Why is Medicare the way it is?

The purpose of government is to improve and protect the lives of the governed.

Is the Medicare Advantage plan an admission that Medicare itself is unnecessarily incomplete?

Rolls-Royce Phantom Prices, Reviews and New Model Information
Free, but with strings.

A story: You receive a call from the wealthiest man on earth. He owns an infinite amount of money.

He tells you he’s in the mood to do a good deed.

He has picked your name randomly, not based on anything but the luck of the draw, and he is giving you a free, no-strings-attached, Rolls Royce automobile.

Well, actually, there are two small strings. You must choose between two Rolls.

One has no heater. The other has no air conditioning.

And you must wait until you are 65 years old before you pick your car.

This puzzles you, so you ask him, “Why would someone having infinite money decide that when does his good deed, he gifts you a car that is missing either a heater or air conditioner?”

And why must you wait until you’re 65?

What’s his purpose?

While you ponder that question, consider this: The federal government, being uniquely Monetarily Sovereign, has infinite dollars. It never can run short of its own sovereign currency.

The government provides you with Medicare, which comes in two basic “models,” Original Medicare and Medicare Advantage.

And you typically must wait until you are 65 to join (with certain exceptions).

But Medicare and Medicare Advantage have different options depending on many of your personal factors.

WHY? Why doesn’t Original Medicare simply cover all medical conditions for everyone?

The American Association of Retired People (AARP) published “8 Reasons to Change Medicare:

1. My prescription costs have jumped.
That happens usually due to one of two scenarios: You’ve been prescribed a new drug your Plan D policy doesn’t cover, or your current medicines have fallen off your Plan D’s formulary (list of covered medicines), Neuman says.

Each September, Part D prescription plans will send out a list of changes to drug coverage, giving you time to make sure your medicines are still covered.

If not, you can shop around for another plan or ask your doctor to apply for an exception in covering your favored medicine.

WHY? Why must a person pay extra for Part D, and why must that person shop around for a plan that covers all his medicines?

2. I’ve decided to spend my winters (or summers) in a different state.
Advantage plans typically charge more to go to doctors outside of their networks; in some cases they won’t cover any charges if it’s not an emergency.

So a Midwesterner might have to pay more to see out-of-network doctors while in Florida.

You need to read the details of your plan, or talk with a representative, to know where you stand. If you’ll be living a dual-residence existence for years to come, you might consider a switch to original Medicare, with the usual caveats.

WHY? Why the “in-network, out-of-network” rigamarole?

3. I need surgery and prefer a specific doctor.
Original Medicare allows patients to choose any doctor or hospital that accepts Medicare.

But if you’re in a Medicare Advantage plan and its surgeons don’t meet your needs, you may need a different MA plan or to switch to OM.

The people who really need to focus on whether doctors are in network are those who’ve suffered major problems like cancer and heart attack, says Joseph Antos, health care expert at the American Enterprise Institute.

“A specialist may be key to their treatment,” he says.

WHY? Why does one Medicare plan cover any doctors or hospitals that accept Medicare and the other plan doesn’t?

4. I’m super healthy and rarely need a doctor.
If you’re in original Medicare, all should be well: As a “pay-for-service” arrangement, not seeing the doctor isn’t costing you anything extra beyond your mandatory parts B and D monthly insurance premiums.

If you’re in an MA plan in which you’re paying a monthly premium on top of your standard Part B premium, that may be for a plan that offers lots of extras , such as gym memberships.

Consider switching to a lower-cost MA plan that doesn’t offer services you don’t plan to use in the coming year.

WHY? Why are there any premiums, and why does one plan not cover the “extras?

5. I’ve been diagnosed with a chronic condition.
A serious medical change should trigger a full review of your Medicare coverage. Make sure your Plan D policy pays for new prescriptions.

Consider the care you’ll need . If you want disease-specific programs, find an MA plan that offers them.

But if you will need lots of specialists, there’s an argument for OM. Making critical changes early can “really affect your pocketbook and save you money,” says Gretchen Jacobson, a vice president with the Commonwealth Fund.

WHY? Why the difference in plans? Why doesn’t one plan cover everything?

6. My income has dropped sharply.
If you are in original Medicare, your Part B monthly premium is locked in, but your Part D drug plan isn’t.

