What is the real reason the Republicans hate Obamacare?

Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
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It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders..
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The Republican party hates Obamacare (ACA). That much is abundantly clear. But why?

For seven years and seventy votes, the Republicans have done everything in their power to “repeal and replace.” But what do they hate about the program?

Is it just the name “Obamacare”? (If so, they should refer to it as “Romneycare,” since that is a more accurate appellation.)

Or are there certain features they would like to change?

Here is the answer, exposed in some excerpts from a Chicago Tribune article:

Chicago Tribune, March 6, 2007
Plan to dismantle ACA begins to take shape
By Noam N. Levey and Lisa Mascaro, Washington Bureau

WASHINGTON — House Republicans are readying an ambitious push this week to begin moving legislation to replace major parts of the Affordable Care Act, a crucial test of their ability to fulfill one of their party’s main campaign promises.

The plan marks the first time GOP lawmakers will do this since the law was enacted seven years ago.

The legislation could affect health insurance for tens of millions of Americans — not only those with coverage under the ACA, but also people with employer-provided insurance and Medicaid.

That was your first clue. What is the commonality among those with ACA, those who rely on employer-provided insurance and those with Medicaid?

The House legislation — which was being finalized over the weekend, according to GOP officials — aims to fundamentally restructure the system that the ACA created, which has extended health coverage to more than 20 million previously uninsured Americans.

GOP plans call for scrapping insurance marketplaces that require insurers to offer a basic set of benefits and that provide government subsidies to help low- and moderate-income Americans who don’t get health benefits at work to buy health plans.

Are you starting to see a pattern?

Republican legislation would create a new system of subsidies that are linked to consumers’ age, rather than their income, according to leaked drafts. That would make insurance harder to buy for millions of Americans, especially low-income working people, outside analyses suggest.

Getting the picture?

GOP leaders would eliminate taxes that have helped offset the cost of the ACA’s coverage expansion, including taxes on medical device-makers and insurance companies and on households making more than $250,000 a year.

Instead, Republicans are proposing to tax the health insurance that employers provide their workers. Employer-provided benefits are tax-free. The change could cause the price of insurance that many Americans get on the job to go up.

The House plan would phase out hundreds of billions of dollars in federal aid that has allowed many states to expand their Medicaid programs to millions more poor Americans.

House Republicans also want to give states more flexibility to reshape their Medicaid programs, allowing states to potentially limit benefits or require poor patients to pay more for their medical care.

House Republicans have proposed to allow insurers to charge higher premiums to those who let their policies lapse.

Leading conservatives in the House and Senate have said they will oppose legislation that does not fully repeal the ACA.

Yes, it is clear. The one thing the Republicans hate most about ACA is not the name or any single factor. They hate helping the middle-classes and the poor.

The “party-of-the-rich” knows that ACA helps narrow 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. The primary goal of the rich is to widen the Gap.)

And that is why the Republicans are salivating like rabid dogs to get rid of a program that helps narrow the Gap. (They similarly would like to cut Social Security and Medicare, under the pretext that the government can’t afford them.)

Visualize now, those crowds at now-President Trump’s campaign speeches. Visualize their wide-eyed passion for the man who would save them from the “establishment” and who would “drain the swamp.” Who are those people? Are they the rich or the rest?

They are the ones who elected Trump, and now ironically, they are the ones who will be hurt most by “repeal and replace.”

To borrow Trump’s favorite twitter word, “Sad.”

In truth, ACA is a complex, convoluted, Rube Goldbergian program. It was made so because of belief in The Big Lie that federal taxes are necessary to pay for federal spending, and that low deficits benefit the economy.

(Unlike state and local governments, our federal government is Monetarily Sovereign, meaning it never can run short of its own sovereign currency, and it creates dollars ad hoc, whenever it spends. Thus, federal deficits grow the economy.)

Yes, the jury-rigged ACA should be replaced, but not in the way the “party-of-the-rich” proposes. ACA should be replaced by Step #2 of the Ten Steps to Prosperity (below): FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE

That would provide medical care for every man, woman, and child in America, at zero cost to anyone. Medically, it would put the rich and the rest of us on a par.

