The fake “debt time-bomb,” still ticking after 78 years Wednesday, Aug 1 2018 

Every so seldom, I feel compelled to remind you of the #1 idiocy in economics, the daily, weekly, monthly, and annual warnings that the U.S. federal “debt” is a ticking time-bomb, ready to explode at any moment.

This repeated forecast has been promulgated for at least the 78 years since 1940, with  no end in sight.

In any other science, a repeated failed prediction would be a strong signal that either the facts are wrong or misinterpreted, and its forecasters are wrongheaded.

But, because mainstream economics is not a real science, but rather is akin to a religion, its asinine, proven-wrong forecasts are treated with solemn respect.

Image result for sign the end is near

Any minute, now

Imagine the cult leader who tells his followers to climb the mountain and await the world’s end.

When the world fails to end, they climb back down, but still believe the cult leader’s next “world-is-ending” prophecy.

That is economics.

By way of reminder, the debt in 1940 was $40 Billion, and today it is $16 Trillion. Surely, a gigantic 40,000% increase should have caused that debt bomb to explode.

But no, the debt bomb ticks, perhaps the slowest time bomb in recorded history. And our cult leaders continue their false warnings.

Waiting, waiting, waiting for that debt bomb to explode. Still waiting.

By way of further reminder, here is a bit of history from previous posts:

Back in 1940, the federal budget was a “ticking time-bomb which can eventually destroy the American system,” said Robert M. Hanes, president of the American Bankers Association.

By 1960: the debt was “threatening the country’s fiscal future,” said Secretary of Commerce, Frederick H. Mueller.

By 1983: “The debt “probably will explode in the third quarter of 1984,” said Fred Napolitano, former president of the National Association of Home Builders.

In 1984: AFL-CIO President Lane Kirkland said. “It’s a time bomb ticking away.”

In 1985: “The federal deficit is ‘a ticking time bomb, and it’s about to blow up,’ U.S. Sen. Mitch McConnell.

Later in 1985: Los Angeles Times: “We labeled the deficit a ‘ticking time bomb’ that threatens to permanently undermine the strength and vitality of the American economy.”

In 1987: Richmond Times–Dispatch – Richmond, VA: “100TH CONGRESS FACING U.S. DEFICIT ‘TIME BOMB’”

Later in 1987: The Dallas Morning News: “A fiscal time bomb is slowly ticking that, if not defused, could explode into a financial crisis within the next few years for the federal government.”

In 1989: FORTUNE Magazine: “A TIME BOMB FOR U.S. TAXPAYERS”

In 1992: The Pantagraph – Bloomington, Illinois: “I have seen where politicians in Washington have expressed little or no concern about this ticking time bomb they have helped to create, that being the enormous federal budget deficit, approaching $4 trillion.

Later in 1992: Ross Perot: “Our great nation is sitting right on top of a ticking time bomb. We have a national debt of $4 trillion.”

In 1995: Kansas City Star: “Concerned citizens. . . regard the national debt as a ticking time bomb poised to explode with devastating consequences at some future date.”

In 2003: Porter Stansberry, for the Daily Reckoning: “Generation debt is a ticking time bomb . . . with about ten years left on the clock.”

In 2004: Bradenton Herald: “A NATION AT RISK: TWIN DEFICIT A TICKING TIME BOMB”

In 2005: Providence Journal: “Some lawmakers see the Medicare drug benefit for what it is: a ticking time bomb.”

In 2006: NewsMax.com, “We have to worry about the deficit . . . when we combine it with the trade deficit we have a real ticking time bomb in our economy,” said Mrs. Clinton.

In 2007: USA Today: “Like a ticking time bomb, the national debt is an explosion waiting to happen.

In 2010: Reason Alert: “. . . the time bomb that’s ticking under the federal budget like a Guy Fawkes’ powder keg.”

In 2011: Washington Post, Lori Montgomery: ” . . . defuse the biggest budgetary time bombs that are set to explode.”

