Tag: the big lie

Obamacare and the Big Lie

Today, in its seemingly unending effort to promulgate The Big Lie (i.e. that, “federal taxes fund federal spending”), the Chicago Tribune published an editorial titled, “Why Obamacare Failed.”

Here are some excerpts:

Come November, Illinois consumers likely face staggering price hikes for individual insurance policies.

Some types of plans could cost an average of 43 percent to 55 percent more. Ditto across the country:

Many Illinois consumers will find fewer choices because major carriers fled this market.

The Affordable Care Act has been criticized (because) its success depended on states supporting their marketplaces and enrolling healthy consumers.

Yes, the ACA depended on monetarily non-sovereign states and monetarily non-sovereign people paying for the health insurance that the Monetarily Sovereign federal government easily could have, and should have, paid for. (See: Medicare for All.)

Those insurers fled because they didn’t want to lose more money on a market they think likely will never be profitable for them.

So let’s look at the failings and how they can drive solutions:

Obamacare failed because it flunked Economics 101 and Human Nature 101. It straitjacketed insurers into providing overly expensive, soup-to-nuts policies.

It wasn’t flexible enough so that people could buy as much coverage as they wanted and could afford — not what the government dictated. Many healthy people primarily want catastrophic coverage.

Obamacare couldn’t lure them in, couldn’t persuade them to buy on the chance they’d get sick.

Obamacare failed because it charged the public for benefits the government should fund.

The Tribune’s “logic” could apply to all government spending. (i.e. Allow each individual to pay only for as much federal highway as he wants, as much grade school as he wants, as much fire protection as he wants, as much military as he wants, as much food inspection as he wants, as much air safety as he wants, etc.)

And how does anyone know in advance how much healthcare funding he will need? If someone miscalculates and suddenly needs more hospital care than he can afford, what should America do about that person?  What about a poor person who can’t even afford an annual exam?

The rich love pay-for-service plans. Being able to pay for more, they receive the best service.  This may be O.K. in Las Vegas casinos, but not for healthcare.

Obamacare failed because the penalties for going uncovered are too low when stacked against its skyrocketing premium costs.

Next year, the penalty for staying uninsured is $695 per adult, or perhaps 2.5 percent of a family’s taxable household income. That’s far less than many Americans would pay for coverage.

Financial incentive: Skip Obamacare.

True, and that is the whole point of federally funded healthcare insurance.

We shouldn’t penalize people for not being able to afford insurance. Medicare for All would solve that problem.

Obamacare failed because insurance is based on risk pools — that is, the lucky subsidize the unlucky.

The unlucky who have big health problems (and big medical bills) reap much greater benefits than those who remain healthy and out of the doctors’ office.

But Obamacare’s rules hamstring insurers.

They can’t exclude people for pre-existing conditions, and can’t charge older customers more than three times as much as the young.

Those are good goals, but they skew the market in ways Obamacare didn’t figure out how to offset.

True: That is why regular Medicare exists.

Old people get sick more often than do young people. Private insurance is based on the profit motive. If private insurance companies had their way, old people either could not find health insurance or could not afford to pay for it.

Apparently, the rich insurance executives would be happy if insurance companies could “exclude people for pre-existing conditions, and charge older customers more than three times as much as the young.”

Federally funded Medicare for All would solve that problem.

Obamacare failed because it allowed Americans to sign up after they got sick and needed help paying all those medical bills.

Insurance should be structured so that, although you don’t know if you’ll need it, you pay for it anyway, just in case; your alternative is financial doom.

But if you can game the system and, for example, buy auto coverage after you crash into your garage, then you have no incentive to buy insurance beforehand.

True. But Medicare for All would be funded by the federal government, thus solving that problem.

Obamacare failed because it hasn’t tamed U.S. medical costs. Health care is about supply and demand: People who get coverage use it, especially if the law mandates free preventive care.

Iron law of economics: Nothing is free; someone pays. To pretend otherwise was folly. Those forces combined to spike the costs of care, and thus insurance costs.

