Tag: monetary non-sovereignty

Donald Trump, a “charitable man”

[What single word would you say best describes someone who continually boasts and repeatedly lies about his charitable giving?]

Donald Trump is a rich and charitable man. How do I know? He says so.

And says so.

And says so.

Did Donald Trump violate IRS rules?

Four years ago, at a charity fundraiser in Palm Beach, Donald Trump got into a bidding war at the evening’s live auction. The items up for sale: A Denver Broncos helmet, autographed by then-star quarterback Tim Tebow, and a Tebow jersey.

Trump won, eventually, with a bid of $12,000. Afterward, he posed with the helmet.

But Trump didn’t actually pay with his own money.

Instead, the Susan G. Komen organization — the breast-cancer nonprofit that hosted the party — got a $12,000 payment from another nonprofit , the Donald J. Trump Foundation.

Trump himself sent no money (In fact, a Komen spokesperson said, Trump has never given a personal gift of cash to the Komen organization).

He paid the bill with money from a charity he founded in 1987, but which is largely stocked with other people’s money. Trump is the foundation’s president. But, at the time of the auction, Trump had given none of his own money to the foundation for three years running.

Trump’s campaign did not respond to requests for comment.

And then there is this:

Mr. Trump’s fake charity

DONALD TRUMP, perhaps the greatest braggart ever to aspire to national office, is hardly shy about flaunting — or rather hyping — his good works.

So it has been with his charitable giving, which, for the better part of 30 years, he has regularly exaggerated to the point of plain mendacity.

Speaking of his royalties from the reality television show “The Apprentice,” Mr. Trump told the radio personality Howard Stern that “I’m giving the money to charity,” mentioning that as the show’s host he had been paid “a lot more than” $1 million.

The money, Mr. Trump said, would go to AIDS research and the Police Athletic League.

Yet that year Mr. Trump’s foundation — the entity he established to bestow charitable gifts — gave just $1,000 for AIDS research and $106,000 to the Police Athletic League.

And while he promised in the late 1980s to give royalties from his successful book, “The Art of the Deal,” to charities for the homeless, Vietnam veterans, AIDS and multiple sclerosis, only 8 percent of his charitable giving in those years went to those causes.

Much more went to society galas, his alma maters and the exclusive schools his children attended.

Mr. Trump’s exaggerated eleemosynary claims match his long history of embroideries, overstatements and wildly inflated assertions of prowess in other endeavors.

The GOP candidate’s whoppers come so fast and thick that it’s easy to lose track, and it’s tempting to ignore much of what he says. That would be a mistake.

Contempt for the truth is a disqualifying feature in a candidate for the presidency.

And this:

There’s something fishy about Donald Trump’s charitable donations

Trump has said he donated $102 million worth of cash and land to philanthropic and conservation organizations over the past five years.

But his campaign has provided little documentation for most of these contributions, and tax filings of the Donald J. Trump foundation show Trump has made no charitable contributions to his own namesake nonprofit since 2008.

Without an endowment, the fund has continued to give grants only as a result of contributions from others.

Pressed by the AP on the details of his contributions, Trump campaign spokeswoman Hope Hicks provided a partial list of donations that appeared to correspond with the foundation’s gifts — indicating that Trump may be counting other people’s charitable giving as his own.

“I give to hundreds of charities and people in need of help,” Trump said in an emailed response to questions from the AP about how he tallied his own philanthropy. “It is one of the things I most like doing and one of the great reasons to have made a lot of money.”

The Trump campaign did not respond to a request that it identify donations that Trump himself gave.

And this:

Trump Foundation Admits Error On Charity Donation

Donald Trump’s charitable foundation has admitted to mistakenly donating $25,000 to an organization aligned with Florida Attorney General Pam Bondi — a potential violation of federal rules prohibiting charities from assisting political candidates.

Of course, all the “mistakes” about Trump’s charity could be resolved if he revealed his tax returns, as every other Presidential candidate has done — as Trump himself has promised but failed to do.

What single word best describes someone who continually boasts and repeatedly lies about his charitable giving, while cheating innocent “students” of his questionable “schools?

My vote: “Slime.”

What’s yours?

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

The vast, unrecognized power of Monetary Sovereignty: Where do we go from here?

Consider this short article to be a “where-do-we-go-from-here” think piece.

The UK has voted to leave the European Union. The EU bankers, hoping to discourage the departure of their cash cows (aka “EU member nations”), will debate the best ways to exact the most excruciating vengeance on the UK.