In 2014: CBN News: “The United States of Debt: A Ticking Time Bomb”

*On Jun 18, 2015: The ticking economic time bomb that presidential candidates are ignoring: Fortune Magazine, Shawn Tully,

*February 10, 2016, The Daily Bell: “Obama’s $4.1 Trillion Budget Is Latest Sign of America’s Looming Collapse”

*On January 23, 2017: Trump’s ‘Debt Bomb’: Deficit May Grow, Defense Budget May Not, By Sydney J. Freedberg, Jr.

*On April 28, 2017: Debt in the U.S. Fuel for Growth or Ticking Time Bomb?, American Institute for Economic Research, by Max Gulker, PhD – Senior Research Fellow, Theodore Cangeros

And now, for your amusement, here is a sampling of this year’s Henny Penny, sky-is-falling, ticking-time-bomb, scare articles:

America’s Debt Bomb Conservatives and deficit hawks are hurling criticism at Washington for deepening America’s debt hole.

Paying debt servicing costs associated with what America owes is also tying up federal dollars that could be used elsewhere.

The U.S. must pay interest on its outstanding debt, and, given the trillions and trillions of dollars that the country owes, those payments are becoming particularly expensive.

This latest article drips with ignorance. Here are the facts:

  1. The U.S. government is Monetarily Sovereign. It has the unlimited ability to create its own sovereign currency, the U.S. dollar. The U.S. government cannot run short of dollars.
  2. Because the federal government has infinite dollars, its dollars cannot be “tied up,” and there always are plenty of dollars to be “used elsewhere.”
  3. Federal deficit is necessary for economic growth, so the interest the government pays into the economy stimulates economic growth.

And then, there’s this:

CBO: US Debt Burden Set to Break Record in Early 2030s
Growing deficits to push debt to almost 100 percent of GDP by 2028
Jun 26, 2018

CBO Director Keith Hall said that by 2048, “as interest rates rise from their currently low levels and as debt accumulates, the federal government’s net interest costs are projected to more than double as a percentage of GDP and to reach record levels.”

Hall said interest costs would equal spending for Social Security, currently the largest federal program, by 2048.

CBO has long warned that rising debt poses a risk to the economy, and Hall made the point again Tuesday.

“The prospect of large and growing debt poses substantial risks for the nation and presents policymakers with significant challenges,” he said in the statement.

It’s all a lie. Debt/GDP is one of economics’ more meaningless ratios.

Debt/GDP does not indicate the federal government’s ability to pay its bills, nor does it indicate the likelihood of inflation, recession, depression, economic growth, stagflation or any other economic measure.

Being meaningless, it naturally is a favorite of mainstream economists and the media.

Then there is this:

Podcast: Ticking Debt Bomb, Jul 2, 2018

The Congressional Budget Office recently issued an alarming report on the nation’s debt outlook, which CQ senior budget reporter Paul M. Krawzak says should worry millennials.

“A tidal wave of interest payments on the debt is about to hit us.”

And from the reliably wrong, Committee for a Responsible Federal Budget:

National debt is about to roar back to life as a pressing issue
By Maya MacGuineas, Updated 6:03 PM ET, Tue July 31, 2018

As a result of an unprecedented debt binge by Congress over the past year, the national debt is about to roar back to life as a pressing issue after years of hibernation.

The debt didn’t go away. It has been growing by the second ever since, and the dominoes are about to start falling. 

These sums accelerate a coming fiscal freefall and will push the nation over a psychological barrier as soon as next year: trillion-dollar annual deficits.

You would expect worries about debt to center on affordability. If you experience debt problems, your primary concern is, “Can I afford to pay it off.”

You would expect warnings about federal debt to include words similar to: “The government will run short of money.

But those words never are used because unlike state and local governments, the federal government cannot run short of money.

It can pay off any size financial obligation at any time, and despite the massive debt increase, through wars and depressions, the federal government never has failed to pay a debt.

Instead, we are treated to such meaningless generalities as “ticking time bomb,” “looming collapse,” “tidal wave,” “the dominoes are about to start falling,” “coming fiscal freefall,” “psychological barrier,” and “alarming report.”