When the Chicago Tribune says, “People who get coverage use it, especially if the law mandates free preventive care,” they really are saying, “Only the rich should receive full health care, including preventive care. You middle- and lower-income people should settle for the lower quality of the health care you can afford.”

And as for that supposed “Iron law of economics, nothing is free.” Total hogwash.  It is the fundamental expression of what has become known as THE BIG LIE.

The federal government, unlike you, and me, and the cities, counties, and states, is Monetarily Sovereign. It creates free dollars every single day. 

No, your federal taxes do not fund federal spending. Even if FICA and all other federal taxes fell to $0, the federal government could continue spending, forever. Dollars are created by laws, and laws are free.

And no again, this would not cause inflation. Being Monetarily Sovereign, the federal government has absolute control over the value of its own sovereign currency, the dollar. It has the unlimited ability to cause, prevent, or cure inflation.

Obamacare failed because too many carriers simply can’t cover expenses, let alone turn a profit, in this rigidly controlled system. Take Blue Cross and Blue Shield of Illinois, the state’s dominant Obamacare insurer.

Last year, for every dollar the carrier collected, it spent $1.32 buying care and providing services for customers, according to BCBS President Maurice Smith. No wonder BCBS is proposing rate increases from 23 percent to 45 percent for its individual plans.

Correct: That is the fundamental weakness of private health-care insurance. It relies on the profit motive. 

Federally funded Medicare for All would solve that problem.

The solutions to Obamacare are implicit in its failures. A repaired or replaced system has to be more flexible, letting insurers offer a wider range of plans so that consumers, not lawmakers or bureaucrats, dictate what’s best for them.

“A wider range of plans” is code for: Plans that cover less and have larger deductibles, i.e poor plans for the poor, and platinum plans for the rich.

The Tribune is correct that the solutions are implicit in its failures. The failure is privately funded insurance that relies on the profit motive.

The solution is to remove the profit motive and provide federally funded insurance: Medicare for All.

That system should protect those who carry continuous coverage, not coddle those who duck in and out of plans when their health needs change.

In short, the Tribune does not want to “coddle” you people who struggle every day to make ends meet.

They don’t want to “coddle” you coupon-clippers, who buy your clothing at resale stores, and drive ten-year-old cars.

They don’t want to “coddle” you if you don’t know how you will pay for rent and food, much less for college tuition or for student debt.

The very rich people know you are a lazy, good-for-nothing “taker,” always trying to get something free, when you should pay for it like the rich people do, even when you can’t.

(We’re talking about those rich people who apparently aren’t “coddled,” even when they bribe politicians to create tax dodges, tax havens, and  tax manipulations. Allowing the rich to duck their taxes — that’s not coddling in the world of the Chicago Tribune.)

A new system also should let Americans not covered via an employer reap tax credits to help finance their insurance purchases on the open market.

Ah, the old “tax credits” scam. It’s the right-wing’s gift to the insurance companies, so they can charge as much as they wish and profits can be supported further by “tax credits.”

Never mind that tax credit savings won’t nearly cover health insurance costs. And never mind that a “tax credit” means a great deal more to those in a high tax bracket than to you.

Apparently, the Tribune owners think everyone is in a high tax bracket.

No, they really don’t. They are well aware that what they are proposing will widen the Gap between the rich and the rest.

And tell us again: Why can’t insurers sell policies across state lines? Imagine the pricing competition that would unleash.

O.K., so long as you’re asking, we’ll tell you.

Historically, insurance has been one of the most scam-based industries in the world. It’s complex and filled with fine print.  So, by necessity, is highly regulated — by the states.

But if insurance were sold across state lines, who would regulate it? Answer: The state with the flimsiest regulations.

People would shop around for the state in which the insurance companies have done the best bribery job, and that is where the lowest priced (worst) insurance scams would be found.

The Tribune seems to hate regulations.  Presumably, it wants to allow the rich insurance executives to do whatever they please. Let the consumer be damned.

Anyway, there would be no need to sell insurance across state lines if the government offered federally funded Medicare for All.

