Why state-funded Social Security or guaranteed income is a colossal mistake. It should be federal.

I long have favored a federal plan in which every man, woman, and child in America would receive a monthly stipend from the federal government. (Some call it UBI—Universal Basic Income. Others call it GI—Guaranteed Income, or Social Security for All.)

A federally funded Social Security for All program was described in a post published seven years ago.

Today, that post was brought to mind by the following article:

a $1,000 monthly ‘guaranteed income statewideThe proposal would have taxpayers fund statewide, $1,000 monthly ‘guaranteed income.’
A measure creating a task force to look into monthly guaranteed taxpayer-funded “unrestricted cash” subsidies to specific individuals in Illinois is being discussed in the state legislature.

An Illinois Senate appropriations committee would review “the landscape of cash supports available to low-income residents” and identify “populations without significant access to cash supports.”

The bill, as filed, says after the board is dissolved at the end of 2027, DHS would administer the program with monthly cash payments of $1,000 to Illinois residents, regardless of immigration status, who provide care for a child or specified dependent, recently gave birth or adopted a child or is enrolled in an educational or vocational program.

Dollar bills coming out of a horn of plenty.
By law, the Monetarily Sovereign U.S. government is an infinite horn of plenty, capable of creating an unending stream of dollars at the touch of a computer key without collecting a penny in taxes.

Mike Buehler, an opponent of the measure, said it’s irresponsible to discuss such a program without knowing how much it will cost taxpayers.

You may be surprised that I oppose this and other similar plans.

Here is why:

1. Local governments are monetarily non-sovereign (unlike the federal government, which being Monetarily Sovereign, has the infinite ability to create dollars).

With few exceptions, local governments get their spending money from taxpayers.

The federal government gets its spending money by creating it ad hoc. The federal government does not spend tax dollars.

That is why it can run trillion-dollar deficits with no funding problem at all.

State, county, or city taxpayers pay for local government-funded UBI programs.

Most local tax dollars come from sales taxes and/or local income taxes, most of which are paid by middle—and lower-income residents. Extracting dollars from middle—and lower-income taxpayers is exactly the opposite of the UBI plan’s basic purpose.

2. While the federal government has unlimited access to dollars, local governments have limited abilities to pay for things. So, the benefits must be limited to local governments’ affordability estimates.

This, in turn, requires limiting benefits to specific groups and denying benefits to other groups, which creates two problems:

A. The government must set up a complex and expensive apparatus for monitoring recipients so that people do not cheat.

B. People just outside the limit of qualifications are unjustly deprived of aid, and/or try to find unanticipated ways to qualify.

“I understand that you would have to be a person with a child, or caring for someone in your home or school to be eligible for the benefits.

A local government would have to hire dozens (or thousands?) of people to monitor these qualifications. (Do you have a child? How old? Are you really “caring for” that boarder? Are you still in school, and exactly what is a “school.” How many days or hours do you attend?

Additionally, there would be extensive and expensive paperwork filed, read, and authenticated.

That could be millions of people and the cost could be in the tens of billions of dollars,” Buehler told The Center Square. “And where’s the state going to come up with these funds and the only place to come up with that is to get it from the taxpayers.

Guaranteed income programs in Chicago and the Metro East St. Louis areas are ongoing, costing taxpayers millions. In 2022, the city of Chicago was in line to spend $31.5 million for $500 a month to go to 5,000 low-income residents.

That same year, Illinois legislators approved a pilot program using state taxpayer funds worth $3.6 million for the Metro East St. Louis area.

Inevitably, a state-run, money-restricted program would evolve to a “nanny-state,” where the money only could be used for approved purposes. And that would have to be monitored.

Ameya Pawar with the Economic Security Project said there are 150 different programs across the country. He gave examples of people using the money to buy sports goods for their children or even to take a vacation.

There is widespread belief that the poor who receive money from taxpayers, should be told what to do with the money (the poor supposedly being too ignorant to know what is best for them). Buying sports goods and taking vacations is not “good” for the poor.

The nanny preference is only to feed starving children, not just make them happy with toys and entertainment. Note the hinted outrage Ameya Pewar expresses for recipients buying baseballs to entertain their kids.

