When all life is interim, what next? What is “The Plan”?

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 in December, 2015, we posted “Are we an interim species?” which speculated on the future of humanity. It’s a question much discussed, and predicting often leads to a “Terminator” world, in which the machines take over, destroy humanity and become the next “species.”

Is that likely? Do you care what will happen to the world and to humanity thousands of year from now? A hundred years from now? Fifty years?

The universe is thought to be just under 14 billion years old, beginning with a dimensionless point — a singularity — and rapidly inflating to start its 14 billion year evolution. How the dimensionless point could inflate to the universe, and what came before, remains beyond our imaginations.

The earth is estimated to be 4.5 billion years old, meaning the universe evolved for at least 9 billion years — about 2/3 of its existence — before it managed to create our planet.

Life on earth is thought to have begun about 2 billion years ago. Dinosaurs were on Earth for between 165 and 177 million years, but anatomically modern humans — people who generally resemble you and me — evolved only about 300,000 years ago, a tiny blip in the age of life on earth, let alone the age of the universe.

Evolution, i.e change, never ends, nothing is permanent. And that includes the universe, the earth, and us.  We humans will end — when and how is unknown — though probably sooner than most of us think.Image result for red sun engulfs earth

We are comforted or deceived, depending on your outlook, by an individual lifespan that, though limited, gives us the illusion of permanence.

Intellectually, we know we will die, but emotionally, we plan for our tomorrows as though they are assured.

If you flip a coin 30,000 times, and every single time it comes up “heads,” you rationally should expect it always will come up heads, no matter how many times you flip it.

Yet, I have awakened more than 30,000 consecutive mornings, so by the same statistical analysis, I should go on forever. The fact that humans have lived for 300,000 years is no assurance we will continue.

We see around us, ominous changes that could interrupt our intuition of eternal life.

Deadly heat: How to survive the world’s new temperature extremes
By John Pickrell, NewScientist Magazine

January 2017 was the hottest ever recorded in Sydney and Brisbane, Australia, often exceeding 40°C (104 Farenheit) for weeks. Dairy cows dropped dead in the fields.

This kind of heatwave isn’t an anomaly. It is part of a trend that saw Sydney’s temperature climb to over 47°C (116.6 F) earlier this month, and could see both it and Melbourne experiencing mega‑heatwaves with highs of 50°C (122F) by 2040.

“Going out to 40 or 50 years, basically the summer we just had will be normal,” says Sarah Perkins-Kirkpatrick at the Climate Change Research Centre of the University of New South Wales (UNSW) in Sydney.

“It hasn’t really sunken in yet in Australia.”

Nor has it sunken in yet in the U.S., where the ruling political party denies even the existence of global warming, claiming it is a “Chinese hoax.”

Heatwaves are deadly, and as global warming increases so will the death rate. Human physiology is not designed to cope with the temperatures predicted for large swathes of the globe and many areas could become uninhabitable.

In the US, extreme heat caused more fatalities between 1978 and 2003 than earthquakes, hurricanes, floods, and tornadoes combined.

The 2003 heatwave centered on France killed 70,000. Another that struck Moscow in 2010 resulted in 10,000 deaths.

Already, 30 per cent of the world’s population experiences potentially deadly temperatures for at least 20 days every year.

A team led by Camilo Mora at the University of Hawaii in Manoa reported in June that this will rise to nearly 75 percent by 2100 if we do little to limit greenhouse gas emissions.

What matters is not the air temperature, but the temperature you experience. You can survive for a while at well above 50°C, as long as you can sweat effectively. The problem is humidity.

“The only way you lose heat when you sweat is by turning liquid into vapour. It has to evaporate,” says Graham Bates at Curtin University in Western Australia. “With a humidity of 90 per cent, the air is almost saturated, and when you sweat it just drips off, and you won’t lose heat.”

A “wet bulb temperature” of 35°C – equivalent to an ambient temperature of 35°C (95F) and 100 per cent humidity or 40°C (104F) and 75 per cent humidity – is considered the limit for human survival.

“Both temperature and humidity are going up,” says Steven Sherwood, an atmospheric scientist at UNSW. The highest risk is in places that are already humid, such as the Amazon, the Indus valley and many tropical countries. “It only takes a 6°C to 7°C increase in temperature before some of these regions become physically uninhabitable,” says Sherwood.

Research published in August 2017 showed that parts of India, Pakistan and Bangladesh could occasionally exceed a wet bulb temperature of 35°C by the end of this century. This region is home to 1.5 billion people, about a fifth of the world’s population.

And it’s not only humans who will suffer. In addition to the Australian dairy cows mentioned earlier, all animals are subject to heat limitations, including those that are part of the human food chain.

And then, there are the plants we eat:

Yields of wheat, rice and maize – which together with soy generate nearly two-thirds of all calories consumed by people – are forecast to fall by between 3 and 7 percent for each 1°C rise in global temperatures.

With a temperature rise of just 1.5 to 2°C – as agreed under the 2016 Paris climate change deal – summer in parts of Australia will effectively become one long heatwave by 2100.

The U.S. has withdrawn from the Paris accords.

Some tropical regions could go into a semi-permanent heatwave state. And the situation will be far worse if greenhouse gas emissions are not curbed.

We humans have been on this earth for a comparatively short time, yet here we are already destroying, faster and faster, the environment that keeps us alive.

We, indeed, may be an interim species, almost a failed experiment, that well could last only a very few centuries longer — if that.