Not only would high insurance costs not be a problem, but federal payments for those high costs actually would benefit the economy.

The bottom line: The pro-rich, anti-poor want you not just to be dissatisfied with Obamacare (reasonable),  but to let your dissatisfaction turn you to an even worse system that will enrich the rich and impoverish the rest.

And it all begins with The Big Lie.

The real solution to the faults of Obamacare is found in Steps #1 and #2 of the Ten Steps to Prosperity (below).

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
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 afford better health care than 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 AN ANNUAL ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) 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 EVERYONEFive 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 benefiting 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 CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from 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 corporate taxes would be an 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

Is Moody’s a criminal enterprise or just plain ignorant?

I’ve written about Moody’s before. You may know Moody’s as one of the “Big Three” credit rating agencies that gave high grades to worthless securities, and helped start the Great Recession.

You also may know standard practice for rating agencies is to be paid by the businesses they rate, a clear conflict of interest and an open invitation to criminality.

And, if you are a regular reader of this site, you know that unlike cities, counties, states, euro nations, businesses, you, and me (all of which are monetarily NON-sovereign), a Monetarily Sovereign (MS) nation never can be forced into bankruptcy. Never.

A Monetarily Sovereign nation can pay any bill of any size at any time, simply by creating its money. For MS governments, ability to pay never is an issue. The only issue is willingness to pay. 

Thus, an MS credit rating cannot legitimately be based on the amount of indebtedness. If the MS nation is willing, it can pay any bill.

An MS nation, even with minimal debt, could be given a low credit rating, if it has a history of refusing to pay its bills.  But, an MS nation, even one with huge debt, should receive a high credit rating if it always pays its bills.

To summarize, the “Big Three” credit agencies have a history of mis-rating securities, being paid by the subjects of their ratings and, as you will see, probably not recognizing the fundamental differences between Monetary Sovereignty and monetary non-sovereignty.

Reader “elizabethharris001” brought to our attention, an article in the Jerusalem Post titled, “Moody’s warns Israel new budget could downgrade credit rating.” The article said, in part:

Credit rating agency Moody’s on Thursday warned that the 2017- 2018 state budget proposal could be a step toward undermining Israel’s solid A1 credit rating.

Israel has a “solid A1 credit rating,” because it always pays its bills, in full and on time.

Finance Minister Moshe Kahlon swept aside legal limits on spending increases and the deficit target in his budget proposal, which accommodated the many, expensive promises made in coalition deals.

The plan is expected to raise Israel’s debt-to-Gross Domestic Product (GDP) ratio, which fell below 65 percent in the past year.

This will have no effect on Israel’s ability or willingness to continue paying its bills, in full and on time.

“The rating or outlook could come under downward pressure if the commitment to fiscal discipline over the medium term was to wane,” the agency wrote in its annual Credit Analysis of Israel’s government.

“With the improvement in debt-to-GDP having already slowed compared to the mid-2000s, renewed fiscal easing puts at risk Israel’s credibility for budget discipline,” the report said.

When Moody’s mentions “budget discipline,” it is talking about austerity, the same process that has destroyed the economies of the euro nations — the same process that is responsible for every depression in U.S. history, as well as most recessions.

The Moody’s report was not all gloomy, however. It also praised Israel’s dynamic economy and its relatively strong performance when compared to many other advanced countries, still struggling in the aftermath of the 2008 global financial crisis.

Israel has a “strong performance,” but its debt above 65% of GDP warrants a reduction in credit rating? Think about the “logic” of that.

By confusing (intentionally??) MS nation finances with business finances (where large debt can impact ability to pay) Moody’s claims Israel’s debt requires a reduced credit rating.

Utterly false and misleading — demonstrating an ignorance bordering on criminal.  Is Moody’s even consistent in its false evaluations?

From Trading Economics:
Government Debt to GDP in Japan averaged 123.60 percent from 1980 until 2015, reaching an all time high of 229.20 percent in 2015.

Moody’s credit rating for Japan was last set at A1 with stable outlook.

