How does the Big Lie enable the Gap? Wednesday, Dec 7 2016 

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:

  1. 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.
  2. 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.

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 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 Wednesday, Oct 19 2016 

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

 

How the rich justify stealing our Social Security Wednesday, Sep 21 2016 

Here is an Email I received just today, telling me how the rich justify stealing our Social Security:

Friends,

The House Ways and Means Subcommittee on Social Security will hold a hearing tomorrow on the solvency of the Social Security program where Stephen Goss, Chief Actuary of the Social Security Administration and Keith Hall, Director of the Congressional Budget Office, will testify.

In light of this hearing, I wanted to share a new paper from the Committee for a Responsible Federal Budget, Sizing Up Social Security’s Solvency Challenge, which explains the significant differences between CBO and the Social Security Trustees.

While both estimators warn that Social Security faces serious financial challenges and is on the fast track to insolvency, CBO has concluded that the problem is much worse and the date of trust fund depletion much sooner than the Trustees believe.

The full paper is available on our website, and for your convenience I’ve also pasted it below.

Feel free to reach out if you have any questions.
Thanks,
Marc Goldwein
Senior Vice President, Committee for a Responsible Federal Budget

We’ve written about the Committee for a Responsible Federal Budget before.  They are the folks who want you to believe that the federal government can run out of its own sovereign currency and so can become insolvent.

The fact that for almost two and a half centuries of existence, through wars, recessions, depressions, inflations, and stagflations, the U.S. government never has run out of dollars, and indeed cannot run out of dollars — that fact never is revealed by the CRFB

To the CRFB, any federal deficit is a looming disaster and any federal debt is a ticking time bomb. They are prime disseminators of The Big Lie.

Here are excerpts from their paper:

Social Security faces a large shortfall between scheduled benefits and dedicated revenue, and the program is currently on a path toward insolvency. However, official estimators disagree on the extent of the program’s financial woes.

The Social Security Trustees project the program’s trust funds face a 75-year gap equal to 2.7 percent of payroll (1.0 percent of GDP) and will be depleted by 2034, on a (theoretical) combined basis. Meanwhile, the Congressional Budget Office (CBO) projects a trust fund gap equal to 4.7 percent of payroll (1.6 percent of GDP) and a depletion date of 2029.

The path to insolvency is a gigantic con job, based on deceiving math and factual error.

But fear not. The CRFB offers us a solution:

To avoid these cuts, policymakers should enact a thoughtful mix of revenue and benefit changes that begin soon, phase in slowly, strengthen retirement security for those who rely on benefits, promote economic growth, and secure Social Security’s long-term finances.

This “thoughtful mix of revenue and benefit changes” is the CRFB’s sneaky way of telling us our taxes will be increased and our benefits will be decreased.

But of course, they don’t want to come right out and say it, because we might object to being screwed.  The CRFB hopes we’ll be too stupid to realize what is being done to us, so long as we’re told it’s “thoughtful,” and these are just “changes,” not cuts.

“Why?” you may ask, “does the CRFB publish such tripe, and why does Congress go along with it?”

Follow the link below to see the CRFB Board Members. Notice anything special about them?

Committee for a Responsible Federal Budget Board Members

They all are highly paid and they all are white.  These are people of privilege, white society people who enjoy the lush benefits of a wide and ever-widening Gap between the rich and the rest.

No middle- or lower-class people allowed, no minorities need attend.

To bolster their phony argument, the CRFB must, of course, supply statistics.

The above chart supposedly shows you the onrushing insolvency of Social Security. After all, projected Revenue is less than projected Spending, so that means disaster, doesn’t it?

But wait. Couldn’t that graph also refer to the White House?  No FICA, or any other taxes, support the White House, so clearly, projected Revenue is far less than projected Spending.

With zero dedicated revenue, the minute Mrs. Obama throws a party for an ambassador, won’t the White House be insolvent?

And couldn’t the graph also refer to Congress?  No FICA taxes, no dedicated revenue, support Congress, so the instant a Senator goes on an investigative winter tour of the Virgin Islands, Congress will be insolvent. Right?

And what about the Supreme Court? No FICA there either. Have just one of those black robes cleaned, and already Spending exceeds Revenue. Hello, insolvency.

The same is true for the FBI, CIA, FAA, the Army, the Navy, and all the other 1000 agencies of the federal government. No dedicated revenue.

But yet, here we are, running along without insolvency. Why? How?

The federal government, absolutely, positively cannot run short of U.S. dollars. It created the original laws that created the original dollars — as many laws and as many dollars as they wished.

So why do we hear repeated cries of “Insolvency! Insolvency! when discussing the Social Security and Medicare federal agencies?

