When Donald Trump (soon) turns away from giving wonderful medical advice, and begins to boast about his tremendous economic successes during this pandemic, and tells you he knows more about economics than anyone, remember that none of the following should have happened.

It all easily could have been, and still could be, prevented.

Despite $484 Billion Loan Program, a Flood of Small Business Bankruptcies Likely in Coming Months

BY JOYCE M. ROSENBERG / AP APRIL 26, 2020 1:28 PM EDT
(NEW YORK) — The billions of dollars in coronavirus relief targeted at small businesses may not prevent many of them from ending up in bankruptcy court.

Business filings under Chapter 11 of the federal bankruptcy law rose sharply in March, and attorneys who work with struggling companies are seeing signs that more owners are contemplating the possibility of bankruptcy.

Small business is the lifeblood of the U.S. economy. It is where many, if not most, American jobs and ideas originate. It is where the more entrepreneurial Americans can be found.

Yet, the government has stood by, tossing crumbs — reluctantly tossing crumbs — which is why there will be that “flood of small business bankruptcies.”

Companies forced to close or curtail business due to government attempts to stop the virus’s spread have mounting debts and uncertain prospects for returning to normal operations.

Even those owners receiving emergency loans and grants aren’t sure that help will be enough.

The most vulnerable companies include the thousands of restaurants and retailers that shut down, many of them more than a month ago.

Some restaurants have managed to bring in a bit of revenue by serving meals for takeout and delivery, but even they are struggling financially.

Small and independent retailers, including those with online stores. are similarly at risk; clothing retailers have the added problem of winter inventory that they are unlikely to sell with spring here and summer approaching.

The common denominator is lack of money. Money is disappearing from the economy. The federal government has unlimited money.

Does that give you any ideas?

Apparently, it doesn’t give our federal government any ideas. This administration is far more interested in criticizing Democrats and the “lamestream media,” denying science, and lying to get Trump re-elected, than actually doing something for businesses, especially small businesses and the economy.

Independent oil companies whose revenue was slammed by the collapse in energy prices also are strapped, as are other companies that were already burdened with high debt levels before the virus struck.

Oil companies are strapped because people are traveling less. And it’s not only the social distancing that causes less travel.

After social distancing becomes less necessary, the potential travelers still will defer travel because — here it is again — they lack money.

And — here this is again — the federal government has unlimited money.

Jennifer Bennett, who closed one of her San Francisco restaurants on Wednesday, was still waiting for the financial aid she sought from the federal, state and city governments.

Even with the money, she doesn’t know if the revenue will cover the bills when she’s finally able to reopen Zazie — especially if she’s required to space tables six feet apart for social distancing.

She’s waiting for financial aid, waiting, and waiting, and waiting. And if/when it ever comes, it may not cover her expenses.

But (Did we mention this?) the federal government has unlimited money.

So why is she forced to wait, and why does she think it may not be enough? The two answers: Federal incompetence and unfortunate history with federal agencies.

“Our occupancy is going to be cut 60% to 65%,” Bennett says. “I fear bankruptcy is a possibility.”

Other small companies have similar anxieties, says Paul Singerman, a bankruptcy attorney with Berger Singerman in Miami.

“There is no reliable visibility into when business operations will be able to resume the pre-COVID normal,” Singerman says.

Even larger companies are in trouble, including already struggling retailers who had to shut their stores.

The jeans company True Religion filed for Chapter 11 earlier this month, saying extended closures of its stores in the pandemic have hurt its business.

Recent reports say department store chains Neiman Marcus and J.C. Penney, which has struggled for years with slumping sales, could soon file for bankruptcy protection.

Bankruptcy “protection” may, in a few cases, somewhat protect the businesses declaring Chapter 11, though most such businesses never regain previous viability.

Worse, bankruptcy merely transfers the business loss to creditors, who also are part of the economy.

It does not benefit an economy for a business to survive while its creditors to suffer. The money and jobs still are lost to the economy.

But, (just to remind you, again), the federal government has unlimited money.

The federal government has already approved or given out more than 2 million loans and grants to small businesses totaling nearly $360 billion; another $310 billion is on the way to one of the programs.

Still, the money may be at best a stopgap for companies with little to no revenue coming in. And the new funds are expected to go so quickly that thousands of owners won’t get loans.

The money from the Trump administration has been, and will continue to be, too-little and too-late, and worse yet, some of it is in the form of repayable loans.

Why loans instead of grants? Why should anyone have to pay money to a Monetarily Sovereign government that has the unlimited ability to create its own, sovereign currency?

And no, federal taxpayers do not fund federal government spending. The federal government creates brand new dollars, ad hoc, by the action of paying bills.