Image result for planet venus
Venus, too hot for life.

All life, as we define it, may have a limited future on this planet, which we seem intent on turning into a waterless,  searing hot 464°C (867°F), Venus.

What then?

I suggest, the greatest loss to the universe would be not the loss of our species, but the loss of human intelligence, that to our current knowledge, is special and unique, not just here on earth, but possibly, everywhere.

We very well may be the smartest living creatures in the universe.

When the evolution of the earth has taken everything — all animal life, all plant life, every living thing of every kind, human intelligence may be the one thing nature alone might never duplicate. It might be a “one-off.”

Which leads us to this article:

Is Art Created by AI Really Art?
By David Pogue | Scientific American, February 2018 Issue

You’ve probably heard that automation is becoming commonplace in more fields of human endeavor. Or, in headline-speak: “Are Robots Coming for Your Job?”

You may also have heard that the last bastions of human exclusivity will probably be creativity and artistic judgment. Robots will be washing our windows long before they start creating masterpieces. Right?

Not necessarily. I recently visited Rutgers University’s Art and Artificial Intelligence Laboratory, where Ahmed Elgammal’s team has created artificial-intelligence software that generates beautiful, original paintings.

Software is doing well at composing music, too. At Amper Music (www.ampermusic.com), you can specify what kind of music you want based on mood, instrumentation, tempo and duration. You click “Render,” and boom! There’s your original piece, not only composed but also “performed” and “mixed” by AI software.

I found these examples of robotically generated art and music to be polished and appealing. But something kept nagging at me: What happens in a world where effort and scarcity are no longer part of the definition of art?

Indeed, what happens in a world where effort and scarcity, i.e. human labor, no longer are rewarded?

Said simply, are we looking at a near future world where there will be no paid jobs?

A mass-produced print of the Mona Lisa is worth less than the actual Leonardo painting. Why? Scarcity—there’s only one of the original.

But Amper churns out another professional-quality original piece of music every time you click “Render.” Elgammal’s AI painter can spew out another 1,000 original works of art with every tap of the enter key.

It puts us in a weird hybrid world where works of art are unique—every painting is different—but require almost zero human effort to produce. Should anyone pay for these things? And if an artist puts AI masterpieces up for sale, what should the price be?

That’s not just a thought experiment, either. Soon the question “What’s the value of AI artwork and music?” will start impacting flesh-and-blood consumers. It has already, in fact.

Last year the music-streaming service Spotify lured AI researcher François Pachet away from Sony, where he’d been working on AI software that writes music.

Why couldn’t Spotify, or any music service, start using AI to generate free music to save itself money? Automation is already on track to displace millions of human taxi drivers, truck drivers and fast-food workers. Why should artists and musicians be exempt from the same economics?

Should there be anything in place—a union, a regulation—to stop that from happening?

To recap, we can anticipate any number of ways the human species may have a relatively short existence:

  1. The habitable world can end through natural events — an impact by a huge meteor, the inflation of the sun into an earth-swallowing red giant, being caught in the X-ray jet of a spinning black hole.
  2. Or we can accelerate the end of our habitable world by pumping greenhouse gasses into the atmosphere, or by pumping poisons into the air, the water, and the ground, or by wars and intentional murder.
  3. Or we can end the need to continue existing in our DNA life form, by creating our replacement.

Evolution occurs when a species changes in response to environmental changes, or is replaced by a better-adapted species. We have sent machines into space, machines that walk (roll) on Mars, machines that can exist in the deepest oceans, machines that even have escaped the solar system.

Machines are better adapted for extreme environments. Humans can’t do these things unless we are protected by machines, and even then with great difficulty and in only limited circumstances.

The fundamental difference between the human brain and a computer is complexity. That’s not a trivial difference, of course. There has been speculation that the human brain works all the way down to the quantum level, enabling it to handle an astounding number of physical and mental tasks, far more than any existing computer.

But, there is no one thing the human brain can do, that a machine can’t do, or at least won’t be able to do in the near future.

Yes, machines can lift tons tirelessly, but they also can play complex mental games like Go and Jeopardy. They can create works of art. They can write:

Can robots write fiction?
Malcolm King

A hallmark of civilization has been the drive to create unique stories that explore the human condition. Now robots are learning to write fiction. Is nothing sacred?

No computer has yet written the Great Australian Novel because they have some of the same handicaps that afflict human writers. Writing is hard. Although computers can work unhindered by free will, alcohol or divorce, such advantages are outweighed by a lack of life experience or emotions.

To be able to write fiction, a machine does not have to think like us but it must “understand” patterns of human experience.

Computers are quietly elbowing their way into the workplace. They’re flying planes, driving cars, selecting job candidates and writing news stories.

The Associated Press employs a company called Automated Insights to create short news reports from raw data. More advanced software is working on longer pieces.

To be able to write fiction, a machine does not have to think like us but it must “understand” patterns of human experience. While not discounting the life of the mind, computers are being fed millions of novels and short stories to “teach” them character, pace, and plot.

This is the goal of the What-If Machine (WHIM) project, a venture involving teams at five universities across Europe. WHIM analyses databases of human prose and then inverts or twists what it has learned to introduce a new idea as a premise for a story. Knowing what is typical is the first step in generating atypical stories.

Researchers at the Georgia Institute of Technology have been working for four years on a program called Scheherazade, which analyses crowd-sourced human anecdotes and then produces plausible short stories.