What the UK has done is what all nations should do: Preserve its national sovereignty, particularly its Monetary Sovereignty (MS).

The euro nations committed a devastating error by exchanging their sovereign currencies and their government financial prerogatives for the mouthful of ashes known as the EU. They looked at the EU, and said, “Take me,” and taken them the EU gladly has — taken them for huge sums of money, while the populace suffers.

The EU even has taken over the political sovereignty of its member nations. Read this denial in the Politico web site:

There are no imminent plans to create an EU army. The creation of EU headquarters would integrate national operational headquarters and command-and-control centers, facilitate planning and enhance coordination of civilian and military EU missions.

“. . . integrate national operational headquarters and command-and-control centers, facilitate planning and enhance coordination of civilian and military EU missions” is exactly what America’s Pentagon does. It is the definition of military headquarters.

The EU doesn’t need to “create” an army. Armies already exist. All the EU wants to do is to run those heretofore national armies.

The euro nations did not (and most nations, including the UK, still do not) recognize the vast power of their political and Monetary Sovereignty:

  1. An MS nation never can run short of its own sovereign currency. It has the unlimited power to pay any invoice and service any debt denominated in its currency.

    The cities, counties, states, businesses, and individuals of a nation are monetarily NON-sovereign, and do not own the powers of MS.

  2. An MS nation has the unlimited power to protect the value of its sovereign currency (inflation) by regulating both the Supply and the Demand for that currency. Demand is a function of Risk and Reward, and the Reward for owning a currency is Interest.

    That is why the Fed raises interest rates, i.e increases the Reward when inflation looms.

  3. An MS nation never needs any sort of income. It never needs to levy taxes if the ostensible purpose is to pay for goods and services. It pays its bills by creating its sovereign currency, ad hoc. (Certain taxes can have economic control functions, but all taxes disappear upon receipt.)

    An MS nation also never needs to borrow or to earn a profit.

  4. An MS nation never needs austerity, i.e the reduction in deficit spending or the creation of “balanced budgets.” On the contrary, deficit spending is the method by which an MS nation creates national prosperity, and balanced budgets create recessions and depressions.

    An MS nation has the unlimited power to prevent those recessions and depressions.

  5. An MS nation has the power to eliminate poverty and to support a middle class, and to narrow the Gap between the rich and the rest. (See: The Ten Steps to Prosperity).

    An MS nation has the unlimited power to feed, clothe, house, educate, and protect the health of its people in two ways: By a direct infusion of cash to the populace (a la Social Security) and by paying businesses to provide services to the populace (a la Medicare).

  6. An MS nation has the unlimited power to maintain and modernize its infrastructure, and to fund research and development in all fields of science and technology.
  7. While individual businesses may benefit from export, an MS nation has no need to export. Exporting involves sending the fruits of scarce and valuable labor and physical assets to other nations, in exchange for money, of which the MS nation has an unlimited supply.

    (Imagine manufacturing automobiles and sending them abroad in exchange for air.)

These are the fundamental facts, and the vast, largely unrecognized powers of Monetary Sovereignty.

And now, allow us to drift to speculation. Where do we go from here?

……………………………………………………………………………………………………………………………………………………

Monetary Sovereignty is the most valuable asset any nation can have. Like all assets, some of its value lies in its scarcity. Some nations don’t have it, and none seems to recognize its power.

If every nation not only were MS, but had leaders who understood and used the powers of MS, fewer nations would be motivated to exchange their scarce goods and services for money, i.e. there would be less motivation to export. (Why trade scarce resources for money that can be created freely?)

MS nations simply could support their own businesses and their economies without the need to ship scarce resources abroad.

(The U.S. consistently runs huge trade deficits — import more than we export — yet never runs short of dollars. Its Monetary Sovereignty allows it to create unlimited, economically stimulative dollars, to replace the dollars sent abroad.)

Though MS nations do not need to export, they all need to import, which with every nation being MS, could create a conundrum: No nation needing to export, but every nation needing to import.

In such a case, nations might be tempted to return to barter — nations paying for foreign goods and services, with domestic goods and services.

But because barter is inefficient, the world could invent a common, scarce product (CSP), for instance — dare I say it? — gold, silver, platinum and the like, to act as a surrogate for barter.

(The euro was sold as a CSP controlled by the EU. It might have worked had the financial merger of European nations been supported by a political merger, i.e. a United States of Europe. In such an arrangement, the citizens and their states (not greed-driven bankers) would have had a voting voice in the use of their money.