After seventy-eight years, that ole’ federal debt bomb still is ticking. Meanwhile, it also has been “unsustainable,” “insane,” and “irresponsible,” a “mounting debt crisis,” and servicing is “problematic.”

All of the above are not based on mere ignorance. Instead, they are part of an intentional plan to deceive you.

The very rich .1%, who run America, do not want you of the 99.9% to know that the federal government has the ability to provide far more benefits for you than it currently does.

They want you to believe falsely, that benefits are a burden on the government and require tax increases. In short, they want to convince you to vote against yourself.

It has to do with Gap Psychology, which you can learn about, here.

In brief, the very rich want to widen the Gap gap between them and you, and making false claims about the federal debt is their insidious method.

It works. You have been suckered.

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

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

The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

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 A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All)
(The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Guaranteed Income)) 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 EVERYONE
Five 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
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 FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce 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 business 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.

MONETARY SOVEREIGNTY

A false defense of income inequality Sunday, Jul 29 2018 

Image result for bernanke and greenspan

It’s our little secret. Don’t tell the people we don’t use their tax dollars.

Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

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

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“Gap Psychology describes the desire to distance oneself from those below, and to come closer to those above, on many positive measures — income, wealth, power, education, etc.

In a comparative world, those at the top have two ways to remain at the top or even to increase their distance from the rest: Move higher or move those below, lower.

In America, the top 1% chooses both methods, as evidenced by the efforts of the Republican Party, which gives tax breaks to the wealthy while denying benefits to the poorer.

Excerpts from the following article summarize the right-wing defense of income inequality — a defense that claims income inequality either doesn’t exist or is beneficial to all.

A conservative scholar, Scott Winship, questions whether the US really has an inequality problem
QUARTZ, Written by Dan Kopf

Scott Winship is now one of the most prominent academic skeptics of the idea that rising inequality is harming the US.Quartz spoke with him about the state of the debate on inequality in the US.

Quartz: So let’s start really broadly. Is increasing income inequality in the United States a problem?

Winship: Maybe? There are some empirical questions in the social sciences that are very hard to answer convincingly, and .this is one of them.

The answer is not all that difficult. There is significant evidence that increasing income inequality is a problem.

Who, other than perhaps Mr. Winship, is willing to claim that the poorer are equal to the richer in crime commission and victimization, diet, health, education, housing, and political power?

Crime commission and victimizationThe poorer are more likely to be victims and perpetrators of crime than are the richer:

As Aristotle said, “Poverty is the parent of crime.” That is why Chicago’s affluent “North Shore” suburbs have almost no violent crime, while Chicago’s poorer neighborhoods are rife with violence.

A disproportionate number of shooters and victims are poor.  The problem is lack of money, not innate morality.

There’s a powerful correlation between cities’ income inequality and their crime rates, including both property and violent crime.

How Income Inequality Affects Crime Rates
In a 2002 study by World Bank economists Pablo Fajnzylber, Daniel Lederman, and Norman Loayza, it was found out that crime rates and inequality are positively correlated within countries and also between countries. The correlation is a causation – inequality induces crime rates.

Economist Gary Becker says an increase in income inequality has a big and robust effect of increasing crime rates. Poverty alleviation has a crime-reducing effect.

Diet: The poorer tend to have worse diets than do the richer:

Health: The poorer tend to live shorter, less healthy lives than do the richer.

In the United States between 2001 and 2014, higher income was associated with greater longevity, and differences in life expectancy across income groups increased.

Education: The poorer tend to be less educated than are the richer:

2011-11-02-Screenshot20111102at11.52.53AM.png

2011-11-02-Screenshot20111102at11.50.09AM.png

Statistical Abstract of the United States, US Census Bureau.

No one doubts that housing is positively related to income.  Yes, Mr. Winship, the richer do live in better houses than do the poorer.

Political power:

The richer have more political power than do the poorer. Political representation functions reasonably well for the affluent. But the middle-class and the poor are essentially unrepresented, unless they share the preferences of the well-off.