“And all of this money that goes into the pockets to stabilize households flows through local businesses,” Pawar told the committee. “So you see some of this money back in sales taxes, and other taxes.”

No buying from Amazon allowed??

Buehler said there could be unintended consequences, like reducing work productivity and more.

“For regardless of immigration status, I think an unintended consequence could be a flood of migrants coming to Illinois looking for benefits and not having to work for it,” he said.

3. If one state, county, city, or village offers better benefits than another, people will tend to go where the money is and the taxpayers will pay. This is true for citizens as well as migrants.

And note the common but false belief  that the poor are so lazy and unmotivated, if you give them money, they won’t get jobs.

Pawar said the proposed statewide guaranteed program of “unrestricted cash” should be in addition to other taxpayer-funded safety net programs.

Programs like Supplemental Nutrition Assistance Program funds go to buy food. The Low Income Housing Energy Assistance Program is for heating bills. The Temporary Assistance for Needy Families program provides monthly cash assistance to low-income families with children.

“And to get this income, they may not necessarily spend that in their own best interest or the interest of the citizens at large,” he said.

Again, the taxpayer requirement exacerbated the nanny-state belief that the poor are too stupid to spend in their own best interests. “Why am I, as a taxpayer helping these people to take vacations, if I can’t afford one myself.”

All the above-mentioned problems would be addressed by a federally-funded, Social Security program covering every man, woman, and child in America, regardless of income or wealth.

The rich, poor, citizens, non-citizens, young, old, married, single, renter, homeowner, in or out of school, etc., all would receive the stated benefits — and unlike with state and local government programs, no one would pay a penny.

Federal Social Security payments made to every man, woman, and child, require much less monitoring. Most importantly, affordability would cease to be an issue. The federal government can afford anything, and without collecting taxes.

All of the money spent by the federal government would be added to the local economy, increasing everyone’s income.

8 Million Have Slipped Into Poverty Since May as Federal Aid Has Dried Up - The New York Times
8 Million Have Slipped Into Poverty Since May as Federal Aid Has Dried Up, October 15, 2020. (By Leigh Lynes: New studies show the effect of the emergency $2 trillion package known as the Cares Act and what happened when the money ran out.)

Here are excerpts from another article on the subject.

33 basic and guaranteed income programs where cities and states give direct payments to residents, no strings attached
The concept of a “universal basic income” has inspired widespread interest in recent years.

Actually, there are “strings,” in the form of qualifications.

More than interest — when former US presidential candidate Andrew Yang announced that a UBI program of $1,000 direct payments to citizens every month would be the keystone policy of his platform, he drew an unexpected amount of grassroots support in a crowded primary year.

Guaranteed income programs have been gaining even more traction during the pandemic, which took a particular toll on low-wage workers and threw many Americans into poverty.

At least 11 direct-cash experiments went into effect this year, Bloomberg estimated in January.

Former Stockton, California mayor Michael Tubbs, took the idea to the next level by launching the Mayors for a Guaranteed Income network. As of this year, there are 60 mayors in the program, advocating — and launching pilot programs for — guaranteed income for their residents.

California recently launched the first statewide guaranteed income program in the US, providing up to $1000 per month to qualifying pregnant people and young adults leaving the foster care system.

“Young adults leaving foster care” and “pregnant people” comprise two, very narrow classes, and $1000 a month is a meager amount. The task of verifying qualifications would be costly. (Imagine trying to verify pregnancy for thousands of people, and who monitors when pregnancies end before birth?)

The basic income program that Tubbs launched in Stockton in 2019, the Stockton Economic Empowerment Demonstration, has been considered the model for other cities that have followed in its footsteps, offering low-income residents hundreds of dollars a month and measuring their job prospects, financial stability, and overall well-being afterward.

It seems like a massive and expensive project for just hundreds of dollars’ worth of benefits.

According to SEED, participants improved in all those metrics.

“Guaranteed income makes a case for investing in our undocumented neighbors and formerly incarcerated residents. In doing so, it addresses the reality of the nation’s fragmented, punitive welfare structure.”

Will taxpayers consider this a reward for being undocumented or incarcerated? (Want to make an easy few hundred dollars a month? Go to jail for some minor charge.)