This is not to say a united states of “anything” is a perfect solution. Far from it, especially if expanded to encompass the entire world. The notion of one-world-rule is frightening to contemplate.)

When a CSP is inconvenient to use, as are the metals, credits based on CSP are created. Thus, one might visualize a bifurcated money system, with CSP credits being the currency of international trade, and sovereign currencies being used locally.

Yet, even that clear division would not endure, as sovereign currencies inevitably would be exchanged with CSP credits. This would bring us right back to the fact that Monetarily Sovereign nations could produce and acquire CSP credits in unlimited amounts, thus reducing the motivation for export.

The same would be true for an international currency, like bitcoin.

In the future, not just nations, but smaller political entities — states, counties, cities, even businesses and individuals — could become Monetarily Sovereign. Small, tentative steps have been taken, the missing link being widespread acceptance.

(Visualize McDonald’s wishing to stimulate sales, so it issues millions of $0.10-off electronic coupons for the purchase of any McDonald’s products. Is McDonald’s sovereign over the coupons? Is there a limit to McDonald’s issuance of the coupons? Are the coupons money?

Where are we headed and where will it all end? There never may be an ending point: Money may continue to evolve, as each solution begets a new problem. Clearly, the citizens of the first nations to discover and use the power of MS will benefit most.

Equally clear, the “secret” will not remain hidden. It is out there today, for all to see — the solution to many of our financial and personal problems.

If those problems are hunger, homelessness, poverty, illiteracy, disease, scientific progress, the infrastructure, the environment, and/or the Gap between the rich and the rest, Monetary Sovereignty provides solutions.

We have only to understand it and have the will to use it.

=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

The myths of “Crowding out”

Reader “CharlesD” bemoaned the difficulty he has had explaining Monetary Sovereignty to Congresspeople. (I feel your pain, Charles.)

He mentioned the “non-partisan” Congressional Budget Offices use of “crowding out” hypothesis,as one of the arguments against the increased federal deficit spending that is inherent in Monetary Sovereignty and the Ten Steps to Prosperity (below).

So far as the CBO being “non-partisan,” the Speaker of the House of Representatives and the president pro tempore of the Senate jointly appoint the CBO Director. The rest of CBO’s staff, including the Deputy Director, are appointed by the Director.

Is it possible to be more partisan than that?

Anyway, partisanship makes little difference, because both political parties and all political directions — right, center, and left — subscribe to the same “crowding out” myths, of which there are several:

Myth I. Federal debt supposedly “crowds out” private debt

From Investopedia: “Because large governments have the power to borrow large sums of money, doing so can actually have a substantial impact on the real interest rate, raising it by a significant degree.

This has the effect of absorbing the economy’s lending capacity and of discouraging businesses from engaging in capital projects.

A. The U.S. government does not borrow, nor does it need to.  What erroneously is termed “federal borrowing” actually is the issuance of T-securities.  Federal “debt” is the total of T-security accounts at the Federal Reserve Bank — similar to bank savings accounts.

In essence, “crowding out” hypothesis proposes that these bank account deposits crowd out lending, a strange idea, indeed.

B. The federal government pays its bills by creating new dollars, ad hoc.  To pay a creditor, each federal agency sends instructions (not dollars) to the creditor’s bank, instructing the bank to increase the balance in the creditor’s checking account.  When the bank does as instructed, dollars are created and added to the economy.

C. Interest rates are determined by the Fed, and evolve from the federal funds target rate, which the Fed arbitrarily sets.

D. Issuing T-securities does not “absorb the economy’s lending capacity.” The federal government does not borrow from banks. The federal government issues T-securities, having no effect on any bank’s lending capacity (which is determined by bank capital).

Myth II. Social welfare programs supposedly “crowd out” private spending.

From Investopedia: Crowding out may also take place because of social welfare, unlikely as this may seem, though indirectly.

This happens when governments raise taxes in order to fund the introduction of new welfare programs or the expansion of existing ones.

With higher taxes, individuals and businesses are left with less discretionary income to spend, specifically on charitable donations toward social welfare or other causes that the government is also funding.

A. Federal spending adds dollars to the economy, thereby increasing the private sector’s discretionary income.

B. A Monetarily Sovereign government’s taxes do not fund the government’s spending. Even if all U.S. federal tax collections fell to $0, the federal government could continue spending, forever.

