Mitigating America’s inequality problem: Progressive Voting. Monday, Apr 22 2019 

The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

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 related to economics.

In attempts to solve that pervasive problem, governments and private sectors have instituted several processes, including: Socialism and communism, progressive taxation, social benefits, unions, charities, etc.Image result for rich voter, poor voter

Each is based on progressively providing money to the lower wealth/power groups.

But, the rich repeatedly evade the most restrictive elements of these plans or they reduce the progressive benefits. Either way, the Gap continues to grow.

Socialism and communism, the ultimates of progressivism, devolve to totalitarianism.

A progressive income tax inevitably becomes loaded with special exemptions for the rich.

Progressive social benefits falsely are derided as “unaffordable” and sloth-enabling. Charities help but are woefully inadequate and often too focused on narrow intent.

The reason for the failure of our most well-intentioned, Gap-narrowing efforts can be summarized in two words: “Political power.”

Because of “Gap Psychology” (the desire to widen the Gap below and to narrow the Gap above), the rich continually try to widen the Gap below them. 

Their political power stems from the money they use to bribe America’s thought-leaders — the politicians, the media, and the economists.

(The politicians are bribed via campaign contributions and promises of lucrative employment later. The media are bribed via advertising dollars and ownership. The economists are bribed via school contributions and jobs in think tanks.)

The November, 2018 edition of Scientific American Magazine contained articles about the “Inequality” (Gap) problem. Here are some excerpts.

The American Economy Is eRigged
By Joseph E. Stiglitz on November 1, 2018

Economic inequality is higher in the U.S. than in virtually all other advanced countries.
The American political system, coupled with high initial inequality, gave the moneyed enough political influence to change laws to benefit themselves, further exacerbating inequality.

Breaking this feedback loop by curbing the power of money in politics is essential to reducing inequality and restoring hope.

By most accounts, the U.S. has the highest level of economic inequality among developed countries. It has the world’s greatest per capita health expenditures yet the lowest life expectancy among comparable countries.

The notion of the American Dream—that, unlike old Europe, we are a land of opportunity—is part of our essence. Yet the numbers say otherwise. The life prospects of a young American depend more on the income and education of his or her parents than in almost any other advanced country.

Things appear to be getting worse, partly as a result of forces, such as technology and globalization, that seem beyond our control, but most disturbingly because of those within our command.

It is not the laws of nature that have led to this dire situation: it is the laws of humankind. Markets do not exist in a vacuum: they are shaped by rules and regulations, which can be designed to favor one group over another.

President Donald Trump was right in saying that the system is rigged—by those in the inherited plutocracy of which he himself is a member. And he is making it much, much worse.

The recent example is the GOP’s recent “Tax Cuts and Jobs Act (TCJA)” that is heavily skewed toward benefiting the richand widening the Gap.

Whereas the income share of the top 0.1 percent has more than quadrupled and that of the top 1 percent has almost doubled, that of the bottom 90 percent has declined.

Wages at the bottom, adjusted for inflation, are about the same as they were some 60 years ago! In fact, for those with a high school education or less, incomes have fallen over recent decades.

Even more important than income, is wealth. Income can be transitory, sometimes relevant to only a year or less. But wealth, too often, is passed from generation to generation, because our laws encourage it.

Wealth is even less equally distributed, with just three Americans having as much as the bottom 50 percent—testimony to how much money there is at the top and how little there is at the bottom.

Families in the bottom 50 percent hardly have the cash reserves to meet an emergency.

Newspapers are replete with stories of those for whom the breakdown of a car or an illness starts a downward spiral from which they never recover.

Defenders of America’s inequality refer to the workings of a competitive market, where the laws of supply and demand determine wages, prices and even interest rates—a mechanical system, much like that describing the physical universe.

Those with scarce assets or skills are amply rewarded, they argue, because of the larger contributions they make to the economy.