This kind of program isn’t a new idea, however. The Eastern Band of Cherokee Indians Casino Dividend in North Carolina has been giving tribal members annual funds since 1997, for instance. Alaska has been paying residents out of its oil dividends since 1982.

The Eastern Band of Cherokee Indians Casino Dividend in North Carolina gets its money from casino revenue. Alaska gets its dividend money from oil. Neither collects taxes to pay recipients. That is a major consideration.

Here are a few of the 33 examples mentioned in the above article.

Compton, California. Duration: December 2020 to December 2022. Income amount: $1,800 every three months for 2 years. Number of participants: 800

Tacoma, Washington,Duration: December 2021 to December 2o22, Income amount: $500 every month for 1 year, Number of participants: 110

Stockton, California, Duration: February 2019 to February 2021, Income amount: $500 every month for 2 years, Number of participants: 1ount: Based on the annual dividend from state-owned oil companies, ranged from roughly $2,000 per person in 2015 to $800 in years with lower gas prices.

 Oakland Resilient Families, Duration: Summer 2020 to present, Income amount: $500 per month for 18 months, Number of participants: 600

Alaska Permanent Fund , Duration: Annual, Income amount: Based on the annual dividend from state-owned oil companies, ranged from roughly $2,000 per person in 2015 to $800 in years with lower gas prices , Number of participants: Alaska residents

North Carolina, Cherokee Tribe, The Eastern Band of Cherokee Indians Casino Dividend pays every tribe member annually, Duration: Annual, Income amount: $4,000 – $6,000 per year, Number of participants: Every tribal member.

The Alaska and Cherokee programs succeed long term because they are not funded by taxpayers. A federally funded program would succeed for the same reason. Federal spending is not taxpayer funded.

When state and local taxpayers fund a spending program, the result is that a large group of middle- and low-income people transfers some of their money to a smaller group of middle- and low-income people.

The large group includes all those who pay sales and income taxes. The small group is all those who receive those tax dollars. It’s just dollars rotating within the municipality, enriching some residents at the expense of others. The municipality’s economy receives nothing.

By contrast, when the federal government funds a guaranteed income program the government creates new dollars and sends them to the nation’s recipients. The result is that there is no expense to anyone, but the nation’s economy is enriched with net dollars. (GDP = Federal Spending + Nonfederal Spending + Net Exports).

Guaranteed income programs help narrow the income/wealth/power Gap between the rich and the poorer. While reducing poverty, in of itself, is a worthwhile goal, narrowing the Gap also helps address related, social problems:

Wide Gaps affect not only poverty itself, but health and longevity, education, housing, law and crime, war, ownership, bigotry, taxation, GDP, scientific advancement, the environment, human motivation and well-being, and virtually every other issue related to economics. 

The most successful guaranteed income programs share several features:

  1. Funded by a Monetarily Sovereign government or by state owned and controlled businesses. This takes taxpayer costs out of the equation.
  2. Minimal requirements for participants achieve voter support by making the plan fairer.
  3. Significant benefits. Trivial payments, i.e. $100 a month, etc. will not generate positive voter sentiment.
  4. Easy entry and supervision. Difficult entry results in negative feelings by voters. Easy supervision lowers costs.
  5. Easily understood goal.
A family -- father, mother, two children -- happily receiving dollars from the federal government
Many good reasons for, and no good reasons why not.

A national Social Security for All plan, with a minimum benefit if $5,000 per year for each adult (18 and over) and $2,500 a year for a child would begin to address the abovementioned social problems.

The Cost:

The U.S. has about 260 million adults (18+) and about 70 million children.

At the $5,000/2,500 level, the benefit cost of the Social Security for All would be $1.3 trillion for adults and $175 billion for children, totaling somewhat south of only $1.5 trillion.

Why do I say “only”? By comparison:

    1. In 2023, the federal government spent about $6.2 trillion.
    2. The Gross Domestic Product (GDP) for the year 2023 had a current-dollar value of $27.36 trillion.
    3. In 2023, the U.S. federal government collected a total of approximately $4.71 trillion in tax revenue.
    4. In fiscal year 2023, the federal government’s spending exceeded its revenues, resulting in a deficit of $1.70 trillion
    5. By the end of 2023, the cumulative federal deficit was $26.236 trillion.
    6. The U.S. M2 money supply is about $20 trillion.

