Well, the Democrats finally prove they understand Monetary Sovereignty

Well, the Democrats finally have proved they understand Monetary Sovereignty.

Image result for handing money
No one is asking, “How much will it cost.”

How do I know? Read the following excerpts. Amazingly, no one is asking, “Who will pay for it?”

Is it possible that at least one political party gets it?

House Democrats to include $250-300 monthly child payments in stimulus
House Democrats will release legislation Monday to provide millions of U.S. families $3,600 a year for each child under 6 and $3,000 for every child age 6 to 17.

The legislation, spearheaded by House Ways and Means Committee Chairman Richard Neal (D-Mass.), will likely be added to President Biden’s $1.9 trillion COVID-19 stimulus package.

Biden wants his American Rescue Plan to use an expanded child tax credit to cut the child poverty rate in half. Under the plan, the IRS would send $250-300 monthly payments to households for a year, starting in July.

The White House and Senate Democrats have reviewed Neal’s proposal and support it, The Washington Post reports.

After trillions of dollars in stimulus, the Democrats already are on board with an additional $1.9 trillion — and  no one is asking, “Who will pay for it?”

Why? Because apparently they must realize that our Monetarily Sovereign federal government pays for everything simply by creating new dollars, ad hoc. Always has, always will.

And then there’s this:

Yellen says those earning up to $60,000 should get full stimulus checks
Treasury Secretary Janet Yellen said Sunday that individuals earning up to $60,000 should receive the $1,400 checks proposed in President Biden’s $1.9 trillion coronavirus relief package.

“The exact details of how it should be targeted are to be determined, but struggling middle class families need help,” Yellen said on CNN’s State of the Union.

The White House has said that Biden won’t budge on sending families another round of stimulus checks, but he is willing to negotiate on where the income cutoff should be to determine who’s eligible.

“He wouldn’t want to see a household making over $300,000 receive these payments,” Yellen said. She added that if Congress approves Biden’s plan the U.S. will return to full employment in 2022.

How much more than $1.9 trillion will those checks cost? No one seems to be asking, because it doesn’t matter. A Monetarily Sovereign government can afford anything.

And no, taxpayers will not pay for it. While state and local taxpayers do pay for state and local government spending, federal taxpayers do not pay for federal government spending.

State and local governments are monetarily non-sovereign, while the federal government is Monetarily Sovereign. There is a vast difference between the two. Those who do not understand that difference, do not understand economics.

But,” cry the deficit hand-wringers, “this will cause inflation.”

WRONG,

Inflation never is caused by government spending. Inflation is caused by shortages, usually shortages of food and/or energy. In fact, inflations can be cured by additional government spending to obtain and distribute the scarce goods.

“But,” cry the Republicans and Libertarians, “this will cause excessive demand, which will cause inflation.”

WRONG.

Inflation is a general increase in prices, but putting money in the pockets of the middle- and lower-income groups never has caused a general increase in prices.

The cost of certain, specific products could rise temporarily, but there will not be price increases for products and services overall.

The primary effect will be for people to be able to afford life’s basics — food, housing, clothing, education — and additionally pay off debts will being able to save for a “rainy day.”

“But,” cry the rich, who because of Gap Psychology, (the desire to distance oneself from those below and to come closer to those above, on any social scale) do not want the middle- and lower-income groups to narrow the Gap between them and the rich, claim: “The people will simply use the money to pay off loans and add to savings, which will do nothing to stimulate the economy.”

WRONG.

Paying off loans and adding to savings not only will encourage spending on things the impoverishment has forced people to do without, but it will help prevent future recessions. The populace will have the resources to continue spending during otherwise lean times.

“But,” cry the most selfish among us, “if we give people money that will discourage them from working, and where would America be without workers?”

WRONG.

Among certain classes there is the false belief that the poor are inherently lazy, and would rather collect meager welfare checks than exert the effort to improve their lives.

Receiving money begets the desire for more money, which is obtained via labor. The vast majority at any income level would gladly work for more money, if they knew how, where, and what. The primary cause of poverty is circumstance, not laziness.

Actually, on average, the poor labor harder than do the rich, the main difference being the better cards the rich have been dealt.

“But,” cry the uninformed, “all that federal spending is socialism.”

WRONG.

Socialism is not government spending. All governments spend. Socialism is government ownership and control. Sending check to people does not constitute ownership or control. It does not, in any way, constitute socialism.

The primary complaints about the stimulus programs being “excessive” will come from the Republicans, who want the economy to fail under President Biden.  These are the people who put politics before patriotism.

They want America to suffer, so they will have election talking points. It’s a traitorous lust for power that has become all too common among the right.

Sadly, we fear the left could fall into the trap. Only recently, left-wing supporters of “Medicare for All,” tried to explain it would be paid for via circuitous, convoluted, complex bookkeeping rather than simply telling the truth: The federal government will pay for it, the way it pays for everything: Via ad hoc money creation.