What they get merely represents what they have contributed. Often they take out less than they contributed, so what is left over for the rest is that much more.

This fictional narrative may at one time have assuaged the guilt of those at the top and persuaded everyone else to accept this sorry state of affairs.

Perhaps the defining moment exposing the lie was the 2008 financial crisis, when the bankers who brought the global economy to the brink of ruin with predatory lending, market manipulation and various other antisocial practices walked away with millions of dollars in bonuses just as millions of Americans lost their jobs and homes and tens of millions more worldwide suffered on their account.

Virtually none of these bankers were ever held to account for their misdeeds.

Fundamentally, the Gap problem boils down to wealth and political power. The wealthy bribe accommodating politicians to pass wealth-friendly laws.

Since the mid-1970s the rules of the economic game have been rewritten, both globally and nationally, in ways that advantage the rich and disadvantage the rest.

And they have been rewritten further in this perverse direction in the U.S. than in other developed countries—even though the rules in the U.S. were already less favorable to workers.

From this perspective, increasing inequality is a matter of choice: a consequence of our policies, laws and regulations.

Weak corporate governance laws have allowed chief executives in the U.S. to compensate themselves 361 times more than the average worker, far more than in other developed countries.

Financial liberalization—the stripping away of regulations designed to prevent the financial sector from imposing harms, such as the 2008 economic crisis, on the rest of society—has enabled the finance industry to grow in size and profitability and has increased its opportunities to exploit everyone else.

A legal provision enacted in 2003 prohibited the government from negotiating drug prices for Medicare—a gift of some $50 billion a year or more to the pharmaceutical industry. Special favors, such as extractive industries’ obtaining public resources such as oil a t below fair-market value or banks’ getting funds from the Federal Reserve at near-zero interest rates (which they relend at high interest rates), also amount to rent extraction.

Further exacerbating inequality is favorable tax treatment for the rich. In the U.S., those at the top pay a smaller fraction of their income in taxes than those who are much poorer.

Historically, the more conservative politicians of either party have favored the rich over the poor.

It’s not that conservatives are more or less honest than progressives. It’s just that the political leanings of progressives, especially at the national level, are more related to compassion for the poor. The vast majority of social programs have been promoted by progressive leaning politicians of either party.

The article concludes with suggested changes:

There is no magic bullet to remedy a problem as deep-rooted as America’s inequality.

Its origins are largely political, so it is hard to imagine meaningful change without a concerted effort to take money out of politics—through, for instance, campaign finance reform.

Blocking the revolving doors by which regulators and other government officials come from and return to the same industries they regulate and work with is also essential.

Beyond that, we need more progressive taxation and high-quality federally funded public education, including affordable access to universities for all, no ruinous loans required.

We need modern competition laws to deal with the problems posed by 21st-century market power and stronger enforcement of the laws we do have.

We need labor laws that protect workers and their rights to unionize.

We need corporate governance laws that curb exorbitant salaries bestowed on chief executives, and we need stronger financial regulations that will prevent banks from engaging in the exploitative practices that have become their hallmark.

We need better enforcement of antidiscrimination laws: it is unconscionable that women and minorities get paid a mere fraction of what their white male counterparts receive.

We also need more sensible inheritance laws that will reduce the intergenerational transmission of advantage and disadvantage.

We need to strengthen and reform retirement programs, which have put an increasing burden of risk management on workers.

Our mortgage system was our Achilles’ heel, and we have not really fixed it. With such a large fraction of Americans living in cities, we have to have urban housing policies that ensure affordable housing

We need to guarantee access to health care.

All of the above suggestions refer to laws, but the wealthy pay to elect representatives who vote to widen the Gap.

While Gap-narrowing efforts provide money and jobs to the less affluent, the rich repeatedly use their political power to pass laws that widen the Gap.

So rather than just trying to provide money and jobs progressively to the less affluent, perhaps there can be an additional approach: Provide progressive political power to the less affluent. I’m referring to Progressive Voting.

