Tag: Social Security

–Elect me and I will build America

The debt hawks are to economics as the creationists are to biology.

Since this is the season for campaign promises, here are mine. When you elect me, I promise to: (O.K., I’m not running for office, but this is what I would do.)

Reform Congress

I will work to end the Senate filibuster rule. I find the notion of one person being able to thwart the will of Congress and the American people, and to prevent the appointment of federal judges and other federal personnel, to be repugnant. It’s a bad rule.
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Improve Social Security and Medicare

1. I will end FICA. This is the worst tax in America for reasons explained at FICA . Briefly, it’s a regressive tax that discourages hiring and discourages spending, and has no function. The federal government does not use FICA taxes.

2. I will reduce the retirement age back to 65 (early retirement at 62).

3. I will stop taxing Social Security benefits. Only a government mentality could pay people benefits, then tax the benefits. It makes as much sense to tax SS benefits as it would to tax Medicare benefits, i.e. no sense at all.

4. I will pay everyone, man or woman, married or single, who begins to claim benefits at age 65, the same Social Security benefit, regardless of prior earnings. Under the current system, the people who need benefits most are paid the least.

5. I will increase Medicare payments to doctors and hospitals to equal the current levels paid by private insurance companies. The current Medicare payment levels discourage doctors from accepting Medicare, and discourage young people from entering the medical profession.

6. I will include long-term care as part of Medicare. Current long-term care policies as too expensive for lower income people.

7. I will eliminate all “donut holes” and other similar limitations from Medicare Part D (drug coverage). I will cover all drugs, generic or branded, from day 1.
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Rescue the States, Counties and Cities

The primary reason the states, counties and cities are in such bad shape: They are not Monetarily Sovereign. Mathematically, inflation and population growth make long-term survival on taxes alone, impossible for any monetarily non-sovereign government. Such governments must have money coming in from outside, via exports and/or federal assistance. I will pay each state $10,000 per person in the first year, then $5,000 inflation-adjusted each year thereafter.
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Cut Income Taxes

I will cut income taxes from the bottom up. Each year, I will increase the standard deduction by $10,000. At the end of the first decade, the standard deduction would be $100,000, and the vast majority of taxpayers will file their taxes on a postcard. (This will impact charities, all of which except faith-based, should be supported by the government, anyway.)

I will eliminate business taxes. The economy is business. Taxing business = taxing the economy, exactly the opposite of what a growing economy needs.
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Support Education

I will pay all students a salary for the job of attending school. (See: Salary 1 and Salary 2 and Salary 3 ).
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Spend Liberally on Research and Infrastructure

I will offer federal support to a myriad of science research and development projects – medical, physical, military, energy – together with rebuilding our aging roads, bridges and dams. Under my watch, we will go back to the moon and on to Mars.
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Raise Interest Rates

If any debt hawks have read this far, they undoubtedly are foaming at the mouth about the federal debt being “unsustainable” (nonsensical for a monetarily sovereign nation) and inflation. There is no post-gold standard relationship between federal deficits and inflation, (See: Inflation) And federal deficit spending reduces unemployment (See: Unemployment ) there is a distant point, when federal spending could be sufficient to cause inflation. So, I will take peremptory action to increase the value of money, by increasing interest rates.

This will strengthen the dollar, providing us with more imports of better goods and services at lower prices. (See: Stronger dollar )

Higher rates also will be stimulative, as it will force the federal government to pay more interest on its debts, thereby adding money to the economy. See: Interest

On a related subject, I will increase FDIC to $1 million, to protect more Americans’ savings.

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So that’s a good start for my first year in office. What do you think? Do I have your vote?

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity

–Does China need to export as much as it does?

The debt hawks are to economics as the creationists are to biology.

It widely is believed China must continue to increase its exports to maintain its economic growth and to pay its massive population. The desire for growing exports is what drives China’s reluctance to revalue the yuan upward.