So ignore those false claims that your grandchildren will have to support today’s spending. The claims simply are false.

(The claims would be true of state and local government spending. State and local governments are monetarily non-sovereign. They do not have the unlimited ability to create money. They do rely on tax dollars for spending. The federal government does not.)

There’s no way to predict how many companies will file for bankruptcy. The majority were for liquidations. although some companies restructured their debt and continued operating under Chapter 11.

Many companies, however, just shut their doors, and that’s likely to be the case again, Singerman says. According to some estimates, 170,000 companies failed during the recession.

And now for the simple solution:

Every company files tax returns. The returns from 2019 reveal each company’s gross sales.

To prevent the flood of small (and large) business bankruptcies, the federal government should give (not lend) to each company the dollars that equal or exceed each business’s gross sales from 2019. For those companies that began in 2020, the amount could be the annually amortized gross from the 1st quarter of 2020.

Now let’s deal with the objections, since every plan has them.

OBJECTIONS

1. The plan will cause inflation. Inflation is caused by shortages of critical needs, usually food and/or energy, never by federal spending.

If business bankruptcies cause shortages of food and/or energy, that will cause inflation, which could be prevented/cured by federal spending to obtain and distribute the scarce goods.

2. The plan would require a tax increase. Already discussed. Federal taxes do not fund federal spending. In fact, federal taxes disappear from any measure of the nation’s money supply and thus are effectively destroyed.

No tax increase would be needed.

3. The plan would increase federal debt. The so-called “debt“ is not like ordinary debt. It is the total of deposits into T-security accounts. The federal government neither needs nor touches these deposits.

They remain in the T-security accounts gathering interest until maturity, at which time the balances are returned to the account owners. No federal deficit spending is involved.

4. The plan is unsustainable. Being Monetarily Sovereign, the federal government can “sustain” any amount of spending.

5. Last year’s tax returns may not be an accurate measure of this year’s potential gross. Each business could fill out a form similar to a tax return containing questions appropriate to that issue. For instance, the form could include this year’s to-date gross rather than last year’s gross.

Like the income tax itself, the government can set up any criteria it wishes, so long as the outcome is sufficient anti-insolvency dollars are being sent to businesses.

It is better to err on the high side, because there is no economic cost in sending “too many” dollars.

6. Some business owners might choose to keep the money personally and still go bankrupt. Although the government can (and already has) set up rules to minimize this, growth money still would be added to the economy.

The major downside would be if some of the dollars don’t reach the lowest income groups. This could be ameliorated by increased unemployment insurance benefits, which is something we should do anyway.

7. People who have lost jobs are covered by unemployment insurance, so this program is redundant. Sadly, and unnecessarily, current unemployment insurance is insufficient to provide adequate support. It should be increased to the point that no one is at or below a poverty level.

8. What about poorly-run companies, that would have gone bankrupt, anyway? Who cares? If the federal government gives money to poorly-run companies, along with the well-run companies, nothing is lost. In fact, the economy gains by the infusion of dollars.

The government does not need to evaluate the merits of any company’s business. It merely needs to grow the economy and narrow the Gap between the rich and the rest.

In Summary:

The single biggest problem facing the American economy is lack of money, and the federal government can solve that problem at the press of a few computer keys.

Every company should have the means to continue in business if it wishes, and to pay its employees. The federal government has the unlimited means to accomplish this.

The Ten Steps can be part of that solution.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

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

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

1. Monetary Sovereignty describes money creation and destruction.
2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

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 Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and 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 the rest.

MONETARY SOVEREIGNTY

To some, she is an extremist, even a kook. Trump would have one believe that she is too intense at wanting to help people in need, since he himself never feels that emotion.

Perhaps it is her aggressive manner. Perhaps because she is a woman, and not only a woman, but a woman of color with an alien background.

Or perhaps, because Donald Trump, who doesn’t have half her brains, fears her and so, tries to belittle her.

Or perhaps it simply is because she expresses “excessive” truth (Does that even exist?)

But for whatever reasons, I believe Alexandria Ocasio-Cortez doesn’t receive the respect she deserves:

‘Incrementalism Is Not Helpful in This Moment’: Ocasio-Cortez Rejects Settling for Crumbs in Next Covid-19 Stimulus
Posted on April 21, 2020 by Jerri-Lynn Scofield

AOC takes no prisoners in outlining what the next stimulus package must include: assistance for the vulnerable rather than massive bailouts for large companies. No wonder, Wall Street is financing a primary challenger, as The Intercept explains, WALL STREET TITANS FINANCE DEMOCRATIC PRIMARY CHALLENGER TO REP. ALEXANDRIA OCASIO-CORTEZ.