It’s not what the Republicans want.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Guaranteed Income)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONE Five reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

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

MONETARY SOVEREIGNTY

Rodger Malcolm Mitchell
Monetary Sovereignty

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

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

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

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

MONETARY SOVEREIGNTY

Ten Steps to Prosperity: Step 8: Tax the very rich more (dictatorship warning)

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

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

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There was a time when I argued against increasing anyone’s federal taxes. After all, our Monetarily Sovereign federal government has the unlimited ability to create its own sovereign currency, the dollar, which it does ad hoc, simply by spending.

Thus, the federal government neither needs, uses, nor even retains tax dollars. The tax dollars you send to the federal government disappear from the money supply and so functionally are destroyed.

(This is unlike state and local tax dollars, which remain in the money supply, are retained by the state and governments, and are necessary for state and local government spending.)

Because federal taxes leave the money supply, they reduce Gross Domestic Product, and they negatively affect the entire economy. Every dollar you send to the federal government is a dollar removed from the economy, impoverishing the economy.

Every dollar the federal government deficit spends is added to the money supply, enriching the economy.

Deficit reduction (aka “austerity), depletes our economy. Applying deficit reduction to grow our economy is like applying leeches to cure anemia.

All but one of the Ten Steps to Prosperity — this one — involve either federal tax reduction or federal spending increases. They all — but this one — increase the money supply, and thereby, grow the economy.

Since all the federal tax dollars paid by anyone, including the rich, disappear from the money supply, and therefore are recessive, why does this step, Step 8., involve increasing taxes on the rich?

The single most important problem facing America and the world — even more important than the suicidal push to reduce the money supply — is the large and growing Gap between the rich and the rest.

That large and growing Gap is a direct threat to Democracy, for it gives the rich excessive power to bribe our politicians, to own our media, and even to influence universities and their economists.

In short, the Gap facilitates the dictatorship of the very rich.

We see it happening again and again in America, with the Supreme Court repeatedly expanding the 1st Amendment’s free speech rights to include greater amounts of money.

Freedom of spending grew from Buckley v. Valeo (limits on election spending are unconstitutional), to First National Bank of Boston v Bellotti (corporations can contribute to ballot initiative campaigns) to Citizens United v FEC (corporations and unions can contribute unlimited funds to political campaigns).

Although some technical spending limits still remain, the true function of these decisions is to give the rich the unlimited power to influence not only elections but the law.

That is the definition of a dictatorship: Complete control over the law.

And we have come dangerously close to crossing that line if we are not already there.

In a dictatorship, the people are powerless. All branches of government answer to one man or one small group.

In a dictatorship, the presidency, the congress, the supreme court and the local governors are dominated by one party, and that party is dominated by one man.

Though supposedly above partisan politics, the courts become political organizations, seldom ruling against the dominant party.

A dictator typically takes action against any news media that disagree with him or which publish unflattering stories.

This action can include lawsuits, expulsion from meetings, claims that the media provides “fake news,” and other forms of disparagement.

It can graduate to arrests, imprisonment or other draconian reprisals.

As it true with all dictatorships, those close to the dictator are the rich and privileged. Laws don’t apply to them, except when they fall into disfavor, in which case they are summarily dismissed.

Though those appointed to high office are in sympathy with the dictator, they often are incompetent or disagree with the putative purpose of the office.

The assigned head of a veteran’s benefit organization might have no knowledge of veteran’s affairs or organization skills; the head of an ecology department might deny global warming; the head of an education department might oppose educating the poor; the head of a justice department might be a bigot opposed to justice.

In a dictatorship, family members are given high posts, and those close to the dictator reap fortunes from their influence. The dictator becomes massively wealthy from the laws he creates.

Dictators claim there is an emergency — a danger only they can deal with.

One commonality among dictatorship beginnings: The future dictator often is greeted with open arms as the person who will save the people from some nemesis, whether it be poverty, aliens, or a previous dictator.

Dictators facilitate this attitude by creating scapegoats: Foreigners, people of a certain religion, color or belief, or other politicians. Hatred and fear are the dictator’s greatest weapons.

Hatred and fear allow the people to blame the scapegoat for their misery rather than blaming the dictator — or themselves.

In accepting the dictator, the people do not realize they are creating their own hardship. Later, when it is too late, and they have surrendered their power to the devil, do they and their children begin a seemingly endless period of suffering?

When they lose all ability to extricate themselves from the pit they have dug, the people enter a period of “hopeless justification.” They tell themselves there is nothing they can do about it, and anyway, things could be worse or were worse in the past.

As their lives deteriorate, they stop trying, stop hoping, and stop thinking.