From, “Voting in Early America,” we find:

At its birth, the United States was not a democratic nation—far from it. The very word “democracy” had pejorative overtones, summoning up images of disorder, government by the unfit, even mob rule.

In practice, moreover, relatively few of the nation’s inhabitants were able to participate in elections: among the excluded were most African Americans, Native Americans, women, men who had not attained their majority, and white males who did not own land.

That was regressive voting, the belief that the rich were more capable of intelligent voting — a belief endlessly fostered by the rich. Elements of that belief remain even today in some states’ restrictive voter identification laws.Image result for voter inequality

Though there are far more poor than rich, who are eligible to vote, one might think voting already is progressive.

But with gerrymandering, polling-place restrictions, threats, voter disenfranchisement, election chicanery, the fundamental belief that “my vote doesn’t count,” and wealth-funded propaganda, the poor too often, are not able to elect progressive representation.

Thus, we might consider Progressive Voting, wherein a less affluent (based on net worth) voter has more votes than does a rich voter. 

Just as an example:

  • Individual’s Net Worth below $100,000: Each vote counts as 3 votes
  • Individual’s Net worth $100,000 – $10 million: Each vote counts as 2 votes
  • Individual’s Net worth above $10 million: Each vote counts as 1 vote

No doubt, there would be complications. Measuring one’s wealth, for instance, would require definitions and appraisals. But, we already do that in our current income tax and poverty-reduction programs.

Great Britain already does it. Great Britain’s Office for National Statistics published “Measuring Wealth on an Individual Level,” describing their method for determining each person’s wealth:

The main results from the Wealth and Assets Survey (WAS) are published in the series Wealth in Great Britain. To date total wealth has only been published at a household level.

This article describes the methodology we have recently adopted to provide estimates of total wealth for individuals living in private households in Great Britain.

Wealth, as measured by WAS, can be split into four categories:

  • net financial wealth
  • net property wealth
  • private pensions wealth
  • physical wealth

Progressive Voting would give necessary political power to America’s less affluent, thus assuring the maintenance of other progressive, Gap narrowing programs.

In summary: 

The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

Because of Gap Psychology, the Gap between the rich and the rest is wide, widening, and a direct threat to democracy and people’s lives.

Progressive programs to narrow the Gap, inevitably have been compromised by the rich, because these programs are not supported by ongoing political power.

Social Security, for instance, has been compromised by changes in age requirements and by taxation. Medicare has been compromised by deductibles and non-coverages. Medicaid has been compromised by funding cuts.

The rich use their money to fund political power. The not-rich can use votes, particularly with a wealth-based Progressive Voting program, to maintain and strengthen Gap-narrowing efforts.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

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

2. Federally funded medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

8. Tax the very rich (the “.1%) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

 

Why do they want to make you angry at the wrong thing? Tuesday, Apr 16 2019 

I’ll tell you who “they” are and what the “wrong thing” is. But allow me to lead off with some excerpts from the anti-government site, Reason.com.

Fundamentally, Reason.com believes all governments are too large, no matter how large or small they may be.

Of course, making a government smaller does not make it more efficient, more benevolent, or wiser. 

Government is an easy target, because as you repeatedly have been told, government is terrible, except for one little thing: In a world without government, we would be starving, non-human, savage, undisciplined animals. 

Recently, Reason.com published an article titled, GOVERNMENT WASTE, Happy Tax Day! Here Are 6 Infuriating Ways the Government Spends Your Money
Surprised? Yeah, neither are we. By, JOE SETYON | 4.15.2019

The article refers to the federal government (important point). Excerpts:

Happy April 15, everyone! The federal government collects about $3.5 trillion in tax revenue each year, according to the White House Office of Budget and Management. Here, in no particular order, are six of the more infuriating ways that money has gone to waste.