Before we continue, Moody’s credit ratings, from top to bottom are: Aaa, Aa1, Aa2, Aa3, A1, A2, A3, Baa1, Baa2, Baa3, and lower.

Japan’s 229 and Israel’s 65 apparently warrant the same rating, and neither Japan nor Israel has been given Moody’s highest rating, despite the fact that both are Monetarily Sovereign and can and do pay all their bills on time.

Let’s look at a few other countries, courtesy of Trading Economics:

Canada: Debt to GDP of 91.50; Moody’s credit rating: Aaa

Canada, an MS nation with a much higher Debt/GDP ratio than Israel’s, and no better record of paying its bills, has an Aaa rating, four levels higher than Isreal’s current rating (which is about to be lowered).

As if that weren’t strange enough, let’s look at really crazy:

“Austria’s public debt reached a new peak of 86.2 percent of GDP in 2015 compared to 84.3 percent in 2014.”  Moody’s credit rating: Aaa, the highest rating.

So Austria, with a “worse” Debt-to-GDP ratio that Israel’s, and no better record of paying its bills, has a higher credit rating — and Austria, unlike Israel, is monetarily NON-sovereign.

Austria is part of the eurozone; it uses the euro, not it own sovereign currency. Austria does not have the unlimited ability to pay its bills. Unlike Israel, Austria could go bankrupt. But it has Moody’s highest rating.

And then here’s another eurozone nation, Germany:

“Germany recorded a Government Debt to GDP of 71.20 percent in 2015.” Moody’s credit rating: Aaa.

Germany too, is monetarily non-sovereign, and could be unable to pay its bills, but has Moody’s highest rating.

Finally, we come to the United States:

The United States recorded a Government Debt to GDP of 104.17 percent in 2015. Government Debt to GDP.  The United States averaged 61.94 percent from 1940 until 2015, reaching an all time high of 121.70 percent in 1946 and a record low of 31.70 percent in 1974.

Moody’s rating: Aaa

I call your attention to that 31.70 lowest Debt/GDP ratio. It comes right before a recession.

Monetary Sovereignty

In fact, there is an uncanny relationship between debt reduction and recessions. Most recessions follow a period of federal debt reduction.

And then there’s this inconvenient fact:

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

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.

Finally, while Gross Domestic Product is a measure comprising 12 months, Federal Debt is a historical measure comprising the entire life of the United States. In short is the classic apples/oranges, meaningless ratio.

Bottom line: Moody’s (as well as the other two major rating agencies, S&P and Fitch) either do not understand how Monetary Sovereignty works or are paid not to understand.

They evaluate nations as though the nations were monetarily non-sovereign businesses. The rating agencies don’t reveal the basic fact that an MS nation cannot be forced into bankruptcy. It can pay its bills forever, despite its Debt/GDP ratio.

Any credit rating is based on just two factors: Ability and willingness to pay bills.

Because an MS nation has the unlimited ability to pay, Debt/GDP has no meaning when evaluating credit. No matter what its Debt/GDP ratio, any nation may or may not be willing to pay its bills.

The Big Lie states: “Federal taxes fund federal spending.” But for an MS nation, spending is funded by money creation, not by taxes nor by borrowing.

The Big Lie is a carefully crafted story. It is designed by the very rich to convince everyone there isn’t enough money available to narrow the Gap between the rich and the rest.

The Big Lie forces countries to cut the spending that would benefit the lower and middle classes. It caused our too-slow growth following the “Great Recession.” It is the method by which the very rich retain power over the world.

The credit agencies are willing, and well-paid, accomplices to the Big Lie.

Is it ignorance or paid criminality? You decide.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
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 afford better health care than 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 AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) 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 EVERYONEFive 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 benefiting 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 CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from 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 corporate taxes would be an good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

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

MONETARY SOVEREIGNTY

The queen of bullsh*t

You may have thought that Donald Trump and Hillary Clinton were the royal monarchs of bullsh*t, but Maya MacGuineas has them beat by a light year.

