downward pressure if the commitment to fiscal discipline over the medium term was to wane,” the agency wrote in its annual Credit Analysis of Israel’s government.

“With the improvement in debt-to-GDP having already slowed compared to the mid-2000s, renewed fiscal easing puts at risk Israel’s credibility for budget discipline,” the report said.

When Moody’s mentions “budget discipline,” it is talking about austerity, the same process that has destroyed the economies of the euro nations — the same process that is responsible for every depression in U.S. history, as well as most recessions.

The Moody’s report was not all gloomy, however. It also praised Israel’s dynamic economy and its relatively strong performance when compared to many other advanced countries, still struggling in the aftermath of the 2008 global financial crisis.

Israel has a “strong performance,” but its debt above 65% of GDP warrants a reduction in credit rating? Think about the “logic” of that.

By confusing (intentionally??) MS nation finances with business finances (where large debt can impact ability to pay) Moody’s claims Israel’s debt requires a reduced credit rating.

Utterly false and misleading — demonstrating an ignorance bordering on criminal.  Is Moody’s even consistent in its false evaluations?

From Trading Economics:
Government Debt to GDP in Japan averaged 123.60 percent from 1980 until 2015, reaching an all time high of 229.20 percent in 2015.

Moody’s credit rating for Japan was last set at A1 with stable outlook.

Before we continue, Moody’s credit ratings, from top to bottom are: Aaa, Aa1, Aa2, Aa3, A1, A2, A3, Baa1, Baa2, Baa3, and lower.

Japan’s 229 and Israel’s 65 apparently warrant the same rating, and neither Japan nor Israel has been given Moody’s highest rating, despite the fact that both are Monetarily Sovereign and can and do pay all their bills on time.

Let’s look at a few other countries, courtesy of Trading Economics:

Canada: Debt to GDP of 91.50; Moody’s credit rating: Aaa

Canada, an MS nation with a much higher Debt/GDP ratio than Israel’s, and no better record of paying its bills, has an Aaa rating, four levels higher than Isreal’s current rating (which is about to be lowered).

As if that weren’t strange enough, let’s look at really crazy:

“Austria’s public debt reached a new peak of 86.2 percent of GDP in 2015 compared to 84.3 percent in 2014.”  Moody’s credit rating: Aaa, the highest rating.

So Austria, with a “worse” Debt-to-GDP ratio that Israel’s, and no better record of paying its bills, has a higher credit rating — and Austria, unlike Israel, is monetarily NON-sovereign.

Austria is part of the eurozone; it uses the euro, not it own sovereign currency. Austria does not have the unlimited ability to pay its bills. Unlike Israel, Austria could go bankrupt. But it has Moody’s highest rating.

And then here’s another eurozone nation, Germany:

“Germany recorded a Government Debt to GDP of 71.20 percent in 2015.” Moody’s credit rating: Aaa.

Germany too, is monetarily non-sovereign, and could be unable to pay its bills, but has Moody’s highest rating.

Finally, we come to the United States:

The United States recorded a Government Debt to GDP of 104.17 percent in 2015. Government Debt to GDP.  The United States averaged 61.94 percent from 1940 until 2015, reaching an all time high of 121.70 percent in 1946 and a record low of 31.70 percent in 1974.

Moody’s rating: Aaa

I call your attention to that 31.70 lowest Debt/GDP ratio. It comes right before a recession.

Monetary Sovereignty

In fact, there is an uncanny relationship between debt reduction and recessions. Most recessions follow a period of federal debt reduction.

And then there’s this inconvenient fact:

U.S. depressions tend to come on the heels of federal surpluses.

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.

Finally, while Gross Domestic Product is a measure comprising 12 months, Federal Debt is a historical measure comprising the entire life of the United States. In short is the classic apples/oranges, meaningless ratio.

Bottom line: Moody’s (as well as the other two major rating agencies, S&P and Fitch) either do not understand how Monetary Sovereignty works or are paid not to understand.

They evaluate nations as though the nations were monetarily non-sovereign businesses. The rating agencies don’t reveal the basic fact that an MS nation cannot be forced into bankruptcy. It can pay its bills forever, despite its Debt/GDP ratio.

Any credit rating is based on just two factors: Ability and willingness to pay bills.

Because an MS nation has the unlimited ability to pay, Debt/GDP has no meaning when evaluating credit. No matter what its Debt/GDP ratio, any nation may or may not be willing to pay its bills.

The Big Lie states: “Federal taxes fund federal spending.” But for an MS nation, spending is funded by money creation, not by taxes nor by borrowing.