Dictatorships and plutocracies operate on the reality that richer people have more political power than do poorer people.

None of the above is surprising, but Mr. Winship seems to downplay its significance. His conservative approach can be summarized: Income inequality may not really exist, and anyway it’s not harmful.

As he says:

It’s not the case that the rich are getting richer and the poor are getting poorer, which is a concern many people express.

The middle class and the poor have actually seen their incomes go up quite a bit over the last 40 years. Median household income is at an all-time high.

Overall poverty, child poverty, and poverty among the kids of single mothers are at all-time lows.

The story for the middle and the bottom is a lot better than most folks believe.

Aside from cherry-picking statistics, Mr. Winship ignores the fact that rich” and “poor” are relative terms, not absolutes.

If you earn $10,000 a year, while others earn $1,000, you are rich, and the $1,000 earners are poor. 

But if you earn $10,000, and everyone else earns $100,000, you are poor.

In both examples, you earned $10,000, but in the first, you were rich and in the second you were poor.

So, whether or not America’s middle class and poor may have increased income, is a diversion. Income inequality has risen.

The poorer are getting poorer. The richer are getting richer.

GINI ratio: Higher numbers = more inequality. (0 = Everyone earns the same; 100 = One person earns all.)

Winship continues:

Conservatives tend to believe that income inequality increases economic growth, which benefits the middle and the bottom.

You can call it “trickle down.” The liberal position is often that every dollar that goes to the top is a dollar that is taken away from the middle and the bottom.

Winship wants you to believe that widening the income Gap benefits the middle and the poor more than does narrowing the Gap.

But as you will see, he skirts the inequality issue, and merely says everyone benefits when the total economy grows, so why worry about inequality?

Further, no economically educated person, liberal or otherwise, believes that the total of available dollars is fixed, so that “every dollar that goes to the top is a dollar that is taken away from the middle and the bottom.” He’s putting conservative words into liberal mouths.

I’ve found that countries that have higher inequality tend to have higher living standards for the middle class and the poor.

I would not assert strongly that that is a causal relationship. But it is not what you would expect to find if inequality was bad for growth.

He doesn’t reference the research that supposedly shows higher income inequality equates to higher living standards, perhaps because such research doesn’t exist.

If you go the CIA’s World Fact Book, you’ll see no such relationship. Quite the opposite.

The GINI ratios of third-world nations tend to cluster above the U.S. score, while first-world European nations all fall below — exactly the opposite of Winship’s claim.

Winship says:

I have argued for an Office of Opportunity in the White House to make income mobility a national priority. In my version of this office, it would spend about $20 billion a year on local experiments to promote school readiness among young kids.

I think we really have to focus on younger kids because of the vast test score gaps by income and by race when kids start school.

He acknowledges “vast test score gaps by income and by race,” yet “questions whether the US really has an inequality problem.”

Then comes the “lazy poor” myth espoused by the rich:

I think the evidence from welfare reform is that a lot of people that aren’t working can work, and that it would actually reduce their poverty and increase their income if they could be encouraged to do so.

I don’t look at work requirements being punitive, I look at it as being better for a lot of people receiving those benefits.

The rich claim the poor are slothful “takers,” and need to be “encouraged” (via punishment) to work. Apparently, just being poor is not punishment enough.  Winship wants to make them poorer, as additional “encouragement.”

He says:

The policies liberals pursue to try to expand mobility too often revolve around just spending more money. They tend to think if you are cutting programs that is bad for mobility, and if you are expanding programs that is good for it.

Yet, Winship wants a $20 billion-per-year Office of Opportunity, to increase income mobility, but doesn’t want to spend more money on the poor, because the poor supposedly are unmotivated to improve.

If this makes sense to you, please explain it to me.

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IN SUMMARY: “Poor” and “rich” are comparatives, not absolutes. The rich become richer either by increasing their own wealth or by decreasing the wealth of those below them.

Income inequality leads to inequality in crime commission and victimization, diet, health, education, housing, and political power.