Her queenship comes not just from her incessant lying, but from the respect she is given by the bribed politicians in Washington.  She repeatedly is asked to testify about the “unsustainable” federal deficit and debt, always confusing them with private deficits and debts.

(News flash: Federal financing is different from private financing.)

I know politicians are cowards — afraid to upset the public’s delusions — but are they all really so ignorant of economics they not only listen to MacGuineas, but actually invite her to speak?

I am set off on this latest rant about her efforts to promulgate The Big Lie, by an Email I received today:

Maya MacGuineas: We Can’t Borrow Our Way to Prosperity

Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget and head of the Campaign to Fix the Debt, wrote an op-ed that appeared in RealClearPolicy. It is reposted here. 

With the general election now officially underway, it’s encouraging that presidential candidates Hillary Clinton and Donald Trump have begun a discussion about how best to grow the economy and ensure our long-term prosperity.

Both candidates laid out their economic agendas last week, and it’s reassuring that reforming our dysfunctional tax system and increasing public investment seem to top the list of ideas for accelerating long-term economic growth.

Yes, they both want to “re-form” (i.e. change, form again), our tax system, but is simple change a good thing?

How about change-for-the-worse, by benefitting the rich more and by providing fewer benefits to the middle-class (Trump’s plan), or simply moving dollars around while increasing total taxes (Clinton’s plan).

Are those the kind of “reforms” we need?

But calls to finance these initiatives by increasing the deficit — effectively tacking them onto the national credit card — are self-defeating. Without a plan to pay for new initiatives and address our long-term debt, the nation faces slower, not faster, economic growth.

Early on, MacGuineas confuses federal finances with personal finances. There is no “national credit card,” nor is there anything even remotely resembling a “national credit card.”

It’s a phrase she uses to paint a picture of a federal government hopelessly indebted and unable to extricate itself — just like a person with large credit card debts.  And it’s all a lie.

The national debt is currently three-fourths the size of the economy — more than at any time in our nation’s history (with the exception of the World War II era).

Perfectly revealing. When the national debt rose dramatically during WWII, so did GDP:

Huge increases in federal deficit spending massively grew the economy. Government buying of goods and services built business sales and profits and employment. Government deficit spending for WWII was the most powerful economic growth device in U.S. history.

And, according to the Congressional Budget Office (CBO), the government’s official score-keeping agency, debt is on track to double as a share of the economy by 2050.

Assuming our creditors continue to allow these levels of debt, the CBO estimates that within three decades this will reduce average income by $4,000 per person compared to what it would be if debt were on a declining path.

In actuality, the U.S. has no “creditors.”

The federal government, being Monetarily Sovereign, has the unlimited ability to create its own sovereign currency, the dollar. It never can run short of dollars. It never needs to ask anyone else for dollars.

Thus, the U.S. never needs to borrow dollars. The so-called “debt” is nothing more than deposits in T-security accounts at the Federal Reserve Bank. The “debt” is bank accounts.

If you own a T-bond, T-note, or T-bill, you have a T-security account at the FRB. It’s part of the so-called federal “debt.” To buy that T-security, you ordered dollars taken from your bank checking account and deposited in your T-security account at the FRB.

It was a simple transfer of dollars.

To pay off the debt to you, the FRB simply will transfer your dollars from your T-security account back to your checking account. No new dollars needed.

MacGuineas either doesn’t know, or pretends she doesn’t know the difference between federal financing (Monetary Sovereignty) and personal financing (monetary non-sovereignty). Either she’s ignorant of basic economics or she’s lying.

While you and I can run short of dollars and may need to borrow some, the federal government cannot run short of dollars, so never needs to borrow any.

Not needing to borrow, the federal government has no “creditors” as the word normally is used. The so-called creditors are depositors — you and all the other depositors in Federal Reserve Bank accounts. (When you put money in the bank, you are referred to as a “depositor,” not a “creditor.”)

