The rich-poor Gap widens in ways you may not realize Monday, Feb 24 2020 

If you are not rich, but you still support Donald Trump and the GOP, congratulations. You now are ready to send your remaining money to a Nigerian prince, who clearly will do more for you than Trump will.

You undoubtedly know Trump and his subservient GOP have tried everything they can to end ACA (Obamacare), primarily because Trump doesn’t want Obama’s name on anything. And you undoubtedly know that though Trump claims to have a better plan in mind, he really has nothing, after all these years.

And by now, you have learned that Trump’s much-bragged-about tax cuts benefited the rich and did nothing for the rest of us. You learned that when you discovered your charitable contributions are too small to be deducted from your taxes.

And you surely have heard of the phony need to cut Social Security benefits and/or raise FICA taxes to “pay for it,” because Social Security, Medicare, and the U.S. government supposedly are “broke.”

And of course, there are the growing salary differences between the top executives and the underlings — you know about those too,

And then there’s the gigantic and growing student debt that funnels money from the middle and lower-income groups to the government and the rich lenders.

Wolf Richter: Subprime Credit Card Delinquencies Spike to Record High, Past Financial-Crisis Peak, as Other Consumers Relish the Good Times. Why?
By Wolf Richter, editor of Wolf Street. 

The rate of credit card balances that are 30 days or more delinquent at the 4,500 or so commercial banks that are smaller than the top 100 banks spiked to 7.05% in the fourth quarter, the highest delinquency rate in the data going back to the 1980s (red line).

But at the largest 100 banks, the credit card delinquency rate was 2.48%, which kept the overall credit-card delinquency rate at all commercial banks at 2.7% (blue line), though it was the highest since 2012, according to the Federal Reserve.

What’s going on here, with this bifurcation of the delinquency rates and what does that tell us about consumers?

The above-mentioned “bifurcation” (aka the Gap between the rich and the rest) has to do with the fact that the largest banks serve the rich, and the smaller banks serve the not-rich. It really is that simple.

A similarly disturbing trend is going on with auto loans. Seriously delinquent auto loans jumped to 4.94% of total auto loans and leases outstanding.

This is higher than the delinquency rate in Q3 2010 amid the worst unemployment crisis since the Great Depression.

On closer inspection, there was that bifurcation again; prime-rated loans had historically low delinquency rates; but a shocking 23% of all subprime loans were 90+ days delinquent.

During the Financial Crisis, delinquencies on credit cards and auto loans were soaring because over 10 million people had lost their jobs and they couldn’t make their payments.

But these are the good times – with the unemployment rate near historic lows. And yet, there are these skyrocketing delinquency rates in the subprime subset of credit cards and auto loans.

It means these people are working, and they’re falling behind their debts.

Contrary to the right-wing’s repeated assertions that the poor are simply lazy and unwilling to work, the poorer on average work harder and longer hours than do the richer, but are paid skimpy wages.

Consumers with subprime credit scores (below 620) can still get credit cards, but under subprime terms – namely interest rates of 25% or 30% or more.

These rates comes at a time when, according to the FDIC, banks’ average cost of funding was around 1.0%.

The difference between a bank’s average cost of funding and the interest it charges is its net interest margin. For banks, subprime credit-card balances, with interest rates of 30%, are the most profitable assets out there.

Borrowing $5,000 at 30% means you pay $1,500 annual interest, a double-whammy for someone who barely can afford food and rent, let alone frivolous things like warm clothing, decent transportation, good schools, and a safe neighborhood in which to live.

The largest 100 banks have a delinquency rate of just 2.48%, which is low by historical standards.

They go aggressively after consumers with high credit scores and high incomes, and to get them, the big banks offer big benefits, and so a bidding war has broken out for these high-credit-score consumers, with “2% cash back on every purchase” and other benefits that small banks cannot offer.

The rich receive the best money-back cards. The not-rich don’t even learn about them.

The rich don’t have to borrow on credit cards, which charge those enormous percentages.

When the rich borrow, they go to a lender who might charge 3-5% or even less, where that same $5,000 loan would cost under $250 a year.