While humans are not all equal, today’s level of American income inequality is incompatible with a well-functioning democracy.

The Ten Steps to Prosperity is a recommendation for dealing with excessive income inequality.

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

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

The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

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 A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All)
(The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Guaranteed Income)) 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 EVERYONE
Five 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
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 FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce 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 business 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.

MONETARY SOVEREIGNTY

The great “socialism” fakeout Friday, Jul 27 2018 

Either by ignorance or intent, those opposed to anything progressive, paint every government spending initiative as “socialism.”

So let’s begin by erasing that bit of misdirection:

Merriam Webster, Definition of socialism
1 : any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods
2 a : a system of society or group living in which there is no private property
b : a system or condition of society in which the means of production are owned and controlled by the state
3 : a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done

In short, socialism means government ownership and administration, not merely government spending and aid.

One would think (hope) that the media would understand that before writing negative articles about America’s so-called “socialism,” but the desire to misinform the public on behalf of the rich 1% seems eternal.

Here are excerpts and comments from a typically wrongheaded article from the 7/27/18 issue of the Chicago Tribune:

Spoiled children of America drawn to socialism
Cal Thomas

For the current generation, it appears one thing is more seductive than sex — and that’s socialism.

Sen. Bernie Sanders, I-Vt., and 28-year-old Alexandria Ocasio-Cortez, winner of a New York Democratic primary, are the old and new faces of socialist America.

Their platforms, it appears, hinge on the concept of shared wealth — in other words, handing out free stuff to just about everyone.

Not only does Mr. Thomas express his disdain for fact by claiming “the current generation” is “socialist,” but he also exhibits disdain for narrowing the Gap between the rich and the rest.

He and the rich, dislike “shared wealth.” In his dystopian world, the poor should stay poor, or perhaps become even poorer. How dare they wish for more?

And seemingly, only the rich deserve “free stuff” in the form of massive tax breaks and business subsidies, unavailable to us of the riffraff.

Note to Mr. Thomas: “Free stuff” is not “socialism.” Free stuff is what the federal government provides to the populace, every time it deficit spends.

1. The “free stuff” includes military protection, roads, dams, and bridges, research and development, along with Social Security, Medicare, Medicaid, aids to education, poverty aids, and thousands of other benefits that provide the reasons for the government to exist.

2. The “free” part comes from the fact that our federal government is Monetarily SovereignIt has the unlimited ability to create its sovereign currency, the U.S. dollar. The federal government never can run short of dollars.

(If you doubt this, try to learn how many dollars the federal government has.)

Thus, it does not need to ask anyone for the dollars it creates at will. It doesn’t need to ask you for tax dollars and it doesn’t need to ask China for dollars. And when the government receives those dollars, it doesn’t use them.

U.S. dollars sent to the U.S. government simply disappear from any definition of the world’s dollar supply. Effectively, dollars received by the U.S. government are destroyed.

3. And merely handing out or spending dollars is not “socialism.” It is what the federal government is designed to do. It is the way government functions.

Mr. Thomas’s primary concern seems to be that the not-rich 99% might receive a decent share of federal spending. But rather than honestly stating that concern, he hangs the “socialism” pejorative on it.

Continuing with excerpts from his article.

How far we’ve come from JFK’s admonition not to ask what your country can do for you, but what you can do for your country.

Today, for many, it’s all about what you should expect from your country with little or no reciprocity.

JFK’s admonition was silly on its face. Government is a collection of laws — a tool invented by people.

The entire purpose of government is to benefit people.

Kennedy’s overly poetic line is akin to saying, “Ask not what your hammer can do for you; ask what you can do for your hammer.” Or perhaps more accurately, “Ask not what the law can do for you; ask what you can do for the law.

In a word, senseless.

And yes, the tool should not expect or be given “reciprocity.”

It is undeniable that capitalism has raised more boats than socialism has sunk. Yet, socialism’s appeal continues, despite historical and contemporary evidence that it delivers a bad deal for those who embrace it.

