More proof the MMT’s “Jobs Guarantee” can’t work Saturday, Jan 14 2017 

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

It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders.

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

Modern Monetary Theory (MMT) understands that federal taxes do not fund federal spending. In that sense, MMT and Monetary Sovereignty (MS) are in perfect agreement.

However, we diverge in several areas, among which is MMT’s “Jobs Guarantee.” Stated in its simplest form, JG is: “The government will guarantee a job to anyone who wants a job.”

We have written about the naive impossibility of JG often, and will not repeat the various reasons here.  (If you are interested, see the links in Step #3 of the Ten Steps to Prosperity below.)

Instead, I merely will direct you to an article that succinctly addresses one of the issues:

Employers Say They Can’t Find Good Workers, but the Fix Is Simple

The economy is still shaky, (and) many parts of the country are suffering from the results of globalization. Employers have sent jobs to other parts of the world or axed them completely, in some cases.

Yet, there are still millions and millions of job openings out there. And incredibly enough, there are many employers who are complaining that they can’t find anyone to come work for them — or at least anyone who is qualified.

A July report from the Dallas Federal Reserve contained a couple of quotes from employers explaining their plight. “Entry-level candidates cannot read or follow instructions. Most cannot do simple math problems. What is wrong with the educational system? The ability to find qualified employees is our largest problem at this time.” 

This is at odds with what we’ve been hearing for many years now — that there simply aren’t enough jobs out there, and that has caused the labor participation rate to fall, and for many American communities to suffer. But evidently, that’s not quite the case.

People want jobs. There are millions of jobs available. Yet, nobody wants the jobs that are available. Why? Because many of those jobs aren’t “good” jobs. They may not pay much, for example, or offer full-time hours.

If you go back to read the links indicated in Step #3, you’ll find that the JG proposes paying minimum wage. (It does that to keep the government from competing with private industry, which would be contrary to the fundamental purpose of the JG.)

So, how will JG’s minimum wage solve the problem?  Obviously, it won’t.

What’s an employer to do, given the circumstances?

The answer is incredibly simple, but evidently, many of the nation’s employers just don’t want to face the music: They need to pay more. Low pay is the number one reason people quit their jobs, and when people quit, companies need to spend more to recruit, train, and retain new employees.

 

For the time being, the economic environment is sending the signal that wages need to go up. Employers who refuse to budge are going to continue to be flooded with applications from workers they don’t want for jobs they can’t fill.

News flash: Employers will not offer higher salaries unless that is their only alternative. Instead, they will send jobs overseas, use automation, or simply not produce job-heavy products.

The solution is not an impossible  “Jobs Guarantee” from the government.  The solution is something indicated at the beginning of this article. Remember this line?

“Entry-level candidates cannot read or follow instructions. Most cannot do simple math problems. What is wrong with the educational system? The ability to find qualified employees is our largest problem at this time.” 

Education and training is the solution, and the solution for that can be found at Steps #4 and #5 of the Ten Steps, below.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

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

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

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ANNUAL ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

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

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

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

MONETARY SOVEREIGNTY

The Looting of America. Why Republicans ride several tigers at once Saturday, Jan 14 2017 

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

It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders.

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

As you might imagine, riding a tiger is not for the fainthearted. Tigers have been known to eat people.

So why is the Republican party riding several tigers, all at once?  Follow the money.

I. The Russian Oil Money Tiger

In excerpts from an hourlong interview published by the Wall Street Journal on Friday, Trump said: “If you get along and if Russia is really helping us, why would anybody have sanctions if somebody’s doing some really great things?”

Trump suggested he might do away with the sanctions – imposed by the Obama administration in late December in response to Moscow’s alleged cyber attacks – if Moscow proves helpful in battling terrorists and reaching other goals important to Washington, the Journal reported.

======================================================================
Follow the money: Will Trump repay Putin by ending Russian sanctions and killing the Paris climate deal?

CEO Rex Tillerson — an extreme Russophile and long-time director of a US-Russian oil company — is Trump’s puzzling choice for Secretary of State.