So why are these delinquencies spiking now? We haven’t seen millions of people getting laid off. These are the good times.

It’s a sign of the sharp bifurcation of the economy for consumers. One group of consumers is doing well.

They have rising incomes, and they can afford the surging home prices, the surging healthcare costs, and the surging new-vehicle prices.

Those price increases are not reflected in the inflation measures. For example, the price of a Ford F-150 XLT has skyrocketed 163% since 1990 while the official CPI for all new vehicles, allowing for hedonic quality adjustments over the same period has increased only 22%.

Hedonic quality adjustment: The practice of examining an item by its characteristics, estimating the value of the utility derived from each characteristic, and using those value estimates to adjust prices when the quality of a good changes.

Consider two TVs, one new and one made in 2015. The features of the new one, that were not available in 2015 are evaluated, and their value is added to the 2015 price.

For instance, if a new set has verbal command and the old one didn’t, the government estimates the value of the verbal command and adds that to the price of the old set.

Say the old set cost $1,000 and the new set, with verbal command costs $2,000. That would seem to be a 100% price increase.

But if the government estimates the value of verbal command to be $500, the official price of the old set would be increased to $1,500, which means the CPI has increased only 33% ($1,500 vs. $2,000) rather than 100%.

Same with used cars. The official CPI for used cars has declined by 11% since 1995, an amazing feat of hedonic quality adjustments, as actual used-car prices have soared since 1995.

There are other consumers whose incomes have not budged much – maybe it went up in line with CPI, but CPI doesn’t reflect actual price increases of cars and homes and other items.

Everything big they’re trying to buy or rent or use has soared in price – new and used vehicles, housing, healthcare, education, etc.

And those consumers, though they’re working hard, are getting squeezed.

That’s the bifurcation.

The rich receive tax breaks from the right-wing, while the not-rich receive criticism and cuts to safety nets like Medicare, Social Security, food stamps, housing aids, education, etc.

And this can happen from one day to the next, for example when the landlord raises the rent by 15%, or when the car turns into a hopeless heap and has to be replaced, or when the insurance premium jumps 25%, or when the kid ends up in the emergency room. Or a combination.

And suddenly, there is no money left to make the minimum payment on the credit card.

And this is happening while people are working.

This subgroup of consumers that are getting squeezed is growing, and their problems are growing, and their credit-card delinquencies and auto-loan delinquencies are spiking into the stratosphere like never before.

And that’s the bifurcation that we’re seeing.

But when Bernie Sanders wants to provide Medicare-for-All, the rich say, “No, it’s Socialism,” and the not-rich are suckered into going along with the “socialism” lie.Image result for dollar bills denominations

The “bifurcation” repeatedly mentioned by Mr. Richter is the Gap we often have discussed. The Gap or bifurcation exists because the rich, who run America, want it to exist.

“Rich” is a comparative word. If you have $100 and everyone else has $1, you are rich. But if you have $100 and everyone else has $1,000 you are poor.

So to be rich, you must widen the Gap, which can be accomplished in two ways: Accumulate more for yourself or prevent the others from accumulating more.

This post has given examples of the latter: Prevent others from accumulating more. The credit card scam is one of those.

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

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

The most important problems in economics involve:

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

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

Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

A movie about Gap Psychology in everyday life Friday, Dec 20 2019 

Gap Psychology is the desire to distance oneself from those considered “below” you in any socioeconomic ranking, and to come closer to those above.

You are subject to Gap Psychology, whether you realize it or not.

Think about where you live, who your friends are, where you go to school, the type of job you’ll accept, how you vote, who you marry, and as in the case of the movie, “Parasite,” your relationship with those you employ and those who employ you.

A discussion of Parasite can be found here; some excerpts from that discussion are below:

The Invisible Line
“Parasite” nails the inherent inequality of hiring household help
By Sarah Todd
The South Korean satire-thriller Parasite is emerging as a major contender this awards season.

It’s on the Oscars shortlist for best international film, while writer-director Bong Joon-ho received Golden Globe nominations for best director and best screenplay, and the movie’s cast is up for best film ensemble at the Screen Actors Guild awards.