A computer can write novels and poetry. Here is an example:

“Dave Striver loved the university – its ivy-covered clocktowers, its ancient and sturdy brick, and its sun-splashed verdant greens and eager youth. The university, contrary to popular opinion, is far from free of the stark unforgiving trials of the business world: academia has its own tests, and some are as merciless as any in the marketplace.

“A prime example is the dissertation defense: to earn the Ph.D., to become a doctor, one must pass an oral examination on one’s dissertation. This was a test Professor Edward Hart enjoyed giving.”

That opening paragraph was written by a computer at the Rensselaer Polytechnic Institute in the US. JM Coetzee can sleep safely. But it shows that computers are learning to obey syntax. They are learning to learn.

Recently the Go grandmaster, Lee Se-Dol was defeated 4-1 by Google’s AlphaGo computer.

In the second game, AlphaGo made a move so surprising – “not a human move” in the words of a commentator – that Lee Se-Dol had to leave the room to recover his composure.

In the shorter term, computers will change the nature of economics, from money-related to desire re-related. That is, people no longer will work to acquire money, with which to buy what they desire (which includes food, clothing, shelter, entertainment, and pride).

It already has begun, as human physical labor is being supplanted by human mental labor, and both are being supplanted by “dumb” machine labor, which in turn, is being supplanted by “smart” machine labor.

Money, as a substitute for barter, and work as a means to obtain money, will become obsolete concepts.

In the longer term, computers may become the last storehouse of the human psyche, the species to which the human species evolves.Image result for galaxies

Currently, humans develop AI that trains computers to have a human outlook. We train computers to have the same goals as ours, to want “winning” and to avoid “losing.”

That may change as computers keep learning. And to that degree, they will evolve to be less and less human.

But some life fundamentals surely will remain: Survival, desire, attraction, identification of good and bad. It would not be surprising if religion appeared.

Long term, our mental/emotional being will survive as machines, rather than as DNA creatures, on a “hot” earth, the moon, Mars, space.

While the rest of life on earth, we, the other animals, the plants, the bacteria, and viruses all will disappear, our progeny, the computers, will become the true citizens of the universe.

That should be “The Plan.”

Is this a bad thing or a good thing?

Image result for pale blue dot
THE PALE BLUE DOT OF EARTH
This image of Earth is one of 60 frames taken by the Voyager 1 spacecraft on February 14, 1990 from a distance of more than 6 billion kilometers (4 billion miles) and about 32 degrees above the ecliptic plane. In the image the Earth is a mere point of light, a crescent only 0.12 pixel in size. Our planet was caught in the center of one of the scattered light rays resulting from taking the image so close to the Sun.

I suggest it is a very good thing. DNA life is fragile.  Of all species that have existed on Earth, 99.9 percent are now extinct. Any notion that humans would be able to defy those odds, probably is misguided.

Too much can happen to this one, lonely “Pale Blue Dot” floating in the emptiness of the universe. The odds for longer life increase for our machine surrogates, especially for our machine surrogates resident on worlds in addition to earth or in space.

If there is “A Plan” for the universe, perhaps it is that we humans should create surrogates, and so, live forever, or at least much longer than any DNA species lives.

If species survival is the ultimate goal, we should facilitate our survival by focusing on building our surrogate machines — machines that having been given the ability to learn, machines that will carry forward some aspects of “humanness.”

Every human is born with a brain, some of us with very good brains, and nearly all of us with brains that far exceed those of any other living creature. But few of us use our magnificent brains to advance “The Plan.”

The vast majority are more concerned with day-to-day personal survival. Though day-to-day survival is necessary, too many of the thoughts of too many of us are devoted to it, and not enough human thought is given to the long-term, the eons of survival we can create.

If day-to-day survival were assured for more of us, more energy could be focused on building that long-term future.

If fundamentals like food, clothing, shelter, health, and education were assured, more brain time would be devoted to preserving the species, in DNA and in electronic forms.

Reducing the burden of having to work for money would give more people more time to work on the AI problem. We — or at least our minds — would more quickly achieve a semblance of permanence in the universe.

Then, when we are destroyed by the next giant meteor, supernova, atomic war, worldwide epidemic — when the next inevitable life-ending phenomenon occurs, the essence of humanity, our psyche, will continue.

Do we care? Is that “The Plan”? If so, the Ten Steps (below) can provide more people with more opportunity to develop our machine progeny.

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

 

Your Social Security and Medicare will be cut. You’ve been warned.

It takes only two things to keep people in chains:

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

================================================================================

Why are these guys laughing?

Image result for Trump and ryan
“Can you believe it? We admit we’ll cut their Social Security, Medicare, Medicaid and every other social program, and they still vote for us!”

Trump’s Startling Plan to Kill Social Security in Second Term
By: Ryan Davis

The new tax plan aimed at restoring larger amounts of wealth to corporations and wealthy individuals — an estimated $1.6 trillion will be added to the national debt.

The Republican authors of the bill have been quiet on their plan to fix the deficit, but the consensus is Social Security, Medicare, and Medicaid “reform.”

As readers of this site know, the so-called national “debt” is not really a debt. It is no burden on the federal government or on taxpayers. It properly should be called “deposits,” for that is exactly what it is: Deposits in Treasury security accounts.

Seventy-seven years ago a total of $40 Billion was deposited in T-security accounts, and we the people were told those deposits were a “ticking time bomb.”

Today, those deposits total $15 Trillion, and that time bomb still is ticking and we still receive the same false warnings.