Every government has some elements of socialism, i.e government ownership and control. The federal government owns and controls the military, the FBI, CIA, federal highways, NASA, and a good deal of acreage, particularly in the West.

But those comprise only a small part of the giant U.S. economy, and are a long, long way from a “socialist” government.

In an article for Reason magazine in May, Steve Chapman, a columnist and editorial writer for the Chicago Tribune, referenced a University of Chicago GenForward Survey of Americans, ages 18 to 34.

The survey found that “62 percent believe we need a strong government to handle today’s complex economic problems.” Only 35 percent said “the free market can handle these problems without government being involved.”

Anyone who thinks “the free market can handle complex economic problems without the government being involved,” is a fool.

Is there any time in human history when the anarchy, Mr. Thomas seemingly favors, has benefitted the people?

The survey, noted Chapman, found that “Overall, 49 percent hold a favorable view of capitalism — and 45 percent have a positive view of socialism,” with socialism scoring higher approval among African-Americans, Hispanics and Asian-Americans.

Note the typical, right-wing dig at those “lazy” African-Americans, Hispanics and Asian-Americans.

Sixty-one percent of Democrats have a positive view of socialism, which is not surprising, while 25 percent of Republicans favor it, which is a surprise.

Nothing is surprising when people are asked questions about something of which they know nothing. The respondents were random people, 18 to 34. What percent of those young people know what “socialism” and “capitalism” are?

It is a ridiculous survey, comparable to asking 18-34-year-olds whether they would prefer a “noocracy” or a “kritarchy.” The sole effect is to demonstrate the ignorance of economics lingo by an age group’s (if one can call 18-34 a “group”) .

Continuing with the article:

I have at least three takeaways from this.

Related image

Mr. Thomas’s “spoiled rotten” poor who, seduced by socialism, have not sacrificed blood, sweat and tears.

The first is that it’s likely most of those who favor socialism have never lived in a country where it is practiced.

A few months in Venezuela might be the perfect cure.

Second, people who claim to prefer socialism to capitalism are probably reaping capitalism’s benefits.

This group of misinformed comrades includes parents who gave their pampered millennials a lifestyle they likely would never have enjoyed under a socialist regime.

The third takeaway is that those who favor socialism over capitalism and socialist countries over America are spoiled rotten.

They are part of a generation that has never had to serve in the military and, I would venture to guess, do not know anyone who is serving or has served, other than maybe a grandparent, whose values many seem to have rejected.

People seduced by socialism have likely not had to sacrifice much for their country.

They seem to take it for granted that the freedoms they enjoy, even the freedom to believe in a political and economic system that is anti-freedom, dropped from the sky and were not achieved by the hard work, blood, sweat and tears (which they think is the name of an old rock group) of others.

I have three takeaways from Mr. Thomas’s rant;

First he, like the respondents, not only has no idea what socialism is, so to claim that Americans actually want socialism is disingenuous. No Americans want a government similar to the dysfunctional, Venezuelan government — and Thomas surely knows it.

Second, Mr. Thomas strangely equates economics knowledge with serving in the military and with not being “spoiled rotten.”

I do not know what percent of U.S. soldiers understand the true meaning of socialism, though if they did, they would understand that they receive their pay and instructions from the most socialist organization in America — completely owned, funded, and administered by the federal government.

I also do not know why Mr. Thomas considers soldiers less “anti-freedom,” and less “spoiled rotten” than the rest of America’s workers.

Soldiers do exactly as they are directed and live exactly where they are told, and in return are given room, board, and education. How “free” and “unspoiled” is that?

Third, Mr. Thomas seems to think that people receiving benefits from the government do not have the moral right to those benefits, because they have not worked hard nor sacrificed blood, sweat, and tears.

Really? Yes, that is the right-wing mantra: The poor don’t work as hard as the rich. Does it get any more foolish than that?

And finally, we come to the typical right-wing, pseudo-moralistic rant about the poor receiving federal benefits:

Socialism stifles incentive and makes people dependent on government, not themselves, which appears to be the liberal ideal.