Though dictatorship thrives on an income/wealth/power Gap between the chosen few and the general populace, it begins with any one of the Gaps: Income, wealth, or power.

The process is:

A Gap is created
The people feel the negative effects of the Gap
Resentment builds
A savior promises to narrow the Gap
The people give the savior their power
Too late, the people realize the savior has enslaved them.
The dictator demands ever more appeasements from the ever more destitute and powerless people.

Because dictatorships always begin with a Gap, our currently large and growing Gap is the greatest danger to our democracy and our lifestyles.

Narrowing the Gap requires not just lifting the bottom but 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 more than $1 billion a year.

Pick any acceptable Gap (100 to 1? 1000 to 1?), and the lowest paid American would have to receive an unrealistic boost to narrow the Gap to an acceptable level.

To trim the top, Step 8 proposes that we increase tax rates on the very rich, and not just the rates, but the overall tax system. Their income that is not taxed or lightly taxed should be fully taxed; their inheritances should be taxed without exceptions.

Unfortunately, I do not have the background to suggest exactly which taxes should be increased or by how much. Taxation is a massively complex process that always has implications beyond mere money retrieval.

That is why this step comes late in the series and is more of an overall direction than a specific proposal. I suggest that those who understand taxation devise changes in the current system with the intention of narrowing the Gap and not as a money-raising process.

Unless we understand and act against the growing Gap, we will continue the way we are going and slide deeper, ever deeper, into the black hole of dictatorship.

America will cease to be a democratic nation.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

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

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

MONETARY SOVEREIGNTY

How does the Big Lie enable the Gap?

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

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The “Big Lie” is the statement that federal taxes fund federal spending.

It is a lie that easily is debunked:

Unlike the euro nations, and unlike U.S. cities, counties and states, the U.S. has a Monetarily Sovereign (MS)government, which is:

A government arbitrarily having passed the laws from thin air:

That created, also from thin air, its sovereign currency, and

That specified by decree, the value of its currency.

A government continuing to retain the power to:

Create again from thin air, more of its sovereign currency, and

Continue to control the value of its currency.

Based on the above, the U.S. government never unintentionally can run short of dollars. It neither needs nor uses tax dollars or borrowing to pay its bills. And. it can control inflation at the level it chooses.

Therefore, even if all tax collections fell to $0, the federal government could continue paying its bills, forever.

The “gap” can be described as the distance between two or more groups. Examples of group members are:

–A citizen of a country
–A resident of some area within a country
–A member of a religion or a non-believer
–An employee of a company
–A member of a team
–A person with a certain level of income
–A person with a certain level of wealth
–A person with a certain level of power

So addicted to group formation are we, that we continually multiply groups. Judaism begat Christianity which begat Protestantism, which begat multiple denominations, in an ever-continuing process of group creation.

Members of groups tend to believe they are superior, in some way, to members of other groups. Given any group of two or more persons, there is a great likelihood that some in the group will be considered “lesser” by some measure, thus creating an additional group — a “lesser” and a “greater.”

The distance between the lesser and the greater is the “Gap.” In any population, there can be many such Gaps.

The U.S. Census Bureau, for instance, tracks income levels in $5,000 increments: “Under $5,000; $5,000-$9,999; $10,000-$14,999 . . . $200,000 and over.” The income “Gaps” represent the distance between any two income levels.

Some years ago, we concluded that the first law pertaining to all Gaps is:

People wish to narrow the gap above them and to widen the gap below them.

When applied to money income, money wealth, and political power:

First Law: The poorer wish to narrow the Gap vs. the richer, and the richer wish to widen the Gap vs. the poorer.

This leads to the:

Second Law: Every income level believes those below them should not be allowed to close the Gap.

We call this”Gap Psychology.”

Based on the Big Lie, politicians make such false austerity claims as:

–Social Security is “going broke.”
–Medicare should be privatized
–Taxpayers pay for all benefits to the poor and middle-classes
–The federal government can’t afford to [fill in the blank]

Despite the fact that the Big Lie easily is debunked, politicians, the media, and the university economists, all having been bribed by the rich (via “contributions”), feel free to make false claims, because the public accepts the laws of Gap Psychology.

Yes, the concept, “Cutting one’s nose to spite one’s face” comes to mind. But, the people’s emotional need to keep those below them down is more powerful than their own desire to rise up.

This phenomenon is known as “Loss Aversion.”