I say “puzzling” because the long-serving Exxon employee (from age 23!) has no qualifications to be secretary of state — other than a history negotiating major oil deals with countries like Putin’s Russia, which in any sane world would actually disqualify him or at least force a recusal from all State Department dealings with Russia.

But that puzzle disappears if we follow the famous dictum from the Watergate era for uncovering a tangled web of covert campaign acts: “Follow the money.”

A half trillion dollars to line their pockets and prop up the Russian economy offers a tangible motivation for team Putin to get Trump elected. And it was Tillerson who had made the $500 billion oil deal with Putin that got blocked by sanctions.

It matters what Trump and his cabinet do in response to the overwhelming evidence that Putin did clandestinely interfere in the election.

Conservative columnist Jennifer Rubin writes that if Trump doesn’t aggressively go after Putin, including working with “Congress to pass a stiff sanctions package,” and instead “sticks with Putin, he’ll have proved Putin and Trump’s critics right — he really is a patsy for Putin.”

Indeed, if Trump and Tillerson instead end the sanctions that are blocking the Exxon-Rossneft deal, it is going to look suspiciously like a half trillion dollar quid pro quo for Putin’s help getting elected.

Trump is not even President yet, and already he has begun the process of paying off Putin.

Ending sanctions will be the first step in putting vast amounts of money in Trump’s and Tillerson’s pockets.

At Tillerson’s confirmation hearing on Wednesday, the former Exxon Mobil CEO got a number of questions about his conflicts of interest — his huge interest in Exxon, through the direct ownership of about $54 million worth of shares, plus another $175 million in a financial contract called restricted stock units (RSUs).

Follow the money.

II. The Obamacare (ACA) “Repeal and Replace” Money Tiger

After six years of thinking, and more than 50 “Repeal” votes, the Republicans still have not developed a “Replace” plan. But Mr. Trump is optimistic it magically will appear.

Here is what he said, recently:

“It’ll be repeal and replace. It will be essentially, simultaneously. It will be various segments, you understand, but will most likely be on the same day or the same week, but probably, the same day, could be the same hour.

“So we’re gonna do repeal and replace, very complicated stuff. And we’re gonna get a health bill passed, we’re gonna get health care taken care of in this country.

“You have deductibles that are so high, that after people go broke paying their premiums, which are going through the roof, the health care can’t even be used by them because their deductibles bills are so high.

“ObamaCare is the Democrats’ problem. We are gonna take the problem off the shelves for them. We’re doing them a tremendous service by doing it. We could sit back and let them hang with it. We are doing the Democrats a great service.

“So as soon as our secretary is approved and gets into the office, we’ll be filing a plan. And it was actually, pretty accurately reported today, The New York Times. And the plan will be repeal and replace Obamacare.

“We’re going to have a health care that is far less expensive and far better. Okay.”

If you understand that word salad, please send your translation to Mr. Trump, because it’s clear he has no idea what he’s talking about.

In the coming days, you will hear many stories about how Obamacare has raised healthcare prices for many people, totally ignoring the 20 million people who have obtained healthcare via this program.

In truth, Obamacare isn’t a great program; it isn’t even a good program. (A great program would be federally funded, comprehensive Medicare for every man, woman, and child in America.)

But it’s a huge improvement over the current Republican “screw them” plan to force millions of people to go without healthcare insurance.

Why do the Republicans want to end Obamacare? Again, follow the money.

I predict that any Republican plan will involve privatization, benefitting the healthcare industry moguls, while costing the poor and middle-classes more.

Privatizing elements of ACA will be the next step in putting vast amounts of “thank you” money into Trump’s pockets.

And, as always with the political right, it will widen the Gap between the rich and the rest.

III. The Climate Change Money Tiger

Rex Tillerson, the former Exxon Mobil chief, would head up U.S. international negotiations on the matter under the Paris climate agreement.

Yet Tillerson stated that while humans are changing the climate, “our ability to predict that effect is very limited” — a dubious assertion when it is clear that more emissions equal more warming, and when scientists can now directly connect the volume of emissions with particular temperature ranges for the planet.

Later in his testimony, he went said of the changing climate, “I don’t see it as the imminent national security threat that perhaps others do.”