And there’s a chance you can find a lower-cost policy that covers the medicines you are on.

If you’re in an Advantage plan, consider a switch to a plan in which there is no extra payment on top of the mandatory Part B premium.

And you might qualify for help. Ask your state Medicaid office about Medicare Savings Programs. Find the state offices here or call 800-MEDICARE (800-633-4227).

WHY? Why is there a monthly premium? Why does one plan not even lock in premiums? Why the difference in costs?

7. My former employer is changing its retiree health benefits.
Some companies provide retirees with Medigap supplemental insurance, which covers many health costs not covered by OM.

If you have changes to your retiree benefit coverage, or for some reason that coverage no longer is offered, contact Medicare’s Benefits Coordination & Recovery Center (855-798-2627).

Someone can tell you whether you fall in the window in which Medigap insurers cannot deny you coverage based on preexisting conditions.

WHY? Why are some retirees not covered by Medigap supplemental? Why is there even a need for supplemental?

8. My regular doctor is no longer in network for my plan.
If you deeply want to stay with a doctor, ask directly whether he or she is moving to a different MA plan, accepting OM patients or dropping out of Medicare completely.

If you decide to make a change, make sure a short-term decision won’t affect your long-term coverage (for example, switching to original Medicare to temporarily stay with one doctor but sacrificing Medigap coveragefor the long term).

It might be safer to ask your doctor to recommend a colleague in your current plan.

I’m in need of serious dental care. Original Medicare doesn’t cover routine dental care costs, but many Medicare Advantage plans do.

If you don’t have your own dental insurance and can’t afford dentistry costs out of pocket, consider finding an MA plan that will cover a portion of the costs of your needed work.

Antos warns that figuring out what portion of your dental bills an MA plan will cover is complicated, so it helps to know what services you will use in the coming year.

WHY? Why does a person need to consult a crystal ball to guess what medical coverage will be needed at some unknown time in the future?

WHY?


HERE IS WHY: Our Monetarily Sovereign government has infinite funds. It can afford any expense, even without collecting a single dollar in taxes. It has ultimate control over the value of the dollar, i.e. inflation.

Thus, the federal government has the unlimited ability to fund comprehensive, no-deductible Medicare for every man, woman, and child in America. There is no financial reason why you, your family and everyone you know does not have free, total healthcare protection.

But . . . 

At the behest of the very rich, who run America, our information leaders promulgate the Big Lie that taxpayers fund federal spending, and that the federal government is in danger of running short of dollars if spending increases without tax increases.

You have been sold the bill of goods that “there is no such thing as a free lunch,” and that federal spending causes inflation, and that the phony Medicare “trust fund” is running short of money.

The rich do this to widen the Gap between the rich and the rest, for it is the Gap that makes them rich. The wider the Gap, the richer they are.

Better “Medicare for All” plans have been proposed, but they have been rejected supposedly because tax dollars are needed to pay for it. 

They aren’t. It’s the Big Lie, the sole purpose of which is to make the rich richer.

There is no other purpose.

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

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THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

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

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics. Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps: Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all
  4. Free education (including post-grad) for everyone
  5. Salary for attending school
  6. Eliminate federal taxes on business
  7. Increase the standard income tax deduction, annually. 
  8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
  9. Federal ownership of all banks
  10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

Correcting the Big Lie

If the Washington Post and the other major media were honest, this is what tomorrow’s front pages would look like

For those who wish to see a classic example of the Big Lie (that federal deficits cause inflation and are a burden on taxpayers) read this article from the Washington Post.

U.S. government spent $660 billion more in March than it collected in revenue, the third-largest monthly deficit on record

Translation: “. . . the third-largest monthly economic gain on record.” (When the government pumps more money into the economy than it takes out in taxes, that is an economic gain for the economy.)

Stimulus plan and $1,400 checks drove spending much higher as the White House and Republicans clash over where to spend money next.
By Jeff Stein, April 12, 2021 at 2:00 p.m. EDT

The federal government spent $660 billion more than it collected in tax revenue this March, the Department of Treasury said Monday, as the Biden administration’s stimulus package pushed the U.S. monthly deficit near record highs.

Translation: ” . . . pushed the U.S. monthly economic gain near record highs.” (That’s the purpose of a stimulus — adding money grows the economy.)