In economics and decision theory, loss aversion refers to people’s tendency to prefer avoiding losses vs. acquiring equivalent gains: it’s better to not lose $5 than to gain $5.

Some studies have suggested that losses are twice as powerful, psychologically, as gains. Loss aversion was first demonstrated by Amos Tversky and Daniel Kahneman.

For most people, a narrowing of the Gap below — that is allowing the poorer to come closer — is felt to be a personal loss, even when there has been no change, or even an improvement, in one’s own finances.

Loss aversion —-> Willing acceptance of the Big Lie —-> Widening of the Gap

At any given level, a benefit to the poorer offers them a greater reward than the same benefit offers the richer. For instance, five thousand dollars means more to a person earning $10,000 a year, than the same five thousand dollars means to a person making $20,000.

If everyone were to receive the same benefit, all Gaps would narrow, but very few people, rich or poor, want the Gaps below them to narrow.

So powerful is this feeling that the populace angers when the Big Lie is explained to them. The end of the Big Lie would mean federal benefits could bring the poor closer to those above them.

On a personal level, if you believe your taxes pay for federal spending, and Medicare and Social Security are going broke, and the poor receive too many benefits, you are helping to perpetuate the Big Lie, and you are helping to widen the distance between you and those “above” you.

In short, the Gap above you grows because you accept the Big Lie.

“Therefore, send not to know
For whom the bell tolls,
It tolls for thee.”

Rodger Malcolm Mitchell
Monetary Sovereignty

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The single most important problems in economics involve the excessive income/wealth/power Gaps between the rich and the rest.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE 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 benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-transferring 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 a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

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

MONETARY SOVEREIGNTY

Why Tax Cuts Worked for Russia, But Not Kansas

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

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“Why Tax Cuts Worked for Russia, But Not Kansas” is the title of a 10/18 article in Bloomberg View.

The article was written by: “Leonid Bershidsky, a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.”

It is a typical, though still infuriating, article about economics by someone who either doesn’t understand economics or intentionally is deceptive.

Here are some excerpts:

Donald Trump may lose the presidential election, but the idea of major tax cuts as a way of boosting the economy is likely to remain a central tenet of Republican ideology long after he’s gone.

Opponents say that if you want to see why such programs don’t work, you need look no further than Kansas, where the Republican governor, Sam Brownback, put in place radical tax cuts four years ago.

Overall, federal tax cuts are economically stimulative. However, the latest iteration of Trump’s proposals indicate the cuts mainly would go to the rich, thereby widening the Gap between the rich and the rest.

“Such programs don’t work” (meaning, “tax cuts don’t stimulate an economy”) is, as a general statement, false. But there is a gigantic difference between state (monetarily non-sovereign) tax cuts and federal (Monetarily Sovereign — MS) tax cuts.

To lump the two is a sign of economics ignorance, and that is the problem with Bershidsky’s entire article.

The ignorant/deceptive equate tax cuts with the need for spending cuts. True for state and local governments; false for the U.S. federal government.

The most effective economic initiative undertaken by President Vladimir Putin in his 16 years in power was to replace a progressive tax scale with a 30 percent top rate in favor of a 13 percent flat tax.

Putin’s 2001 tax reform saved the Russian budget from chronic underfunding and a woeful dependence on high-rate borrowing.

Replacing a progressive tax with a regressive tax is a gift to the rich, and widens the Gap. In the U.S., for instance, sales taxes and FICA are the two main regressive taxes.

One thing tax cuts do not do is save a budget from “chronic underfunding” and/or a “dependence on borrowing.” Cutting taxes to increase total tax collections works only in special circumstances (the “Laffer curve.”)

The Laffer curve is based on a simple premise: Because zero taxes would be collected if the tax rate was 0% or 100%, there must be some place between 0% and 100% where the maximum tax is collected.

The problem: No one ever can know where that place is, because it varies according to a multitude of ever-changing circumstances.

“The Trump tax plan is the Brownback tax plan,” says Duane Goossen, the state’s former budget director. Under a Trump administration, “what’s happening here would happen to the whole country.”

Whether Trump’s plan is a good plan or a bad plan, one thing is certain: The effects on Iowa and on the U.S. would be markedly different.

It’s like saying that feeding manure to animals would have the same effect as feeding manure to plants. That is how different Monetarily Sovereign governments are from monetarily non-sovereign governments.