(The movie) focuses on the complex relationships and moral ambiguity that surrounds hiring household help.

For the uninitiated (spoilers ahead!), Parasite tells the story of the Kims, a poor family who connive their way into working (for) the wealthy Parks.

To get on the rich family’s payroll, the Kims must appear more educated and accustomed to rubbing shoulders with the upper class than they actually are.

The son pretends to have a prestigious university degree; the daughter poses as a trained art therapist. The parents invent lengthy employment histories as a highly sought-after driver and housekeeper.

Yet even as the Kims disguise themselves, they must also respect what Mr. Park, the head of the family, refers to repeatedly as “the line”—the boundaries that mark them as employees in a hierarchical relationship, the terms of which are defined exclusively by the Parks.

It’s fine for Mrs. Park to expect the Kims to come to work on their day off to put together a last-minute birthday party for her son. But it’s unacceptable for Mr. Kim to talk too much about himself as he drives his boss home at the end of a long work day.

The Kims may be the wealthy family’s intimates, even confidantes, but they are never to think of themselves as equals.

This dynamic rings true to the real-life experiences of many domestic workers, according to Megan Stack, a journalist and author of the book Women’s Work: A Reckoning With Work and Home.

Power imbalances tend to manifest most frequently like this,” Stack writes. “The house becomes both an intimate family setting and a job site at the same time. But employers are the ones who have the power, and they end up getting to decide (often without being conscious of it) whether they are approaching the employee in a way that corresponds to an intimate relationship or in a way that corresponds to an employment relationship.

So the employee has to navigate both a faux family relationship and a job where basic labor rights can be granted or withdrawn on the whim of an unreliable manager.”

It’s a job arrangement that depends on a wide gap between haves and have-nots.

Women shouldn’t feel guilty about hiring household help, but that they should push for regulations that ensure domestic workers are earning fair wages and working under non-exploitative conditions.

The movie also exposes the toxicity of the Parks’ expectation that they can pay domestic workers to care for them without caring about the workers in return, or even seeing their employees as fully human.

There is a deep unfairness in the notion that employers get to decide where that line between intimacy and work is drawn—and, usually, it keeps shifting around.

Nannies are asked to be “simultaneously present and absent in children’s lives”—and to be sensitive enough to know when to negate themselves in order to preserve their boss’s feelings.

Parasite makes it impossible for audiences to ignore the uncomfortable ways in which household labor has been constructed to prioritize one group’s emotional life over another—and suggests that money is not all that’s owed to the people who power middle- and upper-class homes.

The income/wealth/power Gap, which stimulates Gap Psychology, always has existed in our lives, always will exist, and indeed must exist in any realistic socio-economic setting. The problem, however, occurs when the Gap becomes too wide, as it always tends to do.

The width of the Gap is determined by the more powerful — i.e., those “above.”  Their natural instincts are to widen the Gap, because it is the Gap that makes them superior. (Without Gaps, no one would be superior. We all would be the same.) And the wider the Gaps, the more superior they are.

Thus, over time, a Gap tends to persist or even widen, because that is what the more powerful want.

Then, moral pressure causes a revolution by the lower group and/or an awakening by the upper group.

The Gap temporarily narrows. It becomes “improper” or unlawful. Then, it again begins to widen, as the upper group resumes its resistance.

Typical scenario: A weaker group is bullied by a more powerful group’s leaders. These actions are mimicked by the more powerful group’s followers until the bigotry becomes routine and traditional.

At some tipping point, the bullied group resists and/or the more powerful group’s leaders find virtue, and they declare the bullying to be improper or unlawful.

After a time, some of the more powerful group’s leaders begin to justify and to resume the bullying, and the cycle repeats.

Slavery in America, the Civil War, and its aftermath provide one example. Today, years after blacks received the right to vote, America’s bigots attempt, and often succeed, in making voting more difficult for blacks.

Social Security, launched as a partial cure for poverty, now is under atta ck, as is healthcare and other benefits for the poor.

Another example. I play tennis, and I much prefer to play with those whose skills are at least equal to, and preferably superior to my own. On the surface, this may seem illogical, because I have a much greater chance of winning when I compete with inferior players. Still, I dislike playing with them.