By Jake Johnson, staff writer at Common Dreams. Originally published at Common Dreams

The rich don’t like her. That tells me much.

Rep. Alexandria Ocasio-Cortez, the only Democrat in Congress to oppose the previous multi-trillion-dollar coronavirus stimulus package, said during a conference call with progressive leaders Monday that communities across the U.S. cannot afford another incremental relief bill that delivers crumbs for the vulnerable and massive bailouts for big businesses.

She is 100% correct. So far, Congress has been “too-little, too-late” — the incrementalism she talks about.

Helping the rich is OK, but helping the rest is absolutely necessary.

“Incrementalism is not helpful in this moment,” said Ocasio-Cortez, a New York Democrat.

“It’s not helpful. For people to say: ‘Oh, well, we got something, so we might as well support it. You know, we got a nickel, a dime in a trillion-dollar bill so a nickel is more than nothing, so we should support it’ is unacceptable… It’s like putting a Band-Aid on an enormous wound.”

Yes, why are we being told to accept one penicillin pill when ten are needed?

When talking about saving the economy, “more than nothing” is not good enough. It simply means a five-year depression may last only four years.

We need “more than enough.”

As the legislation that Congress passed last month fails to deliver adequate relief to workers, the unemployed, and small businesses, progressive lawmakers and outside advocacy groups are pushing for the inclusion of a slate of priorities in the next major stimulus bill, including $2,000 monthly recurring payments and opening Medicare to the unemployed and uninsured.

But the Democratic leadership is at the moment focused on negotiating interim legislation that would provide additional funding for a flawed small business loan program and hospitals while leaving out money for states and cities, hazard pay for frontline workers, and other progressive demands.

Change the above to “the weak, hesitant Democratic leadership.” The Dems have everything going for them: An incompetent, crooked, vacillating President, with an incompetent, pusillanimous GOP, plus a massive disaster that the President helped cause, and what do the Dems do? Incrementalism. Disgraceful incrementalism.

Why are the Dems letting Trump off the hook, when this is the perfect time to set the hook? The people need you to fight for them at the top of your lungs, not offer timid compromises.

“It is insulting to think that we can pass such a small amount of money in the context of not knowing when Congress is going to reconvene. And pass such a small amount of money, pat ourselves on the back, and then leave town again. I am not here to support that… I’m not here for a $5 bill. And I will not insult my community with one.”

She won’t and your Representative shouldn’t.

The impetus of Monday’s call was to outline progressive priorities for what has been dubbed “Phase Four” of the federal government’s coronavirus relief effort, which has thus far been marred by dysfunction and legislative solutions that do not come close to matching the scale of the public health and economic crisis facing the United States.

“The vast majority of people have still not received any relief and bills are piling up,” Rep. Pramila Jayapal (D-Wash.), co-chair of the Congressional Progressive Caucus, said on the call. “If we’re going to climb out of this crisis, we need bold solutions.”

The conversation was attended by a handful of Democratic lawmakers, including Reps. Rashida Tlaib (Mich.), Ilhan Omar (D-Minn.), Ayanna Pressley (Mass.), and Mark Pocan (Wis.), the other CPC co-chair. Leaders from progressive advocacy groups Indivisible, United We Dream, Community Change Action, and MoveOn also took part.

Echoing Ocasio-Cortez’s condemnation of incrementalism, the lawmakers and activists emphasized the urgency of the moment and called on the Democratic leadership to use the significant power they have to deliver a bill that—unlike the CARES Act—puts the needs of frontline workers, the unemployed, the uninsured, and other vulnerable groups ahead of corporate interests.

“Settling for less means that we lose lives,” said Tlaib.

“Settling for less” also means you lose elections.

Where is the screaming and shouting? Why do Trump and his toady GOP Congressman dominate TV? Why so few national broadcasts of Democrats who will tell it like it is, namely:

— Donald Trump is a lying, crooked, ignorant fool, unfit to be President, who blames the world for his own repeated screwups.

–The federal government has unlimited money. It needs to spend at least as much as the losses the economy is taking — and more if we actually wish to grow.

–And no, federal spending never has caused inflation, and never will cause inflation so long food and energy are not scarce.

–It’s the GOP that has prevented millions from having health care insurance, and now when insurance is needed most, people are dying from lack of health care.

Where are the loud voices when we need them?

Earlier this month, as Common Dreams reported, the Executive Board of the CPC outlined a number of demands for the next stimulus package.

The Progressive Caucus is demanding monthly $2,000 stimulus payments to all U.S. households, a nationwide moratorium on evictions and foreclosures, nationwide vote-by-mail, and a suspension of all consumer debt collection.

