Why does the federal government resist education? Sunday, Sep 8 2019 

Intelligent Americans long have recognized that our future national success rests on the shoulders of our educated populace. They are the ones who will lead us.

That is why today, every municipality offers free education for grades K-12.

On April 23, 1635, the first public school in what would become the United States was established in Boston, Massachusetts. Known as the Boston Latin School..

After the U.S. Revolution, northern states especially emphasized education and rapidly established public schools.

By the year 1870, all states had tax-subsidized elementary schools. The US population had one of the highest literacy rates in the world at the time.

Private academies also flourished in the towns across the country, but rural areas (where most people lived) had few schools before the 1880s.

By the close of the 19th century, public secondary schools began to outnumber private ones.

We live in the 21st century, when a widespread college education is as important to America’s success as a high school education was in the 19th century. Yet still, we cling to the archaic notion that while elementary school and high school are paid for by governments, college and beyond must be paid for by individuals.

The time has come to realize that American leadership always has required universal education, the only difference being that in the 1800’s an elementary school, and then later a high school education were sufficient, while here in the 2000’s, advanced education has becomes necessary.

Sadly, we have not yet learned that lesson. We insist on making it difficult for American students to receive the best possible education:

Bloomberg: U.S. Student Loan Debt Sets Record, Doubling Since Recession
By Alexandre Tanzi, December 17, 2018, 4:00 AM CST
Student debt outstanding reaches a record $1.465 trillion
Borrowers over age 50 debt rises by $28.8 billion in one year

U.S. student loan debt outstanding reached a record $1.465 trillion last month.

Image result for student debt 2019

American college students are drowning in debt.

“Over 90% of student loans are guaranteed by the U.S. Department of Education, meaning that if a recession causes a rise in youth unemployment and triggers mass defaults, this contingent liability could prove burdensome for the U.S. government budget,” said Paul Della Guardia, economist at the Institute of International Finance in emailed comments.

Get it? Mr. Della Guardia is more concerned about a non-existent burden on the U.S. government than on the real problems of youth unemployment and mass defaults.

The so-called “burden” on the U.S. government is non-existent because the U.S. government is Monetarily Sovereign. It never can run short of its own sovereign currency, the U.S. dollar. It can pay any size debt denominated in dollars. Federal debt, no matter how large, never can be a burden on the federal government.

Federal Reserve Chairman, Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”

By contrast, indebted students are monetarily non-sovereign. They can and often do, run short of dollars and become insolvent.Related image

A Bloomberg analysis found that students who took a loan in 2012 have had a much more difficult time making their monthly payments compared to students who received loans shortly before and after — students who have had a similar amount of time to pay them down.

A large percentage of those who took out loans in 2012 are currently 24-33 years old, an age where many are generally establishing themselves in their careers.

Borrowers in this group entered the labor force when the unemployment rate was twice as high as today and may have found it difficult to find a career track in their desired field.

Further adding to the difficulties faced by this group was that finding a position in 2012 took almost three times longer than today, according to data from the Bureau of Labor Statistics.

The interest rate for a direct student loan disbursed on or after July 1, 2018, and before July 1, 2019, is more than 100 basis point higher than those issued in 2012 adding to the concern about the size of student loan debt outstanding.

Many student loan borrowers face significant debt burdens. Over 2.7 million borrowers owe in excess of $100,000, of which, about 700,000 owe $200,000 or more, according to data from the U.S. Department of Education. One year earlier, 2.5 million owed in excess of $100,000.

The single largest asset on the Federal government’s balance sheet is Student Loans— the amount students owe to the federal government, which neither needs nor uses the money.

By not recognizing the national importance of advanced education, we have doomed an entire generation to failure — a failure that significantly will reduce America’s competitive and strategic successes.

This is more than shortsighted. It is part of the same plan that attempted to eliminate ACA (“Obamacare”), cut Medicare, cut food stamps, cut Social Security, and cut consumers’ protections against business fraud.

It is a reflection of the Gap Psychology of the rich who run America.

Gap Psychology is the desire to distance oneself from lower-income/wealth/power people, while coming closer to the higher income/wealth/power people.

There were times in America, when Gap Psychology ruled:

When it was a crime to teach slaves how to read and write.