1. $300,000 on 391 coffee mugs
2. $400,000 to promote asset forfeiture…in Paraguay.
3. $13.6 million to hire two border agents
4. More than $325,000 for Mike Pence’s national anthem stunt
5. $333,000 to study bars on the U.S.-Mexico border
6. Nearly $3 million to study dance clubs

If you’re curious, you can click the above link to read the details about each expenditure, but the point is that the federal government spent millions, billions and even trillions on lots of stuff that seems really dumb, and the writer wants you to be angry that these “useless” expenditures are taking dollars from your taxpayer pockets.

And it’s all a lie.

Those payments for coffee mugs, Paraguay, border agents, Pence, bars, and dance clubs didn’t cost you one cent. In fact, those payments put dollars into your pockets.

All federal “wasted” spending puts dollars into your pockets.

Now, if the article had been talking about state government or local government waste, it would have been correct. State and local taxpayers do pay for state and local government spending.

That is because state and local governments are monetarily non-sovereign. (So are you and I).Image result for government money

Those state/local governments do not have the unlimited ability to create their own sovereign currency; they have no sovereign currency; they use the U.S. dollar.

They can, and often do, run short of dollars, and they need tax dollars in order to survive.

By contrast, the federal government is Monetarily Sovereign. It has the unlimited ability to create its own sovereign currency, the U.S. dollar.

The federal government never unintentionally can run short of dollars. Even if all tax collections — income taxes, FICA taxes, luxury taxes, etc. — totaled $0, the federal government could continue spending, forever.

Every time the federal government pays a creditor, it creates new dollars, ad hoc.,

So what about all that “wasted” federal spending? Those are dollars that the federal government created from thin air, and added to the economy.

The “dance club” millions, the coffee mug thousand, the millions for two border agents — all those dollars were created from thin air and were added to the U.S. economy (except for a few that may have gone to overseas suppliers).

The vast majority of those dollars went to U.S. businesses, who used those dollars to pay for employees, who in turn used the dollars to purchase things like food, housing, clothing, cars, education, etc.

In short, the federal government’s “wasted” dollars actually are stimulus dollars, that grow the economy, and eventually wind up in your pockets, my pockets, your kids’ pockets, and even Donald Trump’s pockets.

Again, this is not true of state and local government waste. They do not create dollars from thin air. They use existing tax dollars for their spending. So when they waste money, the dollars come from their taxpayers’ pockets.

Image result for bernanke and greenspan

It’s our little secret. Don’t tell the people we don’t use their tax dollars.

Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

Alan Greenspan: “Central banks can issue currency, a non-interest-bearing claim on the government, effectively without limit. A government cannot become insolvent with respect to obligations in its own currency.”

St. Louis Federal Reserve: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e.,unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.

So, if the government neither needs nor uses tax dollars, why does it collect taxes? I’m glad you asked. There are three reasons: One mostly good, one bad, and one horrible.

The mostly good reason is: To control the economy by levying taxes on things they wish to reduce, and by giving tax breaks to things they wish to encourage. So-called “sin” taxes are examples of the former, and home real estate tax deductions are examples of the latter.

The bad reason is to reward rich political donors by giving them special tax breaks not available to the middle and lower classes.

The horrible reason is to groom you, the public, to believe that federal spending for social benefits (Social Security, Medicare, Medicaid, food stamps, other poverty aids, college tuition aids, etc.) must be limited or taxes must be increased.

Since the people do not want increased taxes, they easily are convinced that social benefits must be reduced. 

Thus, we have the fake claim that the Social Security Trust Fund is running short of dollars. (Like the federal government itself, no federal agency can run short of U.S. dollars, unless Congress and the President want it to run short). The “Trust Fund” is an accounting fiction, designed to give an imprimatur to a false assertion.

And we have the fake claim that “Medicare for All is unaffordable. And we have all the other fake claims about federal spending being unaffordable, and federal deficits costing taxpayers money. All untrue.