Rep. Mike Pompeo (R-Kan), Trump’s pick to head the CIA is on record as raising doubts about the very fundamental climate trend itself: “There are scientists that think lots of different things about climate change. There’s some who think we’re warming, there’s some who think we’re cooling, there’s some who think that the last 16 years have shown a pretty stable climate environment.”

Actually, it’s clear that the planet is warming, and scientists have in fact said that is “unequivocal.”

Why the climate change denial? As with all things Trump, “follow the money” is good advice:

If Trump and Tillerson work together to kill the Paris climate deal, the last best chance to save Americans from catastrophic climate change, that will look like they are putting Putin’s interests and Exxon’s profits above America’s national interest and the health and well-being of our children.

It bears repeating that ExxonMobil’s future is inextricably tied to their stalled oil deal with Putin — and their future drilling plans would benefit from continued global warming and melting of polar ice.

Presumably, denying climate change and ending efforts to prevent it, will be the next step, not only in paying off Putin, but in putting vast amounts of money in Trump’s and Tillerson’s pockets.

IV. The Privatized Transportation Money Tiger

Chao: Trump administration looking to ‘unleash’ potential of private investment in transportation

WASHINGTON — Trump is looking to “unleash the potential” of private investors to boost the national transportation networks that underpin the U.S. economy, Transportation Secretary-designate Elaine Chao told lawmakers Wednesday.

Unions say that as labor secretary, she mostly sided with industry when enforcing labor and safety rules.

Chao advocated using “innovative financing tools” that can “take full advantage of the estimated trillions in capital that equity firms, pension funds and endowments can invest.”

She said private investment should be encouraged with “a bold, new vision.”

Donald Trump recommends providing $137 billion in tax credits to infrastructure investors.

But transportation experts note that investors are interested only in transportation projects that produce revenue, such as toll roads, and there are relatively few large projects like that. Providing tax incentives runs the risk of providing a windfall to investors for projects that would have been built anyway.

Chao’s department frequently faces pressure from industry to relax safety rules and block new ones. (She, having been)  associated with conservative think tanks, is likely to lend a sympathetic ear to industry pleas for less regulation.

See the pattern, here? Less safety for the workers; more profits for investors.

Donald Trump has no moral code. He is all money all the time. If ever you are puzzled about something Trump does, you need only to follow the money.

The road may be convoluted, even hidden, but somewhere at the end of every Trump trail, you will find his pot of gold (plate).

Riding tigers is dangerous. Trump takes the risk that the voting public finally will catch on to his unrelenting greed and toss him out of office. But the outcome will be worth the risk if by then, he has amassed billions in profits for his various businesses and his family.

You know the old saying, “No risk, no reward.” And when the potential rewards are so staggeringly vast, Trump and his “Trumpites” are willing to ride the tiger — the public be damned.

The looting of America has begun.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

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

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

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ANNUAL ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

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

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

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

MONETARY SOVEREIGNTY

Steve Chapman (who?) doesn’t know the difference Thursday, Jan 12 2017 

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

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

I’ll answer the title question, now: Steve Chapman is a member of the Chicago Tribune Editorial Board. He blogs at http://www.chicagotribune.com/chapman. His Email is: chapman@chicagotribune.com. His Twitter is: @SteveChapman13.

Here is what he looks like:

And here is what he wrote for today’s newspaper. It received 2/3 of a page in the Opinions section:

Runaway deficits forever
Trump and Congress won’t balance the budget

Immediately, the word “Runaway” tells us this is going to be an exercise in ignorance. The deficits aren’t going to be “insufficient,” “economically stimulating,” “or necessary,” all of which would be correct.

No, they will be “Runaway,” implying not just large, but out of control.

Upon becoming House speaker in 1995, Newt Gingrich decided it was crucial to adopt a plan to eliminate the federal deficit. In a meeting of House Republicans, Budget Committee Chairman John Kasich balked. “Where is it in stone that we have to balance the budget in seven years?”

Gingrich had a quick answer: “Let’s put it to a vote. Who wants to put it in stone?” Everyone but Kasich voted yes. The Republicans had made a commitment they would have to keep.

Translation: The Republicans promised to reduce the amount of stimulus money the federal government will pump into the private sector. Yes, they promised to reduce the amount of money they will add to business balance sheets and to consumers’ pockets.