When women were not allowed to vote.

When immigration from Ireland was blocked: “The refugees seeking haven in America were poor and disease-ridden. They threatened to take jobs away from Americans and strain welfare budgets. They practiced an alien religion and pledged allegiance to a foreign leader. They were bringing with them crime. They were accused of being rapists. And, worst of all, these undesirables were Irish.” (Does this sound familiar?)

As is usual with the very rich, Gap Psychology is far more important than compassion for the less fortunate or concern for America’s future. Thus anything that would benefit the middle- and lower-income groups, i.e. narrow the Gap, is strenuously resisted.

Even some in the middle-classes are complicit, when they adopt the shortsighted, “If I had to pay, they should pay” position.

It’s the old question,  “Why can’t crabs escape a bucket? Answer: When some try to climb out, the others pull them back down.” That is a version of Gap Psychology in which a man doesn’t want former peers to succeed, opening a new Gap between him and them (aka, “envy.”)

And that is why today, we do not have a national system of free advanced education. It’s urgently needed, but the rich don’t want it.

Most parents can’t afford to place their children in exclusive, private or preparatory schools.

For the majority of U.S. families, public education is the only option. Public elementary and secondary education money usually flows from three sources: the federal, state and local governments. According to the U.S. Department of Education, states contribute nearly as much as local governments, while the federal government supplies the smallest share.

Yet, it is the federal government that is best able financially to pay for education.

We’ll close with excerpts from the following article:

The former student loan ombudsman for the Consumer Financial Protection Bureau (CFPB) believes that agency has been a “complete failure” over the last year and has “completely walked away from its mission” regarding student loan borrowers.

Seth Frotman, who resigned in protest in August 2018, expressing outrage at the then-leadership’s treatment of the nearly $1.5 trillion student loan industry, asserted that things have gotten even worse since his departure.

“I honestly don’t say this lightly, but I don’t know how you could look at the things that have happened over the last year … [and] under the new leadership of the bureau and not say that it is a complete failure in doing its job on behalf of student loan borrowers,” Frotman said. “The current political leadership at the CFPB has prioritized the interests of the student loan industry over the very real plight of the 44 million Americans who have student loan debt.”

We have suggested as part of the Ten Steps to Prosperity, Steps #:

See: 4. Free education (including post-grad) for everyone (Tuition, supplies, transportation, meals, etc. all should be funded by the federal government.)
See: 5. Salary for attending school (Many students drop out of high school to enter the employment world early because they and their families need the money. Even with scholarships, many families cannot afford to send their children to high school, let alone to college and beyond.)

In summary
Millions of our best and brightest young people are hamstrung by lack of money. Not only do finances force children to leave high school or college early, but those who are able to attend college face onerous loan repayments to a government that has unlimited money and does not need to collect money from students.

These loan repayments prevent many young people, who are in the usually most productive growth years of their lives, from investing time, money, and talent into businesses and scientific pursuits that would have benefitted America. Lack of finances turns productive years into lost years.

America is forgoing the national benefits that these young brains could provide.

As a result, America no longer is a world educational leader.

Excerpts from 11 FACTS ABOUT EDUCATION IN AMERICA

–30 years ago, America was the leader in quantity and quality of high school diplomas. Today, our nation is ranked 36th in the world.
–1.3 million high school students don’t graduate on time yearly. States with highest rates (80-89%) are Wisconsin, Iowa, Vermont, Pennsylvania and New Jersey. States with lowest (less than 60%) are Nevada, New Mexico, Louisiana, Georgia and S. Carolina.
–A student living in poverty is 13 times less likely to graduate high school on time.
–In the workplace, 85% of current jobs and 90% of new jobs require some or more college or post-secondary education.
–Only half of the students who enter a 4-year school will receive a bachelor’s degree within 6 years.

Advanced education is as important a protector of America’s future as is the military. The government should be doing everything possible to fulfill this need.

The federal government should stop resisting education, and pay off all student loans, then eliminate the need for student borrowing and student indebtedness. America needs an educated populace.

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

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The most important problems in economics involve the excessive income/wealth/power Gaps between the richer and the poorer.

