The inevitability of endless war. What is wrong with that? Wednesday, Oct 9 2019 

No one wants endless war.

War brings so much death and destruction, and the terrible loss of the world’s youth to the ambitions of the world’s leaders. We all want wars never to begin, and once begun, to end quickly.

But since WWII, the U.S. seldom has unequivocally won a war. Even after wars seemingly are won, skirmishes continue, sometimes flaring up, then cooling, but seldom ending with that familiar formal signing procedure.

With the cooperation of numerous allies, we defeated the Axis of Germany, Italy, and Japan. With that victory — and much money — we made them our allies.

Since then, we have engaged in numerous conflicts, been soundly defeated in one (Vietnam) and still are waging many others.

I was reminded of this by an article that appeared recently in THEWEEK magazine. Some excerpts are illustrative:

The strategic incoherence of Trump’s Syria critics
Damon Linker

Trump’s apparent decision to permit Turkey to conduct military operations against (until now) American-backed Kurdish forces near the Turkish border in Syria has nothing to do with geopolitical strategy or any process of foreign policymaking beyond his personal and business relationship with Turkey’s quasi-authoritarian president Recep Tayyip Erdogan.

The most common response to Trump’s announced change of course in Syria has been a cry of lament for the fate of Kurds, who may well find themselves the target of Turkish attacks.

How can we abandon allies who fought by our side against the Islamic State and allow them to be crushed by a dictator like Erdogan?

(But) the Kurds aren’t our allies. Allies are defined by mutuality: We promise to defend a given state if attacked, that state promises to defend us if we are attacked.

The Kurds, a stateless ethnic group found in Turkey, Syria, Iraq, and Iran, has zero capacity to come to America’s defense.

If the U.S. has an ally in the region, it is … Turkey, a member of NATO, an explicit defense alliance. Do those denouncing Erdogan favor ejecting Turkey from NATO, thereby revoking the country’s status as an American ally?

Mutuality is not part of the definition of “allies,” and certainly not equal mutuality. The Kurds have aided us by fighting ISIS. In that alone, they are our allies.

One alternative to ejecting Turkey from NATO, or abandoning the Kurds, is simply to do what we have been doing: Station enough US soldiers there in Syria to prevent a Turkish attack.

Strangely, the author does not mention that alternative, because the implicit belief is that somehow we must preclude endless American involvement.  The belief that we never must be involved in an endless war.

It is a misguided belief. We have endless responsibilities, and some of them require endless war.

When critics of Trump’s policy shift want to sound harder-nosed, they move beyond Turkey and the Kurds and talk instead about how irresponsible it would be to give up the fight against ISIS: If we don’t stay in Syria, terrorists will grow powerful again, threatening the U.S. homeland like they did on 9/11!

The first thing to be asked in response to those making such claims is whether they think it’s possible for the U.S. to win any war anywhere in the world.

The above is based on the false belief that wars must be won, as they often were in the old days, followed by bringing our boys home.

Wars do not need to be won or lost. They can forever be holding actions, or if not “forever,” then for no end in sight.

Consider the police. Is their goal to end all crime, at which time they can “come home”? Or more realistically, will we forever have to wage a “war against crime,” and always be required to station cops around the country?

Can we realistically set a goal for our firefighters to no longer battle blazes? Can we set a goal for our doctors to no longer battle illness? Just cure everyone and get out?

More realistically, should the police, firefighters and doctors plan to engage forever, in endless wars?

If the battle against ISIS is measured against the goals enunciated at the start — the elimination of ISIS’s territorial caliphate — it has been a smashing success. We won. The caliphate is gone.

Yet now the goalposts have been shifted. Sometimes it sounds like the goal is to make sure ISIS or a successor Islamist organization doesn’t arise.

At other times it appears to mean something even more amorphous, like the complete elimination of any person who might aspire to revive the caliphate at some time in the future.

But is that a sensible foreign policy goal? Keeping an American military footprint in the desert of Syria and Iraq in order to exert control over what happens there for fear that it may possibly cause eventual harm to the United States, a continent and an ocean away?

Yes, that is a sensible foreign policy, which the U.S. is well able to afford financially, so long as minimal lives are lost.

There is no realistic alternative to an endless, religious war. Even if leaders of all participating groups came together and signed a peace treaty, there always will remain some faction who is dissatisfied with the outcome.