I like to play with the “big boys,” and it doesn’t trouble me at all that the “big boys” may not relish playing with me.

Gap Psychology is everywhere. From your “trophy” (or not-so-trophy) wife, to the size of your house in the “right” neighborhood, to sending your children to the “right” school, to belonging to the “right” club, to your clothing, your jewelry, your car, to having the “right” job, the certificate on your wall, yours and your child’s achievements, to your friends, to being an “A-lister (or not),” even to your accent and the language you use, you live your life guided by Gap Psychology, whether you are willing to admit it or not.

If you are a fan of a team, your emotions watching that team are guided by Gap Psychology. When you see a list of nations, states, or cities,  ranked by any positive measure, you want to see your nation, state, or city near the top.

Would you like to be rich? “Rich” is a comparative, not an absolute. You can be rich only if others are poorer. The wider the Gaps below you, the richer you are.

Gap Psychology certainly is not your sole motivator, but it is the single, most powerful motivator in human society, and perhaps in other social animals’ societies, too.

The Gap in America is too wide, and is widening.

The GINI Index. The higher the number, the wider the Gap.

But the Gap can be narrowed. Because the U.S. government is Monetarily Sovereign, and so has the unlimited ability to create its own sovereign currency, it also has the unlimited ability to narrow the Gap.

Applying the Ten Steps to Prosperity (below) would narrow the Gap.

Because of Gap Psychology, the very rich do not want the Gap narrowed. But they comprise only 1% of the voting population.

Narrowing the Gap is a job for the 99%. They can’t hope the 1% will save them.

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

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The most important problems in economics involve:

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

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

Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

1. Eliminate FICA

2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone

3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)

4. Free education (including post-grad) for everyone

5. Salary for attending school

6. Eliminate federal taxes on business

7. Increase the standard income tax deduction, annually. 

8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.

9. Federal ownership of all banks

10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY

 

How does Gap Psychology affect you? Friday, Apr 6 2018 


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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In Economics, everything devolves to Monetary Sovereignty and Gap Psychology.

  1. Economics studies the relationships among wealth, money, and human psychology.
  2. Monetary Sovereignty studies a money issuer’s power over the money it issues.
  3. Gap Psychology describes the human desire to widen the Gap below you on any economic or social measure, and to narrow the Gap above you.

The purpose of this post is to discuss Gap Psychology.

As a social animal, you are protected by your group, or rather, “groups,” for you live in many.  There are evolutionary advantages to being protected by a comparatively strong group, so you tend to cherish whichever groups you find yourself in. A group honor is seen as a personal honor.

Just a tiny sampling of our groups includes: Our nation, village, religion, age, sex, school, interest, income, company, and team.

You cheer for your country in the Olympics. You back your village or school in any kind of competition or measure. You take pride in the accomplishments of those whose religion you share.Related image

For similar emotional reasons, you wish to distance yourself from those below you — the “losers,” the poor, the socially unpopular —  while you wish to be closer to those above you.

Not only do you wish to be part of a “higher” group, but you wish to be seen as part of a higher group. You take pride in having attended a “good” school, though the quality of a school you may have attended does not, in any way, change who you really are, today.

If you yourself cannot be famously respected, you enjoy having a famously respected friend, or being seen with someone who is famously respected. You might even treasure a “selfie” with someone famous.

So deep are your social ties, the merely being thought of in a certain way — even by total strangers — can be a sufficient proxy for actually being that way.

If members of your group endure embarrassment, you feel that embarrassment. Innocent Chicagoans feel embarrassed by Chicago’s murder rate. Innocent Catholics feel burdened by the clergy’s sexual crimes. Innocent immigrants are weighted by pejorative claims against all immigrants. Your memberships in groups define you.

So, you may buy a too expensive car, or live in an unaffordable house, or wear a costly jewel, so that friends and strangers alike, will view you as being at a certain social level.

Merely being seen, even falsely, as part of a certain group, is sufficient to provide you with actual social strength or weakness.

Words that never left my memory:

“If they think you got the goods, they give you room, even if you know you don’t really got the goods.” (Neighborhood boy from my youth.)