Go back to Macguineas’s statement, “Assuming our creditors continue to allow these levels of debt . . .” and substitute the word “depositors”:

  • Assuming depositors in Federal Reserve Bank accounts continues to make these levels of deposits, the CBO estimates that within three decades this will reduce average income by $4,000 per person compared to what it would be if debt were on a declining path.

The CBO is trying to tell you that increases in federal spending (as during the WWII growth years), plus deposits in the Federal Reserve Bank, reduce average income. What utter nonsense.

There is no known mechanism in economics, by which increased federal purchases of goods and services can reduce average income.

Think about it: The government buys more goods and services, thereby increasing business income, so businesses hire more people and pay more salaries. Somehow, by a miracle of mathematics, this is supposed to cut average income???

And yet we’re hearing calls for more borrowing.

No, the government doesn’t borrow.  What we’re hearing are more calls for federal spending on infrastructure repairs, Social Security, Medicare, education, the military, Research & Development, and all the other necessary investments in America the government can and should make.

Earlier this summer, the Committee for a Responsible Federal Budget estimated that Mr. Trump’s policies would add $11.5 trillion to the debt over the next decade, largely as a result of his tax reform plan.

That would be $11.5 trillion added to the economy — $11.5 trillion in purchases of goods and services. And this is supposed to “reduce average income”? Ludicrous.

He has also called for further deficit spending as “priming the pump.”

Meanwhile, there have been calls on the left for Hillary Clinton to expand — and to deficit finance — her $275 billion infrastructure plan.

So, the government should not add 275 billion stimulus dollars to the economy and fix our crumbling infrastructure??? 

Some have pointed to today’s low-interest rates to buttress the argument that now’s the perfect time to invest in our future. And there is some truth to this.

Actually, low-interest rates are not a good argument for deficit spending. The government can pay any bill of any size.  Paying interest on T-securities is no problem, whatsoever.

Paying higher interest rates would be more beneficial, as more dollars would be added to the economy.

But the bottom line is that any plan to increase spending or cut taxes on pro-growth activities would be strengthened by including ways to pay for it over the medium-term, thereby reducing our nation’s long-term debt burden.

The above paragraph is classic MacGueneas obfuscation. She correctly talks about “pro-growth activities” as requiring spending increases and tax cuts.

But then demands spending decreases and tax increases (i.e. anti-growth activities) to pay down the mythical “debt.”

Just ask the CBO. They recently estimated the economic impact of increasing federal investment. According to their findings, $500 billion of new deficit-financed federal investments spread out over a decade would increase the size of the economy by about 0.007 percent over the first ten years, while $500 billion of investment fully paid for would double that level of economic growth.

Classic economic double-talk by MacGuineas and the CBO. The words “fully paid for,” mean no additional dollars added to the economy. Somehow, the federal government would be expected to make a $500 billion investment in economic growth, while spending no new dollars.

How? Where will the $500 billion come from if not from new dollars or new taxing (which would be recessive for the economy)? No one knows.

It’s all part of The Big Lie, the lie that like you and me, the federal government requires income in order to pay its bills. (The Big Lie is: “Federal taxes fund federal spending.)

Unlike state and local governments, and unlike you and me, the federal government requires no income. It creates dollars, ad hoc, each time it pays a bill. That is the method by which the federal government creates dollars.

By 2035, the CBO estimates the fully paid-for investment would increase the size of the economy by 0.06 percent, while the deficit-financed investment would shrink the economy by 0.04 percent.

See, it’s like this: You are asked to believe that adding dollars to the economy shrinks the economy, while taking dollars out of the economy, grows the economy. If you believe that, I have a bridge to sell you.

Or ask the Joint Committee on Taxation. They found that while comprehensive revenue-neutral tax reform could increase the size of the long-run economy by about 1.5 percent, revenue-positive tax reform — even with a smaller reduction in tax rates — would increase it by close to 2 percent.

“Revenue-neutral” means no dollars added to the economy. “Revenue-positive” means dollars taken out of the economy.  You can decide for yourself which is more likely to grow the economy, additional government spending on goods and services, or no additional government spending.

Folks, this is not advance math. It’s a simple concept, made confusing by phrases like “revenue-positive,” which literally means “revenue-negative for the economy.” 

