“Lügenpresse”: Hitler’s “fake news.” We’re making the same mistake, again. Sunday, Dec 10 2017 

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It takes only two things to keep people in chains:

The ignorance of the oppressed
and the treachery of their leaders.

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Back on (ironically) July 4th, 2015, we compared Donald Trump with Adolph Hitler (Hitler in America. Why a bigot can win the Presidency).

We made the same comparison on December 7th (also ironically) 2015 in the post: Hitler redux.

And again on Sep 30, 2016 (Astounding similarities: Hitler in America. It’s happening now.)Image result for trump

We may not have been the first to call attention to the massive similarities between Trump and Hitler. Over the months, we were not the only ones. And surely we won’t be the last.

Trump is following the Hitlerian playbook and unfortunately, many of us Americans are following the German people’s playbook.

Hitler preyed on discontent. He told the German people they were being treated unfairly, and he alone could save them. They believed what they desperately wanted to believe. Some still do.

From a September 2016 article in Newsweek:

Image result for hitler

Trump is capitalizing on a longing for charismatic leadership, to which even highly developed Western democracies seem very susceptible when democratic structures fail to deliver all the desired outcomes.

There is a very real sense amongst a large part of the population that they have not been on the “winning side” for a long time.

Trump promised: “We’re gonna win so much you may even get tired of winning and you’ll say please, please Mr. President, It’s too much winning! We can’t take it anymore!”

The gap between rich and poor is getting wider, and in the process, the classical attributes of political leadership—education, expertise, eloquent speeches—have come to be seen not as problem-solving strategies, but as the identity markers of a social elite who are looking after their own interests only.

Even where new policies on healthcare, education, or job creation achieve their goals, they are not popular, because they are tinged with that smell of elitism that makes many ordinary people not feel valued by the political classes.

Trump has not been the first demagogue to capitalize on such sentiments.

Thus, when Senator Bernie Sanders proposed Medicare for All, he was ridiculed. It was “too good to be true.” The populace opted for Trump’s empty lies rather than accept Sanders’s substantive proposals.

If Trump is known for anything, it is his repeated use of the words, “Fake news.” Hitler used the term, Lügenpresse” (lying press).

All dictators hate a free press. In “Trumpworld,” free speech is only for the Nazis, the white supremacists, and the KKK, and of course, for Donald Trump — not for newspaper reporters.

Trump wants news media to fawn over him as Breitbart and FOX do, and like the many, right-wing conspiracy blogs that still excuse Trump’s faults by focusing on Hillary’s Emails, Barack’s birth certificate, and Bill’s affairs. (They never mention Trump’s wife-cheating, his groping, his Trump University con, his compulsive lying, his incompetence, his notorious laziness, etc.)

If Trump had his way, he would bankrupt the mainstream media with lawsuits, or with military action, Putin style, Putin being one of Trump’s heroes.

A cowardly draft dodger, Trump longs for war. Perhaps North Korea will provide him with one. He seems to hope so.

How did we get here? How did the United States arrive at the same place as Nazi Germany?

Perhaps we should ask, why did the Republican party trade its soul for a political victory, knowing full well that Trump was evil for democracy, evil for America, and evil for the middle- and lower-income people?

The lust for power replaced the GOP’ moral center. It led to health care plans that would have cost millions of Americans their lives and tax plans that widen the Gap between the rich and the rest.

I understand and sympathize with Trump’s voters. They were desperate, unappreciated and so, they were consumed with hatred. Trump made many promises everyone knew he wouldn’t keep, but for desperate people, the heart needs to feel hope, even when the mind knows it is all a lie.

And of course, they need someone to blame, and Trump gave them that, too. Just as Hitler offered up for hatred, the Jews, and the Gypsies, Trump offers up the Mexicans, the undocumented, the Muslims, the immigrants, and the poor.

All are to be despised, as a balm to American self-pity.

Predictably, the man who promised to “drain the swamp” filled his government with swamp creatures — billionaires who care nothing for the people, as they try to undo the laws that protect the people — supposedly to provide jobs, but in reality to provide profits for rich investors.