And that faction will simmer in resentment, soon to begin another conflict.

America, even with our massive armies, never will completely defeat ISIS, so long as there is at least one, hate-filled fighter who, seeking revenge, gathers together yet another guerilla army.

Even assuming this makes sense, for how long should it continue? Five more years? Ten? Twenty? More? And what metrics should we use to evaluate whether it’s really benefiting the country, or is working, or has worked?

Like the cop, firefighter, doctor analogies, it can continue indefinitely, so long as the threat remains viable.

The war against alcohol (aka, “Prohibition”) never was won and never could be won. At best we can fight a holding action by licensing, taxing, and age restrictions.

Similarly, the “war on drugs” was doomed to failure, because the goals and expectations were unrealistic. We never could defeat drug use.

No one wants to say because no one has an answer that makes sense.

It’s enough, they think, to speak gravely and vaguely about dire threats and keep us doing the same thing — always expanding American commitments abroad, never pulling them back, and never even prioritizing among them. Anywhere.

Surely we can and should prioritize them, just as a village may prioritize the location of its cops: Which corners are more important; which speed limits should be set?

The U.S. is committed, all at once, to defending Europe, including serving as a check on Russia’s ambitions in Eastern Europe, and to defending Israel.

It also wants to micromanage regional rivalries across the Middle East in perpetuity. And keep a lid on terrorist activity across North Africa. And win an 18-year-old game of Whack-a-Mole against the Taliban in Afghanistan.

And contain North Korea. And stand toe to toe with a rising China. And determine the outcome of a political transition in Venezuela.

The author complains about our multitude of obligations, but with great power comes great responsibility. The alternative would be a world in which brutal dictators rule everywhere, a world that declines into a dark-ages mentality.

Clearly, America should have better planning than what a government led by Donald Trump can provide. But even poor planning takes us some distance from total dereliction.

Depending on cost and affordability, it is an ongoing job, with no real end date.

That’s a lot for any country to handle intelligently or wisely — because having such control-freak ambitions in the world isn’t intelligent or wise in the first place.

That doesn’t mean that Donald Trump’s acting out in defiance of Washington’s foreign policy consensus makes sense.

But it does mean that those who oppose the president need to do more than run screaming back into the arms of that consensus without reflection on its many unacknowledged problems and confusions.

The biggest problem is the strange belief that the US should pull its soldiers out of harm’s way, and instead surround ourselves with a huge wall, and pretend we now are safe.

Some wars never end. The police fight crime; the firefighters attack fires; the doctors fight illness; the teachers fight ignorance; the U.S. continually must fight to remain safe and free.

Given America’s wealth and military power, we must try to be the world’s policeman. It is our ongoing “forever” job. 

Do not decry endless war. Embrace it as a “long view” that endless war is a better, more realistic than the alternative. It is the price we must pay for security.

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

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The most important problems in economics involve:

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

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

Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

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

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

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

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

Right vs. left vs. Trump: The great Gap Psychology misunderstanding. Tuesday, Oct 8 2019 

For as long as I have been alive, which now exceeds 80 years, the right-wing (conservatives) and the left-wing (progressives) have seen the same world with different eyes.

Though generalities, by definition, do not apply to all cases, one can say that conservatives wish to “conserve” and progressives wish to “progress.”

This fundamental difference manifests in several ways. Conservatives are more likely to be “originalists,” wishing to interpret the Constitution through the eyes of the original drafters, while progressives wish to interpret the Constitution through the eyes of someone living today.

Image result for opposites photo

When viewed through original eyes vs. today’s eyes, many issues can be seen quite differently.

Gun ownership, aid to the less fortunate, abortion, voting rights, female rights, religion, speech, morals, war, government power, etc. — identical facts often are interpreted in opposition — and perhaps no more so than today, by people who sincerely want a better world, but merely see different paths for getting there.

Donald Trump has exaggerated the differences so that opposing sides neither understand, nor seemingly even want to understand, the others.

The reason is that Trump, who formerly was a Democrat, then myseriously became a Republican, does not have a philosophy regarding any of the above issues, but rather employs the philosophy: “What’s best for Trump is best for the world.”

To achieve his personal goals, Trump deliberately has set the two sides in bitter opposition through the politics of hate.

In Trump’s world, the only good people are those who support him, and all the others must be destroyed. Compromise is weakness. Apology is weakness. Compassion is weakness. The truth is what he claims it is.