The U.S. spent $927 billion in March alone — more than double the level from March 2020 — a jump due primarily to the disbursal of tens of millions of $1,400 stimulus payments under the American Rescue Plan. Meanwhile, tax revenues stayed largely flat, with the government only collecting slightly more than last March.

The resulting deficit is the third largest ever in American history, Treasury officials said, eclipsed only by April and June of last year — when the U.S. authorized larger levels of emergency spending to head off the economic crisis caused by the pandemic.

The monthly deficit had contracted relative to the summer months as federal spending expired and the U.S. economy began to heal.

Translation: “The resulting economic gain is the third highest in American history . . . to head off the economic crisis caused by the pandemic.” (Neither you, nor your children, nor your children’s children will ever pay for the so-called “deficit.” Our Monetarily Sovereign federal government funds its payments by creating new dollars, ad hoc.)

The U.S. budget deficit breached $3.1 trillion in 2020 as the pandemic slammed economy

Over the first six months of the current fiscal year, the government’s budget deficit has reached $1.7 trillion, a massive sum.

America’s annual deficit hit $3.1 trillion in 2020, an all-time high that far surpassed the previous record of $1.4 trillion, which came in 2009 during the depths of the Great Recession.

Translation: “The U.S. economic gain breached $3.1 trillion as the pandemic slammed the economy.”

“. . . the economic gain has reached $1.7 trillion, a massive sum.”

“America’s annual economic gain hit $3.1 trillion in 2020, an all-time high . . . ” (And despite all the handwringing by pundits, there is no inflation.)

Democrats and Republicans authorized much of the emergency spending last year as a way to try and stop an economic collapse. They are at odds, though, over spending levels in 2021.

The government has to borrow money to cover deficits, and it does this by issuing debt.

Interest rates are relatively low, which has made it cheaper to borrow, but the federal debt has grown markedly in the past year.

Translation: “The federal government, being Monetarily Sovereign, does not need to borrow money to fund an economic gain, nor does it issue debt.

In an unrelated process, the government accepts deposits into T-security accounts, which are like interest-paying safe-deposit boxes. Unlike “borrowing,” the federal government never touches the dollars in T-security accounts.”

” . . . relatively low, and interest rates have no effect on the federal government’s ability to increase the economic gain.

Most of the new stimulus payments have already been sent out and are reflected in the March data. Still, budget experts say higher-than-usual deficit totals are likely to continue for the rest of the year.

On a call with reporters, Treasury officials noted that all the funding from last year’s Cares Act and the rescue plan had not yet been allocated.

Translation: “Fortunately, budget experts say higher-than-usual economic gain totals are likely to continue for the rest of the year.”

“This is going to be a big deficit year because we were already running substantial deficits and passed a $1.9 trillion bill,” said Marc Goldwein, a budget expert at the Committee for a Responsible Federal Budget, which advocates for lowering the deficit.

“This is not higher than expected. It’s what you’d expect with a $1.9 trillion stimulus on top of a structural deficit.”

Translation: “This is going to be a big economic gain year, because the economy already was running substantial gains . . . “

“It’s what you would expect with a $1.9 trillion stimulus on top of a structural gain.”

Jeff Stein is the White House economics reporter for The Washington Post. 

Translation: Jeff Stein is a White House economics reporter who is paid to promulgate the Big Lie that economic gains are a burden on the federal government and on taxpayers.

Because the federal government is Monetarily Sovereign, it pays for its spending by creating new dollars, ad hoc.

The federal government has the infinite ability to create dollars, so no tax dollars are used for federal spending.

(The sole economic purpose of federal taxes is to allow the government to control the economy. It taxes things it wishes to discourage, and it give tax breaks to what it wishes to encourage.)

Thus, the whole reason for calling it a federal “deficit” is to mislead. The purpose of the misrepresentation is to dissuade you, the public, from demanding more benefits from the government.

Because those benefits tend to narrow the income/wealth/power Gap between the rich and the rest, the rich pay the politicians, the media, and many economists to promulgate the Big Lie.

Shame on Mr. Stein, and shame on the Washington Post, and shame on all the other media, the politicians, and the economists who disseminate the Big Lie. Shame, for doing the dirty work of the very rich.

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Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics. Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps: Ten Steps To Prosperity: The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest. MONETARY SOVEREIGNTY</span

Is poverty harmful, harmless, or a benefit?

Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
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Evolution requires that for any physical feature to last a long time it either must be harmless or a benefit. Over the eons, harmful features tend to disappear.

Consider toenails. Once we came down from the trees, toenails were of no imaginable use, but they require so little energy to grow, they have not been an evolutionary inhibition. So we still have them.

Poverty too, has been with our species for thousands of years. But one is reluctant to say it is harmless. So that leaves the possibility that poverty is a benefit.

Or, because it is a social feature, rather than a physical feature, rather than a physical benefit, might it only be a perceived benefit?

Regarding perception, the Democrats are about to pass what can be one of the most meaningful bills in many years — meaningful because that one bill can change common economics perceptions.

Child tax credit expansion sets up showdown with GOP
By ALEXANDRA JAFFE and JOSH BOAK
March 8, 2021

WASHINGTON (AP) — The massive ($1.9 trillion) coronavirus relief plan making its way to President Joe Biden’s desk includes a plan to temporarily raise the child tax credit that could end up permanently changing the way the country deals with child poverty.

The American Rescue Plan, expected to receive final approval this week, temporarily raises the child tax credit, now at a maximum of $2,000, to as much as $3,600 per child annually.

The plan also expands the credit so it’s fully available to the poorest families, instead of restricting it based on the parents’ tax liability. And it will be paid out in monthly installments, to offer families struggling during the pandemic a more consistent lifeline.

If the Democrats are smart (big “if”), they will resist the calls to raise taxes to “pay for” the bill. The Democrats simply should allow the federal debt to rise significantly. Let debt fear-mongers wring their hands, and offer up dire predictions, none of which will occur.

The legislation gives families up to $3,600 annually for each child under age 6 and as much as $3,000 for those up to 17. 

The benefit is aimed at providing support to millions of families affected by the coronavirus pandemic. Democrats have embraced an analysis that found the proposal would cut child poverty 45%.

Republicans charge the move amounts to an expansion of the welfare state that will disincentivize parents from seeking work.

But Democrats hold out the proposal as a fundamental rethinking of the way the country approaches child poverty and an opportunity to address the income inequality that’s been exacerbated by the pandemic.

The old “disincentivize” myth simply means: “Give poor people some money, and they won’t work.” 

Thus poverty is wrongly portrayed as a benefit to the economy in that it supposedly stimulates labor. That false belief provides a ready excuse to widen the Gap between the rich and the rest.

It’s utter nonsense of course, as demonstrated by all the middle, upper-middle, and even rich people who have plenty of money yet still work. It’s the common “laziness” slur on the poor, most of whom actually labor much harder than do most of the rich.,

Connecticut Rep. Rosa DeLauro, a Democrat who has been advocating for an expansion of the credit since 2003, said in a statement that “this legislation forever changes the way that our nation supports both middle-class families and children in poverty.”

DeLauro and other Democrats on Capitol Hill see the current legislation as laying the groundwork for a permanent expansion of the credit.

Indeed, Biden himself told House Democrats during a private call last week that he supports legislation that would permanently increase the child tax credit to $3,000 per child.

While Republicans broadly support the idea of expanding benefits for children, some have opposed the Biden plan for its price tag, and others have criticized it for divorcing the benefit from any work requirement.

“Price tag” is an argument that takes several forms, among which are the false notions that:

1. Federal taxes fund federal spending. FALSE

The Federal government uniquely is Monetarily Sovereign. It never can run short of its own sovereign currency. Even if it collected $0 taxes, it could continue spending, forever.

Rather than using tax dollars, the federal government creates new dollars, ad hoc, each time it pays a creditor.

While state and local governments (which are monetarily non-sovereign) do use state and local taxes to fund spending, the federal government actually destroys federal taxes upon receipt.

That is why no one can answer the question, “How much money does the federal government have?” The best answer is, “Infinite.”

Tax dollars never become part of any money measure (i.e. M1, M2, M3, et al). They simply are destroyed

2. Federal deficit spending causes inflation. FALSE

All inflations are caused by scarcity, usually a shortage of food and/or energy.

Federal deficit spending actually can cure inflation, if the spending is directed toward reducing the scarcity (for instance, by buying overseas and distributing the scarce goods, or by supporting the manufacture of the scarce goods).