The Big Lie is a carefully crafted story. It is designed by the very rich to convince everyone there isn’t enough money available to narrow the Gap between the rich and the rest.

The Big Lie forces countries to cut the spending that would benefit the lower and middle classes. It caused our too-slow growth following the “Great Recession.” It is the method by which the very rich retain power over the world.

The credit agencies are willing, and well-paid, accomplices to the Big Lie.

Is it ignorance or paid criminality? You decide.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
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 afford better health care than 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 AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

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 EVERYONEFive 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 benefiting 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 CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from 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 corporate taxes would be an 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.

MONETARY SOVEREIGNTY

Voting for lies is necessary. The dangerous season of hatred Thursday, Aug 11 2016 

In case you didn’t see this in a previous “Comments” section, reader “Vincent” wrote: “It is not enough that politicians should be honest; they need to appear honest.”

My response was:

Some politicians appear to be honest. None actually are.

All politicians believe the public is relatively ignorant, and cannot be trusted with the truth. In that, they are correct.

So, you will not hear the truth from Trump, Clinton or Johnson. They all lie.

For instance, they all tell you The Big Lie (Federal taxes fund federal spending.) They believe that you, the public, will punish them for telling the truth, and they probably are correct.

As a voter, the best you can do is determine your own leanings, and select the one candidate most in line with those leanings.

Personally, I cannot subscribe to the basis of libertarianism (less government regulation, which allows the rich and powerful to rule the weak). So that eliminates Johnson.

For similar reasons, I cannot subscribe to the right wing belief that the rich and powerful should rule the weak). So that eliminates the Republican candidate.

By the process of elimination, I am left with the candidate that comes closest to my own beliefs (narrow the Gap between the rich and the rest), even though she still is too right wing for my tastes.

While listing Trump’s and Clinton’s lies is entertaining, in the National Enquirer vein, it is not a good basis for voting.

Then reader “Elizabeth Harris” wrote:

Hillary has the unanimous support of bankers, of neocons, of Wall Street, and the One Percent. She will deliver everything they demand, including mass privatization, the TPP, endless war (perhaps a world war with Russia) and a wider-than-ever gap between the rich and the rest.

For average people, life under Hillary will be a nightmare. And the more it becomes a nightmare, the more they will comfort themselves with the delusion that “Trump would have been worse.” This despite the fact that Trump is opposed by all those who will create the nightmare.

Among common folk, non-stop Trump-bashing is a desperate attempt to deny what they know inside about Hillary and her rich backers. It is a desperate attempt to deny the reality that in many ways, Trump is the de facto Democrat, and Hillary is the de facto Republican. Such people camouflage the economic realities of Hillary by focusing on the social inanities of Trump, such as his proposed border wall, which Congress would never agree to. They focus on Trump’s verbal gaffs about Muslims, while they ignore Hillary’s track record of exterminating Muslims. (Hillary cheered for the destruction of Libya, and has publicly vowed to nuke Iran.)

As President, Trump would not be able to get the US Congress to agree to anything he wants. However Trump would be able to veto the US Congress, and thereby trip up things like the TPP, and war with Russia.

What we need is an ineffective Trump, not an effective neocon-neoliberal Hillary.

And I responded:

True, Trump is not a Republican, but he would appoint more Scalias to the Supreme Court, which would be a disaster for America — unless you like unlimited political contributions, unlimited guns, the reduction in minority voting rights, a theocracy, and jurists who accept free “hunting trips” from the wealthy.

And, Trump’s crazed hand above the button — he wants to nuke ISIS — gives one pause. (Please give me your references for Hillary’s desire to nuke Iran and for her cheering the destruction of Lybia. I’ve not seen those)

And to describe Trump’s vow to exclude Muslims as merely a “verbal gaff” is unbecoming to you, Elizabeth. Is deporting 11 million undocumented Mexicans also just a “gaff”?

By the way, when was the last time any Congress voted for war, and the President vetoed it? Doesn’t it always go the other way?

Unfortunately, Hillary is a continuation of Barack’s policies, which as poor as they may be, still exceeded Bush II and today’s Congress, by a long way,

Sorry, but you can’t shine up a broken Trump. A vote for Trump is a vote for a male version of Sarah Palin with a tinge of Hannity.

The point: Today’s election campaign is more hate-filled and dangerous than any I can remember.

On the one side we have people who simply hate Bill Clinton and partly by extension, also hate Hillary Clinton. They say (rightly) that the Clintons are liars and crooked and will endorse war and everything else that benefits big bankers (aka contributors).