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

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

Ten Steps To Prosperity:

1. Eliminate FICA

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 you.

MONETARY SOVEREIGNTY

The student loan debacle Saturday, Dec 3 2016 

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

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Last May, we posted: The Money Trap: Student loans.  You should read it.

It compared the student loan debacle to: Indentured servitude, the “numbers game,” and loan sharking, all illegal in America, but apparently legal for the federal government.

Today, I saw these data on a site called, Student Loan Hero:

It’s 2016 and Americans are more burdened by student loan debt than ever.

You’ve probably heard the statistics: Americans owe nearly $1.3 trillion in student loan debt, spread out among about 44 million borrowers.

In fact, the average Class of 2016 graduate has $37,172 in student loan debt, up six percent from last year.

General student loan debt facts

First, let’s start with a general picture of the student loan debt landscape. The most recent reports indicate there is:

  • $1.26 trillion in total U.S. student loan debt
  • 44.2 million Americans with student loan debt
  • Student loan delinquency rate of 11.1%
  • Average monthly student loan payment (for borrower aged 20 to 30 years): $351

If those numbers weren’t stunning enough, here’s a closer look at how students accumulate debt based on the type of school they attend.

In 2012, 71 percent of students graduating from four-year colleges had student loan debt:

  • Represents 1.3 million students graduating with debt, increase from 1.1 million in 2008
  • 66 percent of graduates from public colleges had loans (average debt of $25,550)
  • 75 percent of graduates from private nonprofit colleges had loans (average debt of $32,300)
  • 88 percent of graduates from for-profit colleges had loans (average debt of $39,950)

Graduate student loan debt

About 40 percent of the $1 trillion student loan debt was used to finance graduate and professional degrees.

Combined undergraduate and graduate debt by degree:

  • MBA = $42,000 (11% of graduate degrees)
  • Master of Education = $50,879 (16%)
  • Master of Science = $50,400 (18%)
  • Master of Arts = $58,539 (8%)
  • Law = $140,616 (4%)
  • Medicine and health sciences = $161,772 (5%)

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Here are the top 6 lenders of 2016 — (the businesses making billions from student loans):

earnest@2x /> citizens@2x logo_sofi_2016 lendkey@2x

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“I started Student Loan Hero in 2012 because you shouldn’t need a finance degree to understand your student loans. Since then, we’ve been lucky enough to help over 100,000 people better understand and eliminate over $2 billion dollars of student loan debt!”

Andy Josuweit · Co-Founder & CEO Student Loan Hero

Andy, I’m sure you do good work, but if the truth about federal financing were known, you wouldn’t have a business.  There would be no student loans and no need for thousands of students and their families to pay you to “eliminate over $2 billion dollars of student loan debt.”

JUST A FEW QUESTIONS:

Why does the federal government pay for our military?

Why does the federal government pay for our roads, bridges, and other infrastructure?

Why does the federal government pay to inspect our food and our pharmaceuticals?

Why does the federal government pay for a federal court system?

Why does the federal government do all the things it does for us?

Because the purpose of the federal government is to advance the best interests of America.

Does education advance the best interests of America? Of course. That is why the states and cities pay billions to educate children from grades K through12 and has for many years.

The states and cities pay for schooling, while the federal government provides loans. LOANS!

Here we have the cash-strapped, monetarily non-sovereign states and cities paying outright for K-12, while our  Monetarily Sovereign government, which never can run short of dollars, is providing LOANS.

These loans force students, who don’t come from wealthy families, into debt — debt that can last for years — debt that can travel through the generations — debt that hurts credit ratings, discourages college attendance and harms America.

The whole thing is nuts. 

Check out the 10 Steps to Prosperity, (See below) Step #4:  Our Monetarily Sovereign government, which never can run short of its own sovereign currency, should provide: FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE.

No taxes needed. No loans needed. No burden on anyone or any thing.

Of course, the lenders, who are raking in billions from their guaranteed, not-dischargeable-in-bankruptcy loans wouldn’t like losing all those easy dollars rolling in.

But should that be America’s primary concern?

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

Every day, the American public is pummeled with the Big Lie, that federal taxes pay for federal spending, and student loans is the result.