3. Federal deficit spending slows the economy. FALSE

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

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

Increases in federal deficit spending increase all three terms in the GDP formula.

4. Federal borrowing competes with private borrowing. FALSE

Though state and local governments do borrow, the U.S. federal government does not borrow. Federal financing is nothing like state and local government financing.

Banks and credit card companies, which do the vast majority of lending in America, do not lend to the federal government.

5. Future taxpayers will have to pay for the federal debt. FALSE

Because the federal government has the unlimited ability to create dollars, it does not borrow. Instead, it allows for deposits into T-security (T-bill, T-note, T-bond) accounts.

When you buy a T-security, you are not lending money to the federal government. You are making a deposit into your own T-security account, held at the Federal Reserve Bank. There your dollars remain, collecting interest until maturity, at which time the government returns your dollars.

The federal government does not use those dollars to pay its creditors or for any other purpose.

No borrowing or taxpayer money ever is involved in T-security transactions. All taxpayer dollars are destroyed upon receipt.

6. Federal interest payments crowd out other federal spending. FALSE

The federal government has the unlimited power to create dollars. It can pay an infinite amount of interest.

Scott Winship, director of poverty studies at the conservative American Enterprise Institute, said his concern is that a permanent child allowance might make parents less likely to work and reduce the number of two-parent households, since there would be a stream of income from the government.

He wants to reduce child poverty but is concerned that doing so this way might worsen factors such as unemployment and single-parenthood that contribute to policy.

“The feeling is we win the battle against child poverty but we lose the war in the long run because we’ve created incentives that make it tougher to reduce poverty,” Winship said.

The conservatives want you to believe that giving the impoverished money increases poverty. Remember that bit of nonsense, every time to make a contribution to charity. According to the conservatives, when you drop a dollar into the bell-ringer-Santa’s pail, you are worsening poverty!

“If pulling families out of poverty were as simple as handing moms and dads a check, we would have solved poverty a long time ago,” Sen. Marco Rubio wrote.

Pulling families out of poverty is as simple as handing moms and dads checks, but ignorant and/or dishonest politicians won’t admit it.

But the expanded benefits included in the coronavirus relief plan set up a precedent that could put Republicans on defense on the issue. Because the benefit currently expires after a year, the Biden plan essentially creates a potential fiscal cliff for child poverty.

This could set up a political showdown during an election year on whether voters believe it’s acceptable for millions of children to lose the added aid and become impoverished once again.

“When it’s up for renewal, Republicans will be in the awkward position of opposing payments to families delivered through a credit that they pioneered, and championed as recently as 2017,” said Samuel Hammond, director of poverty and welfare policy at the Niskanen Center. 

“No Republican wants to run on taking money away from families of any income,” Hammond said.

The Republicans never have expressed sympathy for the less-than-rich families. They tend to blame the impoverished for their own poverty, rather than to admit that good or bad fortune are the primary determinants of wealth.

Looking toward the midterm elections, the attack ads aimed at Republicans would simply highlight the party’s votes for tax cuts during the Trump administration in contrast with their votes against the Biden plan.

“It’s as simple as, when it was a vote on tax cuts for billionaires, Republicans voted yes, and when it was a check for you, they voted no,” he said.

If the Democrats avoid the pressure from the economics-ignorant, unnecessarily to raise taxes, the results might at long last demonstrate the facts of Monetary Sovereignty, and maybe, just maybe, we wouldn’t be subjected to the following Big Lies from such as the Committee For A Responsible Federal Budget (CFRB):

How High Are Federal Interest Payments?
Mar 10, 2021

This year, the federal government will spend $300 billion on interest payments on the national debt. This is the equivalent of nearly 9 percent of all federal revenue collection and over $2,400 per household.

Households don’t pay for federal interest payments.

The federal government spends more on interest than on transportation, education, and research and development combined.

The above statement is irrelevant. It only demonstrates that the government could spend more on transportation, education, and research and development.

The household share of federal interest is larger than average household spending on many typical expenditures, including gas, clothing, education, or personal care.

Again, irrelevant. Households do not pay for federal interest.

Growing debt levels add to the cost and risk associated with them.

The federal government has the unlimited ability to fund interest payments, which actually stimulate economic growth. There is no risk associated with federal spending.