But, does China’s economy really rely on ever-increasing exports? China is a Monetarily Sovereign nation. As such it has the unlimited ability to create its own sovereign currency.

Think of what happens when Chinese Factory “A” exports to the United States. Factory “A” receives dollars, a foreign currency it cannot use to pay its workers. So how does Factory “A” pay its workers? It exchanges these dollars for the yuan China creates from thin air.

This means, for every dollar Chinese Factory “A” receives, the Chinese government creates 6.7 yuan (current exchange rate), which it gives to Factory “A” in exchange for U.S. dollars. Factory “A” pays its workers with yuan, created by the Chinese government, while the Chinese government amasses dollars.

The Chinese government can use some of those dollars for international trade (oil purchases, etc.), but many become T-securities held in China’s account at the Federal Reserve Bank. In short, China’s economic growth requires the Chinese government to create yuan from thin air.

If Chinese factories exported less and received fewer dollars, the Chinese government could continue to create and distribute the same number or yuan as now. The only difference: Instead of giving these yuan to its people in exchange for many dollars, it merely would give those same yuan to the people, while receiving fewer dollars.

There would be less accumulation of T-securities at the FRB, a difference that has scant effect on the Chinese worker or on the Chinese economy.

How would the Chinese government give yuan to its people, if it were not exchanging yuan for dollars? Answer: More domestic deficit spending on things like roads, health care, retirement benefits, etc. A case might be made that the Chinese population would be better off receiving salaries for building domestic roads, providing domestic health care, etc., than receiving salaries for creating toys, clothing and other export items of no domestic value.

Without exports, the Chinese government would create about the same number of yuan as it now creates with exports. The entire domestic process would be affected very little. Yes, China can use U.S. dollars for certain imports, but I suspect it already has stockpiled enough dollars for that purpose to last several lifetimes, so the question becomes: Does China need to export as much as it does?

Monetarily non-sovereign nations like the PIIGS, which cannot produce unlimited amounts of money, need to have a positive balance of payments. So the other question is: Why does the U.S., which is monetarily sovereign, want to increase exports?

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity

–The “Pledge to America” Sham

The debt hawks are to economics as the creationists are to biology.

The House Republicans have published a “Pledge to America.” It is a blatant, political sham. It includes:
–Make the Bush tax cuts permanent
–Give small businesses an additional tax deduction
–Fully fund missile defense
–Strengthen our Mexican border
–Reduce government spending to the 2008 levels
–Reduce the federal deficit

See anything wrong with these nice, safe political “pledges”? If you make the tax cuts permanent, give extra tax deductions to small business, fully fund missile defense and strengthen our border, there is no way to reduce spending to the 2008 levels and reduce the deficit — nor should we. Reduced spending (aka “money creation”) would doom us to an immediate return to recession. All six depressions and nearly every recession immediately have followed reductions in deficit growth. The reason: Federal deficits provide the money for economic growth.

Further, what spending would be cut? See: Federal Debt cuts for a list of right-wing recommended spending cuts and tax increases. Ask yourself which ones you like.

And, of course, nothing is said about Social Security and Medicare, which politicians will tell you (wrongly) require either tax increases or benefit cuts.

The Pledge also includes:
–Repeal the health-care law
–Ensure access for patients with pre-existing conditions

But, of course, ensuring access for patients with pre-existing conditions is one of the benefits of the health care law the House Republicans want to scuttle. The health care plan also contains such benefits as:
*Young people can remain on parents’ insurance until age 26
*No discrimination against children with pre-existing conditions
*No dropping people from coverage when they get sick
*No lifetime limits on coverage
*Free preventive care
*Increased ability to appeal decisions made by your health plan
And other benefits that slowly come on line between now and 2014. How many of these would you like to forgo if the health care plan is repealed?

And the Pledge includes:
–Tough sanctions against Iran (but no mention is made of Iraq, Pakistan and Afghanistan, where our troops actually are fighting and additionally, spending massive amounts of money.)