1. The monthly stimulus payments are good, but I would make them “per-person,” not “per-household.” A family of ten needs more support than does a family of two.
2. No moratorium on evictions and foreclosures. That just passes the grief down to creditors and landlords. Instead, give the people the money to pay those debts.
3. Yes, vote by mail. The GOP pretends to hate voter fraud, while they are the kings of gerrymandering and hidden polling places. There is no evidence that mail voting increases voter fraud.
4. And no, do not suspend debt collect. Again, this just punishes creditors. Give people money, and good people will pay their bills. Bad people shouldn’t be rewarded at the expense of good lenders.

On the conference call Monday, participants stressed that relief must be made available to those who were neglected or entirely left out of previous bills, such as undocumented immigrants.

Whether the Democratic leadership is willing accept any of the progressives’ demands, and how quickly another massive stimulus package could come together, remains to be seen.

Yes, support undocumented immigrants. We now are learning that they are largely responsible for supplying us with our farm-grown food.

In a Dear Colleague letter on Saturday, House Speaker Nancy Pelosi (D-Calif.) wrote vaguely that as negotiations with the Trump administration over the interim legislation move forward, “we are working on CARES 2 to prepare for the path ahead to support the lives and livelihoods of the American people.”

“It is recognized that the key to opening our economy is testing, treatment, contact tracing, and quarantine,” said Pelosi. “It is self-evident that America’s heart is full of love. Let us be worthy of the American people’s generosity of spirit.”

Yes, blah, blah, blah. Where are the public demands? Where is the outrage? Where is the justified finger-pointing and laying of blame?

Why not use this occasion to gain much-needed public support?

On the conference call, progressive lawmakers voiced frustration about the lack of transparency surrounding the interim bill, lamenting—like Ocasio-Cortez—that most of what they know about the legislation has come from news reports.

A typical Pelosi “I-know-better-than-you” system. Make it all public so the people can see what the GOP is hiding from them. Why play into Trump’s greedy, little hands?

Leah Greenberg, co-executive director of Indivisible, raised concern Monday that if Democratic leaders give Republican lawmakers and the Trump administration what they want in the interim legislation, progressives will “have less leverage for the coming fights.”

“We know that Republicans are taking advantage of this moment to shovel more money to big corporations. They are simply indifferent to the human suffering that is unfolding before our eyes,” said Greenberg. “That’s why it’s so critical that Democratic leadership use their leverage and the full power of the House to demand solutions that rise to the needs of the moment.”

So say it, again, and again, and again, on TV, on the radio, in tweets. LOUDLY DEMAND that the government support the poor and middle-income people.

Jayapal echoed Greenberg, saying the Progressive Caucus has “real concerns about giving away leverage now without getting some of the priorities that we need.”

“We have to recognize the urgency of the moment, the scale of the crisis,” said Jayapal. “We cannot just give away the things that Republicans want most when we know that they’re not going to fix the problem that is in front of us.

This moment will not come again. GOP incompetence, arrogance and favoring the rich, while the rest of us suffer and die. If the Dems don’t do it now, they never will win as a party.

And no one wants to vote for losers.

=======================================================================================================================================================

Obama health care guru has been right
His message about coronavirus: This will be over, but it’ll hurt
Inverview with Andy Slavitt, once-acting administrator at the Centers for Medicare and Medicaid, at the Department of Health & Human Services in Washington.
By Christopher Borrelli

Q: How much of our situation traces to a decline in the lack of trust and belief that many Americans, and the White House, have shown for science and expertise?

A: Some of it. Absolutely. The cold hard fact is we were late, we didn’t start making tests, securing ventilators, we didn’t start planning until months after we should have.

Even if you put aside the Trump administration getting rid of Obama’s pandemic-response team and defunding the CDC, the danger of starting late is you’re chasing something growing exponentially. You’re swimming after a speed boat.

There were two months while the rest of the world prepared, but CDC scientists felt hemmed based on this president’s reaction.

He didn’t understand or want to. As opposed to how a wartime president might have seen it — and this is war — he saw it as a reflection on him.

There’ll be time for historians to assign blame. But if he had paid as much attention to scientists as he had Wall Street, we’d be in a better place.

We’d be in a better place if the Dems weren’t so cautious and timid, and the entire GOP wasn’t sucking up to a psychopath. (For the technical criteria for a psychopath and why Trump matches them, click here.)

God save America.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

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

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

1. Monetary Sovereignty describes money creation and destruction.
2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

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 Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and 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 the rest.

MONETARY SOVEREIGNTY