Why does this Trump-centric philosophy have strong appeal to a large number of people?

It begins with the fact that Trump demonstrates hatred of the same people his followers hate: The poor, the non-white, the immigrants, the non-Christians, the gay, the progressives.

Seemingly, the people Trump admires most are hate-mongering strongmen, dictators like Vladimir Putin, Kim Jong-un, Rodrigo Duterte, and Recep Tayyip Erdoğan.

And all this hatred has its basis in Gap Psychology.

The foundation of hatred is fear.

It is almost impossible to hate someone or something unless you fear them in some way. Do you hate the poor? Do you fear they will impinge on your neighborhood, alter your life in some way, take money from you?

Do you hate the non-white for the same reasons, or that they will bring criminality or unwanted changes to your life? Do you fear the non-Christians for their “alien” beliefs that will affect your own beliefs? Do you fear the gays for turning your children gay? Do you fear the progressives for their support of the people you fear?

Gap Psychology describes the fear that the upper-income/wealth/power groups have of the lower-income/wealth/power groups. Imagine the fear and loathing many people feel when a ragged panhandler approaches.

Trump exploits these often-latent fears and brings them to the surface. He tells you Mexicans are rapists and criminals. He tells you Muslims are terrorists.  He tells you immigrants will take your job.

He tells you the poor will take your money, and the progressives will take your guns and kill your babies and steal your money. He tells you only he can save you.

And this politics of fear works on those who are most susceptible to belief in conspiracy theories and undocumented allegations. The politics of fear works on those who already are afraid.

This “fear-of-the-other” is merely a subset of Gap Psychology, which has two parts:

  1. Wanting to distance oneself from those “below” you on any socio-economic measure, and
  2. Wanting to come closer to those “above” you.

The importance of Gap Psychology in our daily lives cannot be overstated. It, along with Monetary Sovereignty, describes almost everything that happens in the world of Economics.

Quoting from What is Gap Psychology? A brief explanation”

“Gap Psychology affects the clothes you wear, the house in which you live, the schools you attend, the car you drive, the stores and restaurants you frequent, the church you attend, your job, your hobbies, your vacations, your voting, the person you marry, even the name you give your child.”

Gap Psychology is both cohesive and dividing. Evolution has retained it as an integral part of higher-level social species’ interactions. It both strengthens and weakens groups.

Gap Psychology creates ambition and enthusiasm, aversion and disgust. It supports dictators and causes wars. Gap Psychology is the basis for Donald Trump’s hate-mongering power.

Economists don’t speak of or even consider Gap Psychology, and it is seldom if ever taught in economics courses,  which represents a huge hole in the science.

Teaching economics without teaching Gap Psychology is comparable to teaching mathematics without arithmetic.

Gap Psychology not only should be part of every economics course. It should be a part of every class. It is that fundamental.

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

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

The most important problems in economics involve:

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

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

Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

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

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

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

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

Will the whistleblower be protected? Wednesday, Oct 2 2019 

Trump told reporters, “We’re trying to find out [who the whistle-blower is]…when you have a whistle-blower that reports things that were incorrect, as you know, and you’ve probably now have figured it out, the statement I made to the president of the Ukraine—a good man, a nice man, new—was perfect, it was perfect, but the whistle-blower reported a totally different statement, like a statement that was not even made…. The call was perfect.”

“Perfect,” is a strange way to describe a phone call. Have you ever made a “perfect” phone call?

My own belief on this is:

Someone at the White House may have warned Trump about asking a foreign government to take action against a Trump political opponent.

They must have told Trump such a request would be illegal.

So Trump, in his ignorance, thought his phone call had danced around the subject sufficiently to get the message across without being specific enough to break the law.

How else can one explain Trump, having told his lackeys to stonewall all requests for information, now allows a transcript to be made public?

Trump stupidly must have assumed he had been “perfect,” and the release would demonstrate his “innocence.”

More troubling is that in violation of the Whistleblower Protection Enhancement Act of 2012, Trump issued this not-so-veiled threat:

“Of course I’m trying to unmask the whistleblower. I want to know who’s the person who gave the whistle-blower the information because that’s close to a spy. You know what we used to do in the old days when we were smart with spies and treason, right? We used to handle it a little differently than we do now.”