Given that:

Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency. There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody. The United States can pay any debt it has because we can always print the money to do that.”

and

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.”

A Monetarily Sovereign government spending $1.7 trillion to send an additional $5,000 to every adult and $2,500 to every child — and at no cost to anyone — would seem to be a bargain price and a great investment for America.

Further, because of the multiplier effect*, that additional $1.7 trillion in federal spending, would increase Gross Domestic Product far more than $1.7 trillion.

*Per Investopedia:
A government increases spending or decreases taxes in part to inject more money into the system.

Such fiscal policy has a multiplier effect. That is, every dollar spent can be expected to cause an increase in the gross domestic product (GDP) by more than a dollar.

This is due to the sheer momentum created by the policy. Consumers spend more so businesses produce more goods.

Businesses have to hire more to produce more goods, so more people have more money to spend on goods.

The same phenomenon occurs for both government spending increases and tax cuts. Either tends to increase GDP disproportionately.

A cut in government spending can reduce GDP by a greater degree than the amount saved by the cut.

The expanded Child Tax Credit had a multiplier effect of 1.25 on GDP in the first quarter of 2021, according to an analysis by Moody’s Analytics. The increase in the Supplemental Nutrition Assistance Program boosted GDP by a 1.61 multiplier effect in the same period. Increased defense spending had a 1.24 multiplier effect.

Infinite benefits at no cost to anyone: Can any knowledgeable person object to Social Security for All?

Rodger Malcolm Mitchell
Monetary Sovereignty

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

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The Sole Purpose of Government Is to Improve and Protect the Lives of the People.

MONETARY SOVEREIGNTY

We did it for COVID. We did it for the Great Recession.” Why can’t we do it all the time?

We did it with the “Economic Stimulus Act 2008. The federal government simply sent people money.

Generally, low and middle-income taxpayers received up to $300 per person or $600 per couple.

The purpose was to stimulate economic growth and to cure the recession.

It worked:

As federal deficits (blue) declined, we fell into a deep recession, cured only by a robust increase in federal deficit spending (red).

Gross Domestic Product (GDP) is a common measure of the economy. The above graph should come as no surprise. The formula for economic growth is:

GDP = Federal Spending+ Nonfederal Spending + Net Exports

Mathematically, as federal deficit spending decreases, economic growth falls, and as federal deficit spending increases, economic growth increases.

If you want economic growth, you want federal deficit spending to increase.

I’ve written about this many times. It’s simple algebra. I’m not sure why this is a mystery to the politicians who think a debt limit is prudent finance. It’s exceedingly ignorant finance.

I mention this again because of an article I just read on MEDPAGETODAY:

Uninsured Rate Hits Record Low of 8.3%
— But that number will slowly rise as pandemic health insurance protections unwind, experts say
by Joyce Frieden, Washington Editor, MedPage Today May 24, 2023

WASHINGTON — The uninsured rate in the U.S. has fallen to a record-low 8.3%, but that percentage is expected to gradually increase as insurance protections from the COVID-19 pandemic wind down, according to officials from the Congressional Budget Office (CBO).

Why will insurance protections “wind down.” For the same reason we currently have a debt=limit battle in Congress. Sheer ignorance.

The federal government has repeatedly proved that it has the infinite ability to pay for anything. Why is it “winding down” payments for healthcare insurance?

The temporary policies enacted in the wake of the COVID-19 pandemic “have contributed to a record low uninsurance rate in 2023 of 8.3% and record-high enrollment in both Medicaid and ACA [Affordable Care Act] marketplace coverage,”said Caroline Hanson, Ph.D., principal analyst at the CBO, during a briefing sponsored by Health Affairs.

“As those temporary policies expire under current law, the distribution of coverage will change and the share of people who lack insurance is expected to increase by 2033.”

CBO is projecting an uninsured rate of 10.1% by 2033, and “while that’s obviously higher than the 8.3% that we’re estimating for 2023, it is nevertheless lower than the uninsured rate in the last year prior to the COVID-19 pandemic,” which was about 12%, she said.

Think about it. America has about 330 million people. A ten percent uninsured rate means 33 MILLION (!) people in America will have to do without health care insurance. I hope you’re not among them.

