If Donald Trump wants to fire Janet Yellen, I’m with him

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

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Warren Mosler was a founder of Modern Monetary Theory (MMT), a cousin of Monetary Sovereignty (MS).

Recently, Warren posted some remarkable comments by Janet Yellen, Chair of the Board of Governors of the Federal Reserve System.

Here are a few excerpts:

“The long-run deficit probably needs to be kept in mind. With the debt-to-GDP ratio at around 77 percent there is not a lot of fiscal space should a shock to the economy occur, an adverse shock that did require fiscal stimulus.”

The federal deficit is the difference between tax collections and spending. The federal debt is the total of deposits in T-security accounts.  The two are unrelated.

The federal government could run deficits without accepting deposits in T-security accounts, and it could offer T-security accounts without running deficits.

More importantly, the debt/GDP ratio is nonsense math, a completely meaningless fraction. Despite what you may have been told, GDP does not in any way help service federal debt.

The federal government could pay off the entire “debt” tomorrow, simply by transferring existing dollars from all T-security accounts back to the account holders’ checking accounts.  No new dollars needed.

Short of that, the Federal Reserve Bank simply could buy back the T-securities, which is exactly what the Fed does when it engages in Quantitative Easing (QE).

The federal “debt” does not limit any financial action the Fed or Congress might wish to make.

Apparently, Ms. Yellen has forgotten that Japan exceeded the “magic” 77% level years ago, and today, with the ratio above 225% and growing, still has no difficulty deficit spending or servicing its debt.

Here are a few more “Yellenisms”:

“Importantly, that rise in debt over the long term could mean that policymakers would have more limited options in needing to stimulate the economy if it fell into another deep recession.”

“I also worry that if we were to again be hit by an adverse shock, that there’s not much scope to use fiscal policy. It was used in the early years after the financial crisis — we ran large deficits — but in the course of doing that, the debt-to-GDP ratio rose.”

“And were another negative shock to come along, it’s questionable how much scope we would now have to put in place even on a temporary multiyear basis expansionary fiscal policy, and I think it’s important to deal with these issues — for the Congress to do so.”

“Lawmakers should not get complacent about debt stabilizing over the next few years as it could become a greater problem beyond then.”

“It is crucial that the federal budget be put on a sustainable long-run trajectory. A failure to put in place a credible plan to address our long-run budget imbalance would expose the United States to serious economic costs and risks in the long term and possibly sooner.”

Allow me to describe Ms. Yellen’s comments in the kindest, gentlest, most accurate manner possible: They are 100% bullsh*t.

Does that about do it?

Not only are they 100% bullsh*t, but surely the Chair of the Board of Governors of the Federal Reserve System knows it.

So why does she say it?

The only reason I can imagine (perhaps you can think of others) is that she is a paid toady for the very rich, who want to widen the Gap between the rich and the rest of us.

The Gap is what makes them rich. Without the Gap, no one would be rich (We all would be the same), and the wider the Gap, the richer they are.

There are two ways to widen the Gap: Give the rich more and/or give the rest of us less, the latter being the inevitable effect of reductions in deficit spending (aka “austerity.”)

The federal government can “sustain” any amount of debt. There are no functional limits. But false worries about the size of the debt are what lead to:

  • Cuts in Social Security and Medicare benefits
  • Claims that universal healthcare is unaffordable
  • Unnecessary taxes like FICA and income taxes
  • The insufficient funding of programs to aid low income people
  • The suffocating student debt
  • Insufficient funding of Research & Development, infrastructure upgrades, climate change prevention, food & drug inspection
  • And cuts to numerous other federal initiatives that improve our lives.

The rich do not want our lives improved. They want the Gap between their lives and our lives widened.

(If we were well-fed, well-housed, well-educated, and well endowed for the future, where would the rich find their servants? Who could the rich look down upon?)