On a second side are the people who hate Trump. They say (rightly) that Trump is a liar and crooked, and an incompetent loose cannon who spreads hatred for minorities and hatred for foreigners, and who will appoint fellow bigots to the Supreme Court.

Then, on yet another side, we have the people who hate the federal government because it’s “big” (but seem O.K. with state and local governments — even more crooked and incompetent than the federal government — and hate the laws that protect the poor from the rich.

And we have the Bernie Sanders people and the independents, and the Greens, and all of them lie and hate the others for lying.

Maybe this is the way it always has been, and it only feels like more hatred than ever.

But, none of this would matter much, if you simply do what I suggested to Vincent, and merely vote for the candidate who comes closest to your own leanings.  Heaven knows there are plenty of candidates from which to choose.

There is however, a huge problem with my suggestion: If no candidate receives 270 electoral votes, the Republican majority in the House of Representatives will select the President from the top three candidates, and they will choose Donald Trump for President.

The Republican majority in the Senate will select the Vice President from the top two candidates, and they will select Mike Pence.

Bottom line: If you want Trump/Pence in the White House, vote for Trump or for Johnson, or for Sanders or for Stein (Green Party) or for an independent or even for yourself in a write-in.  They all would be votes for Trump.

There is yet another possibility, of course: The House of Representatives could pick someone else altogether — someone the voters did not select — but that would lead to the destruction of America’s political system. 

These are dangerous times, indeed.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
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 afford better health care than 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 AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

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 EVERYONEFive 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 benefiting 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 CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from 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 corporate taxes would be an 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.

MONETARY SOVEREIGNTY

An easy solution to violent crime Wednesday, Aug 10 2016 

There is a way to prevent and cure violent crime.

O.K., there is no way entirely to prevent violent crime, but it can dramatically be reduced.

First, let me remind you about what doesn’t work.

  1. Mass incarceration doesn’t work. We’ve tried that.

    Wikipedia: “In October 2013, the incarceration rate of the United States of America was the highest in the world, at 716 per 100,000 of the national population.

    “While the United States represents about 4.4 percent of the world’s population, it houses around 22 percent of the world’s prisoners.”

    Mass incarceration has minimal (if any) effect on crime, but it creates a huge subset of the population that is stigmatized.

    Stigmatization encourages future crime, as many legitimate jobs are closed to convicted felons.

  2. Guns in the hands of “good guys” doesn’t work. We’ve tried that.

    No one knows who the “good guys” are today, and who they might be tomorrow. The mild-mannered librarian can turn into a raving lunatic on the road.

    A “good guy” who loses his job, his house or his wife, can become a “bad guy” instantly.

    And an untrained “good guy” can be an unintentional menace to other good guys.

  3. The “war on drugs” doesn’t work. We’ve tried that.

    By now, America’s disastrous experiment with Prohibition should have taught us that prohibiting something people want, only encourages consumption — and crime.

    Gun owners surely understand the concept. Every time there is a concern guns might be banned, gun sales go up.

To prevent violent crime, we first must identify the people who most commit those crimes, the places where they commit them, and their motivation.

And that is fairly obvious, isn’t it?

Criminals live and operate in high-crime areas (a tautology), and high-crime areas are relatively poorer areas.

People commit crimes to satisfy their wants, and it is human nature to want at least as much as your neighbor has.

If no one had a TV set (as was the case in the 1800’s) those lacking TV sets would not feel the desire to steal one. But if some people have TV sets, those lacking sets are motivated to steal them.

Generally, criminals steal the way they know best. People whose educational and social background helps them to understand accounting, salesmanship, psychology and other paths to scamming, prefer “white collar” crime.

It usually is not violent. Upscale suburbs, for instance, seldom see violent crime.

Violent crimes in upscale city neighborhoods generally are committed by lower-income non-residents.

The crime low-income people know best is more confrontational and violent. They have seen it and been victims of it. They understand it, well.

If relatively low income is a common precursor to violent crime, the prevention of violent crime requires the elimination of relatively low income.

Why should we deny social benefits to those poorer than us, only to spend time and money protecting ourselves from violent crime? Wouldn’t we be wiser, and much safer, to lift the poor out of poverty, so to give them less motivation to attack us?

Yes, some may resent so-called “lazy” welfare recipients, receiving money and other “free stuff” without working.

But does it make any sense to encourage people into violent crimes that will hurt us? Rather than advocating mere punishment, wouldn’t we be smarter to add a nice, juicy carrot to that stick?