Why is this considered something to boast about?

It’s like promising to take away millions of Americans’ health care. It’s like promising to rig state elections by rampant gerrymandering. It’s like promising to make it harder for minorities to vote. It’s like promising to elect a President whose every word seems to be a lie and/or an attack on the media, the disabled, women, Mexicans, Muslims and all who disagree with him.

See a pattern to their promises?

Contrast that show of determination with the vote last week by Senate Republicans for a budget resolution that projects an increase in the public debt of $9 trillion over the next decade.

The supporters said that for arcane reasons involving budget rules and the repeal of Obamacare, the resolution is needed. But in practice, they insisted, they don’t intend to allow such a flood of red ink.

Just to make this abundantly clear:
1. The federal government cannot run short of dollars.
2. You can run short of dollars.
3. The federal government’s “red” ink is the economy’s “black” ink

“So,” you might ask, “why would anyone want the economy to receive fewer dollars, while the federal government keeps more dollars, when it’s the economy that needs more dollars to grow, while the federal government creates all the dollars it needs?”

Why, indeed.

The fiscal responsibility upheld by Gingrich and company — which led to a balanced budget not in 2002 but in 1999 — is not visible on either side of the aisle today.

That so-called “fiscal responsibility” led to the recession of 2002. 

Between 2009 and 2015, the deficit shrank from $1.4 trillion to $438 billion — but last year it rose, and the Congressional Budget Office expects it to balloon to $1 trillion by 2024.

Chapman “forgot” to mention that in 2008, the deficit rose dramatically, which cured the recession that came as a result of deficit cutting from 2006 to 2008.

He also forgot to mention that every depression in U.S. history, and most recessions, have been introduced with deficit reduction.

Just a slight omission.

Nor is the incoming president likely to accept serious budget discipline as President Bill Clinton did.

President Clinton’s budget “discipline” led to the recession of 2001. (See graph above).

On the contrary, Donald Trump will probably cause a lot of congressional Republicans to stop worrying and learn to love the deficit.

Ah, if only the Republicans (and the Democrats) were that smart.  Everyone, including the public, should stop worrying and learn to love the deficit, for it is the deficit that grows Gross Domestic Product.

GDP = Federal spending + Non-federal spending + Net exports

If GDP growth relies on federal spending, non-federal spending and exports, which of those three comes from federal deficit spending. I’ll give you two guesses.

Right, federal spending comes from federal deficit spending.  That’s a tautology.

And non-federal spending, which is enriched by deficit spending, also grows from federal deficit spending.

So is there any mystery why federal deficit spending grows the economy?

House Republicans have a plan to balance the budget by 2026, but the details are lacking. Not only that, but they also will have to contend with the next president. The Tax Policy Center in Washington reported in October that his proposals would add $7.2 trillion to the government debt over the next decade — comparable to what has been piled up in the past eight years.

Chapman says the Republicans predict $9 trillion. He also says The Tax Policy Center predicts $7.2 trillion.  What’s a lousy $2 trillion, when you’re piling on the bull dung?

Trump’s promises have proven to be as reliable as a hormonal teenager’s, “I’ll love you forever” promise.

And $7.2 trillion debt growth over 10 years isn’t nearly enough. It would amount to a debt growth of about 50%. Compare that with the last decade — 2007-2017 — in which federal debt grew almost 300% — and it wasn’t enough.

In short, Chapman is trying to alarm you about what amounts to comparatively slow debt (and GDP) growth, when faster growth is needed.

(Yes, debt growth isn’t the same as deficit growth. We explain that in numerous other posts. But, since Chapman mixes the two, we’re trying to work from his logic.) 

There are other alarming signs. Trump’s border wall with Mexico will cost $8 billion by his calculation and double or triple that by other estimates. He claims Mexico will pay for it. But he and Congress aren’t prepared to wait for him to get the money. They plan to start construction now and send Mexico the bill.

Plenty of money for a ridiculous wall, but not enough money to fund healthcare for the poor. Perfect.

This is the equivalent of taking out a loan that you plan to pay off with the lottery ticket you just bought. In the best (and least plausible) case, we’ll have to wait awhile for the Mexican treasury to cut the check — “a year or a year and a half,” Trump blithely estimated at his news conference Wednesday.