The Chairs of the Fed are hired by the Presidents of the United States, most (all?) of whom have demonstrated unyielding fealty to the rich. Apparently, Janet understands the source of her paycheck, and will do just as the rich ask. If there is one thing the rich appreciate, it’s obedience and obsequiousness.

Though she is America’s #1 banker, the boss of banking, I’ve not heard of her demanding jail time for the rich bankers who caused America’s Great Recession, and who still cheat America’s homeowners and depositors. (Correct me if I’m wrong on this).

So, for disseminating the Big Lie (the lie that federal taxes fund federal spending), Ms. Yellen should be fired, and if Mr. Trump does it, I’m with him. (Unless he replaces her with someone equally duplicitous.)

Just say it, Donald, as you did on TV: “You’re fired.”

Rodger Malcolm Mitchell
Monetary Sovereignty

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the rich and the rest.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ANNUAL 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 benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-transferring 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 a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY

Bill Black’s take on why the Dems lost

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

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I respect and admire Professor Bill Black, which is why I am pleased by his recent article paralleling much of November 12th’s post: The one, very simple reason why Hillary lost.

Unfortunately, Black’s article misses one important point, which I will discuss.

Here are some excerpts from Black’s article:

Hillary Clinton, during the closing 40 days of her campaign, showcased repeatedly her promise to assault the working class with continuous austerity.

The assault on the working class via austerity was such a core belief of the New Democrats that their candidate highlighted that assault even as the polls showed massive, intense rejection of her candidacy by the white working class.

These were the people who enthusiastically crowded Trump’s speeches. As we said on November 12,

They were the Democratic base, though they didn’t realize it, and Trump was telling them what they wanted to hear.”

Black continued:

It is morally wrong, economically illiterate, and politically suicidal for the New Democrats to continue to assault the working class via austerity, “free trade” (sic) deals, and financial deregulation.

The only thing worse is to then insult the working class for reacting “badly” to being pummeled for decades by the Party that once defined itself as the party of working people.

We’ll never know how differently the politics would have played if Obama, instead of systematically echoing and giving credibility to all the arguments of the people who want to destroy him, had actually stood up for a different economic philosophy.

But we do know how his actual strategy has worked, and it hasn’t been a success.

We had said:

The new Democrats forgot about their base. The Bill Clinton, Barack Obama, Hillary Clinton Democrats were not Democrats at all. They were Republicans in Democratic clothing.

“They were conservatives.

“They were the Bill Clinton who ran a federal surplus, thereby guaranteeing a recession that cost his base their jobs, and afterward asked for, and received $200,000 per speech.

“They were the Barack Obama who wanted a “Grand Bargain,” which included cuts to Social Security and Medicare and cuts to the overall budget, all of which would impact the working class far more than the idle rich, thereby widening the Gap between the rich and the rest.

“They were the Barack Obama who refused to prosecute, and still refuses to prosecute, any of the wealthy banksters who caused the Great Recession that took the homes, jobs, and savings from the Democratic base.”

The Democratic liberal base, composed of ordinary, working class, compassionate Americans, is far, far larger than is the Republican conservative base of the rich, the bigots, and the religious extremists.

This massive majority would have voted for an “LBJ” Hillary, but instead were offered an “Obama” Hillary

Bill Black said:

Ever since the birth of the New Democrats, their adherents have embraced austerity.

This act of mutual economic and political self-destruction has become so core to their identity that Hillary unhesitatingly made it one her most important closing pitches during the last 40 days of her campaign against Trump.

At the very moment when her pollsters were warning her that she could lose due to working class hostility, she chose to showcase her hostility to the working class by promising to inflict eight more years of austerity on them.

Despite intense criticism from progressives of her austerity threats, Paul Krugman never urged her publicly to promise to end austerity’s assault on the working class.

Similarly, no one on her official campaign team had the courage and strength to tell her to stop and reverse her position.

A November 14, 2016 Krugman column revealed the hold his past dogmas still had on him.

Eight years ago, as the world was plunging into financial crisis, I argued that we’d entered an economic realm in which “virtue is vice, caution is risky, and prudence is folly.”