Because those are the two agencies most responsible for closing the Gap between the rich and the rest.

The rich run America and they love the Gap.  

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 fund organizations like CRFB to sell us The Big Lie. That way, when Congress decides to take dollars from our pockets by raising our taxes and cutting our benefits, we’ll agree without making a fuss.

And the rich fund Congress, now in unlimited amounts thanks to a right-wing Supreme Court.  So Congress is only too happy to go along.

And us, like docile little puppies, we’ll eat the crap they feed us, and even wag our tails in appreciation.

Now repeat after me: “Bow wow, thank you, master. Please cut my Social Security, again.”

Rodger Malcolm Mitchell
Monetary Sovereignty

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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

Three things to remember as you watch Trump, Clinton speeches Monday, Aug 8 2016 

Soon you will hire someone for the difficult job of being President of the U.S. As with any talent hunt, you’ll want to take into consideration certain key factors, while eliminating extraneous factors.

For example, the ability to be a good President does not rely on who cheated on a spouse, or who stole money. Personal morality never has been a good measure of Presidential effectiveness.

(Lyndon Johnson, for instance, may have been one of our least moral, but most effective, Presidents.)

Though the “job interview” speeches may seem complex, with both candidates offering excessive solutions to non-problems and bashing the other candidate for trivial offenses.

But it’s quite simple, really. There are three, and only three, issues:

1. The single biggest problem facing the U.S. economy and the world’s economy is: The Gap between the rich/powerful, and the rest, is too wide and continues to widen. (See: This is the single biggest problem facing America)

The Gap is responsible for our most serious ills:

  • Poverty: “Poor” is a relative term. The rich/powerful always have sucked the best out of the economy, leaving only the dregs for the rest.
  • Street crime: Have you noticed that most street (as opposed to white collar) crime occurs in poor neighborhoods and/or by poor people? Having little wealth and power, and with no hope of obtaining more, the poor resort to physical crime.
  • Gun violence: Street crime not only includes gun violence, but fear of street crime breeds the need for guns, which breeds more gun violence.
  • Poor health and early death: Unaffordable health care and bad (but cheap) food, shorten lives.
  • Lack of education: No one knows how many millions of children are born with native intelligence, but are unable to use that intelligence because they cannot afford a good education. The cost to America’s growth, well-being, power and prosperity is immeasurable.

By enabling poverty, street crime, gun violence, poor health, early death, and lack of education, the Gap adversely affects everyone — the entire nation — even including the rich.

When you listen to each of the candidates’ proposals, ask yourself this: Will this proposal help narrow the Gap between the rich/powerful, and the rest?

2. The single biggest Lie about our economy is: “Federal taxes fund federal spending.” (See: Monetary Sovereignty and Free Lunch)

This “Big Lie leads to:

  • Unnecessary, regressive taxes: The FICA tax, which purportedly funds Medicare and Social Security, in reality, funds neither. Even if FICA were eliminated, Medicare and Social Security could continue paying benefits, forever. The only thing FICA (and sales taxes, and income taxes on the non-rich accomplish is to widen the Gap)
  • Unnecessary reductions in Social Security, Medicare, Medicaid and other social programs. The false belief that the federal government “can’t afford” these programs, leads to ongoing attempts to reduce benefits.
  • Lack of federal spending to support infrastructure, research & development, scientific progress, and education.

When you listen to each of the candidates’ proposals, ask yourself this: Will this proposal reduce FICA, sales taxes and/or income taxes on the non-rich? Will it increase funding for social programs and science?

3. The single biggest consideration about the candidates is: What are their qualifications?

  • Will they do what they say they will do? What is their history? Whether in business or in government service, have they done what they promised to do?
  • What is their experience? When hiring for any job, past experience is one of the most important attributes a candidate can have.
  • Are their proposals truly feasible? One can promise to bring everlasting peace, and defeat all our enemies, but is this reality?
  • What is the nature of their lies? All politicians lie. The real question is not whether they lie, or even how much they lie, but how will their lies affect you? A lie about a personal indiscretion is much less important than a lie about one’s experience.

When you listen to each of the candidates’ proposals, as yourself this: Considering the nature of the candidate, is this proposal possible or even likely to occur?

In summary, ask yourself three simple questions:

  1. Will this proposal help narrow the Gap between the rich/powerful, and the rest?
  2. Will this proposal reduce FICA, sales taxes and/or income taxes on the non-rich? Will it increase funding for social programs and science?
  3. Considering the nature of the candidate, is this proposal possible or even likely to occur?

Those questions will help you wade through the clutter, the obfuscations, the personal insults and the moral digressions, and decide who should be President of the United States.

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

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