The bottom line is, the rich are rich because they have more money and property than you do. The key word is, “more” because “rich” is a comparative word.

That is, if you have a million dollars, and everyone else has a million dollars, you are not rich. You are just the same as everyone else. But, if you have one hundred dollars and everyone else has just one dollar, you are very rich, indeed.

In short, to be richer, you either must obtain more money for yourself, or you must arrange for the other people to have less money.

Either way widens the Gap between you and those below you, and it is the Gap that makes you rich.

That is why the rich bribe:

  • The politicians via campaign contributions and promises of lucrative employment later
  • The media via advertising dollars and ownership
  • The economics professors via university contributions and jobs with think tanks

The primary purpose of these bribes is to induce legislation to widen the Gap and to make you accept the necessity of widening.

In Summary:

The rich control American politics. Their fundamental goal in life is personal enrichment, which requires widening the Gap between the rich and the rest.

This involves not only bribing the politicians to make Gap-widening legal changes, but also bribing the media and economists to convince you, the public, that Gap-widening is necessary and beneficial.

These information sources promulgate the “Big Lie” that federal finances are similar to your finances, and federal taxes are necessary to fund federal spending.

The rich fear that if you knew federal taxes are not necessary to fund spending, you would demand more benefits, thereby narrowing the Gap, and effectively making the rich less rich.

The rich want you to be angry at “unnecessary” federal spending, so you readily will agree to cut your social benefits.

Finally, the rich want you to believe that federal deficit and debt lead to hyperinflations, similar to those in Zimbabwe and Weimar Germany, though inflations actually are caused by shortages, usually shortages of food and/or energy, not by money creation.

(Despite a 50,000% increase in federal money creation over the past 80 years, average inflation has been moderate, within the Fed’s target range.

While federal debt (blue line) has risen dramatically, inflation (red line) has risen moderately and within the Fed’s target rate

Unfortunately, the constant drip, drip, drip of anti-deficit, anti-debt propaganda continues to brainwash the public, and the Gap widens.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

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

2. Federally funded medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

8. Tax the very rich (the “.1%) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

Mr. President, is it immigrants or is it drugs? Make up your mind. Saturday, Apr 6 2019 

Mr. President, is it immigrants or is it drugs? Make up your mind.

“We’re going to give them a one-year warning, and if the drugs don’t stop or largely stop, we’re going to put tariffs on Mexico and products, particularly cars.

And if that doesn’t stop the drugs, we close the border.”
Donald J. Trump

O.K., he’s talking about drugs. But the vast majority of illegal drugs come through legal ports that are protected by American guards — via planes, boats and through legal entryways.

The vast majority of illegal drugs comes through legal ports, not via unwalled areas.

Stopping immigrants will do virtually nothing to “stop the drugs.”

“The lawless state of our Southern border is a threat to the safety, security and financial well-being of all Americans.

“We have a moral duty to create an immigration system that protects the lives and jobs of our citizens.

“This includes our obligation to the millions of immigrants living here today, who followed the rules and respected our laws.

“Legal immigrants enrich our nation and strengthen our society in countless ways. I want people to come into our country in the largest numbers ever, but they have to come in legally.

“I want people to come into our country in the largest numbers ever, but they have to come in legally . . . . Our country is full.”
Donald J. Trump

O.K., now he’s talking about people and the law. But, statistics show that undocumented immigrants are far less likely to commit crimes against the “safety, security and financial well-being of all Americans” than are American citizens. Stopping immigrants will do virtually nothing to make America safer.

And does Trump want immigrants, or is our country “full”? As always with Trump, there is no rational answer.

Immigrants also contribute greatly to the American economy in labor value — just as immigrants have done for the past two centuries. That is why Trump historically has hired immigrants to work for him.