The purpose of those false warnings is to make you believe the federal debt is “unsustainable,” and must be cut, so that you will agree to completely unnecessary Social Security, Medicare, Medicaid, etc. cuts.

The GOP, “the party of the richest 1%” is just itching to cut benefits to the 99%. They can hardly wait.

One anonymous Republican lawmaker had a lot to say about the process of “entitlement reform.”

“Entitlement reform always takes leadership at the presidential level, and it also takes — by the way, real reform takes bipartisanship. If we’re worried about the debt in 10 years, when we get serious about entitlement reform, then I’ll know we’re serious about the debt.”

Not only is the “debt” not a debt, but “reform” isn’t reform. It’s cuts, pure and simple. But doesn’t the word “reform” sound oh, so much better?

Trump allegedly wouldn’t want to go after Social Security (or Medicare and Medicaid) until the first day of his second term – if he actually were elected a second time – because he made a very big promise that he wouldn’t. Here is the content of a tweet from Trump’s personal Twitter account on May 7, 2015:

“I was the first & only potential GOP candidate to state there will be no cuts to Social Security, Medicare & Medicaid.

Trump wants to wait to break his promise so he can keep you in the dark until the election is over.

He knows you won’t like giving up your money so the rich can get richer, but that is exactly what he wants to do: Take dollars from your pocket and put more dollars in their pockets.

“We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Paul Ryan said.

Now that Trump, Ryan and the rest of the GOP have voted to enrich the already rich, they suddenly have begun to “worry” about the mythical debt.

Before the vote, it was no problem at all. Now it has become a huge problem that only your money can solve (Please don’t ask the rich for any money.)

Washington Post: Today, only about 24 percent of workers at midsize and large companies have pension coverage, and that number is expected to continue to fall as older workers exit the workforce.

In place of pensions, companies and investment advisers urge employees to open retirement accounts. The basic idea is workers will manage their own retirement funds, sometimes with a little help from their employers, sometimes not.

Once they reach retirement age, those accounts are supposed to supplement whatever Social Security might pay. (Today, Social Security provides only enough for a bare-bones budget, about $14,000 a year on average.)

Trump, Ryan and the rest of the GOP feel that an annual stipend of $14,000 is too much for you and should be “reformed” either by cutting the annual payout or by starting it later.

The trouble with expecting workers to save on their own is that almost half of U.S. families have no such retirement account.

Of those who do have retirement accounts, moreover, their savings are far too scant to support a typical retirement. The median account, among workers at the median income level, is about $25,000.

According to the Government Accountability Office. “Traditional pensions have become much less common, and individuals are increasingly responsible for planning and managing their own retirement savings accounts.”

The GAO further warned that “many households are ill-equipped for this task and have little or no retirement savings.”

The GAO recommended that Congress consider creating an independent commission to study the U.S. retirement system. “If no action is taken, a retirement crisis could be looming,” it said.

Paul Ryan and his fellow Republicans already have studied the U.S. retirement system and they have concluded that you, the 99% receive too much, while the richest 1% receive too little.

Simply keep this in mind:

  1. The federal government cannot run short of its own sovereign currency, the dollar.
  2. That means, even if all federal tax collections fell to $0, the government still could pay all its bills, forever. There is no “debt crisis” or “ticking time bomb.” The so-called “debt” never will be paid by you or by your children.
  3. Not only is there no reason to reduce Social Security, Medicare, or Medicaid et al, but there even is no reason to take FICA from your paycheck.

Bottom line: You have been warned. The GOP has told you exactly what they plan to do to you. You can’t claim you didn’t know.

If you still are foolish enough to vote Republican, you deserve what they will do you.

You can prevent it. Don’t cry later.

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

Fake News comes at us from all sides

It takes only two things to keep people in chains:
.

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

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

The word of the past year is “fake.” President Trump calls everything with which he disagrees, “fake news,” and ironically, though not unexpectedly, he and the White House are the primary sources of “fake news.”Image result for coming from all directions

Sometimes it seems as though we are being bombarded with fake news coming at us from all directions, even from the most respected sources.

James C. Capretta is a resident fellow and holds the Milton Friedman Chair at the American Enterprise Institute (AEI), where he studies health care, entitlement, and US budgetary policy, as well as global trends in aging, health, and retirement programs.

Mr. Capretta wrote an article that was published by the American Enterprise Institute, ” . . . a public policy think tank dedicated to defending human dignity, expanding human potential, and building a freer and safer world.”

Given Mr. Capretta’s background, and that of the publisher, the article is stunning in the degree of misinformation — the “fake news” — it provides.

Image result for debt clock
Fake news. Your family does not owe the so-called “debt.”

Immediately, you notice a photo of the ridiculous, misleading “debt clock.”

This serves as a warning that the article is absolutely going to be filled with fakery.

But it only gets worse and worse. Begin with the title of Mr. Capretta’s article, “The coming challenge of servicing our national debt.

The federal government’s “debt” is nothing more than the total of deposits in T-security (T-bill, T-note, T-bond) accounts. When you purchase a T-security (aka “lend to the government”), you instruct your bank to take dollars from your checking account and deposit them into your T-security account.

There, your dollars remain. Prior to maturity, there never is a time when the dollars in your T-security account are removed. It always contains the dollars you put in, plus any interest dollars the federal government adds.  You can check your account balance any time, night or day, and your money always will be there.