And now, the GOP urgently tries to pass a tax bill that will benefit those swamp creatures most.

Today, 1/3 of America still hopes and prays that Trump’s lies were real, and that Trump’s GOP (Yes, it’s his now), really intends to help them, though that’s an obvious lie.

They gave away two of their most valuable possessions, their votes and their souls, and in return what did they get? The vague hope that poor pregnant women and undocumented immigrants will be punished. That is their sad reward.

In the end, these Trump backers, having closed their eyes to the obvious, will find themselves more desperate, less appreciated, and more consumed with hatred.

Their real reward: Their pockets will be emptier, and their mouths will be filled with ashes.

Here we are, like the people of Nazi Germany, like the people of other nations who traded freedom for a dictatorship, making that same mistake, again.

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

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The most important problems in economics involve the excessive income/wealth/power Gaps between the 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 (Economic Bonus)) 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
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.
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THE RECESSION CLOCK

Monetary Sovereignty

Federal Deficit — 1955 – Present. Vertical Bars are recessions

Monetary Sovereignty

Federal Deficit — 2004 – Present

As the federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise. Federal deficit growth is absolutely, positively necessary for economic growth. Period.

#MONETARY SOVEREIGNTY

MONETARY SOVEREIGNTY

Economics and a tin foil hat Wednesday, Dec 6 2017 

Image result for make america ignorant again

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It takes only two things to keep people in chains:

The ignorance of the oppressed
and the treachery of their leaders.

——————————————————————————————————————————————————————————————————————————————————————————–

Imagine you have been feeling unusually tired, so you visit your doctor, who performs various tests.  Here is the resultant conversation:

Doctor: Based on the results of your tests, you have severe anemia. You don’t have enough healthy red blood cells.
You: What do you recommend?
Doctor: Leeches.
You: But don’t leeches remove blood. How will that help?
Doctor: If you have too many red blood cells, eventually that will cause strokes, heart attacks, embolisms, even death. Excessive red blood cells is not sustainable.
You: But I thought I had too few red blood cells, not too many. Shouldn’t I be taking iron or vitamin B-12 or something?
Doctor. Oh, no. Excessive iron eventually will cause heart attack or heart failure, diabetes mellitus, osteoporosis, hypothyroidism, and a bunch of other symptoms. And too much vitamin B-12 eventually will cause a rare form of acne. Yes, excessive iron and B-12 are not sustainable.
You: When would the adverse effects of adding iron and vitamin B-12 to my diet occur.
Doctor: It’s impossible to say.
You: So what should I do?
Doctor: Leeches.

In summary, your doctor said you have too few red blood cells, then said the usual cures — iron and B-12 — cannot be sustained and will cause many diseases, and instead suggested removing your blood cells via leeches.

Can you draw any parallels with the following excerpt, which essentially expresses the beliefs of today’s economics:

Sustained Budget Deficits: Longer-Run U.S. Economic Performance and the Risk of Financial and Fiscal Disarray
Allen Sinai, Peter R. Orszag, and Robert E. Rubin, Brookings Institute

The U.S. federal budget is on an unsustainable path. In the absence of significant policy changes, federal government deficits are expected to total around $5 trillion over the next decade.

Such deficits will cause U.S. government debt, relative to GDP, to rise significantly. Thereafter, as the baby boomers increasingly reach retirement age and claim Social Security and Medicare benefits, government deficits and debt are likely to grow even more sharply.

The scale of the nation’s projected budgetary imbalances is now so large that the risk of severe adverse consequences must be taken very seriously, although it is impossible to predict when such consequences may occur.

Let’s pause to examine exactly what a federal deficit is. A federal deficit is the difference between federal tax collections and federal spending.

Thus, a federal deficit is the net number of dollars the federal government adds to the economy, aka the “private sector.”

Dollars are the lifeblood of our economy. Our economic growth is measured in dollars. Gross Domestic Product (GDP) is our usual economic measure; it is a dollar measure.