Specifically, we’d stumbled into a situation in which bigger deficits and higher inflation were good things, not bad. And we’re still in that situation — not as strongly as we were, but we could still very much use more deficit spending.

Many economists have known this all along. But they have been ignored, partly because much of the political establishment has been obsessed with the evils of debt, partly because Republicans have been against anything the Obama administration proposes.

Krugman still does not understand sovereign money. A budget deficit for a government with a sovereign currency is not a moral issue. Budget surpluses are not a “virtue” and deficits are not a “vice.”

The economic issue is strictly pragmatic – what size budget deficit or surplus is best for the overall economy?

Bernie Sanders’ economic stimulus proposals were far superior to (Clinton’s) proposals.

The 2009 fiscal stimulus was far too small; the federal government had made a dire mistake in moving toward austerity in 2010 rather than increasing substantially the size of the stimulus package.

Krugman was out to defeat Bernie’s candidacy for the nomination. Had Bernie won that nomination he would now be President-elect.

Sanders was the one candidate for the nomination that embodied what Krugman said the Democratic Party desperately needed – ending the hold of “the political establishment obsessed with the evils of debt.”

Krugman has been unable yet to summon the integrity and courage to admit how badly he served the Nation and the millions of Americans that rejected that “political establishment.”

Amen, brother.

Except . . .  Except, let’s not be too naive about Sanders. He didn’t tell the truth, either. In fact, he broadcast The Big Lie.

His signature “Medicare for All” proposal was to be “paid for” by taxes. He campaigned on the “the success of the Affordable Care Act,” that Rube Goldbergian plan that forces some Americans to pay the medical bills of other Americans.

Despite having Professor Stephanie Kelton on his team, and therefore understanding the truth, Sanders did not have the courage to explain why federal deficits are absolutely necessary for economic growth.

Nor did he have the courage to explain why federal taxes do not fund federal spending. He said:

GETTING HEALTH CARE SPENDING UNDER CONTROL
We outspend all other countries on the planet and our medical spending continues to grow faster than the rate of inflation. Creating a single, public insurance system will go a long way towards getting health care spending under control.

Bernie tacitly claimed that spending was a problem, that need to get “under control,” when in fact, more federal deficit spending benefits the entire economy.

When dollars are pumped into the economy (by paying doctors, hospitals and pharmaceutical companies) the economy is stimulated. Businesses that serve doctors, hospitals, and pharmaceutical companies prosper and hire more employees, whose increased income and spending benefits other businesses and employees.

That is how economies grow.

Sanders did not have the courage to say it.  Instead, he perpetuated the myth of “unsustainable” deficits just as much as the Republicans did.

See for yourself.  This was what Sanders said about his Medicare for All plan:

THE PLAN WOULD BE FULLY PAID FOR BY:

  • A 6.2 percent income-based health care premium paid by employers.
  • A 2.2 percent income-based premium paid by households.
  • Progressive income tax rates.
  • Taxing capital gains and dividends the same as income from work.
  • Limit tax deductions for rich.
  • The Responsible Estate Tax.
  • Savings from health tax expenditures.

No, Bernie. The plan would not be “paid for” by taxes. Federal taxes do not fund federal spending. Stephanie Kelton knows that. And you know that, because Stephanie surely must have told you.

So despite Bill Black’s kind words, Sanders did not “end the hold of ‘the political establishment obsessed with the evils of debt.'” Sanders didn’t even try.

In fact, he strengthened that “hold” by incorporating it into his own plan.

Oh, somewhere in this favoured land the sun is shining bright,
The band is playing somewhere, and somewhere hearts are light;
And somewhere men are laughing, and somewhere children
shout,
But there is no joy in the middle class; mighty Sanders has struck out.

Rodger Malcolm Mitchell
Monetary Sovereignty

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the rich and the rest.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ANNUAL 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 benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-transferring 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 a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

What will be the purpose of economics in an AI+ world?

“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.” RMM

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An exploration.