Even with exceptionally low interest rates, the federal government is projected to spend just over $300 billion on net interest payments in fiscal year 2021. This amount is more than it will spend on food stamps and Social Security Disability Insurance combined.

It is nearly twice what the federal government will spend on transportation infrastructure, over four times as much as it will spend on K-12 education, almost four times what it will spend on housing, and over eight times what it will spend on research and development.

All the above demonstrates is the that government could, and should, spend more on food stamps, Social Security, infrastructure, education, housing, and research and development.

Interest payments effectively consume more than half of the worker-side payroll tax paid by households and are almost twice as large as total payments received through federal excise taxes and customs duties.

Interest payments do not “consume” any taxes. Federal taxes do not fund federal spending.

If interest rates were one percent higher than projected for all of 2021, interest costs would total $530 billion — more than the cost of Medicaid.

If rates were two percent higher, interest costs would total $750 billion, which is more than the federal governments spends on defense or Medicare. And at three percent higher, interest costs would total $975 billion — almost as much as is spent on Social Security benefits.

On a per-household basis, a one percent increase in the interest rate would increase costs by $1,805, to $4,210.

The CRFB keeps repeating the same lie, that federal taxes fund federal spending. They learned from Hitler that if you repeat a lie often enough, people will begin to believe it.

Trump used the same strategy with his repeat of the lie that the election was stolen. Millions of people believe that lie, too.

The higher the federal debt, the more exposed the federal government is to interest rate risk. 

There is no risk to the federal government or to taxpayers. The government has the unlimited ability to pay its bills. There also is no risk of inflation, which is not caused by government deficit spending, but rather by shortages, usually of food and/or energy.

And now, here is the CRFB’s Big Lie in all its glory:

Once the U.S. recovers from the COVID-19 pandemic, policymakers should work to adopt a combination of entitlement reforms, smart spending reductions, and revenue increases that will ultimately put debt and deficits on a more sustainable path.

“Entitlement reforms” and “spending reductions” mean “cut Social Security, cut Medicare, cut all social benefits for the poor and middle-income.”

“Revenue increases” means “increase FICA and other taxes on the poor and middle-income.”

“Sustainable” is the CRFB’s favorite word, that actually has no meaning at all, but it sounds oh, so prudent, doesn’t it?

SUMMARY

The Big Lie in economics is: The Monetarily Sovereign U.S. government uses tax dollars to pay its bills. This lie prevents the government from supplying benefits to those who are not rich.

A corollary to the Big Lie is the notion that spending for social benefits discourages people from working.

The Big Lie and its corollary are disseminated by the media, the politicians, and the economists who are bribed by the rich so as to widen the Gap between the rich and the rest.

Rodger Malcolm Mitchell

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

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

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

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics. Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all or a reverse income tax
  4. Free education (including post-grad) for everyone
  5. Salary for attending school
  6. Eliminate federal taxes on business
  7. Increase the standard income tax deduction, annually. 
  8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
  9. Federal ownership of all banks
  10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

Joe Biden’s big mistake

  1. Monetary Sovereignty: This term describes the unlimited ability to issue and control a currency.  Even without collecting taxes, a Monetarily Sovereign can spend forever.
  2. Gap Psychology: This term refers to the desire to distance oneself from those below, in any social ranking, and to come nearer to those above.
  3. The Big Lie: This term describes the false claim that a Monetarily Sovereign entity needs or uses income.

Joe Biden made a big mistake. He revealed, in an interview with ABC’s David Muir, that he doesn’t understand federal financing.

Joe Biden releases plan to reopen schools amid coronavirus ...
“Everyone should pay their fair share” of a useless and regressiv tax.

Here are some excerpts:

Biden to ABC’s David Muir on raising taxes: ‘No new taxes’ for anyone making less than $400,000
Everybody should pay “their fair share,” Biden said.
By Arielle Mitropoulos, August 23, 2020, 7:09 PM

Joe Biden and his running mate Sen. Kamala Harris, the former vice president (said) everybody should pay “their fair share.”

“I will raise taxes for anybody making over $400,000,” Biden told Muir, adding, “no new taxes” would be raised for anyone making under $400,000.

Presumably, Biden and Harris believe that making “soak-the-rich” statements will endear them to the working populace, who gleefully enjoy any punishment of the rich.

They may be right about those emotions, but they are at least partly wrong about the economics.