WANTED: ONE POLITICIAN WHO WILL TELL THE TRUTH ABOUT OUR MONETARY SOVEREIGNTY. HELLO? ANYONE?

If you, dear reader, do not understand MONETARY SOVEREIGNTY, and the reasons why the federal government should support education, I urge you to click the links. Don’t allow yourself to be one of the ignorant oppressed.

Then contact your Senators and your Representative

Rodger Malcolm Mitchell
Monetary Sovereignty

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

The single most important problems in economics involve the excessive income/wealth/power Gaps between the rich and the rest.

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

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

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

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

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

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

A shameful graph Friday, Aug 12 2016 

Education is important to America.

Of the many investments the federal government could make, few would have a greater positive impact on the American economy than education.

When you visualize the things that make America special compared to other large nations, like China and India, advanced education is one of the first things that comes to mind.

So it is sad that Americans believe making advanced education difficult to afford, somehow is normal or acceptable.

Steps #4 and #5 of the Ten Steps to Prosperity (below) tell why the federal government can and should fund college educations for all those who want them.

Instead, we have the following shameful graph.

STUDENT DEBT

In case you wonder why we intentionally put our students into debt, the answer is quite simple: Student loans widen the Gap between the rich and the rest.

Gap widening, rather than mere income, is the primary motivation of the rich. It is the Gap, not just their own incomes, that makes them rich (Without the Gap, no one would be rich; we all would be the same). The wider the Gap, the richer they are.

Thus, keeping the non-wealthy down is just as important to the rich as lifting their own incomes up. Either way, the Gap is widened.

Every wealth stratum wants the Gap between them and those lower, to be widened. That is why so many lower-to-middle-income people resent aid to the poor. Such aid narrows the Gap, bringing the poor uncomfortably closer to those in the middle.

When the federal government lends to students, interest payments remove stimulus dollars from the economy,  and all loan repayments punish borrowers, who primarily are middle-income (The rich don’t use student loans).

The federal government, being Monetarily Sovereign, neither needs nor uses any form of income. To pay its bills, the government creates dollars ad hoc. There is no economic purpose for student loan payments to a government that has no use for the money.

When the lender is a private bank, the bank is enriched by a loan that is difficult to discharge in bankruptcy.  It is a “forever” loan, passed down through the generations — perfect for Gap widening:

Business Insider: America’s crushing surge of student debt, now at $1.2 trillion, has bred a disturbing new phenomenon: School loans that span multiple generations within families.

Weighed down by their own loans, many parents lack the means to fund their children’s educations without sinking even deeper into debt.

  • School loans increasingly belong to Americans over 40. This group accounts for 35 percent of education debt, up from 25 percent in 2004
  • Student loan balances average $20,000 for Generation X adults — those from 35 to 50 years old.
  • Gen-X parents who carry student debt and have teenage children have struggled to save for their children’s educations. Many of their children will need to borrow heavily for college, thereby perpetuating a cycle of family debt.
  • Student debt is surpassing groceries as a primary expense, with the gap widening most for younger families.

And if the above weren’t shameful enough, consider this graph, also supplied by Business Insider:

w704

Student loans are listed on the government’s books as its largest financial asset. Millions of American families are in debt to the federal government for educating children.

In reality, this is all just record-keeping. The federal government has no need for financial assets, because as mentioned earlier, it creates all the dollars it needs, ad hoc, when it pays its bills.

Thus, the government has discovered yet another, powerful Gap-widening device, designed to keep millions of families in financial bondage for many years, even for generations.

(Among such Gap-widening devices are federal sales taxes, FICA, and high-end income taxes on 401k mandatory distributions.) 

State and local governments are monetarily non-sovereign. They need income in order to pay for K-12 education.

The federal government is Monetarily Sovereign. It needs no taxes or loan repayments to fund a college education for every American who wanted one.

All those additional educated minds would greatly benefit America. No one knows how many potential Nobel winners America has lost lack for of the finances to attend college.

Even the time away from work is too expensive for many people. The federal government should pay for that, too.(Step #5)

But the rich don’t want federal funding for college; it would narrow the Gap. Despite what Presidential and Congressional campaigning may indicate, the rich, not the politicians, run America.