Implementing Steps #2 – 5 of the Ten Steps to Prosperity immediately would reduce America’s poverty rate and reduce America’s violent crime rate.

It would grow America’s economy, enrich you and your loved ones, and make you and your family safer.

Just because it’s obvious and easy, doesn’t make it wrong.

Reduce violent crime by reducing poverty. Reduce poverty by implementing the Ten Steps to Prosperity.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
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 afford better health care than 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 AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

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 EVERYONEFive 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 benefiting 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 CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from 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 corporate taxes would be an 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.

MONETARY SOVEREIGNTY

How ignorance will “make America weak, again.” Sunday, Aug 7 2016 

The federal government’s finances are different from yours. They also are different from your city’s, county’s, and state’s finances.

Before the U.S. existed, there was no dollar. The U.S. dollar is an arbitrary creation of U.S. laws, which in turn are arbitrary creations of the U.S. government.  The dollar is exactly what the government’s arbitrary laws say it is.

At various times, U.S. laws arbitrarily have valued the U.S. dollar at  .0515616 tr (troy ounces) of gold, .0483742 tr, .0483091 tr,  .0285714 tr, and other weights.

These official weights were part of gold standards.Today, there is no official dollar evaluation relative to gold.

While we say that gold backed the dollar, in reality, the U.S. government could have removed that backing any time it wished — and it did several times, the most recent on August 15, 1971, when President Nixon finally and permanently took us off the gold standard.

We stressed the word “arbitrary”  to show that gold never has provided safety for dollars.  Gold backed the dollar only at the whim of the government.

Unlike you and your local governments, the U.S. government never can run short of its own sovereign currency, the dollar. It creates dollars at will. It is Monetarily Sovereign.

So long as the government can create new laws, it can create new dollars.

(And it can prevent/cure inflation by increasing the Demand for dollars via interest rate control.)

In summary, the U.S. has total control over its dollar supply and the value of its sovereign currency. It never needs to ask anyone for dollars. Which brings us to the following article:

Japanese will ‘watch Sony TV’ if US is attacked

“You know we have a treaty with Japan, where if Japan is attacked, we have to use the full force and might of the United States,” Donald Trump said.

“If we’re attacked, Japan doesn’t have to do anything. They can sit home and watch Sony television, OK?”

Trump added that the United States protects Japan, South Korea, Germany, Saudi Arabia and other nations, and “they don’t pay anything near what it costs.”

“They have to pay. Because this isn’t 40 years ago.  It’s got to be a two-way street.”

Japan’s alliance with Washington has been the bedrock of its defense since the end of World War II, and the country still hosts 47,000 US troops.

Trump stirred international concern in April by stressing that NATO member states should begin paying their “fair share,” and that Japan and South Korea must be prepared to arm themselves to deter a threat from North Korea.

“It could be that Japan will have to defend itself against North Korea,” Trump said Friday. “You always have to be prepared to walkI don’t think we’ll walk, I don’t think it’s going to be necessary. It could be, though.”

We don’t invest in our allies out of the sheer goodness of our hearts. There are many political, military and strategical advantages for the U.S. to protect NATO nations and our other allies.

They provide air bases, and rocket sites, as well as financial and military cooperation in isolating rogue nations and fighting other enemies. Aid to our allies is a very good investment, indeed.

Unfortunately, Donald Trump, the man who refuses to ask for advice because he “has a very good brain,” the man who claims to know more than our generalsthis man apparently has no understanding of why the U.S. invests in our allies.

He wants to make them think we’ll “walk” at any time, so they will have no trust in us.

Not living up to his promises is the way Trump always has done his business — cheating those who invested their time and their money in him.

Perhaps not paying laborers their salaries, and not paying creditors their due, worked in Trump’s businesses, but cheating fellow nations wouldn’t work for us.

After time, we would be branded as unreliable, and find ourselves isolated in the world.

More importantly, we don’t need the money Trump wants our allies to pay. Unlike Trump, who needs income to support his lavish lifestyle, the U.S. is Monetarily Sovereign. We can continue spending forever, and never ask taxpayers for one additional dollar.

In fact, even if all federal taxes fell to $0, the U.S. government could double spending and still never run short of dollars.

So giving our allies an ultimatum that offers no benefit for us, displays monumental ignorance — not just ignorance, but dangerous ignorance.

Trump relies on the ignorance of the public, but ignorance has its penalties.

Trump would “make America weak again.”

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
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 afford better health care than 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 AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

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 EVERYONEFive 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 benefiting 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 CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from 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 corporate taxes would be an 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.

MONETARY SOVEREIGNTY

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