To pay you back, when your T-security matures, the federal government returns your money, plus interest. The government takes the dollars from your T-security account and sends them back to your bank, to be re-deposited into your checking account. No tax dollars are involved.

No one’s family is liable for anything. The dollars that exist in the T-security “debt” accounts are returned.

The federal government has the power to pay off the entire “debt” today, if it chooses, simply by sending existing dollars from T-security accounts back to the checking accounts of T-security owners.

Now, let us see what Mr. Capretta writes. Here are some excerpts:

As the economy heats up, the federal government’s borrowing costs are set to soar.

The most recent budget projections from the Congressional Budget Office (CBO) show the government’s annual interest payments on federal debt more than doubling over the next decade — from 1.5 percent of GDP in 2018 to 3.1 percent of GDP in 2027.

Higher borrowing costs threaten to make the government’s already daunting fiscal challenges even more intractable.

The U.S. government, unlike state and local governments, is Monetarily Sovereign.  As such, it has the unlimited power to create its own sovereign currency, the U.S. dollar.

The very first dollars, created 240 years ago, were created from thin air by laws that were created from thin air.

So long as the federal government doesn’t run short of laws it never can run short of dollars. In fact, the ad hoc method by which it creates dollars, is to pay creditors:

The federal government sends instructions, not dollars, to the creditors’ banks, instructing the banks to increase the balances in the creditors’ checking accounts. When the banks do as instructed, brand new dollars instantly are created and added to the money supply.

Paying federal bills actually creates new money.

What then are the “daunting fiscal challenges” for a government that never can run short of money, and in fact, creates new money by the very act of paying bills?

From 2009 to 2016, the government ran a cumulative deficit of $7.3 trillion.

The $7.3 trillion deficit is supposed to shock you. Consider this: Back in 1940, the federal debt was $40 billion. At the time it was referred to as “a ticking time bomb.”

Every year thereafter, media “experts,” economists, and politicians called the federal debt “a ticking time bomb.” Today, the federal debt is $15 trillion  — a gigantic 37,500% increase —  and that “time bomb” hasn’t exploded.

The pundits have been wrong for 78 years, yet they still bemoan the debt.

At the end of 2016, federal debt reached 77 percent of annual GDP — up from 39 percent at the end of 2008.

This too is supposed to shock you, though:

a Debt/GDP ratio, for a Monetarily Sovereign nation, is meaningless.

Wikipedia says, “A low debt-to-GDP ratio indicates an economy that produces and sells goods and services sufficient to pay back debts without incurring further debt.”

But if debt doesn’t matter, as is the case with Monetarily Sovereign governments, then the Debt/GDP ratio has no significance. Consider a few typical Debt/GDP ratios:

Japan 240%
Canada 100%
United States 75%
India 55%
China 20%
Russia 13%
Libya 10%

Which nations are more likely to be unable to pay their bills? Which nations have the strongest economies? What does the Debt/GDP ratio tell you?

In 2008, the federal government made $253 billion in net interest payments on debt that was $5 trillion at the end of fiscal year 2007, for a 5 percent average interest rate on the debt. The government made only $240 billion in interest payments in 2016, although the debt had more than doubled to $13.1 trillion at the end of fiscal year 2015, for a 1.8 percent average interest rate.

It’s hard to know what point Mr. Capretta thinks he is making, but the more the federal government pays in interest, the more stimulus dollars it pumps into the economy.

As monetary stimulus ends, and interest rates move toward more normal levels, the federal government will be required to pay higher rates on the funds it borrows.

That’s a good thing. The more federal “debt,” and the higher the interest rates, the more stimulus the private sector receives. I don’t think Mr. Capretta understands this basic fact.

But even a partial normalization of interest rates would dramatically increase federal costs, making it even more difficult for policymakers to get the nation’s fiscal house in order.

The nation’s “fiscal house” (Does this mean federal debt??) always is “in order.” It was “in order” in 1940 when the debt was $40 billion; it is “in order” today when the debt is $15 trillion; it will be “in order” years from now, when the debt is many trillions higher.

Moreover, the added interest expense on the debt is likely to far exceed the added revenue from stronger economic growth.

Above, Mr. Capretta writes what has become known as “The Big Lie” — the fake news that federal spending is funded by federal taxing. While state and local taxes do fund state and local spending, federal taxes do not fund federal spending.

Even if all federal tax collections fell to $0 — all FICA, all payroll taxes, all business taxes, all sales taxes, all luxury taxes, all taxes — even then, the federal government could continue spending, forever.

The federal government was able to borrow liberally over the past decade on the cheap, thereby masking the severity of the nation’s fiscal problems. As interest rates rise, the full scale of the budgetary challenge will be more visible.

The federal government, having the unlimited ability to create dollars, has no need to borrow dollars, and indeed, does not borrow. It accepts deposits in T-security accounts, some of which actually are owned by an agency of the federal government, the Federal Reserve.

And now folks, what follows is the fundamental purpose of the Big Lies about federal finances:

The purpose of the Big Lie is to widen the Gap between the rich and the rest.

The keys to limiting future deficits and debt are gradual changes in spending on the major entitlement programs, to lower their costs over the medium and long term.

Social Security and Medicare should be modified for future entrants to encourage longer working lives, more reliance on private savings in retirement, and greater efficiency in how health services are delivered to patients.