We only can pray that the past year’s multi-trillion dollar federal deficit, combined with federal tax decreases and a growing economy, will educate the populace about Monetary Sovereignty.

Perhaps then, we can use the federal government’s unlimited resources to eliminate poverty and to fund the many heretofore underfunded strategies that will improve our lives.

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. Social Security for all or a reverse income tax
  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

Can you answer these few simple questions about our economy? Your Congressperson won’t.

Let’s begin with a few facts:

  1. Unlike state/local governments, the U.S. government is Monetarily Sovereign. That means it never, NEVER, unintentionally can run short of its own sovereign currency, the U.S. dollar.
  2. Federal taxes do not support federal spending. Even if all federal tax collections ceased, the federal government could continue spending forever.

    Amazon Pay Joins the War on Cash – #hiswai
    The federal government has infinite money. It cannot run short of dollars.
  3. The federal debt and deficit are not a burden on anyone — not on you, not on your grandchildren. On the contrary, when federal debt growth slows, we have recessions and depressions, which are cured by increases in federal debt growth.
  4. Inflations never are caused by federal deficit spending. Inflations always are caused by shortages, most often by shortages of food and/or energy. In fact, inflations often are cured by deficit spending to obtain and distribute the scarce goods.
  5. Federal deficit spending itself is not socialism. Socialism is government ownership and control. That said, some forms of socialism are good for the economy. Examples: Virtually all streets and highways, Social Security, public parks and beaches, many museums and zoos, many rivers and lakes, the military and VA hospitals, many libraries, federal lands, federal buildings, federal agencies like NASA, FBI, and CIA.
  6. Government in itself is neither good nor bad. Government is a tool. The function of the tool is to improve and protect the lives of the people. To the degree it fulfills that mission, it is good. Where it fails that mission, it is bad. Mere size is not an issue any more than the size of the pencil in the voter’s booth is an issue.

Given all of the above, why do we see an article like this? “Congress likely to avert government shutdown, Brady Tax Package heads toward floor vote”

I. Given Congress’s infinite checkbook, why is there even a discussion of a government shutdown?

II. The Democrats had suggested $1,200 checks. Even Trump wanted $2,000 checks. Why was this reduced to $600, and still is being debated, in face of the private sector’s worst financial crisis in many years?

III. Why exclude assistance to states?

IV. Why has Congress struggled for months to produce a plan for preventing/curing the COVID recession, that has hurt so many people?

V. Pfizer Says Millions of COVID-19 Vaccine Doses Are Sitting Unclaimed in Warehouse Coolers. The federal government has not given the company shipping instructions. Why?

You can contact your Senator or Representative– that person to whom you gave your valuable vote — and ask these questions.

Do you think you will get an informative answer? An honest answer? An intelligent answer?

If not, why did you toss away your vote on an uninformative, dishonest, unintelligent fool?

What should Congress really do? Institute the Ten Steps to Prosperity (below) immediately, especially rush Step #3: Social Security for All.

Give me one good reason why not.

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. Social Security for all or a reverse income tax
  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

A disgrace of leadership. Starvation in America.

As you read excerpts from the following article, keep several facts in mind.

  1. Unlike state and local governments, the United States government uniquely is Monetarily Sovereign. It never can run short of dollars. Even if it collected zero tax dollars, the U.S. government could continue spending, forever.
  2. The American people are running short of money, and many are entering a starvation phase they never before had experienced.
  3. U.S. politicians, especially conservatives, claim that federal deficit spending (aka “money printing”) will cause inflation or will have to be paid for by our children. Neither claim is true. They both are part of what is known in economics, as “The Big Lie.”

It is a disgrace. The wealthiest government on earth, having infinite resources, is intentionally allowing its people to fall into starvation.

In the history of the United States, inflation never has been caused by federal deficit spending. Inflation always is caused by scarcity — shortages of vital products, usually food or energy (oil).

And the claim that aid given now will be paid for by our children later, not only is false, but makes no sense on the face of it.

No one pays for federal spending, not our children, not taxpayers, not anyone. All federal spending is funded exactly the same way: The federal government creates new dollars, ad hoc, every time it pays for something.

State and local governments don’t operate that way. They are not Monetarily Sovereign. They use tax dollars to pay their bills. The federal government does not.

What becomes of those federal tax dollars you send to the Internal Revenue Service or the U.S. Treasury? They are destroyed upon receipt. They cease to exist in any money measure. That is why there cannot be a definitive answer to the question, “How much money does the federal government have?” The correct answer is: It has infinite money.

And as for worries about future children paying for federal stimulus dollars, our children are paying now, by sliding into poverty.

Many children and adults will die too soon, by not being able to afford medical care or by inadequate nutrition. Many brilliant brains will be wasted by not being able to afford college.