Federal financing is not “equivalent” to personal financing.

This is Trump at his best. He has absolutely no idea what he is talking about, so he gives a cockamamie “year or year and a half,” knowing his backers don’t want or even expect him to tell the truth.

There is Trump and there is the Truth, and ne’er the twain shall meet.

(Ask Trump backers why they settle for lies, and you will receive a one-word answer: “Hillary.” Everything is excused by saying, “Hillary.” When Trump’s Presidency proves to be a horrifying disaster, the Trump-lovers will say, “Hillary would have been worse.” Depend on it.)

In the worst case — which happens to be the one President Enrique Pena Nieto has embraced — we won’t get a single peso and American taxpayers will eat the expense.

No, American taxpayers will not eat any expense for the wall. The federal government does not use tax dollars to fund federal spending. It does not use tax dollars for anything.

Even if all tax collections fell to $0, the federal government could build a dozen walls, plus fund Social Security and Medicare for every man, woman, and child in America, and still not run short of dollars, while controlling inflation.

So go ahead, Donald, build your dopey wall. The money will grow the economy, so long as you don’t cut other spending.

Anyway, either Chapman is ignorant of this fact or he is lying.  Take your choice.

Scrapping the Affordable Care Act, it turns out, would be a fiscal loser overall because of the taxes it imposed and the Medicare savings it implemented. The bipartisan Committee for a Responsible Federal Budget recently reported that a full repeal would add between $150 billion and $350 billion to the debt over the next 10 years.

I favor scrapping ACA and replacing it with fully funded Medicare for every man, woman, and child in America. (See Step #2 of the “Ten Steps to Prosperity,” below.) You should, too.

Under a fiscally responsible approach, the CRFB advised, “savings from repealing parts of the ACA must be large enough to not only finance repeal of any of ACA’s offsets, but also to pay for whatever ‘replace’ legislation is put forward. This is not an easy task, and it will likely require policymakers to retain or replace the majority of ACA’s health and revenue offsets.”

Let’s make the above paragraph easier to understand. It very simply means: “We plan to screw the middle classes and the poor.”

Clear enough?

But Congress and the president-elect appear to have every intention of torching the ACA now and fighting the budget fire later. Reducing taxes soon while pledging to cut spending eventually is a familiar tactic, and it functions reliably to enlarge budget problems rather than solve them.

Translation: “Enlarge budget problems” means: “Take fewer dollars out of the economy and add more dollars to the economy.”

This is a problem?

The ongoing retirement of the baby-boom generation puts great pressure on the budget, which has to cover more and more retirement checks and Medicare bills.

Another looming strain is the interest on the debt, which has been pleasantly manageable because interest rates have been so low. But they are bound to rise in the coming years, and if Trump gets his fiscal plans enacted, interest alone could cost taxpayers upward of $1 trillion a year a decade from now.

Both Congress and the president-elect have told Americans they will balance the budget. But that promise is written in sand.

Because the federal government never can run short of its own sovereign currency, there never, never, never is “great pressure” in the federal budget. Never.

This is a problem?

As for interest on the debt (i.e. T-securities), it benefits the public, especially T-security holders. If you own any T-bills, T-notes, or T-bonds, you benefit from interest. You will benefit even more, when rates are raised.

This is a problem?

I’ll tell you what the real problem is: Communicators like Steve Chapman either are ignorant of, or are lying about, the differences between federal finances (Monetary Sovereignty) and personal finances (monetary non-sovereignty).

Either way, columns like his are more harmful to America than the Russian hacking of our secrets. If the public ever figures that out, there will be a revolution.

At the beginning of this post, I’ve given you Chapman’s contact information.  Tell him what you think.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

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

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

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ANNUAL ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

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

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

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

MONETARY SOVEREIGNTY

Er, ah . . . about that wall, what I really meant was . . . Saturday, Jan 7 2017 

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

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For those of you who elected Donald Trump because he promised to do something you wanted done — Good morning. Wake up. You’ve been scammed, again. And he isn’t even President, yet.