All multi-celled animals, even insects, have something that serves as a brain. But, even the powerful human brain is not unique; it merely is “better” (depending on how one defines “better.”)

The human brain was not planned; it evolved naturally via trillions of chemical reactions influenced by trillions of outside stimuli. One could say that brains are accidents of natural selection, a slow process requiring millions of years.

By contrast, computers result from planning, i.e. directed selection , a much faster process.

Within one human generation, a computer has become the word’s best chess player (because of its superior ability to analyze the future) and another became the best Jeopardy player (because of its superior recall).

Siri recognizes your voice, can translate it into printed letters, words, and sentences, and can extract some meaning from those sentences. Google maps can determine the best route from among an infinite number of alternatives, based on various criteria changing in real time. Computers can recognize faces — almost, as you will read.

A living brain receives inputs, which it analyzes to produce results.  Humans learn via neuronal changes that give greater weight to the inputs leading to correct results. Computers can do the same.

But, computer “thinking” differs vastly from human thinking.

Want to beat facial recognition? Get some funky tortoiseshell glasses

A team of researchers from Pittsburgh’s Carnegie Mellon University have created sets of eyeglasses that can prevent wearers from being identified by facial recognition systems, or even fool the technology into identifying them as completely unrelated individuals.

The attack works by taking advantage of differences in how humans and computers understand faces. By selectively changing pixels in an image, it’s possible to leave the human-comprehensible facial image largely unchanged, while flummoxing a facial recognition system trying to categorize the person in the picture.

Computer systems don’t understand faces the way we do; they’re simply looking for patterns of pixels.


Pictures showing how researchers were able to use their glasses to impersonate celebrities, as well as each other. Photograph: Mahmood Sharif, Sruti Bhagavatula, Michael K Reiter and Lujo Bauer

A facial recognition computer confused the upper row with the lower row.

We have created computers that can learn, not from human input, but from their own experiences (“machine learning”).

We now have begun to develop “deep learning,” a closer approximation of living brains, in which layers of neural networks functionally program succeeding network layers. Development of deep learning is the most advanced field of Artificial Intelligence (AI), wherein a computer continually improves its results, without human supervision.

Imagine now, an AI computer continually improving,  faster and faster, millions of times a second, producing ever more intelligent generations, ultimately leading to a super-intelligence beyond that of any human or group of humans.

If we create an Artificial Intelligence (AI) that repeatedly can “improve” on existing AI, thus creating an even more “improved” AI, eventually, step by ever faster step, there would become an AI so powerful it would rule the world, if not the universe. That result is known as a “technological singularity.”

That leaves many questions, not the least of which is the meaning of the word “improve.”

Here are some excerpts from a November 9, 2016, NewScientist article titled, “A Singular Proposition”:

Sooner or later, humankind will invent a true AI, a thinking machine that fully deserves attributes such as wisdom, acumen, self-awareness, mind, and consciousnessan entity that can out-think us as we outthink mice.

We will have achieved the “singularity,” but what will be its purpose — not our purpose — but its purpose? What will the singularity want?

As living creatures, our prime purpose is survival, but what kind of survival?
–Our personal survival?
–Our family’s survival?
–The survival of our mores?
–Our species’ survival?
–Our government’s survival?
–Our planet’s survival?

Survival relates to time, i.e. survival for how long?

We value the present more than the future because prediction is uncertain. Still, we are concerned about the survival of things that will outlive us. We sacrifice to protect our children, and soldiers risk death to protect our government, though our children and our government probably will survive beyond us.

We make sacrifices to protect the future of the planet. Scientists labor to make discoveries that will benefit future generations. Authors and Presidents are concerned with their legacy. A few of us even write the words to appear on our gravestones.

To facilitate the above-mentioned survivals, we have invented governments and laws. For some societies, the fundamental law is the “Golden Rule, ” a subset of which is the Ten Commandments.

Such laws form the basis for our “morality,” which in turn, is based on the length of, and pleasure in, our lives, often measured by “fairness.”