Whether or not you have insurance, here are some data that should concern you:

“A widely cited study published in the American Journal of Public Health in 2009 analyzed data from the National Health Interview Survey and found that uninsured individuals had a 40% higher risk of death compared to their insured counterparts. This study estimated that lack of health insurance contributed to approximately 45,000 deaths annually in the United States.

“Another study published in the Annals of Internal Medicine in 2017 conducted a systematic review and meta-analysis of previous research. The analysis concluded that uninsured individuals faced a 25% higher risk of mortality compared to those with insurance.”

When you don’t have healthcare insurance, you die younger. 

“Throughout the 2023-33 period, employment-based coverage will remain the largest source of health insurance, with average monthly enrollment between 155 million and 159 million,” Hanson and co-authors wrote in an article published in Health Affairs.

Employer-based health care insurance has two features seldom discussed.

  1. It ties employees to their employer, making job negotiation and movement much more difficult
  2. It is paid for by the employee because the employer figures the cost as part of the employment. Salaries could be higher without this “perk.”

If the federal government funded a comprehensive Medicare for All plan, employees would earn more without costing employers more.

However, they added, “in addition to policy changes over the course of the next decade, demographic and macroeconomic changes affect trends in coverage in the CBO’s projections.”

The Families First Coronavirus Response Act of 2020 gave states a 6.2-percentage-point boost in their Medicaid matching rates as long as the states didn’t disenroll anyone in Medicaid or CHIP for the duration of the COVID public health emergency.

Hanson noted that this law “allowed people to remain enrolled regardless of their changes in eligibility. So, for example, even if they had an income increase that would have made them ineligible but for the policy,” they were still able to stay on Medicaid.

The COVID public health emergency has been canceled now. Disenrollments can begin.

As a result of the law, Medicaid enrollment has grown substantially since 2019 — by 16.1 million enrollees, she said. But that has been superseded by another act of Congress, which allowed states to begin “unwinding” the continuous eligibility rules and start disenrolling people from Medicaid and CHIP beginning on April 1.

In total, “15.5 million people will be transitioning out of Medicaid after eligibility redetermination,” said Hanson. “Among that 15.5 million people, CBO is estimating that 6.2 million of them will go uninsured and the remainder will be enrolled in another source of coverage,” such as individual coverage or employment-based coverage.

Of those who are leaving Medicaid, how many are leaving voluntarily and how many are “falling through the cracks” because they didn’t receive their disenrollment notification or failed to fill out the required paperwork to reapply?

“We recognize that before these continuous eligibility requirements were put into place, people were losing Medicaid coverage, both because they were becoming no longer eligible for Medicaid, and … because they did not complete the application process despite remaining eligible,” said CBO analyst Claire Hou, PhD. However, she added, “we’re currently not aware of any data that would allow us to quantify the size of those two different groups.”

All of the above would be unnecessary if our Monetarily Sovereign federal government (which has unlimited funds) simply would fund a comprehensive, no-deductibles Medicare for All program.

Hanson delivered some bad news for those footing the bill for private health insurance. “We are projecting relatively high short-term premium growth rates in private health insurance, and this is for a few reasons,” she said.

“One is the economy-wide inflation that we’re experiencing in 2023 and that we have been experiencing, and that has not fully reflected itself in premiums yet.

And another contributor is the continued bouncing back of medical spending after the suppressed utilization that we saw earlier in the pandemic.”

The study authors project average premium increases of 6.5% in 2023, 5.9% during 2024-2025, and 5.7% in 2026-2027.

The current and projected-to-increase hardship on the American people is totally unnecessary. The federal government efficiently could ameliorate this hardship by: 

  1. Funding comprehensive, no-deductible Medicare for every man, woman, and child in America
  2. Funding Social Security benefits for every man, woman, and child in America.

Both would add dollars to Gross Domestic Product, thus growing the economy.

Instead, Congress battles over the unbelievably stupid debt ceiling. How do those people manage to dress themselves in the morning, much less be elected to America’s Congress? It boggles the mind.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

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The Sole Purpose of Government Is to Improve and Protect the Lives of the People.

MONETARY SOVEREIGNTY

Insurance for all . . . and more.