In your social world, perception is truth.

Given all of the above, why do you give to charity? On its surface, charity would seem to be a violation of Gap Psychology.

Giving money or goods to the poor not only narrows the financial Gap (however slightly) between you and the poor, but it widens the financial Gap (also however slightly) between you and those who are richer.

Why would anyone want to do that? There are many reasons why you give to charity, and none of them are totally selfless, and all are Gap-based.

Every college contains buildings named in honor of a generous philanthropist, who stipulated the name. The price of having one’s name adorn a building might be in the millions, but to the giver, the reward was greater than the cost.  It was a gift to himself in terms of self-seen prestige.

At some point, the donor made this mental calculation: “Is the cost worth the benefit?”

Was there a time when you volunteered your time to a charity? Your benefit came from the support of your fellow volunteers, and from outsiders who know what a good thing you do. The benefit came from your enhanced view of yourself (“I am a good person.”)

The admiration for “doing a good thing,” or for merely being allowed entrance to a “good” group, can be reward enough. Even in this instance, the ever-present question is asked, “Is the cost (in time) worth the benefit (the membership in the group).

Even if you donated anonymously, you made a cost/benefit decision.  The benefit came from your view in your mirror: “I am a good person.”

In essence, everything you do, involves the tacit question, “Is the cost worth the benefit?”

Think about your day, from the time you wake up, until your bedtime, and you will be astounded at how much you do that is based on Gap Psychology — widening the Gap below you and narrowing the Gap above you.

Image result for wearing a rolex

A Rolex keeps no better time than a Timex.

You brush your teeth for a brighter smile, you dress for the approval (or at least to avoid the disapproval) of friends and strangers. You comb your hair; you may apply makeup; you drive a certain car; you live in a certain kind of dwelling in a certain kind of neighborhood, and work at a certain kind of job — and even in the most menial of jobs, if you have co-workers, you act in a certain way, so they will believe certain good things about you.

Solitary animals do not have these concerns.

Your entire life, the lives you bestow upon your children, and the pride you feel in their accomplishments, and the shame you feel in their transgressions — all are a testament to Gap Psychology.

And that also can have negative consequences because you can widen the Gap below you, not only by lifting yourself up, but by pushing others down.

If you are a Chicago Cubs fan, you not only want the Cubs to win, but you want the other teams to lose.

Go to a right-wing site like breitbart.com, and look at the readers’ comments. You will see the most hateful and vile statements about immigrants — how they should be jailed, deported, separated from their children and punished in every way.

Why? Not for factual reasons, but rather because this hatred is born of the terror that the Gap below might be narrowing.

The most extreme bigots are those who feel most insecure or resentful about their position in society.

Bigotry against certain ethnic backgrounds is Gap Psychology at its worst. We see it in the unreasoned excuses to deny jobs to those of a certain sexual orientation or of a certain religion or nationality.

Despite thin rationales to the contrary, those merely are efforts to widen the Gap below.

Similarly, the delight we take in seeing the mighty fall — a rich woman sent to jail, a powerful man humiliated  — these events narrow the Gap above us (“They are no better than me.”)

Without the Gaps no person or group would be rich, smart, talented, beautiful, or strong. We all would be the same. It is the Gaps that make you and your groups special, protected, and safe in a harsh world.

Everything in economics devolves to Monetary Sovereignty and to Gap Psychology.

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

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

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

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

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

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

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

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

MONETARY SOVEREIGNTY

What is the fundamental motive for everything in politics? Friday, Jul 21 2017 

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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Economics is a branch of Psychology so, as in Psychology, everything in Economics devolves to motive.

Illinois Senator Dick Durbin is one of my Senators. He actually does not, or pretends he does not, understand Monetary Sovereignty.

He repeatedly sends Emails indicating his beliefs that:

  1. Federal financing is just like personal financing
  2. The federal government can run short of its own sovereign currency, and
  3. Just as state and local government spending are funded by state and local taxes, federal spending is supported by federal taxes.

As those who understand Monetary Sovereignty know, the three statements are false, false, and false.