To summarize, survival, our basic drive, leads to morality which leads to the consideration of fairness:

But what exactly is “fairness”?

  • Is it fair for the lazy person to receive as much as the hard-worker?
  • Is it fair for the sick to receive more than the well?
  • Is it fair for the rich to receive more than poor?
  • Is it fair for the unwise to receive as much as the wise?
  • Is it fair for the selfish to receive more than the generous?
  • Is it fair for the devious to receive more the honest?
  • Is it fair for the strong to receive more than the weak?
  • Is it fair that some are sicker, poorer, less wise, weaker or live shorter or less pleasant lives than others?

Are “all men created equal”? Do we have equal rights to Life, Liberty and the Pursuit of Happiness”? Do we have “certain inherent natural rights”?

Even if we do not, should we?

I suggest that the single most important question you ever address — a question you answer dozens, if not hundreds, of times every day, consciously or not, is: “Is this “fair?”

That question forms the basis for much of our law.  Humans have a powerful, instinctive need for fairness. It is the foundation of human society and the human species.

And not just human. Some animals too, are influenced by what they perceive as fairness and unfairness. Many experiments have demonstrated this.

The results of thousands of sensory inputs have been weighted in your neurons, so today you have a general belief about fairness. This general belief allows you to ascribe fairness even to situations you never have encountered, thus the multitude of disparate laws, all based on fairness.

But what laws would intelligent machines follow? Would their morality, fairness, and laws be like ours? Or would they fashion completely different rules?

We evolved as social animals, and fairness seems important to the cohesive strength of social groups. But would AI machines evolve as social animals? Would they evolve naturally at all, or would they remain programmed with our biases?

Social animals form specializations, which benefit the society. For “higher” animals there are leaders who generally benefit more than others.

Human leaders receive special privileges in the form of money, service, glory, and protection. Objectively, this is unfair. Objectively, caste systems are unfair, as are poverty vs. wealth, worker vs. boss, waiting vs. being seated immediately.

But we have evolved naturally to accept those “unfairnesses” as seeming to bring us survival benefits. Altruism, for instance, is not just common, but vital, among humans and other social animals. 

Is altruism fair? When voluntary?  When enforced?

Is there ever true altruism, or is what we call “altruism” really self-serving in disguise?

The basic purpose of economics is to find uses of money to improve our lives. As a social science,  economics is heavily influenced by fairness and altruism.

Visualize an AI machine that has reached singularity. Would fairness be a concern?

Now visualize that machine creating, then interacting with, thousands of other machines, which also have achieved singularity. What would be the prime issues for any one of those machines and for all machines collectively? Would fairness naturally evolve?

If (big “IF”) a machine or a group of machines are motivated by survival, what would survival mean to machines?

The “Terminator” movies postulated that intelligent machines would be motivated to eliminate humans. But to a machine brain, would that be the best use of the human species?

Humans are not motivated to eliminate other predators. Currently, we try to prevent their extinction.

(This very question has arisen regarding the use of CRISPR to eliminate malaria- and zika-transmitting mosquitoes.  

We already have eliminated the smallpox virus species. Specific mosquito species can be made extinct using a sterile insect technique that has existed for over 50 years. It has been effectively used to eliminate species  for disease prevention in humans and animals, most notably, with the screwworm and the melon fly.)

Although we have discussed AI as a thinking issue, the vast majority of the human brain is devoted to body control. That is why a whale, being larger, has a larger brain, though we may have higher intelligence, according to our measures.

Science News Magazine: November 12, 2016: Robot Awakening, by Meghan Rosen

For robots, AI means more than just “brains.” The body matters too. In humans, eyes and ears and skin pick up cues from the environment.

Even someone sitting (nearly) motionless at a desk in a quiet, temperature-controlled office is bombarded with information from the senses.