A government’s sole purpose is to improve and protect people’s lives. No rational person would take dollars from the economy and give them to a federal government that has the infinite ability to create dollars.

Our Monetarily Sovereign government’s greatest asset is its infinite ability to create and spend its sovereign currency, the U.S. dollar. The federal government cannot unintentionally run short of dollars.

 

It can pay any bill and fund any enterprise based on dollars and do it without the need to collect a penny in taxes. In fact, federal taxes (unlike state/local taxes) are destroyed upon receipt.

The U.S. federal government has infinite dollars.

Though the federal government may not always be good at running things, it is outstanding at paying for things.

Consider retirement. Social Security pays for retirement life by issuing money. Though the government collects the FICA tax, this tax doesn’t fund Social Security. Like all other federal taxes, FICA dollars are destroyed.

But Social Security, unlike private retirement plans, does not rely on stock market or bond market investments or any other form of income, and it does not need to make a profit or even to break even.

Pay no attention to the Henny Penny claims of the Social Security fund’s insolvency. Social Security can become insolvent only if the federal government wants it to. Benefits could double or triple or begin at age 0 rather than in the 60s, and SS always will be able to pay benefits.

Consider Medicare. This program, too, is funded by federal money creation. Despite what you have been told, Medicare is not financed by taxes but by federal money creation.

Medicare does not do medical treatments; Medicare pays for medical treatments.

Social Security and Medicare replace insurance companies as retirement and healthcare insurance providers. Having no need for income or profits and having the unlimited ability to pay for anything, the federal government is a much better source of insurance dollars than any private sector insurance company.

We previously have recommended instituting Medicare for All and Social Security for All. In that same vein, we recommend Life Insurance for all.

The federal government already provides life insurance for its civilian employees. Worldwide Assurance for Employees of Public Agencies (WAEPA) is one version:

As a non-profit formed For Feds, By Feds, we understand what it takes to help provide peace of mind. More than 46,000 Feds and their families choose WAEPA’s portable life insurance coverage to help protect the future of their families.

While we actively provide more than $10 billion in coverage to Feds, we’ve refunded over $100 million in premiums since 1996. That’s one way how WAEPA serves Feds who serve our country.

Short-Term Disability Insurance — WAEPA’s newest product provides paycheck protection for eligible illnesses or injuries.
 
You can receive up to $6,500 in coverage a month for up to six months to replace lost income if you’re out of work due to recovery.
 
Underwritten by New York Life Insurance Company, 51 Madison Ave., New York, NY 10010

Another is Federal Employees’ Group Life Insurance (FEGLI):

The Federal Employees’ Group Life Insurance (FEGLI) Program is a life insurance program for Federal and Postal employees and annuitants, authorized by law (Chapter 87 of Title 5, United States Code).

The Office of Personnel Management (OPM) administers the Program and sets the premiums.

FEGLI does not build up cash value. You cannot take a loan out against your FEGLI insurance. OPM has a contract with the Metropolitan Life Insurance Company (MetLife) to provide this life insurance.

MetLife has an administrative office called the Office of Federal Employees’ Group Life Insurance (OFEGLI). OFEGLI is the contractor that adjudicates claims under the FEGLI Program.

While Medicare and Social Security replace private insurance companies, WAEPA and FEGLI pay private insurance companies to administer their programs.

Either approach has advantages, but all have two glaring weaknesses.

  1. The federal government unnecessarily extracts premiums from the private sector.
  2. None of the programs offers comprehensive coverage, as though the government needed profits or even breakevens. It doesn’t.

The WAEPA website includes this chart:

It shows neither plan is comprehensive nor complete, which is not surprising. Two other federal programs, Medicare and Social Security,  are not comprehensive or complete.

But why? Given that the federal government has infinite financial resources, why should any plan it supports offer less than the optimum? 

Why does Medicare have a 20% deductible, along with limited coverages and not covering drugs or dental care, etc., without an extra cost? Why are Social Security benefits so meager? In WAEPA and FEGLI, why is one spouse’s life insurance death benefit less than the other’s?

The federal government repeatedly acts as though it can run short of dollars. It works like a monetarily non-sovereign entity. And why does the federal government extract a tax to fund something when it has the unlimited ability to support anything?