College debt is another destgructive result of The Big Lie, the lie that federal taxes fund federal spending.

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

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

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

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

MONETARY SOVEREIGNTY

Student loans and the unforgivable debt Thursday, Dec 17 2015 

Twitter: @rodgermitchell; Search #monetarysovereignty

Facebook: Rodger Malcolm Mitchell

Mitchell’s laws:

•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.

•The more federal budgets are cut and taxes increased, the weaker an economy becomes..

Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

•The single most important problem in economics is the Gap between rich and the rest..

•Austerity is the government’s method for widening the Gap between rich and poor.

•Until the 99% understand the need for federal deficits, the upper 1% will rule.

•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..

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I know of no undertaking more important to the growth, success and survival of America than the education of our people.

Our forefathers knew it:

Historical Timeline of Public Education in the US

1647: The General Court of the Massachusetts Bay Colony decrees that every town of fifty families should have an elementary school and that every town of 100 families should have a Latin school.

1790: Pennsylvania state constitution calls for free public education but only for poor children. It is expected that rich people will pay for their children’s schooling.

1817: A petition presented in the Boston Town Meeting calls for establishing of a system of free public primary schools. Main support comes from local merchants, businessmen and wealthier artisans. Many wage earners oppose it, because they don’t want to pay the taxes.

1820: First public high school in the U.S., Boston English, opens.

1827: Massachusetts passes a law making all grades of public school open to all pupils free of charge.

1851: State of Massachusetts passes first its compulsory education law.

Today, free education, grades K – 12, is available to virtually all Americans, and mostly mandatory for those 18 and under. This education is paid for by monetarily non-sovereign governments: State, county, city, village — i.e., it is paid for by taxpayers.

Through time, mechanization and technology have made America’s competitiveness and success dependent on education beyond grade 12.

1945: At the end of World War 2, the G.I. Bill of Rights gives thousands of working class men college scholarships for the first time in U.S. history.

The “Ten Steps to Prosperity” (below) contains two steps directly addressing education:

4. Free education (including post-grad) for everyone. Click here

5. Salary for attending school (Click here)

The November 30th issue of Time Magazine contains an article titled, “But can America afford this approach to solving the student debt,” by Haley Sweetland Edwards:

“I’m a correspondent at TIME. Previously, I was an editor at the Washington Monthly, where I wrote about policy and regulation. I studied philosophy and history at Yale and journalism and politics at Columbia.”

Some thoughts from Ms. Edwards’s article:

Tens of millions of Americans collectively owe $1.3 trillion in student debt.

In the past eight years, the federal government has quietly, almost imperceptibly, changed the rules of the loan game. It has made itself the primary bank for students and put in place an expansive new safety net.

Rather than owing for-profit lenders, students will owe dollars to the federal government, which being Monetarily Sovereign, has no need to collect dollars from students.

A key provision allows all federal borrowers to cap their monthly payments at 10% or 15% of their discretionary income and wipes any remaining balance off the books after 20 or 25 years.

The great “improvement” is that students will not be in debt for life; they will be in debt “only” for their first 20-25 years after college, the prime family-building times of their lives.

Paying this debt effectively will require their children to apply for school debt, and so the cycle will continue.

Bush and Rubio have advanced higher-education plans that would overhaul the accreditation process to clear the wary for new, online institutions offering cut-rate degrees.

The thought of online institutions offering cut-rate degrees to the masses, makes one shiver.

It is the perfect right-wing solution, guaranteed to widen the gap between the rich (who can afford the best brick-and-mortar universities), and the rest (who will be “educated” by cut-rate, online schools.)

Hillary Clinton offers a smorgasbord approach, including cutting loan-interest rates, expanding existing grant programs and offering rewards to colleges that keep their tuition low.

In short, she offers the typical left-wing, complex, convoluted Obamacare-esque sort of, not quite, pretend solution to two problems that need real solutions: Eliminating onerous student debt and educating our population.

And now, for the inevitable Big Lie:

But this new federal safety net contains serious flaws. The Brookings Institution estimated that it could cost taxpayers $250 billion over the next 10 years.