C. For monetarily non-sovereign (state and local) governments, taxes do fund spending, but that spending goes back into the economy. Local taxing does not create a net change in individuals’ and businesses’ discretionary income.

Ironically, the “crowding out” false claim is that federal spending on social programs crowds out private spending — on social programs.

Myth III. Government-funded infrastructure development projects can discourage privately funded infrastructure programs.

From Investopedia: Another form of crowding out can occur because of government-funded infrastructure development projects, which can discourage private enterprise from taking place in the same area of the market by making it undesirable or even unprofitable.

This often occurs with bridges and other roads, as government-funded development discourages companies from building toll roads or from engaging in other similar projects.

For example, if Build-It Infrastructure Corp. is thinking about building a bridge across the San Francisco Bay and has structured the project’s profit model around charging tolls for cars crossing the bridge, the announcement of a government-funded bridge project in the area will likely prevent Build-It’s project from taking place, as their toll bridge will likely not be able to compete with a free, publicly funded one.

A. Whatever the government does, it can “crowd out” a private company from doing the same thing. Instead, the government may hire a different private company to do the work.

In the “Build-It” example given above, the government usually will hire Build-It or one of its competitors to build the bridge. The government itself does very little of its own work, but generally finances private industry to do the work.

For example, the entire defense industry is built on federal financing. No “crowding out” there.

B. When the government does the work, it usually is because of control and risk. A classic example is NASA, which was funded and controlled by the government, for important political reasons.

Even here, however, the majority of NASA’s work is done by private contractors, who were relieved of the risk inherent in rocketry. Now, many years after the moon missions, private industry has learned enough from NASA’s experiences, the current risk seems acceptable.

Rather than “crowding out” private industry, NASA supported private industry and created an information base which private industry now is using.

Further, NASA pays the private sector (i.e. individual employees) to do the work, and these employees spend their money with private industry.

We have quoted the myths from Investopedia, but in all fairness, Investopedia does mention (at the end of its article) the other side of the story:

On the other hand, macroeconoic theories like Chartalism and Post-Keynesianism hold that in a modern economy operating significantly below capacity, government borrowing can actually increase demand by improving employment, thereby stimulating private spending as well.

This process is often referred to as “crowding in,” (which) has gained some currency among economists in recent years after it was noted that during the Great Recession of 2008 enormous spending on the part of the United States federal government on bonds and other securities actually had the effect of reducing interest rates.

Almost, but not quite.

Enormous spending by the federal government on products and services pumped dollars into the economy, which stimulated the economy.

Simultaneously, the Fed lower interest rates, by fiat, which in fact, did not stimulate the economy, and may have had a recessive effect. (See: The Low Interest Rate / GDP Growth Fallacy.)

Low rates cause the Federal Government to pay less interest on T-securities. Thus fewer dollars are pumped into the economy, an economic recessive.

Summary: The “crowding out” hypothesis demonstrates ignorance of economic reality and particularly of Monetary Sovereignty.

Save this article for the next time someone mentions the “crowding out” myth.

=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.
=================================================================================================================================================================================================================================

Brexit: How Obama “bailed then failed”

I received this letter written by someone named “Mike,” whom I do not know, other than he lives in the UK

Hi everyone.

Thoughts on this subject have been asked for, so here goes!

Brexit – where do I start? Some background first….

When the UK joined in the early 70s and voted to remain in 1975, we joined what was then called the European Economic Community (EEC) or Common Market. There were no political connotations, it was simply a free trade area.

Over the years since then, the EEC morphed into the European Union (EU) which created a European Parliament, a European Court, a European Currency (the Euro) with a European Central Bank, a European Foreign Service and many other institutions and trappings of a sovereign state.

On the stocks at the moment is a proposal to create a European Armed Force in ‘opposition’ to NATO.

Many of us (52% as it turns out) were deeply disturbed by this as we found that our laws, passed by Parliament, were being overturned by the EU; that the decisions of our courts were being overruled by the European Court and by the European Court of Human Rights; and that we were powerless to prevent anybody with “European Citizenship” from travelling to the UK and, if they could not find work, from drawing our Welfare Benefits.

In fact, because Britain is more prosperous than any other country in the EU (yes, even Germany), many hundreds of thousands did come here from Poland, Romania, Bulgaria, Italy, Portugal, Greece and, amazingly, France – there were a net 300,000 last year alone – causing great strain on our housing stock, schools and hospitals.