So, is this “real” ignorance or is it political ignorance? Durbin is a very experienced, and very careful politician, who seldom (never?) strays into controversial territory, so I suspect he intentionally espouses popular political “ignorance.”

Image result for dick durbin

What’s “Monetary Sovereignty”? Hmmm, don’t tell me. I’ve heard of it.

 

After all his years in office, he knows what’s true, and he knows what his voters think is true, and when in doubt, he leans toward the latter. No Galileo he.

His motive is to stay in office, not make too many waves, and to continue enjoying all the perks of being a Senator with seniority.

This lends a small bit of irony to an Email I just received from him:

The Durbin Report: Senate Republicans Are Still Secretly Working To Repeal Health Care For Tens of Millions of Americans

Fellow Illinoisan,

If you asked me what Senate Republicans plan to do with their health care repeal effort, I couldn’t tell you. I bet most of them couldn’t even tell you.

It is incredible to me that Republicans will not tell the American people which version of their cruel repeal effort we’re supposed to be voting on in just a few short days.

Is it the one that throws 22 million Americans off insurance, including one million Illinoisans? Or is it the one that throws 32 million people off insurance?

The one that would increase individual market premiums by 25 percent? Or the one that would increase them by 100 percent?

Every week, it seems like there’s a different ploy thrown on the table, each idea worse than the one that came before it. With failure after failure, Senate Republicans have just pushed the American public further into the dark.

Instead of this secretive, one-sided exercise, they should be rolling up their sleeves and working with Democrats to strengthen our current health care system for all Americans.

Depending on which Senate Republican bill you look at, their plan would throw somewhere between 22 million and 32 million people off insurance, increase premiums between 20 and 100 percent for middle-class families, decimate the Medicaid program which serves one in five Illinoisans, undermine protections for people with pre-existing conditions, cripple our fight against the opioid epidemic, and cut funding to hospitals nationwide, especially rural hospitals.

Not to mention provide hundreds of billions in tax give-aways for wealthy Americans and big corporations.

Senate Republicans have held zero hearings, and every bill of theirs was crafted in secret and opposed by medical and patient advocacy groups from every corner of the country, as well as Governors from red states and blue states.

Secret bills, no transparency, and no input from those who would be impacted the most is how Republicans want to pass a bill that would impact 1/6 of our economy and literally every single American.

This is no way to govern. This shell game must end. Democrats and Republicans should instead come together and strengthen the Affordable Care Act.

Sincerely, U.S. Senator Dick Durbin

Durbin’s letter is factually correct, but it doesn’t address the omnipresent question: Why would any intelligent politician vote for something so immoral, so ignorant, and so obviously wrong for America?

And the answer always is the same:

The leadership, the base, and the rich are more important to the GOP than are the needs of the general public and of the nation.

For the Republicans, the leadership is comprised of Donald Trump, Mitch McConnell, and Kevin McCarthy. The base consists of the rich and the most rabid right wingers, who as a group are anti-poor, anti-immigrant, anti-government, anti-deficit, anti-science, anti-gay, anti-abortion, pro-rich, pro-Christian, pro-gun, and pro-incarceration.

So the Republicans continue their practice of voting against anything and everything Obama — at least 60 votes to destroy ACA before Trump became President, and now more votes afterward — not because of any desire to benefit the American people, but rather because the leadership, the base, and especially the rich want it. That is their motive.

There is one, fundamental, common, overriding motive that unites today’s Republicans: Gap Psychology.

The income/wealth/power Gaps between the richer and the poorer have been widening for years. It is these Gaps that make people rich. Without the Gaps, no one would be rich (We all would be the same), and the wider the Gaps, the richer they are.

It is a fact of human psychology that we want the Gap below us to widen and the Gap above us to narrow.

So in voting to deny 20+ million people adequate health care, the Republicans in Congress merely obey the desires of their base, their leadership, and rich to widen the Gap — in this instance, the health Gap.

The Gap the Gap is the motive of motives, the boss of bosses, the king of kings in Psychology and thus, in economics.

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 (Economic Bonus)) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

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

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

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

MONETARY SOVEREIGNTY

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