In short, the House Republican “Pledge” includes a potpourri of popular-sounding, though contradictory ideas. They want to spend more and spend less. They want to increase benefits and reduce them. They want to cut taxes and cut the deficit. Meanwhile, the public has been sold on the idea of “reduced federal deficits,” while not understanding what that really means. It means higher taxes and/or reduced federal benefits.

And it means recessions and depressions. But the politicians don’t tell you that.

Yes, the Pledge is a sham, but it will fool some of the people, and that might be enough.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity

–What is the American dream?

The debt hawks are to economics as the creationists are to biology.

What is the American dream? Does it focus on money, taxes, deficits, debt and government? Or does it focus on people?

Today’s oh-so-chic belief among debt hawks, mainstream economists, some Democrats, most Republicans, all Tea Partyers, the public and the media is: The federal government and the federal debt are too big. The government should get off our backs and allow our John Wayne, American, can-do spirit to take over. We don’t need big government; we would rather roll up our sleeves and do it ourselves. The main problems with big government are: It requires big taxes and it inefficiently does what we-the-people can do better.

Wrong on all counts. You who understand monetary sovereignty already are aware there is no relationship between federal spending and federal taxing. The government can spend endlessly, without taxes. You also understand that federal debt = money, which is necessary to grow our economy. And while big government can be massively inefficient (as can business, for that matter), there are several things big government can give us, that business cannot give us as well or at all.

In another post on this blog, I list some of the government funtions the right wing would like to eliminate. See: Debt hawk proposals.

I believe the American dream should include:

Universal health care: There is no reason every man, woman and child in America, citizen and non-citizen, ever should lack health care – and not just any health care, but the world’s best health care. Medicare not only should be expanded to pay more and for more procedures, but it should cover everyone. It should cover doctors, hospitals, drugs, home care and hospice. There simply is no reason why anyone should suffer health problems for lack of money.

Universal education opportunity: In other posts on this blog, I have made the case for paying students a salary for attending school.

Freedom from poverty: Poverty has many causes. The debt hawks act as though poverty always were the fault of the poor, and are reluctant to provide assistance, “lest it encourage laziness.” There are many reasons for poverty, and laziness is one of them, but surely not a primary one. Most poverty is thrust upon people who either cannot work or cannot find work. No one in America should go hungry. No one in America should be forced into homelessness.

The problem with the high rise, slum housing projects like notorious Cabrini Green in Chicago, was not the concept. The problems were crime and maintenance. Had these buildings been treated like condos, with plenty of police protection and 24-hour maintenance, they could have been as suitable as an upscale, high rise condo. However, the government built them, then walked away from them, and the criminals took over, while the buildings fell apart.

Retirement: It simply is a fact of life that few people are able to amass enough money during their working years, to support themselves during retirement, without a significant loss of life style. Social Security is a good, though inadequate, support system for our senior citizens, and now there is talk about raising the retirement age and reducing benefits in other ways.

FICA should be eliminated and Social Security benefits should be increased. Only big government can do this.

Security: Police and the army: Obviously the responsibility of big government, unless you believe in the vigilante system of justice or wish to fight the enemy with your own hands.

Safety in food, drugs, investments, environment: Another responsibility of big government, unless you prefer eating unsafe food, taking unsafe drugs, having unsafe banks and watching our environment degrade. If anything, more government help is needed, not less, as this most recent recession has demonstrated.

Transportation: Yet another responsibility of big government, unless you and your neighbors plan to take pick and shovel in hand, to build roads, airports, and public (oops, private) transportation.

There are many other irreplaceable functions of big government, and the point is, people who decry big government simply do not know what they are asking for. If anything, the government needs to get bigger, to take care of our unmet people needs. I agree with not wanting federal taxes. The government neither needs nor uses them. But the notion that government should “get off our backs” is misguided at best and suicidal at worst.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

No nation can tax itself into prosperity