Fluorescent lights flutter, air conditioning units hum and the tactile signals are too numerous to count. Fingertips touch computer keys, feet press the floor, forearms rest on the desk. If people couldn’t tune out some of the “noise” picked up by their skin, it would be total sensory overload.

“You have millions of tactile sensors, but you don’t sit there and say, ‘OK, what’s going on with my millions of tactile sensors,’ ” says Nikolaus Correll, a roboticist at the University of Colorado Boulder. Rather, the brain gets a filtered message, more of a big-picture view.

In UCLA’s Biomechatronics Lab, a green-fingered robot just figured out how to use its body for one seemingly simple task: closing a plastic bag.

Two deformable finger pads pinch the blue seal with steady pressure (the enclosed Cheerios barely tremble) as the robot slides its hand slowly along the plastic zipper. After about two minutes, the fingers reach the end, closing the bag.

It’s deceptively difficult. The bag’s shape changes as it’s manipulated — tough for robotic fingers to grasp. It’s also transparent — not easily detectable by computer vision.

So the researchers let the robot learn how to close the bag itself.

First they had the bot randomly move its fingers along the zipper, while collecting data from sensors in the fingertips — how the skin deforms, what vibrations it picks up, how fluid pressure in the fingertips changes.

They also taught the robot where the zipper was in relation to the finger pads. The sweet spot is smack dab in the middle, Santos says.

Then the team used a type of algorithm called reinforcement learning to teach the robot how to close the bag. The program gives the robot “points” for keeping the zipper in the fingers’ sweet spot while moving along the bag.

“If good stuff happens, it gets rewarded.”  When the bot holds the zipper near the center of the finger pads,  “it says, ‘Hey, I get points for that, so those are good things to do.’ ”

As you read this, your body senses many thousands of inputs each second, from the soles of your feet, to your legs, your back, your arms and hands, your heart and digestive system, your head.

Your brain selects only the meaningful ones for your conscious attention.  You don’t feel your bladder unless you need to empty it or it contains a stone.

A machine needs a body, too, and that body needs to signal the machine’s brain, not just with intellectual questions, but with signals about operation.

The UCLA machine taught itself to zip a plastic bag, but future AI+ or AI++ machines may not even use plastic bags. They may move items balanced between entangled atoms, or some other sophisticated method. (Star Trek’s “beam me up” transporter?)

Evolution is not straight-line. The evolution of the telephone involved the creation of the coin slot, which proved to be a “time-wasting” divergence when cell phones were created.

Today, billions of dollars and millions of man-hours are devoted to landing a human on Mars. It is seen not just as an exploratory, information-gathering effort, but more importantly, as a survival insurance policy should the earth become inhabitable.

Most of those dollars and hours are being spent to find ways to protect humans from the dangers of space travel and the Martian climate.

But machines already have made that trip and “live” on Mars, and they are not even AI. So all these efforts to send humans to Mars might be an evolutionary digression, like those “time-wasting” coin slots on phones.

At what point will computers achieve self-determination, the ability to decide and to procreate, without human intervention? You well might ask, do we have self-determination now? Aside from a cave-dwelling hermit, does any person operate without human intervention?

In summary, the evolution of computers toward AI is ongoing and inevitable. What nature did in a long, complex series of “accidents,” humans and computers will achieve, purposefully.

The question is “When (not if) AI+ or AI++ is achieved, what will be their prime issues? Will they pursue fairness, as many animals, including humans, do? And if so, what will be their measures of “fairness”?

Will they have governments, laws, rewards & punishments, emotions, goals, and if so, what will they be?

Will they be altruistic, and if so, what form will it their altruism take?

Remember the face recognition experiment? Computers don’t understand faces; they understand pixels. Even an AI computer doesn’t understand the world the way you do.

If you have owned a dog and a cat, you will have noticed that cats especially, think differently from dogs.  But that difference is nothing compared to the differences between your thinking and a computer’s “thinking.”

Despite the pleasant voices in Siri and your GPS system, even the most advanced computers contain the most foreign brains you ever will encounter. You simply have no intuition about computers’ wants, needs, and motivations.