In short, Trump:

  • Wrongly conflates undocumented immigration with the drug problem
  • Wrongly blames an incomplete wall for America’s drug problem
  • Wrongly implies that completing his wall will solve America’s drug problem
  • Wrongly blames Mexico for America’s drug problem
  • Wrongly claims that Mexico can solve America’s drug problem
  • Wrongly claims that the undocumented immigrants are mostly Mexicans
  • Wrongly claims America has no more room for immigrants
  • Wrongly claims that punishing Mexico will solve the two real problems:

1. The drug problem is not caused by the easy availability of drugs, which in any event, more miles of wall will not solve.

The drug problem is not a foreign problem; punishing foreigners will not solve it. We must accept the fact that the drug problem is America’s problem. 

Blaming the Mexicans is an excuse invented by a dishonest leader and adopted by weak-minded followers.

The drug problem actually is a symptom of many, more fundamental problems in America: Poverty, bigotry, unpunished corporate greed,  the lack of help for addicts, crooked politicians, judges, and police, and the wide and growing Gap between the richer and the rest.

How is President Trump addressing the fundamental problems? He goes in exactly the wrong direction.

Poverty: Trump cuts, or tries to cut, social programs that benefit the poor and middle-income people: Social Security, Medicare, Medicaid, food stamps, school aids.

Bigotry: Trump does not conceal his loathing for Blacks, browns, Muslims, gays, foreigners from “shit-hole” counties. He defends the KKK and white supremacists as “good people.” He wants nice, white immigrants to come from Norway.

Unpunished corporate greed: Trump takes pride in removing consumer financial protection and environmental protection laws. Banks that steal from poor Americans are protected. Industries that pollute our air, water, and ground are protected. Global warming is denied.

The lack of help for addicts: The drug problem is not solely a supply problem. It is based on supply and mostly on demand.

America’s addicted victims are the buyers of drugs. American buyers create the demand. If there were no demand, the illegal drug trade would dry up.

Many, perhaps most, drug users would like to stop, but they need help. Trump’s approach is strictly about punishment. Yet that has been proven not to work.

Just as Prohibition didn’t work many years ago, the current “war on drugs” doesn’t work. Trump didn’t invent the war on drugs, but he is an enthusiastic supporter of the police-and-punish approach.

Addiction recovery requires money and time. But, the GOP’s anti-healthcare for the poor efforts, assure a steady, even growing, demand for illegal drugs by helpless addicts.

Crooked politicians, judges, and police: Trump sets the tone. He himself is an admitted crook, having had to pay an astounding $25 million dollars as a penalty for his crooked Trump University. His Foundation was fined and closed for crooked dealings.

He is so crooked, American banks refuse to lend to him, forcing him to beg for money from Russians and Saudi Arabians (which gives them leverage over him).

And he has surrounded himself with an astounding number of bad actors: Michael Cohen, Michael Flynn, Richard Gates,  Konstantin Kilimnik, Paul Manafort, George Papadopoulos, Sam Patten, Rob Porter, Richard Pinedo, Rob Porter, Tom Price, Scott Pruitt, Wilbur Ross, Bill Shine, Stephen Moore, and Roger Stone are examples of the type of people with whom Trump associates.

Trump hires people, not for their skills or honesty, but rather, for their love for and loyalty to him, which also may explain his admiration for dictators Vladimir Putin, Kim Jong-un, and Rodrigo Duterte.

There is no effort toward morality or honesty within the Trump world, where lying is considered normal. When a leader is dishonest, his criminality is contagious.

The wide and growing Gap between the rich and the rest. Poverty breeds crime and hopelessness, which in turn, are a large part of the drug-use problem. People with no hope for future happiness often turn to drugs.

Trump and the GOP foster widening the Gap by favoring the rich with unfair tax laws, and punishing the poor with the elimination of protections and social benefits.

In Summary:
Trump appeals to his base by creating a culture of hatred and fear. As with nearly all dictators, the hatred and fear are directed at “others.”

Sometimes the “others” are people following a different religion. Sometimes the others come from a different country. Sometimes they have different customs.