Yes, the goal is to cut Social Security, cut Medicare, cut Medicaid, cut poverty aids, cut anything that benefits the lower-income groups, while giving tax breaks to the rich.,

Why do the media, the politicians, and the economists promulgate the Big Lie? A few might be ignorant of the facts, but most are bribed by the rich, who what the Gap widened.

The media are bribed by advertising dollars and by ownership. The politicians are bribed by campaign contributions and by promises of lucrative employment later. The economists are bribed by university contributions and by lucrative jobs in think tanks.

This post began with the statement, “Sometimes it seems as though we are being bombarded with fake news coming at us from all directions.” Well, here’s another bit of fake news, this time from Mary Wisniewski in the 1/29/17 Chicago Tribune:

The long-promised Trump plan to rebuild the nation’s roads, bridges, and other public works could finally be released in the next few weeks — the president is expected to tout his program in Tuesday’s State of the Union address, and more details may come in February.

Everyone likes better roads and water systems, but many Republicans will balk if a gas tax hike is needed to pay for it, and Democrats have expressed doubts about what they see as its over-reliance on local government and private dollars.

Our Monetarily Sovereign government neither needs nor uses taxes to pay for anything, nor does it need or use local governments and private dollars.

The federal government pays for everything by creating brand, new dollars, ad hoc. 

How to fund the program is the big unanswered question, both on the local and the federal side, noted Frank Manzo, policy director for the Illinois Economic Policy Institute, a nonpartisan think tank whose members include representatives from the construction industry.

“The devil is in the details …” said Manzo in an interview. “The actual funding side is going to be very difficult and even more difficult in the wake of a tax reform plan that will result in fewer resources for government spending, let alone infrastructure projects.”

Complete nonsense, just mere repetitions of the Big Lie. It comes at you from all directions.

The Trump plan wants 25 percent of the total appropriation to go to rural infrastructure programs, and requires that no individual state can receive more than 10 percent of the amount available.

See the illogic? States are monetarily non-sovereign. Dollars are not their sovereign currency. They do not have the unlimited ability to create dollars.

The federal government is Monetarily Sovereign. Dollars are its sovereign currency. It does have the unlimited ability to create dollars.

Yet the federal government wants the states to pay 90% of the infrastructure cost. Absolutely insane.

The administration has not said where the federal portion of the money would come from, other than unidentified budget cuts.

Another possible source is an increase in the federal gas tax, which has been 18.4 cents a gallon since 1994 and finances the Highway Trust Fund. Illinois’ gas tax is 19 cents and has not been raised since 1991.

In only two short paragraphs: Three misleading statements.

  1. The “unidentified budget cuts” already have been identified by the GOP. They would come from Medicare, Social Security, and other social benefits
  2. The increase in the federal gas tax not only is unnecessary, and would not fund any spending, but it is a regressive tax, falling most heavily on the 99%, thereby widening the Gap between the rich and the rest.
  3. There is no “Highway Trust Fund.” Federal Trust Funds (Social Security Trust Fund, Medicare Trust Fund, etc.) all are bookkeeping fictions. There can be no purpose of a trust fund for an entity having the unlimited ability to create dollars.

Illinois Congressman Dan Lipinski, the senior Illinois member on the House transportation committee, said relying on public-private partnerships, also known as PPP, has a limited usefulness.

It can work for toll roads because a private investor can get back his money, but would not work for projects like transit and rural roads, which benefit the people who use them but do not provide a source of income for investors, Lipinski said in an interview.

There is no use for a PPP, when one of the partners, the federal government, has the unlimited ability to pay for it all.

Another concern of Democrats is that the administration will find the $200 billion in federal money by taking it out of other infrastructure programs — robbing Peter to pay Paul, when Peter does not have much, to begin with.

Taking dollars out of “other infrastructure programs” does not pay for anything.

Ken Simonson, chief economist with the Associated General Contractors of America, said his organization has long supported indexing fuel tax rates for inflation and also trying to find other funding sources for road building including the broader use of tolls and legislation to allow states to do more public-private partnerships.

Mr. Simonson is an economist, who should know better. Federal fuel taxes do not pay for anything (though state and local fuel taxes do pay for state and local spending).

And so it goes. Fake news from all sides. It’s no wonder the public believes the Big Lie that spending by our government, having the unlimited ability to create its sovereign currency, relies on federal taxes.

It doesn’t take much thought to realize that is a ridiculous proposition. It’s as ridiculous as saying that if the U.S. passes laws, it’ll have to ask the public for some laws, before any more are passed.

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

 

Ignorance or Treachery?

It takes only two things to keep people in chains:
.

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

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

THE WEEK Magazine, January 19, 2018, contained an article titled, The national debt, explained, by The Week Staff. The article is filled with ignorance and treachery.

Here are excerpts and commentary.

The U.S. debt is $20.5 trillion and rising. Should Americans be worried? Here’s everything you need to know:

Why does the U.S. owe so much?

Immediately, we come to the first bit of ignorance: The question, “Why does the U.S. owe so much?”

That question, preceded by the question, “Should Americans be worried,” implies there is something negative about the federal debt.

But the so-called “debt” is nothing more than the total of deposits in T-security accounts, similar to bank savings accounts.

When you supposedly “lend” (misleading word) to the federal government, you instruct your bank to take dollars from your checking account and deposit them in your T-security account. You can do this online with a system called “TreasuryDirect.

Quoting from the TreasuryDirect website:

In your TreasuryDirect account, you can purchase and hold Treasury bills, notes, bonds, Floating Rate Notes, Treasury Inflation-Protected Securities (TIPS), and savings bonds, and it’s available to you 24 hours a day, 7 days a week.