This is today’s America, the once “golden land,” that now has been turned into “misery land.” And it all is unnecessary.

At the touch of a computer key, our federal politicians could end poverty in America. Yet, because their own bellies are full, they focus only on being re-elected, not on the welfare of the people.

The Democrats want to spend money into the economy; the Republicans refuse. It is that simple.

There is no apolitical way to sugar-coat this. It is the Republican Senate, led by Senator Mitch McConnell, that primarily is responsible for the currently growing poverty in America.

The Democrats are responsible for not explaining the facts to the American people, but at least they want to pump money into the economy. The Republicans don’t.

The blood of today’s impoverished and dying Americans is on GOP hands.

Yahoo Money
Millions of Americans are entering poverty amid pandemic as stimulus runs out
Denitsa Tsekova·Reporter, Sat, October 17, 2020
Millions of Americans have been thrown into poverty as government aid dried up in the last five months, according to a pair of studies, and those ranks will likely swell without more relief on the way.

“Poverty is rising in the United States,” Zach Parolin, a researcher at the Columbia University’s Center on Poverty and Social Policy told Yahoo Finance (video above). “More families, once again, are struggling to put food on the table, struggling to provide for their families at a time when we have the means to be able to help them out.”

Eight million more Americans fell below the poverty threshold since May, a study by Columbia University found. A similar study from the University of Chicago and Notre Dame estimated 6 million Americans entered poverty for the same period.

A figurative “wall” divides federal wealth from starving people. The wall is guarded by Congress.

Without further government intervention, more Americans could follow, facing food insecurity, utility shutoffs, and even homelessness.

What a disgrace, what a cruel disgrace.

Visualize that to the left is a vast pile of wealth — money, food, medicine, education etc. — and to the right are homeless, starving people.

In between is a wall, guarded by the U.S. Congress, intentionally preventing the impoverished people from receiving aid.

That is America, today.

Poverty in the U.S. actually declined at the beginning of the coronavirus pandemic, thanks largely to two provisions in the CARES Act: stimulus checks and the extra $600 in weekly unemployment benefits.

Since then, there has been no second round of checks, and the extra unemployment benefits expired at the end of July.

“That’s just a lot of money that they’re going to have to do without,” Bruce Meyer, a University of Chicago economist, told Yahoo Money. “It means people are going to be cutting back on what they can.”

While the funding provided under the $2.2 trillion CARES Act was the largest economic stimulus package in history, its effects won’t last long enough to support those in financial hardship, especially when the job market and the economy haven’t recovered.

“Unless we see a miraculous employment recovery,” Parolin said, “it’s certain that families are going to need some extra income support to be able to pay the bills and put food on the table.”

The fading effect of the stimulus comes as House Speaker Nancy Pelosi (D-CA) and Treasury Secretary Steven Mnuchin continue talks for a bipartisan stimulus deal.

But disagreements on price tag and key provisions, lack of GOP support, and the proximity of the election all lower the prospects of a deal before the election.

The bottom line is quite clear. The Republicans, having for decades told their constituents that federal deficits are bad for the people and bad for the economy, now do not want to tell the simple truth: Federal deficit spending is necessary for economic growth.

So despite the fact that predictably, deficit spending for stimuli has been beneficial, with none of the politicians’ dire predictions realized, the GOP would rather see people starve than to admit they have been lying all along.

I hate to put this in such stark political terms, but there is no way around it: The Democrats want more stimulus; the Republicans want less. Period.

With no additional support, experts warned that the economy will slow and fewer jobs will be created. Protections for renters and borrowers also are set to expire, likely leading to another increase in poverty.

The so-called “protections for renters and borrowers” merely shifted the pain to landlords and lenders, who also are people suffering from the recession.

The solution is not to transfer pain from one group to another, but rather for the federal government to pump dollars into the pockets of all the people.

Only the federal government can spend money without feeling pain.

“Poverty is going to continue to rise,” Meyer said. “You’re going to have people having had more and more weeks out of work, and only a fraction of those lost earnings replaced. That’s going to accumulate over time.”

The financial hardships caused by this will likely mean a rise in people who can’t pay rent and utility bills, who will struggle to buy food, and who could even lose their homes.

“It’s sad to say,” Parolin said, “we can probably expect to see an increase in homelessness in the United States.”

At least 38 states have paid out all their funds available under the Lost Wages Assistance (LWA) program. (David Foster/Yahoo Finance)

The above article should make you furious. All this pain, all this hunger, all this tragedy in America, coming mostly from the party that promised to “Make America Great, Again,” is completely unnecessary.

Way back in April we published an article titled “The coming depression; The problem and the solution.” It began:

There is no other way to say this. We (in the U.S.) are headed for a depression because we have an incompetent and untruthful government.