Some would rather get a check than earn one. Look at the TV ads advertising toll-free numbers, free shipping and other free incentives, which are not free at all. Their cost is simply added to the product you purchase.

It’s enlightening to learn that self-reliant Mr. Thomas does not depend on government. Apparently, he will refuse protection from our military and from his local police and fire departments, and from the CIA, FBI, NSA et al.

He will refuse Social Security benefits and Medicare benefits. He will refuse to ride on the highways, streets, and roads built by governments. He will not take medicines or eat foods judged safe by government agencies.

He will not fly in airplanes, because they all are supervised by a federal agency.  His children will not attend school grades 1 – 12, most of which are government owned and directed. Nor will any attend federal military colleges.

He will refuse FDIC protection for his money, and indeed, he will not use U.S. dollars, for they are created by the federal government.

And of course, he never, never will use a toll-free number or accept that free shipping he loathes.

The list goes on and on about all the things Mr. Thomas will forego to maintain his unique, manly, and moral self-reliance.

And just when you believe his nonsense has reached its apex, Mr. Thomas ends his article with a bit more:

Socialism is little more than mutually shared poverty, a version of “spreading the wealth around” with government taking from the productive and giving to the nonproductive.

Progressivism is not socialism, and absolutely is none of the above. Rather than mutually shared poverty, it is mutually shared prosperity. (See The Ten Steps to Prosperity.) It does not involve the government taking from the productive (presumably the 1%) and giving to the nonproductive (we folks of the 99%.)

But Mr. Thomas acts clueless about that, though at the very end of his article, he makes one good point:

Do Democrats really want to embrace socialism heading into the next two elections? If so, they can expect the same defeats they have suffered in the past — think George McGovern and Walter Mondale.

Each thought the American people were taxed too little and that big government was the answer.

It isn’t, and it never will be.
Tribune Content Agency
caeditors@tribpub.com

Messrs. McGovern and Mondale were not socialists, nor did they think the American people were taxed too little, two common, right-wing lies.

They believed the gap between the rich and the rest is too wide, and that the federal government should obey its mandate of benefitting the people by narrowing that gap.

This does not require increasing federal taxes for the simple reason that federal taxes do not fund federal spending.

Because the federal government cannot run short of U.S. dollars, it does not need taxes. Even if all federal taxes were $0, the federal government could continue spending forever.

But Mr. Thomas is right about one thing: The public has been misled, and does not understand the meaning of “socialism,” “capitalism,” and “Monetary Sovereignty.”

So progressives wrongly are tarred with the “socialist” label, which costs them votes.

Lying that federal benefits are socialism is the way the wealthy keep the 99% down, and Mr. Thomas is just a pawn in their chess game.

The GINI ratio measures income inequality. Higher ratio = more inequality.  US inequality is the highest in 50 years, and perhaps ever.

In summary, equating progressivism with socialism is a Big Lie, the sole purpose of which is to widen the Gap between the rich and the rest.

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

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

The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

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 A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All)
(The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Guaranteed Income)) 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 EVERYONE
Five 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
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 FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce 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 business 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.

MONETARY SOVEREIGNTY

Absolute proof that H.L. Mencken was right — in 3 articles. Wednesday, Jul 25 2018 

Here are three related articles showing absolute proof that H.L. Mencken was right:

1. Air pollution is the single largest environmental health risk in Europe,” says the EEA.
NewScientist, By Andy Coghlan

Air pollution kills 7 million people a year, worldwide. In the US, the figure is about 200,000. Most of us will die earlier from the toll it takes on our health.

Filthy air killed half a million people in Europe prematurely in 2014. So says a report on air quality from the European Environment Agency.

Related image

Reuters: Air pollution linked to asthma in children and teens

Nitrogen dioxide, mostly from vehicle exhausts, cut short an estimated 78,000 lives across the same 41 countries.

Heart disease and stroke are the most common reasons for premature death attributable to air pollution, and are responsible for 80 percent of cases,” the report says.

Air pollution also contributes to other respiratory diseases and cancer, and has non-lethal impacts on diabetes, Alzheimer’s disease, pregnancy and brain development in children.