While your sensory world causes an analog agglomeration of brain chemicals, a computer’s world causes a completely different, digital, organized array of electrical charges. Although computers can achieve amazing feats of what we see as “thinking,” we cannot know whether even the most advanced “A+++ . . . +” ever will understand the same way we do.

That is both the strength and the weakness of computer “thinking.” The more we make computer brains like our brains, the more susceptible they will be to the weaknesses of our brains: Forgetting, emotions, fatigue, biases, computational mistakes. 

We don’t need to  develop artificial human brains.  We already have real human brains.  The future will deliver advanced computer brains, and these will be quite alien to us.

Will computers, despite their massive knowledge, memory, and sensing abilities, ever truly understand concepts like compassion and fairness, anger, and fear?

We began this post with an economics postulate:

“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.”

It mentions such concepts as “purpose,” “government,” the “rich,” the “poor,” the “powerless,” the “powerful,” and “protect.” It implies economics.

Will there be an AI+ corollary?

What will be the purpose of economics in an AI+ world?

Rodger Malcolm Mitchell
Monetary Sovereignty

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

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THE LAWS

•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.

•The more federal budgets are cut and taxes increased, the weaker an economy becomes..

•No nation can tax itself into prosperity, nor grow without money growth.

•Cutting federal deficits to grow the economy is like applying leeches to cure anemia.

•A growing economy requires a growing supply of money (GDP = Federal Spending + Non-federal Spending + Net Exports)

•Deficit spending grows the supply of money

•The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.

•The limit to non-federal deficit spending is the ability to borrow.

•Until the 99% understand the need for federal deficits, the upper 1% will rule.

•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 single most important problem in economics is the Gap between the rich and the rest.

•Austerity is the government’s method for widening the Gap between the rich and the rest.

•Until the 99% understand the need for federal deficits, the upper 1% will rule.

•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

MONETARY SOVEREIGNTY

Why has the ACLU recently gained so many members?

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

Why has the ACLU recently gained so many members? Read why it’s more than just Trump.

First, a little background:

ACLU, other groups report post-election surge of donations
By David Crary | AP November 15

NEW YORK — In the week since Donald Trump’s election, there’s been a dramatic surge in donations to the American Civil Liberties Union, Planned Parenthood, the Sierra Club and other progressive organizations which have pledged to resist any moves by the new administration that would undercut their causes.

The ACLU unleashed feisty fundraising appeals, including one warning that if Trump implemented certain campaign promises, “We’ll see him in court.”

The result, according to the ACLU, has been the largest surge of support in its 94-year history, including roughly 120,000 donations totaling more than $7.2 million.

“We’ll need to build up the most powerful legal organization mankind has ever known to fight for us over the next four years,” wrote HIV/AIDS and gay-rights activist Peter Staley, who pledged on his Facebook page to become a monthly ACLU donor.

The ACLU’s executive director, Anthony Romero, said the infusion of new funds would help in addressing several urgent priorities, including resisting possible mass deportation efforts, protecting the civil rights of transgender Americans, and preventing “stop-and-frisk” police policies from being adopted nationwide.

Since the election, Planned Parenthood has reported an unprecedented outpouring of support, with more than 128,000 people making donations. The organization said at least 20,000 of the donations made reference to Vice President-elect Mike Pence, who as a congressman and governor of Indiana has been an advocate of tough anti-abortion restrictions.

“We will never back down, and we will never stop providing the care our patients need,” said Planned Parenthood’s president, Cecile Richards.

The Sierra Club said it had registered 9,000 new monthly donors since the election — more than it had added from Jan. 1 until Election Day.

“We don’t feel helpless at all,” said Debbie Sease, the organization’s national campaigns director.

Other organizations reporting major increases in support included the NAACP, the National Immigration Law Center, and major LGBT-rights organizations, including the Human Rights Campaign and Lambda Legal. Lambda Legal said it received support from more than 1,000 first-time donors in the four days following the election.