Not only has Trump broken the law with his infamous “Do us a favor . . . ” phone call, but he has compounded the illegality by threatening the whistleblower.

For your reference, here are some excerpts from the Act:

The Whistleblower Protection Enhancement Act of 2012 will strengthen the rights of and protections for federal whistleblowers so that they can more effectively help root out waste, fraud, and abuse in the federal government.

Whistleblowers play a critical role in keeping our government honest and efficient.

Moreover, in a post–9/11 world, we must do our utmost to ensure that those with knowledge of problems at our nation’s airports, borders, law enforcement agencies, and nuclear facilities are able to reveal those problems without fear of retaliation or harassment.

That seems clear enough, but . . .

Unfortunately, federal whistleblowers have seen their protections diminish in recent years, largely as a result of a series of decisions by the United States Court of Appeals for the Federal Circuit, which has exclusive jurisdiction over many cases brought under the Whistleblower Protection Act (WPA).

Specifically, the Federal Circuit has wrongly accorded a narrow definition to the type of disclosure that qualifies for whistleblower protection.

Additionally, the lack of remedies under current law for most whistleblowers in the intelligence community and for whistleblowers who face retaliation in the form of withdrawal of the employee’s security clearance leaves unprotected those who are in a position to disclose wrongdoing that directly affects our national security.

The withdrawal of security clearances specifically mentioned in WPA is a tactic Trump already has used to punish enemies, real or assumed:

More than 175 former U.S. State Department and Pentagon officials added their names to a statement signed by former national security officials criticizing President Donald Trump’s decision to cancel the security clearance of former CIA director John Brennan.

While they may not agree with all Brennan’s public attacks on Trump, the statement read, they believe “the country will be weakened if there is a political litmus test applied” before former officials are allowed to voice their views.”

Further in the Whistleblower Protection Enhancement Act:

Often, the whistleblower’s reward for dedication to the highest moral principles is harassment and abuse.

Whistleblowers frequently encounter severe damage to their careers and substantial economic loss.

Protecting employees who disclose government illegality, waste, and corruption is a major step toward a more effective civil service. In the vast federal bureaucracy it is not difficult to conceal wrongdoing provided that no one summons the courage to disclose the truth.

Whenever misdeeds take place in a federal agency, there are employees who know that it has occurred, and who are outraged by it. What is needed is a means to assure them that they will not suffer if they help uncover and correct administrative abuses.

What is needed is a means to protect the . . . conscientious civil servants deserve statutory protection rather than bureaucratic harassment and intimidation.

Though this was written in 2002, it could not have more accurately described a government run by Donald Trump.

Because of the dangers posed by a government run amok, Congress tried to prevent future “Trumps” from doing what dictatorial bureaucrats tend to do: Punish the innocent for disclosing the guilty.

Unfortunately, in the years since Congress passed the WPA, the Merit Systems Protection Board (the MSPB) and the Federal Circuit narrowed the statute’s protection of ‘‘any disclosure’’ of certain types of wrongdoing, with the effect of denying coverage to many individuals Congress intended to protect.

Both the House and Senate committee reports accompanying the 1994 amendments criticized decisions of the MSPB and the Federal Circuit limiting the types of disclosures covered by the WPA.

Specifically, this Committee explained that the 1994 amendments were intended to reaffirm the Committee’s long-held view that the WPA’s plain language covers any disclosure.

It is critical that employees know that the protection for disclosing wrongdoing is extremely broad and will not be narrowed retroactively by future MSPB or court opinions.

Without that assurance, whistleblowers will hesitate to come forward.

Despite the clear wording and intent of the law, Trump and his followers see nothing wrong with him saying, “Of course I’m trying to unmask the whistleblower.”

Disclosing the name of the whistleblower would be a serious violation of federal law.

The acting director of national intelligence says a whistleblower “did the right thing” by coming forward to report concerns over the White House’s handling of a call between President Donald Trump and Ukraine’s leader.

Joseph Maguire told the House intelligence committee at a hearing on Thursday the whistleblower followed the law “every step of the way.

Combine a lawless President, who cares nothing for America, but only for himself, plus a gaggle of sycophantic enablers, who approve of his every misdeed, and add to that a timid, cautious Democratic party fearful of possible backlash , and you have a nation teetering on the brink of tyranny.