While we attempted to negotiate with the other EU countries a deal which would alleviate our difficulties, concessions were derisory and we could see further problems arising if the flood of refugees from the Middle East and Africa were eventually granted EU citizenship as Germany, in particular, was suggesting.

There was also on the table a proposal that Turkey would join the EU which would eventually add a further large population entitled to travel here.

These issues have been a festering problem in British politics ever since the premiership of Margaret Thatcher but they came to prominence when the financial crash provoked problems within the Euro Zone.

The weakest economies – mainly in the south of Europe and, principally, Greece – collapsed and became reliant on the strongest economy, Germany.  The EU economy within the Euro Zone faltered and stagnated and calls to free the UK from all this became louder.

In an attempt to stifle these calls, David Cameron said that he would make a further effort to negotiate a deal and, once these negotiations were over, we would have an In/Out Referendum. We’ve had it and you know the result – we want out.

It’s a result that Pam and I voted for – principally on the constitutional issue. We didn’t vote for a European Union in 1975 and we don’t like what the Common Market has turned into. The nearest analogy that I can think of in US terms is States’ Rights and we didn’t like our rights being surreptitiously removed.

Incidentally, and I hate to have to say this, but President Obama did the Remain in Europe campaign, himself and the US no favours by saying that we would have to go to the end of the line for a trade deal with the USA if we left the EU.

Were we back of the line after Pearl Harbor; in Korea; during the Cuban Missile Crisis; with President Reagan in facing down Gorbachov; during Operation Desert Storm; or after 9/11?

We don’t expect favours or thanks but a little consideration would be welcome.

Of course, we recognise that there is going to be a downside: the financial institutions, having lost their bets on Britain staying in are screaming but they’ll get over it; the eurocrats and their masters in the EU are furious but if they want to go on trading with us, they’ll have to calm down and come to a sensible deal.

I suspect that a short-term slimming down of our economy is a price worth paying to get back control of the country.

Mike

Here is my response:

You are correct.

The EU was invented by the rich, insatiable bankers who always want to grab more and more money and power.

At least the UK was smart enough to keep their own currency (i.e. remained “Monetarily Sovereign”).

Greece, France, Italy, et al surrendered the single most valuable asset any nation can have — their Monetary Sovereignty — and so have been at the mercy of the rapacious bankers, who have been bleeding them ever since.

Way back in 2005, I spoke at the University of Missouri, Kansas City, where I said, “Because of the Euro, no euro nation can control its own money supply. The Euro is the worst economic idea since the recession-era, Smoot-Hawley Tariff. The economies of European nations are doomed by the euro.”

That goes for the EU.  Nations can have free trade without giving up their Monetary Sovereignty. But the bankers feel that doesn’t allow them to steal enough.

As for Obama, he is a pseudo-liberal, a right-winger in disguise. He opted for cutting Social Security and Medicare, begged for a “Grand Bargain” that would have widened the gap between the rich and the rest, and brought into existence the Simpson/Bowles Committee designed to cut all social spending.”

Now, he backs the EU, because it is a feeding trough for bankers.

(Obama always has been a flunkie for the bankers. Presumably, they will return the favor and support him and his family in luxury, for the rest of their lives.)

In his role as bank stooge, he bailed out the banks, then failed to prosecute a single lawbreaking bankster. He long will be remembered as the “bailed and failed” President.

The UK people made a great move, and if they get a wise Prime Minister, they will prosper well beyond any of the EU nations, which will continue to be bled by the banksters.

Congratulations and Godspeed to the UK.

The EU is nothing more than a direct money transfer system from the people to the bankers. The people are impoverished while the bankers grow richer.

The Brexit allows the UK to regain its Monetary Sovereignty. It has the power to do whatever is best to grow its economy and to benefit its people (and that, after all, is the fundamental purpose of government).

Britain will not need to adhere to any ridiculous “debt” limits or unlimited immigration, or the negation of its laws, as it creates the money to pay for jobs, food, housing, education, infrastructure and all other aids for its people. It will be able, if it wishes, to end poverty in the UK.

The greedy bankers will scream at the loss of a cash cow. Surrogates for the rich, like Obama, will tell the English they would be better off as slaves to the EU. The bankers will do everything possible to punish the populace for refusing to be Greece.

But if England stands firm against these criminals, that nation will become a shining beacon of economic freedom and human success.

We only can pray the next U.S. president will be as smart in his/her dealings with the bankers. America does not need another “bail and fail” President.

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