The Anti-Defamation League, which combats anti-Semitism and other forms of bigotry, said donations surged 50-fold the day after the election.

Another beneficiary of the election results is ProPublica, an independent, nonprofit news organization that produces investigative public-interest journalism.

Richard Tofel, ProPublica’s president and founding general manager, said online donations increased sharply the day after the election, and then skyrocketed after John Oliver — on Sunday’s edition of his HBO show “Last Week Tonight” — urged viewers to support “actual journalism” produced by ProPublica and other outlets.

“There are a lot of people who, in response to the election, feel that they need to take some sort of civic action,” Tofel said.

The ACLU published an open letter to Trump. You can read the full letter here, but a couple excerpts are:

Specifically, you promised to:

– amass a deportation force to remove 11 million undocumented immigrants

ban the entry of Muslims and institute aggressive surveillance programs targeting them

– restrict a woman’s right to abortion services

– reauthorize waterboarding and other forms of torture

– change our nation’s libel laws and restrict freedom of expression

These proposals are not simply unAmerican and wrong-headed. They are unlawful and unconstitutional, and would violate the First, Fourth, Fifth, Eighth, and Fourteenth Amendments of the Constitution, as well as other statutes and international treaties.

If you do not reverse course, you will have to contend with the full firepower of the ACLU at your every step.

Our staff of litigators and activists in every state, thousands of volunteers, and millions of supporters stand ready to fight against any encroachment on our cherished freedoms and rights.

One thing is certain: We will be vigilant every day of your tenure as president. And when you ultimately vacate the Oval Office, we will do likewise with your successor.

Now, here is the real answer to the title question, “Why has the ACLU recently gained so many members?

The Democratic Party long had been the protector of the “common man,” the underdog,  the downtrodden, the powerless, the so-called “99%.”

It was the progressive Democrats who brought us Social Security, Medicare, Medicaid, civil rights laws, bans on racial discrimination, aids to education, aids to the impoverished, the “Voting Rights Act,” and the removal of racial origin quotas for immigration.

That was the progressive Democratic Party of Roosevelt, Truman, Kennedy, and Johnson.

That progressive Party no longer exists.

Today, the Democrats are the Party of Clinton and Obama, money-hungry conservatives in Democrats clothing, who have proved to be far more interested in protecting the .1% than in following any progressive agenda.

The current Democrats have been weak against the conservatives’ false narrative that the poor are “lazy takers,” who only want “free stuff,” while the rich are hard-working “makers.”

The current Democrats have lent support to the notion that Social Security and Medicare should be cut and FICA (America’s most regressive tax) increased.

The current Democrats have been weak against the Republican refusal to consider a Supreme Court nominee or the Republican states’ destruction of voting rights for people of color.

The current Democratic Party no longer can be relied upon to fight for civil rights or the less-than-affluent.

The current Democratic leaders are more interested in aiding rich banksters than in lifting the poor.

Progressives believe the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives believe the purpose of government is to protect the rich and powerful from the poor and powerless.

The Democratic Party has lost touch with its traditional progressive base.

And that is why we see the massive influx of membership and money to progressive-leaning organizations like ACLU, Planned Parenthood, the Sierra Club, and other progressive organizations.

We now have, in effect, a one-party system, with each party caring only about money and power rather than about people.

As a result, America now has elected the ultimate money/power President, a man who plans to chip away at the rights of the moneyless, powerless people the Democrats were supposed to represent.

If you lean progressive, the Democratic leadership will do nothing for you. Democrats have failed the progressives.

Until the Democrats find a strong leader in the Roosevelt, Truman, Kennedy, Johnson mold, you would be better served to join and contribute to the ACLU et al than to support yet another toady-to-the-rich conservative Democrat.

Hundreds of thousands now have made that decision. Many more will join them.

Rodger Malcolm Mitchell
Monetary Sovereignty

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the rich and the rest.

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ANNUAL 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-transferring 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 a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.

MONETARY SOVEREIGNTY