Already, we have a President who has been involved in an astounding amount of immorality and outright criminality:

Inaugural committee disclosure violations, obstruction of justice, tax evasion, violation of the Emoluments Clause, sexual misconduct, defamation, conflicts of interest, financial fraud, bank fraud, perjury, suborning perjury, witness tampering, acting as an agent of a foreign government, using a charitable foundation for personal expenses, influence peddling, nepotism, etc.

Today’s America is but a short hop from fascism, and unless Congress retakes morality and Constitutional powers, we will suffer the same tragedy as did Nazi Germany.

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

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

The most important problems in economics involve:

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

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

Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

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

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

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

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

Every month, millions of people are told the earth is flat Wednesday, Sep 25 2019 

The Balance, according to their website:

“The Balance makes personal finance easy to understand. It is home to experts who provide clear, practical advice on managing your money.

“With more than 24 million monthly visitors, The Balance is among the top-10 largest finance properties. Our more than 50 expert writers have extensive qualifications and expertise in their topics, including MBAs, PhDs, CFPs, other advanced degrees and professional certifications.

“The Balance family of sites have been honored by multiple awards in the last year, including The Telly Awards, The Communicator Awards, and Eppy Awards.”

That is truly impressive — 24 million people every month, 50 expert writers, multiple awards, college degrees. They are a major source of information for the public.

Specifically, let us consider their U.S. economy expert, Kimberly Amadeo:

KIMBERLY AMADEO
US Economy Expert
Kimberly is the author of The Obamacare Handbook and Beyond the Great Recession, and has been quoted as an economic expert by Fox Business, US News and World Report, and The Huffington Post.

She has authored hundreds of articles on economic topics ranging from health care reform to monetary policy to global trade. Kimberly has been the U.S. Economy Expert for The Balance, and prior to that, About.com, since 2006.

In addition, Kimberly has more than 20 years of senior-level corporate experience in economic analysis and business strategy, and received an M.S. in Management from the Sloan School of Business at M.I.T.

With that introduction, let us see what Ms. Amadeo has to say. Here are a few excerpts from one of this year’s articles:

US Federal Government Tax Revenue
Who Really Pays Uncle Sam’s Bills?
BY KIMBERLY AMADEO Updated May 18, 2019
The U.S. government’s total revenue is estimated to be $3.643 trillion for Fiscal Year 2020.

That’s the most recent budget forecast from the Office of Management and Budget for October 1, 2019, through September 30, 2020.

We pause to remind you that the federal government, which uniquely being Monetarily Sovereign and having the unlimited ability to create U.S. dollars, neither needs nor uses your tax dollars.

The federal government, unlike state and local governments, never unintentionally can run short of dollars.Related image

Taking more than $3.6 trillion from the economy every year represents a giant economic loss.

Visualize the effect of dumping more than $3.6 trillion down the toilet, every year.  That is what your federal taxes accomplish.

Continuing with excerpts from Ms. Amadeo’s article, I’ll comment directly to her:

So where does the federal government’s revenue come from? Individual taxpayers like you provide most of it. Income taxes contribute $1.822 trillion, over half of the total. Another third, $1.295 trillion, comes from your payroll taxes.

Corporate taxes add $256 billion, only 7%. The Tax Cut and Jobs Act cut taxes for corporations much more than it did for individuals. In 2015, corporations paid 11% and income taxpayers paid 47%.

The best way to reduce the individual tax burden is to reduce government spending, not shift the burden to corporations.

No, Ms. Amadeo, the best way to reduce the federal individual tax burden is to reduce federal individual taxes. 

Recessions (vertical gray bars) begin with declines in federal deficit growth (red line) and are cured by increases in federal deficit spending. 

Federal spending benefits Americans. Reducing federal spending would reduce those benefits, and lead to recessions and depressions.

The government’s annual income only pays for 77% of spending. It creates a $1.1 trillion billion budget deficit.

The $1.1 trillion budget deficit inserts $1.1 trillion growth dollars into the economy. It more properly should be called an economic surplus.

And, Ms. Amadeo, the federal government’s annual income pays for nothing. The government creates brand new dollars, ad hoc, every time it pays a creditor.

When the federal government pays a creditor, it sends instructions to the creditor’s bank, instruction the bank to increase the balance in the creditor’s checking account.

The instant the bank does as instructed, new dollars are created and added to the nation’s money supply. Deficit spending is the federal government’s primary method for creating economic growth dollars.