Our fundamental problem is the lack of money in the private sector. The solution is for the federal government, which being Monetarily Sovereign has unlimited money, to pump dollars into the economy.

Sorry, but it isn’t any more complex than that.

Problem: Lack of money. Solution: Add money. How much money? What the economy lost due to the virus.

The economy needs at least $7 Trillion net added from the federal government. But, our Congress is spending far too little and spending way too late.

Unless Congress and the President deign to see the light, we have no way to prevent a depression.

That was April, yet Congress and the President still have not seen the light.

So you will suffer, sadly, needlessly, disgracefully. We will have a depression. The blame is directly on the shoulders of Congress and the President. You trusted them. They failed you.

Be sure to vote.

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:

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 or a reverse income tax
  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

The two surprising reasons why the Dems say “More,” and the GOP says, “Less.”

From a humanitarian standpoint, you would expect both parties to want to pump vast amounts of money into the economy. Paying for businesses to stay open, paying for medical services, paying the unemployed, and the newly impoverished — this is exactly what Americans need now.

And from a political standpoint, a huge stimulus check would help grow the economy and prevent a depression, which the GOP, being the party in power, should welcome. Similarly, the Dems, who would benefit in the next election from a weak economy, should oppose stimulus.

But in the byzantine world of Washington, things seldom are as they may seem. The Dems say, “More,” and the GOP says, “Less.” Why?

Let’s look at some background:

1. In the past 50 years, the federal debt (blue) has grown massively, from $280 Billion to $21 Trillion.
2. In the same period, inflation (red) has grown relatively modestly.

Monster increase in federal debt; moderate increase in inflation. And still sustainable.

3. The debt still is sustainable, has not replaced private debt, is not running short of lenders, and is not a “ticking time bomb.” None of the warnings from the debt fear-mongers have come true.
4. Because of Covid, we now suffer from a terrible recession. Many millions of Americans have run short of money, or soon will. They can’t afford even the basics: Food, rent, clothing, transportation, schooling.
5. The federal government has unlimited money. Even without collecting a single penny in taxes, it never can run short of dollars. At the touch of a computer key, the federal government could pump trillions more dollars into the economy. It could give every man, woman, and child survival money.

The U.S. government has the power to ease the fear and suffering of its people, at no cost to anyone. And yet, we see articles like this:

Second stimulus check updates: House Democrats pass partisan $2.2 trillion COVID-19 relief bill as talks on smaller measure drag on

WASHINGTON — Democrats controlling the House narrowly passed a $2.2 trillion COVID-19 relief bill Thursday night, a move that came as top-level talks on a smaller, potentially bipartisan measure dragged on toward an uncertain finish. An air of pessimism has largely taken over the Capitol.

The Democratic bill passed after a partisan debate by a 214-207 vote without any Republicans in support.

The move puts lawmakers no closer to actually delivering aid such as more generous weekly unemployment payments, extended help for small businesses and especially troubled economic sectors such as restaurants and airlines, and another round of $1,200 direct payments to most Americans.

Passage of the $2.2 trillion plan came after a burst of negotiations this week between Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi, D-Calif. The Trump administration delivered concessions Wednesday, including a $400 per week pandemic jobless benefit and a markedly higher overall price tag of $1.6 trillion, but that failed to win over Pelosi.

“This isn’t half a loaf, this is the heel of the loaf,” Pelosi said in a televised interview Thursday. Pelosi spoke after the White House attacked her as “not being serious.”

White House Chief of Staff Mark Meadows has drawn a line in the sand and warns that Trump won’t approve legislation that approaches a $2 trillion threshold.

So, why do the Dems want to stimulate the economy, while the GOP is dragging its feet? Two reasons:

1. The GOP is the “party of the rich.” Gap Psychology shows why the primary goal of the rich is to become richer. The only way to do that is to widen the income/wealth/power Gap between the rich and the rest.

The Gap is what makes them rich; the wider the Gap, the richer they are.

There are two ways for the rich to widen the Gap: Either get more for themselves or force the “non-rich” to settle for less. The COVID recession is forcing the “non-rich” into desperate poverty.

Desperate workers, willing to accept any job at a low wage, are exactly what the rich want. A generous stimulus package would narrow the Gap.

Desperate workers, wider economic Gap: Sounds like heaven to the party of the rich.

2. A stimulus package passed today would primarily affect the post-election economy — much too late to improve the GOP’s political chances this year.

So from the Republican standpoint, why do anything that might help a possibly Democrat administration, especially since the GOP has been locked into the false narrative that deficits are bad?

They would rather wait until they see this year’s election results. Then if they win, they always can ride in heroically to stimulate economic growth before the mid-term elections.

As for the starving, jobless Americans, who cares about them? To the right-wing, they merely are what Modern Monetary Theory refers to as “buffer stock.”

Cynicism is the number one product in Washington.

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. Social Security for all or a reverse income tax
  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