Contrary to popular wisdom, the federal government does not spend the dollars that are in your T-security account. The dollars stay in your T-security account until your securities mature, at which time your T-account is debited and your checking account is credited.

Thus, your T-security account is not paid off by taxes.

And again, contrary to what you have been told, your grandchildren will not pay the debt. The debt is paid by the dollars that already are in T-security accounts.

Returning to the article:

Apart from a four-year stretch during the economic boom of the late 1990s, the federal government has run a budget deficit every year since 1970. In 2017, the shortfall was $666 billion.

The national debt is now slightly larger than the size of the entire U.S. economy, equal to 106 percent of the country’s gross domestic product (GDP).

If the author believes there is something wrong with a debt greater than GDP, let’s consider that to be Ignorance.

Years ago, pundits claimed that a Debt/GDP ratio above 100% would spell doom for the economy. Yet here we are.

The debt has nothing to do with GDP. The debt (deposits in T-security accounts) is not paid by GDP. They are two separate, unrelated numbers.

Overall, the Congressional Budget Office (CBO) expects the national debt to surpass $30 trillion by 2028, as Medicare and Social Security costs soar to cover aging baby boomers.

Outgoing Federal Reserve Chair Janet Yellen has warned that the country’s growing debt load could eventually become unsustainable. “It’s the type of thing that should keep people awake at night,” she told Congress in November.

This is major Treachery. Surely the Federal Reserve Chair knows better.

Back in 1940, and repeatedly thereafter, the media called the debt a “ticking time bomb.” (See: “From ‘ticking time bomb’ to ‘looming collapse.'”) It was $40 Billion then.

Today, 78 years later it is $15 Trillion — a 37,500% increase — and that “time bomb” still hasn’t exploded.

Janet Yellen should be ashamed.

Why is it a problem?
Like any credit card user, the government must pay interest on its debt. For much of the past decade that hasn’t been a major problem, because of historically low interest rates.

An example of Ignorance.

It hasn’t “been a major problem,” but not because interest rates are low. Rather it’s because the Federal government (unlike state & local governments, businesses, you & me) is Monetarily Sovereign. It is sovereign over the dollar.

When America began, its government created laws from thin air, and some of those laws created the U.S. dollar,  also from thin air. Today, the federal government continues to create laws and dollars from thin air.

To pay an invoice, the federal government sends instructions (not dollars) to the creditor’s bank, instructing the bank to increase the numbers in the creditor’s checking account.

At the moment the bank does as instructed, brand new dollars are created, ad hoc. So long as the government doesn’t run short of instructions, it won’t run short of dollars.

The federal government simply cannot run short of dollars, unless it wants to.

For the government, paying any amount of interest requires nothing more than clicking a computer key.

Net interest payments on the debt represented 6.8 percent of the federal budget in 2017, or $276.2 billion, compared with more than 15 percent in the mid-1990s.

But with the Fed unwinding its post-recession stimulus campaign, interest rates are expected to rise steadily in the coming years.

As a result, the CBO estimates, the cost of servicing the national debt is expected to nearly triple by 2027 — leaving the government paying more on interest payments than on national defense.

Ignorance: Perhaps this is supposed to worry you. But why would you be worried about a government with the unlimited ability to create dollars, paying more in interest than on national defense?

It’s a meaningless comparison (interest vs. defense) and a meaningless concern. The federal government can create unlimited dollars for interest and for defense.

Is everyone worried?
No. Economists point out that debt can be used to fund important investments, such as stimulating the economy during a recession or fighting unavoidable wars.

The nation’s debt is also wildly different from a household’s budget, because the government can print its own money and has a theoretically infinite life span to pay off its obligations.

Some theorists even argue that deficits and the debt are mostly irrelevant. One emerging school of thought, known as Modern Monetary Theory, argues that inflation is the only obstacle standing in the way of the government creating and spending as much money as it wants.

“The national debt is not a national crisis,” says economist Stephanie Kelton, a former adviser to Sen. Bernie Sanders. “The fact that 21 percent of all children in the United States live in poverty — that’s a crisis.”

The above may be the only true paragraphs in the entire article, yet they are buried amidst the deceptions.

Who owns the debt?
About three-quarters is held by investors in the form of Treasury securities sold by the government to raise money.

Ignorance. The federal government, which has the unlimited ability to create its own sovereign currency, the dollar, has no need to “raise money.”

The rest is intragovernmental debt that comes from Washington borrowing against government trust funds, such as Social Security and Medicare.

Ignorance. A “trust fund” involves a grantor and a recipient. The grantor adds money or other assets to the fund, for later payment to the recipient. Once in the fund, the assets no longer belong to the grantor and don’t yet belong to the recipient.

The notion of a “trust fund” established by a Monetarily Sovereign nation, is senseless. Of what purpose is the fund, if the grantor has the unlimited ability to create assets, at any time and in any amount?

And if trust fund assets no longer belong to the grantor or to the recipient, to whom do the funds in a Social Security or Medicare “trust fund” belong?

In fact, there are no Social Security or Medicare trust funds. They are bookkeeping fictions, having zero purpose other than to deceive.

And the federal government has no need to borrow dollars, and indeed, does not borrow. It creates dollars, ad hoc, by paying bills.