Because GDP is a dollar measure, GDP rarely can grow while the dollar supply is falling

The graph below shows the essentially parallel paths of GDP growth vs. perhaps the most comprehensive measure of the dollar supply growth, Domestic Non-Financial Debt:

Because deficits and GDP growth go hand-in-hand, why do conventional economists argue against deficits? What are the “severe adverse consequences” to which the authors refer?

Again from the Brookings article, here is what the “science” of economics tells you:

Conventional analyses of sustained budget deficits demonstrate the negative effects of deficits on long-term economic growth.

This is what economists say, though the facts speak otherwise, as you easily can see from the above graph.

What school of thought deliberately ignores easily obtainable facts in favor of intuitive belief? No, not science. Religion.

Economics is a religion, dressed in the clothing of a science.

Under the conventional view, ongoing budget deficits decrease national saving, which reduces domestic investment and increases borrowing from abroad.

The authors make the amazing claim that adding dollars to the private sector reduces domestic investment.  How giving dollars to consumers and to businesses can reduce investment, never is explained, simply because it makes no sense, whatsoever.

. . . and increases borrowing from abroad.

Obviously, adding dollars to the private sector will not cause you or your business to borrow, so we assume the authors mean the federal government will have to borrow.

But the federal government is Monetarily Sovereign. It has the unlimited ability to create brand new dollars, ad hoc, every time it pays a creditor. It never can run short of dollars, unintentionally.

Not only does the federal government (unlike state and local governments, which are monetarily non-sovereign) not need to borrow, but indeed it does not borrow.

Those T-securities (T-bonds, T-notes, T-bills) which supposedly are evidence of borrowing, actually are evidence of accepting deposits in T-security accounts — similar to bank savings accounts.

The government issues T-securities, not to obtain those dollars it can create forever, but rather to help control interest rates, to provide safe dollar investments, and to provide a basis for the dollar being the world’s reserve currency.

The article then follows with pseudo-scientific gobbledegook, which I will try to explain:

Interest rates play a key role in how the economy adjusts. The reduction in national saving raises domestic interest rates, which dampens investment and attracts capital from abroad.

The Fed, not national saving, arbitrarily controls interest rates via the Fed funds rate. Actually, it is interest rates that increase saving rather than the other way around. Capital coming in from abroad is economically stimulative — a good thing.

The external borrowing that helps to finance the budget deficit is reflected in a larger current account deficit, creating a linkage between the budget deficit and the current account deficit.

The reduction in domestic investment (which lowers productivity growth) and the increase in the current account deficit (which requires that more of the returns from the domestic capital stock accrue to foreigners) both reduce future national income, with the loss in income steadily growing over time. 

But, wait. The authors express a concern about the “loss of future national income, ” meaning the economy will lose dollars.

But losing dollars is exactly what happens to the economy when the federal government runs a surplus. It is a federal deficit that adds dollars to the economy.

In short, conventional economists decry deficits that add dollars to the economy, while simultaneously decrying deficits they claim will subtract dollars from the economy.

This is science?

The authors of the article then go off on a magical mystery tour of what deficits will cause:

Substantial ongoing deficits may severely and adversely affect expectations and confidence, which in turn can generate a self-reinforcing negative cycle among the underlying fiscal deficit, financial markets, and the real economy:

  • As traders, investors, and creditors become increasingly concerned that the government would resort to high inflation to reduce the real value of government debt.

The common, nonsense idea is that inflation makes debt easier to pay with cheaper dollars. But so-called federal “debt” consists of T-security deposits, which the government pays off by simply transferring the dollars that exist in T-security accounts back to the checking accounts of T-security holders.

Whether, at the time of redemption, a dollar is “worth” $10 or $0.01 is completely irrelevant. Existing dollars, whatever their worth, are transferred. Period.

  • The fiscal and current account imbalances may also cause a loss of confidence among participants in foreign exchange markets and in international credit markets, as participants in those markets become alarmed not only by the ongoing budget deficits but also by related large current account deficits.

First, to clarify the gobbledegook, there may be a loss of confidence in a certain currency, but there never is a loss of confidence in “foreign exchange markets.”

Foreign exchange rates are determined by inflation, which in turn, is determined by interest rates and by product scarcity. When a nation raises its interest rates, it increases the demand for its currency. It is said to have “strengthened its currency.”