If federal debt wasn’t already on a path to increase by $10 trillion over the next decade, there might be a case for new borrowing. But, as a nation, we’ve too often been cavalier about borrowing when rates are both high and low, making tens of trillions of dollars in promises with no plans for how to pay them back. Given our past fiscal irresponsibility, no honest assessment of our nation’s balance sheet could conclude that what we need now is more borrowing.

And all these years, “with no plans for how to pay them back,” the federal government continues to pay it bills. Through depressions, recessions, stagflations, and wars, not only has the federal government never failed to pay a single invoice, but the U.S. economy has grown.

How would this be possible under the MacGuineas theory of austerity?  She keeps telling you the federal “debt” is unsustainable, and yet here we are, still paying our debts with no problem, whatsoever — still sustaining.

At what point do we acknowledge that “the girl who cried wolf” is a phony?

The evidence is clear: Reducing our projected long-term debt will promote economic growth; increasing debt will slow that growth.

In other words, increased government purchase of goods and services actually reduces economic growth, while reduced government purchases increase economic growth. Is that insane, stupid, or The Big Lie?

Today’s low interest rates do provide an opportunity: They buy us time to implement gradually much needed deficit reduction plans. Meanwhile, we can boost the economy by leading with pro-growth tax and spending reforms and enabling the pay-fors to follow as rates rise and the economy grows.

But low interest rates don’t get us off the hook. We must still address our massive and growing debt burden, particularly over the long run. There’s no excuse for punting this burden — and the slow economic growth that will accompany it — to the next generation.

And there you have it, The Big Lie in all its glory. “Cut deficit spending to grow the economy,” is like: “Apply leeches to cure anemia.”

Does The Big Lie result from mere ignorance or is there a more sinister motive?  I submit that the real motive is the desire to widen the Gap between the rich and the rest.

Without the Gap, no one would be rich (We all would be the same), and the wider the Gap, the richer they are.

So the rich pay the politicians (via campaign contributions), and the media (via ownership), the economists (via salaries and university contributions), and Maya MacGuineas (via her salary) to promulgate The Big Lie and to impoverish you.

They are terrified that one day, you will demand the truth.

At that point, poverty in American will diminish to historic lows, the Gap between you and the rich will be narrowed, and America will fulfill its promise of true greatness.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
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 afford better health care than 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 AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) 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 EVERYONEFive 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 benefiting 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 CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from 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 corporate taxes would be an 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

Voting for lies is necessary. The dangerous season of hatred

In case you didn’t see this in a previous “Comments” section, reader “Vincent” wrote: “It is not enough that politicians should be honest; they need to appear honest.”

My response was:

Some politicians appear to be honest. None actually are.

All politicians believe the public is relatively ignorant, and cannot be trusted with the truth. In that, they are correct.

So, you will not hear the truth from Trump, Clinton or Johnson. They all lie.

For instance, they all tell you The Big Lie (Federal taxes fund federal spending.) They believe that you, the public, will punish them for telling the truth, and they probably are correct.

As a voter, the best you can do is determine your own leanings, and select the one candidate most in line with those leanings.

Personally, I cannot subscribe to the basis of libertarianism (less government regulation, which allows the rich and powerful to rule the weak). So that eliminates Johnson.

For similar reasons, I cannot subscribe to the right wing belief that the rich and powerful should rule the weak). So that eliminates the Republican candidate.

By the process of elimination, I am left with the candidate that comes closest to my own beliefs (narrow the Gap between the rich and the rest), even though she still is too right wing for my tastes.

While listing Trump’s and Clinton’s lies is entertaining, in the National Enquirer vein, it is not a good basis for voting.

Then reader “Elizabeth Harris” wrote:

Hillary has the unanimous support of bankers, of neocons, of Wall Street, and the One Percent. She will deliver everything they demand, including mass privatization, the TPP, endless war (perhaps a world war with Russia) and a wider-than-ever gap between the rich and the rest.