Breaking Campaign Promise, Trump Now Says U.S. Taxpayers Will Pay for Border Wall. Posted on Jan 6, 2017, By Nika Knight

President-elect Donald Trump’s transition team has signaled to Republicans in Congress that Trump would like to fund his infamous planned U.S.-Mexico border wall through the Congressional appropriations process in April, House Republican officials told CNN Thursday.

In doing so, the president-elect appears poised to break one of his core anti-immigrant campaign promises: that Trump would build a wall to “keep the Mexicans out,” and that Mexico would pay for it. (Early in his presidential campaign, he even promised to force Mexico to build the wall.)

Early Friday morning, Trump defended his move on Twitter by alleging that Mexico would pay the U.S. back for the cost of building the wall:

✔ @realDonaldTrump
The dishonest media does not report that any money spent on building the Great Wall (for sake of speed), will be paid back by Mexico later!

Mexico’s president has vociferously and repeatedly said that the country will not pay for Trump’s promised wall. “We’re not going to pay for that fucking wall,” former president Vicente Fox added last March

On Twitter, commentators were swift to poke fun at Trump’s plan:

✔ @wkamaubell
“Hello Mexico, it’s Trump. I’m ready for you to pay for that wall… Remember the wall we discussed. Hello? Hello?”

When it comes to funding the wall through taxpayer dollars, Republicans “are considering whether to tuck the border wall funding into a must-pass spending bill that must be enacted by the end of April,” Politico reported Thursday.

Congressional Republicans therefore believe that appropriating funds for the wall, expected to run into the billions, will pass easily, arguing that Democrats “would fall in line [when] faced with the choice of funding the wall or shutting down the government,” reports The Hill.

So Mexico will pay for the wall, as Trump promised, except they will pay for it “later.” Right. Later.

And the Republicans will “tuck the funding” into another bill, and force the Democrats to approve the billions of dollars needed to pay for the wall because the Democrats are adults who don’t want to shut down the government, while the Republicans are children who don’t care.  What an admission!

Aren’t these the same Republicans who claim the government can’t afford to spend on Social Security, Medicare, Medicaid, food stamps, education and other social programs? Isn’t the federal government “broke” as the previous Republican speaker of the House claimed?

Hmmm . . . In Trump’s world, there is plenty of money for a wall, but not enough for America’s poor and middle classes.

Ah, the Donald and his lies. They flow from his mouth like poop from a goose. Who are these people who still pay attention to his lies — even believe them?

He promised to show his tax returns.  That never happened.  He said he never groped women; then there was that tape of him saying he did.

And ask the students at Trump University about the Donald’s lies. They learned a lesson at that “school” — a lesson they never will forget (nor will he, after all the law suits finish).

I feel bad for all folks who were suckered into voting for him. They are the world’s patsies, the schmendricks. They are the people sending money to that Nigerian prince, who promised them millions.

They are the people who open the door to the guy who claims to have an extra truckload of asphalt, and will redo their driveway at a bargain price.

They are the people who pay a 2% annual fee on that 401K plan their company cooked up for them.  They are the dupes and doormats for the rich, buying lottery tickets they can’t really afford, then lying awake at night, dreaming about what they will do with the money.

They believe Trump’s lies, knowing in their hearts that he is lying, but hoping, hoping that somehow this time he is telling the truth.

Their disappointments will keep coming. But, to excuse their own gullibility, they will fall back on the all-purpose, “Hillary is worse,” line. “He was the lesser of two evils,” they will tell themselves, though in fact, he will prove to be the worst, ever.

You should pray for Trump’s cheated followers, while Trump and his billionaire .1% friends prey on them.

In a way, I wish the Donald would build that wall. It would be pitiful, almost laughable, as a defense against a Mexican invasion, but it would require that the federal government pump billions of stimulus dollars into the economy.

And if the public ever begins to understand Monetary Sovereignty, those could be billions of additional stimulus dollars, which would employ thousands of workers and benefit everyone — especially the rich contractors.

All things considered though, dollars invested in the Ten Steps to Prosperity (below) would accomplish more for the 99.9%.  If only the people wanted to understand.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

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

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

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ANNUAL ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

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

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

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

MONETARY SOVEREIGNTY

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