The U.S. has the financial ability to strengthen or weaken its currency at will, or simply to determine exchange rates at will.

  • The increase of interest rates, depreciation of the exchange rate, and decline in confidence can reduce stock prices and household wealth, raise the costs of financing to business, and reduce private-sector domestic spending.

Apparently, there are different levels of gobbledegook, because this last paragraph has reached a higher level yet.

“The increase of interest rates” and the “depreciation of the exchange rate” are exact opposites. The effect of increasing interest rates is to increase exchange rates. It’s like saying that increases of demand reduce prices. Total nonsense.

An increase in rates can reduce stock prices, but this does not “reduce household wealth.” Average household wealth is more associated with the total money supply (which is increased by federal deficits), and by the Gap between the rich and the rest (which is narrowed by deficit spending, especially on social programs.)

Incredibly, subsequent paragraphs exceed prevous gobbledegook standards. Here are a few of the “Henny Penny, the sky is falling” excerpts:

  • The disruptions to financial markets may impede the intermediation between lenders and borrowers
  • . . . potentially substantial increases in interest rates
  • . . . become relatively illiquid
  • . . . adversely affects the balance sheets of banks and other financial intermediaries;
  • . . . reduce business and consumer confidence
  • . . . discourage investment and real economic activity
  • . . . worsen the fiscal imbalance
  • . . . harmful impacts on the economy
  • . . . substantially magnify the costs
  • . . . asymmetries in the political difficulty of revenue increases and spending reductions

Oh, the list of problems goes on and on, and yet even a modest bit of scientific research shows these problems absolutely do not happen. How can we be so sure?

History.

Back in 1940, when the Henny Penny’s claimed the federal debt was a “ticking time bomb, the debt was $40 Billion. And every year thereafter, authors of “learned,” scientific, economics publications have used the “ticking time bomb” example or something similar, to “prove” the federal debt and deficit are “unsustainable.

Today, the federal debt has grown to $14 TRILLION, and we still are sustaining. The ticking time bomb still is ticking, and economists, having learned nothing, still write the same ridiculous articles.

Science changes because of discoveries. Read almost any science book from 100 years ago, and you will find it substantially out of date. And 100 years from now, today’s science books will be obsolete.

What does not change? Religion. The Torah, the Christian Bible, the Koran, all remain quite similar to what they were 100 years ago or 1000 years ago, with only the most minor of linguistic adjustments.

While science is based on evidence, religion is based on belief.

And that is why economics, as currently practiced, is a religion, or at best, a failed science, akin to astrology, phrenology, creationism, homeopathy and a tin foil hat.

Sadly, today, tomorrow, and in the future, you will continue to read the same anti-science about the federal debt. The religious are a stubborn people.

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

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•All we have are partial solutions; the best we can do is try.

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

•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money no matter how much it taxes its citizens.

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

•No nation can tax itself into prosperity, nor grow without money growth.

•Cutting federal deficits to grow the economy is like applying leeches to cure anemia.

•A growing economy requires a growing supply of money (GDP = Federal Spending + Non-federal Spending + Net Exports)

•Deficit spending grows the supply of money

•The limit to federal deficit spending is an inflation that cannot be cured with interest rate control. The limit to non-federal deficit spending is the ability to borrow.

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

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

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

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

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

MONETARY SOVEREIGNTY

Why Trickle-up Economics? Monday, Dec 4 2017 


It takes only two things to keep people in chains:

The ignorance of the oppressed
and the treachery of their leaders.

——————————————————————————————————————————————————————————————————————————————————————————–

Warning: This is going to be dead simple — 2nd grade, child’s picture-book simple.

Why do businesses spend precious dollars — billions, in fact — on Advertising, Sales, and Research & Development?

The primary purpose of Advertising and Sales is to attract and maintain customers. The primary purpose of Research & Development is to create products and services that will attract and maintain customers.

In short, businesses rely on customers. Gaining and serving customers is how businesses profit and grow. That’s Business 101.

So, if the U.S. government wants to help America’s business profit and grow what should it do?