BOTTOM LINE

  1. The federal government has infinite dollars. It can pay any debt denominated in dollars. No such obligation is a burden on the government or on taxpayers.
  2. A healthy economy needs a continual input of dollars. Federal deficit spending prevents and cures recessions.
  3. A government’s sole purpose is to improve and protect people’s lives.
  4. No rational person would take dollars from the economy and give them to a federal government that has the infinite ability to create dollars.

Therefore, the federal government should fully fund the following comprehensive, no deductible, tax-free programs for every man, woman, and child who wants to participate:]

  • Healthcare insurance (aka Medicare for all)
  • Retirement insurance (Social Security for all)
  • Life insurance
  • College
  • Salary for attending college
  • Food support [aka Supplemental Nutrition Assistance Program (SNAP)]
  • Rental (living quarters) support

Objections:

  1. Federal spending causes inflation: In previous posts (here, here, here, and elsewhere, we have demonstrated that federal deficit spending does not cause inflation. Shortages cause inflation. Inflations are cured by curing the shortages, which can be accomplished with the aid of federal deficit spending.
  2.  If given these benefits, people would refuse to work. We suggest this is not true, as demonstrated by the fact that people at all wealth strata continue to work.

    The total of human wants never is satisfied.

    If the government pays for an apartment’s rent, the family wants a bigger apartment, a car, a yacht, or a vacation home. People always want more for themselves, their children, and charity.

The single most valuable asset owned by the U.S. federal government is its Monetary Sovereignty — its unlimited ability to create and control the value of the U.S. dollar.

Unfortunately, the government and many information sources refuse to acknowledge this great asset, so we slog along with poverty, hunger, homelessness, illness, lack of education, recessions, and depressions.

The federal government has the power to mitigate or prevent them all with the application of its Monetary Sovereignty. 

Rodger Malcolm Mitchell
Monetary Sovereignty

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

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MONETARY SOVEREIGNTY

The crime rate is way up. What is the best way to prevent crime in America?

Every politician wants to be known as “tough on crime.” No one wants to be seen as “soft on crime.”

The Republicans especially like to rage at crime, especially when the criminals are poor and/or black — not so much when the criminals are white and Republican.

Florida boy, 8, placed in handcuffs in viral video - New York Daily News
Tough on crime

You don’t hear the same Fox News outrage when it comes to Trumpers Rep. Matt Gaetz, Rudy Giuliani, Sidney Powell, Steve Bannon, and all the other traitors who defended and/or attempted what previously was unthinkable in America –a coup — so unthinkable, that many people still refuse to believe the crime they have seen actually occurred.

We also don’t hear much from Republicans regarding gun control while guns are used in thousands of crimes, annually,

Even a respected judge is not immune to “soft-on-crime” criticism. Here are excerpts from a Fox News article written by none other than Sen. Josh Hawley, who as a coup encourager and thus a traitor to the U.S., is not the best one to complain about criminals.

Supreme Court nominee Judge Jackson’s soft-on-crime sentences are disturbing By Josh Hawley

“While serving on the Sentencing Commission, she (Judge Jackson) supported eliminating the existing child pornography mandatory-minimum sentence.)

(She opposes all mandatory minimums as being blind to circumstances, and substituting generalizations for specifics.)

“Those views carried over to Judge Jackson’s time on the bench. Over and over again, she handed down sentences well below the congressionally endorsed Sentencing Guidelines recommendations.}

(Not to mention the many times all judges do that — it’s the purpose of using human judges rather than robots — and the many times she handed down sentences above those guidelines, but why quibble about facts when you are a mean-spirited Trumper writing for Fox News?)

“Unfortunately, Jackson is not the first judge to do that.”

Right, judges normally impose a range of punishments.

“But she stands out because she also consistently sentenced child pornography offenders below even what liberal prosecutors in Washington, D.C., were seeking.”

(It wasn’t consistent, and prosecutors always ask for the maximum. In most cases, judges look at circumstances and don’t grant the maximum the prosecutors seek. All of Hawley’s shrieking is about normal judicial procedure. The notion that Judge Jackson encouraged child pornography stretches credulity.)

Hawley knows all this, but he is a renowned liar writing for Fox. They are Trumpers, and we expect nothing less from them.