Shouldn’t Congress only spend what it earns, just like you and me?

Here, Ms. Amadeo, you had the perfect opportunity to explain the difference between a Monetarily Sovereign federal government’s finances,  and a monetarily non-sovereign individual’s finances.

While a Monetarily Sovereign entity never can run short of its own sovereign currency, I have no sovereign currency. So my income is less than my spending, I can run out of money. The federal government can’t.

Since the federal government neither needs nor uses income, and can create unlimited amounts of money, there is absolutely no reason for Congress to spend what it earns.

Pants on fire.png

Pants on fire

By failing to explain this difference, Ms. Amadeo, you help perpetuate the Big Lie of federal –  personal finance equivalence. Unfortunately, you expound upon the Big Lie, and write the single, most wrong-headed, completely false paragraphs in the entire article:

It depends on where the economy is in the business cycle. Congress should use deficit spending to boost economic growth in a recession. It uses stimulus spending to create jobs.

Once the recession is over, the government should live within its means and spend less. It should raise taxes, if needed, to reduce the deficit and the debt. That will keep the economy from overheating and forming dangerous bubbles. Congress should switch from expansionary to contractionary fiscal policy.

Think about it, Ms. Amadeo. Why would Congress want to “boost economic growth” only “in a recession”? It makes no sense at all. And later in your article, you contradict yourself on this point.

Today, as I write this comment, we are not in a recession. Why would I not want to “boost economic growth, today?

And stimulus spending creates jobs by growing the economy and by providing the goods and services the populace desires. Why is this a bad thing?

After missing the opportunity to educate, Ms. Amadeo, you execute a confused turnaround and write:

The revenue collected equals 16.3% of gross domestic product. That’s the nation’s measurement of economic output.

If that much production is going to the federal government, then you want to make sure it’s reinvested into the economy to support future growth.

Let’s examine that last phrase. “It” (federal tax revenue”) is not reinvested in anything. It is destroyed upon receipt.

Then, Ms. Amadeo, you admit that federal investment “into the economy to supports future growth,” but you previously opposed federal investment into the economy, unless there is a recession.

Revenues would be much higher without the Trump tax plan. It was also lowered by the extension of the Bush tax cuts and the Obama tax cuts. They were meant to fight the 2001 recession and the 2008 recession.

They were supposed to spur the consumer spending that drives almost 70% of economic growth.

But most people didn’t even realize this happened since the tax cut showed up as reduced withholding instead of a check.

Instead of spending the cuts, people used some of it to pay off debt. The recession scared people into saving more and using credit cards less. So, the budget didn’t expand enough to spur economic growth.

The above is mystifying. Do you, Ms. Amadeo, not realize that the deficit spending you decry — the deficit spending that began in 2008 — caused the recovery and 11-year massive growth that continues even today?

Now that the recession is over, those tax cuts should be reversed. Taxes should be increased, not cut.

An economic expansion is the time to pay off the debt, not add to it.

Uh, Ms. Amadeo, news flash: The recession has been “over” for 11 years. It ended because of federal deficit spending. Now you want to create another deficit by taking more dollars out of the economy?

And exactly why do you want to pay off the federal debt?

First, the federal government never can run short of dollars, so why does the “debt” trouble you?

Second, the so-called “debt” isn’t really debt in the classic sense. The federal debt is the total of deposits into Treasury Security (T-bill, T-note, T-bond) accounts, which are paid off every day, simply by returning the dollars in those accounts.

Thus, the so-called federal “debt” (unlike state and local government debts) is not a burden on the federal government, nor is it a burden on taxpayers.

What is a burden on taxpayers? Taxes.

IN SUMMARY
Kimberly Amadeo and THE BALANCE claim to reach more than 24 million readers each month. This platform would give them an excellent opportunity to educate the populace and to dismiss pernicious and damaging myths about the American economy.

Instead, out of ignorance or intent, they have chosen to perpetuate the Big Lie that federal finances are like personal finances, and that stimulative federal deficit spending should be reduced and limited to times of recession.

The Big Lie has led to many trillions of dollars unnecessarily being taken from the economy, a depletion that has resulted in repeated recessions and even depressions through the years.

Millions of people every month, rather than being enlightened, are told the world is flat.

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

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The most important problems in economics involve:

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

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

Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts a, b & d, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

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

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

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

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

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