Trump directs his followers to hate all three: Muslims, Mexicans, and gays. Muslims are “terrorists.” Gays are “immoral.” And Mexicans “bring crime and drugs.”

All such claims are lies, but Trump’s lies appeal to people who are psychologically susceptible to hatred and fear.  To them, no matter what the leader’s faults and lies, his promulgation of hatred and fear keeps followers loyal to the Fuehrer (the leader).

America is not “full,” and Mexicans are not responsible for America’s drug crisis. These are pretexts to keep Trump’s followers in line.

The war on drugs can be won, not by a war on supply, which never will succeed, but rather by efforts to reduce the poverty, sickness, and hopelessness that create the demand for drugs.

America, being Monetarily Sovereign, has the unlimited money to create resources that would reduce the demand. We need only the will.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell

…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

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

2. Federally funded medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

8. Tax the very rich (the “.1%) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

 

Trump appointee, Fed Chair Jerome Powell, recommends austerity Wednesday, Mar 27 2019 

It figures.

President Donald J. Trump hired an anti-environment guy to run the Environmental Protection Agency, and an anti-consumer guy to run the Consumer Financial Protection Bureau (followed in that role by an unqualified Peace Corps volunteer), so it figures that he would hire a Fed Chairman who is ignorant about economics.

Here is what Trump’s Fed Chair Jerome Powell told Congress, recently:

The idea that deficits don’t matter for countries that can borrow in their own currency I think is just wrong … U.S. debt is fairly high to the level of GDP — and much more importantly — it’s growing faster than GDP, really significantly faster.

We are going to have to spend less or raise more revenue.

Powell called out “unsustainable” federal debt in his opening remarks. But in response to questions from senators, he emphasized that “decisions about spending and controlling spending and paying for it” are up to Congress, not the Fed.

He didn’t use the word, “austerity,”  but his use of “unsustainable” federal debt, and his comments about, “decisions about spending and controlling spending and paying for it” are right in line with the worst of the austerity sellers.

He apparently is right on board with the Republican “cut-social benefits and raise taxes on the middle-classes” philosophy.

Compare him with previous Chairmen, who though not always stating truth, at least acknowledged it:Image result for greenspan and bernanke

Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”

Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

And as has become the rule with debt nuts, Powell never gives any specific reasons why the deficits are “unsustainable,” or why “controlling and paying for deficits” are necessary. Do you think he learned that at Trump University?

And to top it off, get this:

“Defaulting on these debts—as the hetereodox  macroeconomic theory Modern Monetary Theory (MMT) proposes simply unthinkable,” Powell said.

Oh really? Exactly when did MMT propose defaulting on debts? Not only is that a Trumpian-style lie, but it demonstrates that Powell has no idea what MMT is all about. The man’s ignorance is as shocking as Trump’s.

MMT (like Monetary Sovereignty) specifically says the federal government never will need to default, because it has the unlimited ability to create dollars.

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And then we come to yet another debt fear-monger, Randy Schultz, a writer for Boca Magazine:

Remember when Republicans cared about budget deficits?

Last week, the government announced that February’s red ink set a monthly record — $234 billion.

In a growing economy, setting an annual deficit record is like having your house go into foreclosure when the family income is $500,000. Something is wrong.

Huh? How is a federal deficit anything “like having your house go into foreclosure”? It’s a completely senseless analogy?

As recently as 2015, the deficit was $438 billion. Yet Republican policies have the deficit on track to be $1.1 trillion for this year. In a growing economy.

For perspective, the deficit was $1.4 trillion in 2009.

Remember, though, that to hold off a second Depression Congress had to pass the $700 billion financial bailout and the $787 billion fiscal stimulus during that budget cycle.

And revenue tanked with the economy. Republicans can’t use calamity as a defense.

Talk about not seeing what is right in front of his nose, Schultz acknowledges that deficit spending — “the $700 billion financial bailout and the $787 billion fiscal stimulus “– held off a second Depression.