The UK saw many premature deaths from exposure to nitrogen dioxide: about 14,000. This was compounded by widespread use of diesel fuel in vehicles.

Summary: Air pollution sickens and kills, adults and children.

2. Trump could move this week to end California’s clean-car authority
By: David R. Baker, a San Francisco Chronicle staff writer.

For automakers, it could create years of uncertainty over which standards their cars must meet.

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From 9/1/17, new cars must pass stricter emissions tests before they can be driven on European roads.

“These were issues that were resolved 9 years ago, and it’s almost like picking at a scab that healed long ago and reopening it, only to cause the automakers a lot of bleeding,” said Simon Mui, a senior scientist and clean vehicles specialist at the Natural Resources Defense Council, an environmental group.

The administration will propose stopping planned increases in fuel efficiency after 2020 and challenging California’s unique ability to set its own auto air pollution standards.

Thirteen other states and the District of Columbia also follow California’s emission standards.

Since 1970, California has had under the federal Clean Air Act the ability to set air pollution standards that are more stringent than the federal government’s. Although the state initially used that power to regulate smog-causing pollutants, it has become a key weapon in the state’s fight against climate change.

President Barack Obama took California’s standards nationwide. So California’s standards are now in sync with the federal government’s. Trump has made rolling back Obama’s environmental and climate programs a high priority.

An annual report issued this month by the California Air Resources Board found that California has already met its 2020 goal for cutting greenhouse gas emissions back to 1990 levels. State law now calls for slashing emissions another 40 percent by 2030.

“In California, transportation has been the only sector where emissions have been flat or even going up, so this is very important,” said Daniel Sperling, a member of the Air Resources Board and founding director of UC Davis’ Institute of Transportation Studies. “By simple math, if we don’t get the substantial reductions from vehicles, we’ll have to get them from industry or some other way.”

The administration’s actions could place automakers in a bind.

Shortly after President Trump’s election, an auto industry lobbying group sent him a letter asking for more flexibility in the fuel-mileage program. But the prospect of an across-the-board freeze — and another protracted fight between California and the federal government — appears to have unnerved the industry. Top executives of Ford, for example, spoke out this spring against a rollback.

And a long legal fight between the state and federal governments could make it difficult for the automakers to plan, since the process of designing, engineering and introducing a new car typically takes more than three years.

Summary: Trump wants to end anti-pollution efforts because they are an Obama initiative, supposedly they are a burden on automakers, and climate change isn’t happening.

But, the automakers don’t want Trump’s plan to end anti-pollution efforts.

3. Donald Trump’s Approval Rating Inches Higher, Buoyed by Republican Support
In the latest WSJ/NBC News poll, the president’s job approval rose to 45%
By Michael C. Bender, Updated July 22, 2018 10:15 p.m. ET

Mr. Trump’s job approval rating rose to 45% in a new Wall Street Journal/NBC News poll, the highest mark of his presidency and up 1 percentage point from June.Related image

The survey was taken over a four-day period that started July 15, a day before Mr. Trump’s news conference with Mr. Putin in which he questioned the conclusion of U.S. intelligence agencies that Russia meddled in the 2016 election.

Underpinning Mr. Trump’s job approval was support from 88% of Republican voters. Of the four previous White House occupants, only George W. Bush, in the aftermath of the Sept. 11, 2001, terrorist attacks, had a higher approval rating within his own party at the same point in his presidency.

Summary: Trump opposes efforts to cut the pollution that kills adults and children, and causes damaging climate change. Forty-five percent of Americans and 88% of Republicans, think he is doing a good job.

Mencken was right:

“No one in this world, so far as I know — and I have searched the records for years, and employed agents to help me — has ever lost money by underestimating the intelligence of the great masses of the plain people. Nor has anyone ever lost public office thereby.”
H. L. Mencken

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

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

The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

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 A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All)
(The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Guaranteed Income)) 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 EVERYONE
Five 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
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 FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce 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 business 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.

MONETARY SOVEREIGNTY

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