But even the most softhearted, squishy Democrats have no idea what “tough on crime” really means:

The Washington Post
The 5-Minute Fix
By Amber Phillips with Caroline Anders

Crime is looking like it’s going to be a big issue in November’s midterm elections — and that has Democrats on the defensive.

“We must invest in our police departments, said Rep. Val Demings (D-Fla.), a former police chief who is running for Senate in Florida.

Ask virtually anyone, winged right or left, about being tough on crime, and you will hear such suggestions as:

  • More police
  • More money spent on policing
  • More laws
  • Tougher judges
  • Longer jail sentences
  • Harsher jail conditions

Everything has to do with increasing the punishment for committing crimes and nothing for reducing the cause of crimes.

Republicans especially are interested in punishment, especially of the aforementioned poor blacks:

It (crime) has been fed and fueled in multiple ways by the Democratic Party’s far-left turn,” Senate Minority Leader Mitch McConnell (R-Ky.) has said of the country’s recent crime wave.

Strange, how Mitch seems unconcerned about a mob of people attacking the nation’s capital, attempting to overthrow the United States government, and even causing deaths and injuries. And for certain, he is not worried about gun crime.

To Mitch, criminals are street, not white-collar, criminals, who are born bad and born black.

Syracuse Police Handling of 8-Year-Old Black Boy Reminds Us How Anti-Black Blue Lives Can Be

From 2019 to 2020, the homicide rate in the United States jumped nearly 30 percent, according to FBI data, marking the largest increase since we started keeping track of those stats. 

Third Way, a Democratic think tank, found that cities (run by Democrats and GOP-led) in red states were hit harder by the 2020 murder surge than blue states were.

Democrats who have been recently elected as mayors in liberal cities such as New York and Seattle have campaigned on being tough on crime.

“There is little doubt that the sheer stress and strain of the pandemic, not to mention the economic dislocation, helped to push up homicide rates,” criminologist Richard Rosenfeld told Witte.

Democrats are nervous about getting tagged as anti-police — again. This time, they’re already campaigning on more funding for police departments.

And none of this “tough on crime” blustering addresses the root cause of most street crime: PovertyPoverty is the mother of crime.

Yes, crime has many parents — that “stress, strain, and economic dislocation” to name three. But walk through a wealthy area, any wealthy area, and you will fear street crime far less than you would in an impoverished area.

Republicans are adamant in their desire to apprehend and punish street criminals. But while apprehending and punishing after the fact may be their focus, Republicans have no desire to address prevention.

They are adamant in their opposition to gun control, to keep guns out of the hands of potential criminals, and to reduce the lethality of the guns being sold, which would have a significant impact.

Similarly, Republicans vote against anti-poverty benefits, i.e.  Social Security for All, Medicare for All, School lunch programs, housing aid, food aid, college for all, and the myriad other easily affordable (by the federal government) programs that would reduce poverty and crime in America.

The right dismisses them all with one word, “socialism,” then blindly continues to chatter on about the need for tougher police and harsher sentences.

(White-color crime and political crime are OK, except if found on a Biden laptop)

Even the Democrats have been dragged into the false rhetoric:

“Fund the police,” Biden roared at his State of the Union address this spring, to bipartisan applause.

Yes, fund the police. We do need well-trained, well-paid police. Digging recruits from the bottom of the barrel, and then without training, setting them loose on the public, is no way to be tough on crime.

Fund the police, but also fund the people.

Our Monetarily Sovereign federal government, having the infinite ability to spend dollars, also has the infinite ability to cure poverty in America without levying one cent in taxes or causing inflation.

There is a reason why poor areas of the country endure more street crime than do wealthy areas. It’s not that poor people are innately more dishonest. They simply have less money and less of what money can buy. 

They have the same desires the rich have, but fewer means of satisfying those desires. So they steal. It has been the same for time immemorial. 

We can curse the darkness by arresting a hungry kid for stealing food from a grocery store, and locking him up forever, or we can light a candle by giving him food, shelter, and reasonable hope for his future.

For some reason, we lately have shown a greater desire to beat down than to lift up, and that truly is wrong. It is wrong morally and it is wrong as an effective solution.

Beating down may satisfy the blood-lust of the mob, but it will not reduce crime, and it will turn on the innocent.

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

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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. 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