Image result for water a tree

Trickle-up

Right: The government should help American business attract and maintain customers.

And who are the customers for America’s business? For the vast majority of America’s businesses, their customers are the middle- and lower income 99%.

Yes, the upper 1% buy things. Like the 99%, they buy food, clothing, and shelter. They also buy diamonds, yachts, and private airplanes.

But the purchases by the richest 1% add up to only a minuscule fraction of what the 99% spend.  The 99% are the primary customers of America’s business.

The best way to help America’s business grow is to help customers of American business buy.

The most common measure of our economy is Gross Domestic Product (GDP). The formula for GDP is:

GDP = Federal Spending + Non-federal Spending + Net Spending on Exports

In short, U.S. GDP measures the spending on American-produced products and services. And again, who does the vast majority of spending in America? The lower 99% income groups. They are the primary customers for America’s business.

How can the federal government help the lower 99% increase their spending?

The federal government can help the lower 99% increase their spending by helping them to have more spending money. 

This is known as: Trickle-up Economics

Give the 99% a billion dollars and they will buy goods and services, thus stimulating the entire economy. They will stimulate America’s business.

But, give the richest 1% a billion dollars, and they will buy stock, increasing the prices of stocks and their own wealth, all to distance themselves from the 99%.

Trump’s Tax Promises Undercut by CEO Plans to Help Investors
By Toluse Olorunnipa, November 29, 2017, 4:00 AM EST

Major companies including Cisco Systems Inc., Pfizer Inc. and Coca-Cola Co. say they’ll turn over most gains from proposed corporate tax cuts to their shareholders.

Robert Bradway, chief executive of Amgen Inc., said in an Oct. 25 earnings call that the company has been “actively returning capital in the form of growing dividend and buyback and I’d expect us to continue that.”

Executives including Coca-Cola CEO James Quincey, Pfizer Chief Financial Officer Frank D’Amelio and Cisco CFO Kelly Kramer have recently made similar statements.

“We’ll be able to get much more aggressive on the share buyback” after a tax cut, Kramer said in a Nov. 16 interview.

 

The biggest moral problem facing the world is the wide and widening Gap between the rich and the rest. Enriching the 99% helps solve that problem.

And the biggest economic problem facing the world also is the wide and widening Gap between the rich and the rest. Enriching the 99% helps solve that problem, too.

The moral and the economic problems can be addressed by providing the 99% with more money — something governments are exquisitely designed to do.

Governments can budget spending that enriches the 99% and also can pass laws that protect the 99%. This too, is Trickle-up Economics.

There are those among the rich, who advocate “trickle-down economics — the notion that if the government supports the rich, or supports business directly, then increased spending by the rich and business will “trickle down” to the rest of America.

It is utter nonsense. It is a lie meant to justify enriching the rich and widening the Gap between the rich and the rest.

When the rich and businesses spend, it is to benefit themselves. When they hire, they pay the lowest wages possible and they hire the least number of people they can.

The rich and businesses actually do their best to avoid trickle-down effects.

The rich do not care whether the 99% have adequate food, clothing, housing, education, etc. Obviously, there are exceptions, but the rich as a group, care only that the 99% serve and stay distant (See: Gap Psychology.)

The Ten Steps to Prosperity (below) are based on Trickle-up Economics. They are designed to encourage business customers to buy goods and services. They do for all businesses what Marketing and R&D do for individual businesses.

Trickle-up Economics grows the economy by creating a solid base of newly enriched customers. Rather than rewarding the rich and their businesses for doing nothing, the Ten Steps rewards businesses by doing exactly what businesses pay Marketing and R&D to do: Attract customers’ dollars.

Talk to your federal Senators and Representatives, and demand Trickle-up Economics — aid to the 99% who are the customers of business —  for the sake of yourself, your family and friends, and for America.

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

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

The 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 (Economic Bonus)) 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
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

Two flaws in tax cut debate: Deficit reduction & trickle-down economics Friday, Dec 1 2017 

Image result for make america ignorant again

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

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Cutting federal taxes is a good idea. Contrary to popular belief, federal taxes do not fund federal spending. Even if all federal tax collections were $0, the federal government could continue spending, forever.