They are right that raising taxes on the rich would narrow the Gap between the rich and the rest, which would benefit the economy in myriad ways.

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.

But, the federal government neither needs nor uses tax income. The federal tax dollars you send to the U.S. Treasury leave the economy and cease to exist. So, rather than holding taxes steady, the Democrats should cut taxes for everyone who is not rich.

Tax policy is taking on additional significance for the 2020 presidential election, with the economic crisis inextricably tied to the pandemic, and more than 30 million Americans currently on unemployment.

Although Biden has been leading in the polls, polls also have shown that voters have greater confidence in President Donald Trump when it comes to the economy.

Voters may have greater confidence in Trump regarding the economy, because Trump has taken credit for the ongoing effect of President Obama’s increased deficit spending.

Trump, with his tax cuts for the rich and his increased import duties — which effectively are tax increases on the “not-rich,” has widened the Gap between the rich and the rest.

“Is it smart to tax businesses while you’re trying to recover?” Muir asked.

“It’s smart to tax businesses that are in fact making excessive amounts of money and paying no taxes,” Biden told Muir.

“It’s how we did it last time,” he said, in reference to the 2008 recession, adding that his work, at the time, with then-President Barack Obama, led to economic recovery, “with the largest, the most consecutive number of months of growth in jobs of any time in history. We did it the right way.”

No, it is not smart to tax business when you’re trying to recover, or any other time. What they actually did was pump money into the economy with increased federal deficit spending:

Federal debt growth declines in advance of recessions (vertical gray bars). Then, to cure recessions, the federal government increases deficit spending.

A growing economy requires a growing supply of money. Increased federal deficit spending (which increases the federal debt) grows the economy. When federal deficit spending does not increase sufficiently, recessions result. These recessions are cure by increases in federal deficit spending.

Increased taxation reduces federal debt growth and therefore is recessionary. 

Taxing the rich more, while holding taxes level for the “not-rich” would be recessionary. While taxing the rich would help narrow the Gap, the recessionary effect must be overcome by taxing the not-rich less.

“Look [at] what he’s doing,” Biden continued, criticizing the president. “The money was supposed to go to help small businesses. You have one in six small businesses that have already closed. You’re finding a situation that over 60% of the money — only 40% of money for small businesses went to small businesses.”

When Muir pressed him on whether taxes would be raised on small businesses, Biden emphatically said, “No.”

“There will be no raising taxes” on the “90% of the businesses out there are mom and pop businesses — that employ less than 50 people,” Biden responded.

“We have to provide them with the ability to reopen. We have to provide more help for them, not less help,” he said.

Biden is correct that small businesses need help, but this will not be accomplished by taxing large businesses, however one defines “large” and “small.”

That a business employing more than 50 people should be considered “large” and taxed more, is ludicrous. The number of employees is not relevant to “making excessive amounts of money and paying no taxes.” What is relevant? Profits and taxes.

Why penalize businesses for hiring? It makes no sense to penalize businesses at all, because businesses provide goods, services, and money to the economy.

To narrow the Gap between the rich and the rest, the highest personal incomes should be taxed, not businesses.

In Summary, Biden doesn’t understand Monetary Sovereignty, Gap Psychology, and this misunderstanding leads him to tell The Big Lie.

Assuming he wishes to help the underclasses, narrow the Gap, and stimulate the economy he should begin by eliminating FICA, while leaving the funding of Medicare and Social Security to the federal government.

Contrary to popular wisdom, FICA does not fund Social Security or Medicare. Like all federal taxes (but unlike state/local taxes) FICA funds nothing. The federal government could fund unlimited spending with no taxes.

FICA is the most regressive tax in America. Eliminating FICA would benefit workers and businesses. It would decrease unemployment by making employment cheaper. It has been suggested seriously by just one politician, none other than Donald J.Trump. But, in perhaps the only time the GOP toadies have stood up to Trump, they said “No.”

Ironically, this may have been the only good idea Trump has had during his term.

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

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

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

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics. Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:
1. Eliminate FICA
2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
3. Social Security for all or a reverse income tax
4. Free education (including post-grad) for everyone
5. Salary for attending school
6. Eliminate federal taxes on business
7. Increase the standard income tax deduction, annually. 
8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
9. Federal ownership of all banks
10.Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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