Americans own most of the public debt, which means they benefit from the interest paid on it. That includes corporations, state and local governments, and individual investors, many of whom hold Treasury bonds in their retirement funds.

Foreign investors own about 30 percent of the nation’s total debt, or about $6.3 trillion. America’s biggest foreign creditor is China, which holds about 5 percent of the total debt, followed closely by Japan.

This could become a problem if the U.S. ever damaged its credit rating, but for now American debt is still considered one of the world’s safest assets.

This is a combination of Ignorance and Treachery. On August 5, 2011, Standard & Poors (S&P) reduced America’s credit rating from AAA (outstanding) to AA+ (excellent) on August 5, 2011.

Ignorance: Two companies, Microsoft and Johnson & Johnson, have a credit rating of AAA — higher than the American government!

Think of it. The U.S., being Monetarily Sovereign, pays its debts with its own sovereign currency, of which it has the unlimited ability to create.

Microsoft and Johnson & Johnson are monetarily non-sovereign, and though they use dollars to pay their bills, they do not have the unlimited ability to create dollars.

So how can their credit rating be higher than that of the U.S.?

More ignorance: If the U.S ever failed to pay its debts, the dollar would lose value, which would send Microsoft and Johnson & Johnson into financial shock — probably bankruptcy.

So why did S&P lower America’s credit rating? This is where the Treachery comes in. Congress has created the “debt ceiling,” an artificial limit to the amount of money the government can pay for existing obligations.

That limit is based on a lie, the “Big Lie,” that federal taxes pay for federal spending. (While state and local government taxes do pay for state and local government spending, federal taxes do not pay for federal spending.)

Even if all federal tax collections fell to $0, the federal government could continue spending, forever.

Congress is well aware of this, but continues its pretense that dollars are limited, to keep you from asking for benefits. The rich want to limit your benefits so as to widen the Gap between them and you. The wider the Gap, the richer they are.

The debt limit is one of America’s biggest con jobs. Neither prudent nor wise, it’s economically harmful.

Has the U.S. always been in debt?
President Andrew Jackson briefly paid off the national debt in 1835, partly with proceeds from lands seized from Native American tribes.

Treachery: The author hides the fact that this caused a depression.

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.
1997-2001: U. S. Federal Debt reduced 15%. Recession began 2001.

Otherwise, the U.S. has been in hock for nearly every year of its existence, beginning with the bill for the Revolutionary War.

The debt peaked after World War II, ballooning to 119 percent the size of the GDP in 1946, but it swiftly shrank during the postwar economic boom. The debt load bottomed out at about 24 percent of GDP in 1974, and has been rising ever since.

But it was after the Great Recession in 2007 that the debt really began to explode. Tax revenues cratered while the government spent heavily trying to stave off economic collapse, including George W. Bush’s $700 billion bank bailout, known as TARP, and Barack Obama’s $787 billion economic stimulus package.

Probably, Ignorance: Apparently, the author doesn’t realize that while debt reduction leads to depressions and recessions, those depressions and recessions are cured by debt increases.

What can be done to pay it off?
Theoretically, paying down the debt is simply a matter of spending less and collecting more in taxes. But voters don’t like spending cuts or tax increases, so politicians who want to be re-elected avoid them.

Give this a Treacherous Ignorance grade.

It is tantamount to asking, “What can be done to completely destroy the U.S. economy?” The debt is $15 Trillion. Does any sane person really want to remove $15 trillion from the American economy?

Does any sane person want to remove even $1 Trillion, or any amount from the American economy? Surely the most stupid idea in this entire article, and that is saying something.

Depending on whether they’re in power or out, both Democrats and Republicans are conveniently inconsistent in their views on the debt. During the 2008 presidential campaign, Obama chided Bush for “unpatriotic” deficit spending on the Iraq War and tax cuts, which helped increase the total debt by 101 percent during the Bush years.

But Obama increased the debt by 68 percent during his own presidency, arguing that deficit spending was necessary to rescue the economy.

Likewise, Republicans who warned that Obama was spending away the country’s future have now embraced deficits, arguing that their $1.5 trillion tax plan will pay for itself by generating economic growth — a contention that most economists say is unrealistic.

Rep. Mark Walker (R-N.C.) says his party sees the dangers of debt as “a great talking point when you have an administration that’s Democrat-led. It’s a little different now that Republicans have both houses and the administration.”

The above is 100% Treachery. Both parties are well aware that federal deficit spending grows the economy, and federal surpluses shrink the economy.

And if any tax cut were to “pay for itself” by decreasing the federal deficit, that tax cut would cause a recession or a depression.

Other countries’ debt
In sheer dollars, the U.S. is the most indebted country in the world, followed by Japan ($11 trillion) and China ($5 trillion).

But in relation to the size of its economy, Japan’s debt is the biggest in the world by far. Japan’s debt is more than 240 percent the size of its economy, with Greece carrying the world’s second-largest debt load at 180 percent.

Probably Ignorance: The authors fail to mention the difference between a Monetarily Sovereign nation (the U.S., China, Japan) and a monetarily non-sovereign nation (Greece and all other euro-using nations).

While a Monetarily Sovereign government can pay any bill denominated in its sovereign currency, a monetarily non-sovereign government has no sovereign currency, so can run short of whatever currency it uses.

In Summary:

The THIS WEEK article is a damaging blend of Ignorance and Treachery, that serves only to promulgate the Big Lie.

It’s a disgrace, but a typical disgrace, for you will see articles like this every day, from many sources, both right and left.

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