The reason is that the federal government, unlike state and local governments, is Monetarily Sovereign. It is sovereign over its currency, the dollar. The federal government never can run short of dollars, which it creates, ad hoc, every time it pays a bill.

The sole effect of federal taxes is to reduce the economy’s money supply, a rather dubious accomplishment, since a growing economy requires a growing money supply.

That is why cutting taxes grows an economy. This brings us to the first flaw in the tax cut debate:

Debate Flaw #1. The desire to reduce or even eliminate federal deficits.

This clearly is the strangest idea since homeopathy. There is zero credible evidence that federal deficits are “unsustainable” (the favorite word of deficit attackers), and there is massive evidence that deficits are necessary to grow the economy.

For example: U.S. depressions tend to come on the heels of federal surpluses.

1804-1812: U. S. Federal Debt reduced 48%. Depression began 1807.
1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.

There also is zero evidence that federal deficits lead to hyperinflations, which actually are caused not by “money printing, as so often is claimed, but rather by shortages of goods and/or services.

The U.S. never has had a hyperinflation, despite gigantic past deficits.

There even is zero evidence that deficits are a prime cause of inflations. Since America has gone off its most recent gold standard (1971), the prime cause of inflation has been oil prices, i.e. oil shortages.

The GOP’s various tax-cut plans are truly awful, and are nothing more than a “We-have-to-pass-something, – anything” bit of political desperation. So, there is enough to hate about the plans without resorting to false objections based on “excessive deficits.”

Debate Flaw #2. The notion that “trickle-down” economics benefits America. 

The so-called “trickle-down” economics hypothesis boils down to this “wrong-on-its-face” notion: If you give the rich more money, they will hire more people and give these people higher salaries. 

In the entire history of human existence, that never has been true. It is a con-job by the rich. They want you to have the pitiful hope that the rich will be kind to you, if only you make them richer.

The fact is: If you give the rich more money, they will have even greater power over you, and will use that power to provide you with the fewest jobs, at the least pay they can get away with.

If, as the GOP tax planners want, you cut taxes on business, those dollars will not go primarily to increases in payroll, but rather to shareholders and to executive bonuses. The last 10 years have proven that increased business profitability does not translate into increased payrolls.

Why do you think the stock market had been zooming in anticipation of the GOP tax bill passing?  Certainly not because businesses will increase pay scales.

If anything, businesses will use the dollars to automate, thereby reducing the number of good-paying jobs.

So rather than the proven-to-be-wrong trickle-down economics, how about the mathematically-certain-to-be-correct trickle-up economics?

How about giving the middle- and lower-income groups more financial support, which would allow them to buy more goods and services, thus benefitting the rich owners of business?

Why try to help businesses directly, if consumers don’t have enough money to buy from those businesses?  Doesn’t it make more sense to help consumers buy more, and allow that additional buying to trickle up to business owners?

The Ten Steps to Prosperity (below) does exactly that. The Steps are designed to put more money into consumers’ pockets, so that they can spend, spend, spend.

The most common measure of the economy is Gross Domestic Product (GDP), the formula for which is:

GDP = Federal Spending + Non-federal Spending – Net Imports

Notice the word, Spending? Increasing Federal Spending to support the poor and middle-income groups will increase Non-federal Spending — two of the three factors that move GDP.

Money is the way modern economies is measured. By definition, a large economy has a larger money supply than does a small economy. Therefore, a growing economy requires a growing supply of money. QED

The graph below shows the essentially parallel paths of GDP vs. perhaps the most comprehensive measure of the money supply, Domestic Non-Financial Debt:

One could argue that money begets production or that production begets money, and both would be correct. The point is that money supply (i.e. debt) and GDP go hand in hand.

Similarly, reduced debt growth results in reduced economic growth.

In summary:

The GOP tax “reform” plans focus on exactly the wrong goals: Deficit reduction and trickle-down economics.

The correct goals are: Deficit spending increases and trickle-up economics.

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

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The most important problems in economics involve the excessive income/wealth/power Gaps between the 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 (Economic Bonus)) 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
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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