For average people, life under Hillary will be a nightmare. And the more it becomes a nightmare, the more they will comfort themselves with the delusion that “Trump would have been worse.” This despite the fact that Trump is opposed by all those who will create the nightmare.

Among common folk, non-stop Trump-bashing is a desperate attempt to deny what they know inside about Hillary and her rich backers. It is a desperate attempt to deny the reality that in many ways, Trump is the de facto Democrat, and Hillary is the de facto Republican. Such people camouflage the economic realities of Hillary by focusing on the social inanities of Trump, such as his proposed border wall, which Congress would never agree to. They focus on Trump’s verbal gaffs about Muslims, while they ignore Hillary’s track record of exterminating Muslims. (Hillary cheered for the destruction of Libya, and has publicly vowed to nuke Iran.)

As President, Trump would not be able to get the US Congress to agree to anything he wants. However Trump would be able to veto the US Congress, and thereby trip up things like the TPP, and war with Russia.

What we need is an ineffective Trump, not an effective neocon-neoliberal Hillary.

And I responded:

True, Trump is not a Republican, but he would appoint more Scalias to the Supreme Court, which would be a disaster for America — unless you like unlimited political contributions, unlimited guns, the reduction in minority voting rights, a theocracy, and jurists who accept free “hunting trips” from the wealthy.

And, Trump’s crazed hand above the button — he wants to nuke ISIS — gives one pause. (Please give me your references for Hillary’s desire to nuke Iran and for her cheering the destruction of Lybia. I’ve not seen those)

And to describe Trump’s vow to exclude Muslims as merely a “verbal gaff” is unbecoming to you, Elizabeth. Is deporting 11 million undocumented Mexicans also just a “gaff”?

By the way, when was the last time any Congress voted for war, and the President vetoed it? Doesn’t it always go the other way?

Unfortunately, Hillary is a continuation of Barack’s policies, which as poor as they may be, still exceeded Bush II and today’s Congress, by a long way,

Sorry, but you can’t shine up a broken Trump. A vote for Trump is a vote for a male version of Sarah Palin with a tinge of Hannity.

The point: Today’s election campaign is more hate-filled and dangerous than any I can remember.

On the one side we have people who simply hate Bill Clinton and partly by extension, also hate Hillary Clinton. They say (rightly) that the Clintons are liars and crooked and will endorse war and everything else that benefits big bankers (aka contributors).

On a second side are the people who hate Trump. They say (rightly) that Trump is a liar and crooked, and an incompetent loose cannon who spreads hatred for minorities and hatred for foreigners, and who will appoint fellow bigots to the Supreme Court.

Then, on yet another side, we have the people who hate the federal government because it’s “big” (but seem O.K. with state and local governments — even more crooked and incompetent than the federal government — and hate the laws that protect the poor from the rich.

And we have the Bernie Sanders people and the independents, and the Greens, and all of them lie and hate the others for lying.

Maybe this is the way it always has been, and it only feels like more hatred than ever.

But, none of this would matter much, if you simply do what I suggested to Vincent, and merely vote for the candidate who comes closest to your own leanings.  Heaven knows there are plenty of candidates from which to choose.

There is however, a huge problem with my suggestion: If no candidate receives 270 electoral votes, the Republican majority in the House of Representatives will select the President from the top three candidates, and they will choose Donald Trump for President.

The Republican majority in the Senate will select the Vice President from the top two candidates, and they will select Mike Pence.

Bottom line: If you want Trump/Pence in the White House, vote for Trump or for Johnson, or for Sanders or for Stein (Green Party) or for an independent or even for yourself in a write-in.  They all would be votes for Trump.

There is yet another possibility, of course: The House of Representatives could pick someone else altogether — someone the voters did not select — but that would lead to the destruction of America’s political system. 

These are dangerous times, indeed.

Rodger Malcolm Mitchell
Monetary Sovereignty

===================================================================================
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 afford better health care than 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 AN ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) 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 EVERYONEFive 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 benefiting 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 CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-tranferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from 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 corporate taxes would be an 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