Though he admits that deficit spending saved and grew the economy, he decries deficit spending. Amazing.

In fiscal terms, the GOP sinned most notably by passing the 2017 tax cut on a party-line vote in the Senate and a mostly party-line vote in the House. Thirteen GOP House members honorably defected.

Republicans crafted that legislation to please megadonors and corporations.

The plan offered no structural changes to help the economy over time and thus needlessly increased the deficit.

The sin was not the tax cut itself. That is helping to grow the economy. The sin was to cut taxes on the rich, with widened the Gap between the rich and the rest.

President Trump proclaimed that the tax cut would help the middle class. Of course, he also proclaimed that he would lower the trade deficit, which is at a 10-year high.

The president said companies would use tax savings to boost pay and hire more employees. In fact, many large corporations used the money on stock buybacks, which set a record last year after the tax plan became law.

What a surprise. Trump either lied or spoke out of ignorance. Who could have predicted that?

Amid the current fiscal misfeasance, recall that the country ran budget surpluses from 1998 until 2001.

Will someone please mention to Schultz that those budget surpluses led to the recession of 2001?

How austerity kills: Everything below the horizontal black line is a  federal surplus (money flowing out of the economy, i.e austerity). The recession was cured by eliminating the federal surplus (i.e. adding money to the economy). 

Why would a federal budget surplus lead to a recession? Because a federal surplus occurs when the federal government takes more money out of the private sector than it puts in.

One would hope that a Chairman of the Fed would understand that starving the private sector of money leads to recessions. Sadly, one would be disappointed.

In April 2000, Clinton addressed the American Society of Newspaper Editors and mused about the country paying off its debt, which was about $5 trillion. It’s now $22 trillion.

Had the federal government cut spending and increased taxes to take $5 trillion from the economy, we would have slipped into a monster Depression that would have made 1929 look like heaven.

Of course, Schultz doesn’t understand this, but paying off the federal debt need not require a reduction in deficit spending. The government could pay off the debt simply by returning the dollars that are in T-security accounts.

This would not have required deficit reduction, and it actually would have increased liquidity. But why worry about facts?

Deficit reversal began under President George W. Bush. Seeing those surpluses, he proposed a tax cut to “give the people their money back.”

Democrats were complicit in passing that plan, which did no more good than the 2017 tax cut.

No more good” than to increase GDP growth. Otherwise a failure??

For good measure, Republicans in 2003 passed the Medicare prescription drug benefit.

With no payroll taxes or premiums to finance it, Part D adds roughly $100 billion to the deficit.

Part D adds roughly $100 billion to the deficit,” which means the federal government added $100 billion to the nation’s economy. And this is a bad thing??

Last week, Federal Reserve Chairman Lawrence Powell said, “Deficits matter.” But he sounds like the housemother trying to break up the frat party.

No, he sounds like either a damn fool, who doesn’t understand economics, or like a liar who doesn’t want the public to learn the truth.

A few adults are around. Speaker Nancy Pelosi faced down an attempt by young, ultra-liberal Democrats to reject “PAYGO” – offsetting new spending with tax increases or cuts.

House Democrats have presented a sensible plan to shore up Social Security. Some Senate Republicans have offered ideas to reduce the deficit.

In the above two paragraphs, we are told that the “young, ultra-liberal Democrats” understand economics and want to help the economy grow, while the “House Democrats” would rather promulgate the Big Lie, that federal spending is funded by federal taxes.

Though Republicans once chided Democrats as “tax and spend liberals,” they abdicated on fiscal policy years ago.

Now the chaperones outdrink everyone.

More like the debt scare-mongers want everyone to drink the austerity Koolaid.

Pitiful.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereigntyFacebook: Rodger Malcolm Mitchell

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The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

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

2. Federally funded medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

8. Tax the very rich (the “.1%) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

 

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