Wrong, of course. Taxpayers do not fund federal spending. That is the basis for Monetary Sovereignty, and is the fundamental difference between the Monetarily Sovereign federal government and the monetarily non-sovereign state and local governments.

And here, Ms. Edwards repeats the Big Lie:

It allows (students) to run up vast debts . . . and to leave future taxpayers holding the bag.

Oh, well, it is ever thus. Anyway, she gets down to the rest of the problem:

Perhaps most damning, while the program takes the pressure off students, it does nothing to control the actual price of tuition, which has risen like crazy for years.

It also arguably makes it more likely that tuition will rise even more quickly in the future, as students’ ability to pay becomes a moot point.

First, it won’t really be a “moot point,” because student still will pay. The rich ones will pay out of their own checkbooks, and the rest again will take out loans. The loan payments merely will be capped.

But let’s get beyond the details and explore the theory, which is: Federal support makes ability to pay moot, so prices will rise. Is this a justifiable concern and is it a real problem?

The closest parallel I can think of is Medicare. It pays most of the doctors’ bills. And if you ever review those bills to see what Medicare pays doctors, you will find that far from being out of control, they are so “in control,” that most doctors are underpaid.

With but few exceptions, doctors net less today than they did in the pre-Medicare days. Medicare actually has held down fees. So much for the effects of the “moot point.”

Though health care costs have risen, most of that rise can be attributed to more sophisticated and expensive tests with more sophisticated and expensive machines and better hospital facilities. (Are you old enough to remember when nearly all hospital rooms were “doubles,” “triples” or “wards”?)

But, let’s say, for argument sake, that university tuitions do rise dramatically, because of the “moot point” effect, and that the federal government pays a great deal more, and schools and teachers get rich. Here’s what would happen:

–The government would pump more dollars into the economy, which would grow the economy.

–The public schools would receive more dollars, requiring less state taxes to support them.

–Some private schools would expand and improve their facilities while others simply would get rich

–Teachers’ pay would increase, resulting in more people and better people wanting to be teachers.

–Students wouldn’t have to shop around for scholarships, some of which require free labor (Think: Athletic scholarships)

–Schools wouldn’t have to shop around for donors, many of whom come with “strings” (Think: Koch brothers dictating curriculums)

Frankly, I can’t imagine a single reason why rising, federally funded tuitions would be harmful, and if there are any, surely the benefits would outweigh them.

Ms. Edwards’s article includes many interesting points, and I advise you to read it in the Time Magazine issue. But all her points have to do with loan capping, scholarships and grants, and none really levels the playing field between the rich and the rest, and none eliminates the financial penalty for attending college.

So we are left with two questions:

1. Is it in America’s best interests for all those who want a college education to be able to afford it?

2. Should the federal government fund what is in the nation’s best interests?

At the end of World War II, our answer to both questions was, “Yes.” Sadly, we have drifted away from sense and into the Big Lie. We have made it more difficult to earn a college education, when we should be making it easier.

Bottom line: The entire student loan program is unforgivable, in every sense of that word.

Rodger Malcolm Mitchell

Monetary Sovereignty

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Ten Steps to Prosperity:

1. Eliminate FICA (Click here)

2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)

3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.

4. Free education (including post-grad) for everyone. Click here

5. Salary for attending school (Click here)

6. Eliminate corporate taxes (Click here)

7. Increase the standard income tax deduction annually Click here

8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)

9. Federal ownership of all banks (Click here and here)

10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)

The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.

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10 Steps to Economic Misery: (Click here:)

1. Maintain or increase the FICA tax..

2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.

3. Cut federal employment in the military, post office, other federal agencies.

4. Broaden the income tax base so more lower income people will pay.

5. Cut financial assistance to the states.

6. Spread the myth federal taxes pay for federal spending.

7. Allow banks to trade for their own accounts; save them when their investments go sour.

8. Never prosecute any banker for criminal activity.

9. Nominate arch conservatives to the Supreme Court.

10. Reduce the federal deficit and debt

No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.

1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)

2. All deficit spending grows the supply of dollars

3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.

4. The limit to non-federal deficit spending is the ability to borrow.

THE RECESSION CLOCK

Recessions come only after the blue line drops below zero.

Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.

#MONETARYSOVEREIGNTY

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