To the supporters of Hillary Clinton, who wants to raise taxes on the wealthy, Kansas’s problems — a big budget shortfall and anemic growth — are the natural result of any broad tax-cutting strategy.

Absolutely, 100% false as regards to anemic growth. While tax cuts can cause a budget shortfall, this is no burden at all for MS governments, which create money ad hoc, by paying creditors.

The U.S. government has run “budget shortfalls” during all but a handful of its 240 years. No problem. We still are solvent.

The federal government can (should) run budget shortfalls every year in the future, to achieve economic growth.

Putin’s reforms immediately increased personal income tax revenue to 2.9 percent of gross domestic product in 2001, from 2.4 percent the previous year.

Why does the author consider this a good thing? Every nation has three financial sectors: The private sector, the federal government sector, and the foreign sector.

Money flows between sectors. In order, for instance, for the federal sector to have an inflow of money, that money must flow out of the private and foreign sectors. Why would it be beneficial to any nation for net money to flow out of the private sector?

It wouldn’t be beneficial. It would be harmful.

Since the income tax cuts, Kansas has raised its sales tax twice.

Of course, it has.

Brownback is a Republican. Republicans support the rich vs. the rest. Sales taxes are regressive, punishing the rich far less, and widening the Gap.

Brownback was mainly concerned with his home state’s population outflow to other states and the subsequent loss of Kansas’s political power.

The governor’s analysis of the migration flows gave him the idea that Americans were fleeing to states with lower taxes.

(But) Kansas lost almost 6,000 people to outward migration last year, many of them to higher-tax states. “I don’t have oceans and I don’t have mountains,” the governor told me. “Just got mountains of grain.

Right. People move for many reasons, but taxes are not high on the list, especially for the middle and lower income groups. Jobs and weather are far more important.

Kansas’s gross domestic product grew 4.8 percent from the end of 2012 through the first quarter of 2016, less than half the national rate.

Nor have the cuts resulted in a job boost.

“Kansans treasure their schools, and I do, too,” the governor says. Schools are responsible for more than half of the state’s spending. At the school level all people see are painful cuts.

Classroom assistants have been moved to a 29-hour week, stripping them of benefits and making them hard to hire at $7.50 an hour.

While six years ago, there were 22 students in the average class, there are 27 to 28 now.

The privatization of school transport has resulted in more crowded buses and longer routes.

Ah, yes, privatization — the rich love it. But contrary to what the rich claim, privatization almost always results in poorer service and ultimately higher costs. See: Privatization scam.

Republican politicians and the governor’s office contend that the cuts should make the public school system more efficient, not weaker.

“Every time the schools need more funds,” O’Neal, the former speaker, says, “They say, oh, we’re going to lose this chemistry teacher. But why not a janitor or a third vice-principal?”

Or why not privatization? That usually is the recommendation. Fire the janitors and hire an outside maintenance company. That is what the rich love to recommend.

“We’re broke,” Goossen says. “There’s no money in the bank.”

And there it is, the answer to the question. Kansas, being monetarily non-sovereign, is broke. The United States, being Monetarily Sovereign, never can be “broke.” It has the unlimited ability to pay its bills.

Tax cuts are like a train that cannot back up.

Even Teflon Putin rebuffed his technocratic advisers this year when they suggested going back to a progressive income tax.

Putin did it because he caters to the rich, who do not like taxes (except a regressive tax like sales tax). The rich despise progressive income taxs.

The danger of Trump’s Brownbackian proposals is not inherent in tax-cutting as such.

It’s that Trump and congressional Republicans might cut taxes for the wrong reasons, with the wrong expectations and in the wrong way.

The U.S. federal government neither needs nor uses tax dollars. Federal taxes do not fund federal spending.

That being the case, even if all federal tax collections fell to $0, the government could continue spending forever, and the economy would grow markedly.

Though all federal tax cuts are stimulative, tax cuts done “the wrong way,” i.e cuts that benefit the rich more than the rest, widen the Gap and so, damage the economy.

Sadly, the Kansas tax cut experience will provide false grounds for claiming that “tax cuts don’t work,” without consideration of the differences between the federal government and state/local governments.

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

Rodger Malcolm Mitchell
Monetary Sovereignty

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

•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.

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

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

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

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

•Deficit spending grows the supply of money

•The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.

•The limit to non-federal deficit spending is the ability to borrow.

•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.

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

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

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

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

MONETARY SOVEREIGNTY

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