What you should know about our economy that others don’t know.

On September 7, 2009, we published a summary of our economy, facts that seem unknown to the public and ostensibly to economists, the media, and politicians (though I believe many of them fake their ignorance.

Much has changed in the past 13 years, but not the realities, and it is these realities that seem to mystify our thought leaders.

Today’s post will give you those realities, so you will understand why our economy continually lurches from recession to recession, with Congress, the President, and the Federal Reserve flailing about in apparent helplessness against the winds of fate.

Our leaders are not helpless. On the contrary, they have all the tools necessary to exert absolute control over our economy, even during the most stressful times. Even in the face of war, COVID, global warming, and population changes, etc., recessions, depressions, and inflations could be prevented, and prosperity could be implemented, but for the prevailing lack of knowledge or effort.

Economists wish to portray economics as a mathematically-based science, similar to physics, where precise predictions often are possible. But because economics is intertwined with psychology, at best a pseudo-science, predictions veer from inaccurate to just plain WAG (Wild Ass Guesses).

Knowing that exact replication of economics studies is impossible, and even approximations can be wrong, economists tend not to stray far from earlier WAGs and to quote liberally from the past.

Unfortunately, the past, at least the more distant past, omitted Monetary Sovereignty. It is the recognition that the creator of a currency never can run short of that currency, does not need or use income to pay for things, and has absolute control over all aspects of that currency.

The finances of a Monetarily Sovereign entity are nothing like those of a monetarily non-sovereign entity. Confusingly, similar words are used to describe both.

Words like “debt,” “deficit,” “trust fund,” “taxes,” “financial burden,” “prudent,” “money supply,” “borrow,” and even “pay” have different meanings and implications when applied to Monetarily Sovereign entities vs. monetarily non-sovereign entities. These differences are not widely understood or taught in schools.

What follows is a summary-in-brief of those differences. 

But if it ever becomes widely understood, the intelligent application of Monetary Sovereignty will significantly reduce the incidence of inflations, recessions, depressions, poverty, hunger, homelessness, street crime, illiteracy, sickness, and the collection of taxes.

Here are some facts of which you may not be aware:

  1. The U.S. government arbitrarily created the U.S. dollar from thin air. There were no U.S. dollars in the thousands of centuries before the 1780s.
  2. Then suddenly, the U.S. government created U.S. dollars from thin air — as many as it wanted to — by creating new laws, also from thin air, which it has the infinite ability to do.
  3. Just as laws have no physical existence, so do U.S. dollars have no physical reality. Dollars are nothing more than numbers on balance sheets controlled by the government. Those printed dollar bills are only titles to dollars. Just as a house title is not a house and a car title is not a car, a dollar bill is not a dollar.
  4.  Every form of money is a form of debt. Bank savings accounts, checking accounts, money market accounts, C.D.s, travelers’ checks, and corporate bonds all are owed by someone or something. Even the dollar bill represents a debt of the federal government, which is why it has the words  “federal reserve note” printed on it. “Bill” and “note” are words referencing debt.
  5. Just as a car title is not a car, and a house title is not a house, a dollar bill is not a dollar. It is a bearer title to a dollar, which is no more physical than a number.
  6. Because dollars have no physical existence but are only numbers, the federal government has the power to create infinite dollars merely by pressing computer keys. It makes as many dollars as it wishes.
  7. (Former Federal Reserve Chairman Ben Bernanke: “The U.S. government has a technology, called a printing press [or, today, its electronic equivalent], that allows it to produce as many U.S. dollars as it wishes at essentially no cost.“)
  8. The federal government gives its dollars any value it wishes. Through the years, the federal government often arbitrarily changed the value of dollars.
  9. Today, the federal government retains the power to create laws that develop infinite dollars and to give those dollars whatever value it wishes.
  10. This ability is called “Monetary Sovereignty.” The federal government is sovereign over the U.S. dollar.
  11. While the federal government is Monetarily Sovereign, state/local governments, businesses, and people are monetarily non-sovereign.
  12. Monetarily non-sovereign entities do not have the infinite ability to create U.S. dollars or to give those dollars arbitrary values. Monetarily non-sovereign entities can run short of dollars.
  13. While the U.S. government and the governments of the U.K., Mexico, Canada, Australia, Sweden, and others are Monetarily Sovereign, the governments of France, Italy, Germany, Portugal, and others are monetarily non-sovereign. They use the euro. They cannot control their money supplies, nor do they have the ability to fight inflation, recession, or depression.
  14. The European Union (E.U.) is sovereign over the euro. The E.U. is run by the rich. It can fight inflation, recession, and depression but instead forces the poorest people of the euro nations to shoulder that burden.
  15. The U.S. federal government cannot unintentionally run short of dollars, even if it collects no taxes.
  16. Federal taxes and American federal taxpayers do not fund federal government spending. The federal government could provide unlimited benefits (Medicare for All, Social Security for All, College for All, etc.) without taxes. The term, “spending taxpayers’ money,” when referring to the federal government is incorrect. The government does not spend taxpayers’ money.
  17. The purpose of federal taxes is not to provide the federal government with dollars but rather to:
    A. Control the economy by taxing what it wishes to discourage and giving tax breaks to what it wishes to encourage
    B. To assure demand for the dollar by requiring dollars to be used for tax payments, and
    C. to discourage the public from asking for benefits. This is a function of Gap Psychology — the desire of the rich to distance themselves from the middle- and lower-income/wealth/power public.
  18. Money is the way modern economies are measured. By definition, a large economy has a larger money supply than does a small economy. Therefore, a growing economy requires an increasing supply of money. QED.
    The graph shows the essentially parallel paths of GDP (red) vs. a broad measure of the U.S. money supply, Domestic Non-Financial Debt (blue)
  19. Medicare and Social Security are not funded by so-called “trust funds,” which are not real trust funds but only balance sheet lines.
    WHAT ARE FEDERAL TRUST FUNDS?
    September 20, 2016, Peter G. Peterson Foundation
         A federal trust fund is an accounting mechanism used by the federal government to track earmarked receipts (money designated for a specific purpose or program) and corresponding expenditures.
         The largest and best-known funds finance Social Security, Medicare, highways and mass transit, and pensions for government employees.
         Federal trust funds bear little resemblance to their private-sector counterparts.
         In private-sector trust funds, receipts are deposited, and assets are held and invested by trustees on behalf of the stated beneficiaries.
         In federal trust funds, the federal government does not set aside the receipts or invest them in private assets.
         Instead, the receipts are recorded as accounting credits in the trust funds, and the receipts themselves are comingled with other receipts that Treasury collects and spends.
  20. The government has total control over these balance sheet numbers, belying the false claim that the “trust funds” soon will run short of dollars. The federal government has absolute control over those balance sheet numbers. It can add to them or reduce them at will.
  21. Your Social Security check comes from a mythical trust fund that contains no money and receives no money. Social Security (and Medicare) benefits are paid ad hoc by the U.S. government, not from a trust fund, and are not dependent on FICA taxes. Which can and (opinion) should be eliminated.
  22. The federal government creates new dollars ad hoc by paying bills. No receipts by the Treasury are spent. They all are destroyed.
  23. Debt is not a burden on the federal government. It is not, as some have been calling it for over eighty years, “a ticking time bomb.”The infinite ability to create dollars means the government can service any debt denominated in dollars by creating dollars, ad hoc.
  24. The federal Debt/GDP ratio often is quoted with alarm. A high ratio wrongly is thought to indicate the federal government’s difficulty paying its debts. In fact, the Debt/GDP ratio is meaningless, having zero predictive power. Looking at a list of countries by their Debt/GDP ratio will not tell you which countries are better or worse able to pay their bills.
  25. It is impossible to evaluate any aspect of a nation’s economy by looking at its Debt/GDP ratio. The ratio says nothing about the health of the U.S. economy or about the federal government’s ability to pay its bills. See Debt to GDP ratio by country.
  26. The federal government creates dollars by paying creditors.
    A. To pay a creditor, the federal government sends instructions (not dollars) to the creditor’s Bank, instructing the Bank to increase the balance in the creditor’s checking account.
    B. The instant the Bank obeys those instructions, new dollars are created from thin air and added to the M1 money supply measure.
    C. The instructions then are cleared through the Federal Reserve and the government agency issuing the instructions.
  27. What is commonly called “debt” is the total of dollar deposits into privately owned Treasury Security accounts by the purchase of T-bills, T-notes, and/or T-bonds.
    A. To make a deposit into a T-security account, one opens a T-security account and uses U.S. dollars to invest in a T-bill, T-note, or T-bond.
    B. The government never touches those dollars other than to make interest deposits.
    C. The government does not use those dollars; it creates new dollars, ad hoc, to pay its bills.
    D. Upon maturity, the government returns the account balance to the account owner. Visualize how a bank treats deposits in safe deposit boxes.
    E. Because the dollars already exist in the T-security accounts, returning them is not a financial burden on the U.S. government or any taxpayer.
  28. Not needing an input of dollars, the government provides T-bills, etc., only to provide a safe place to store unused dollars and to help it control interest rates. Both purposes help the government stabilize the dollar. 
  29. Even if large holders of T-securities (China is a notable example) were to stop buying T-securities (the term “lending” erroneously is used), the federal government could continue spending as before. If the Federal Reserve felt a need to issue T-securities, they could buy them themselves. There is no financial need for the U.S. to sell T-securities to China.
  30. Some worry that one day the U.S. dollar will cease to be the world’s reserve currency. That should not be a concern. A reserve currency is nothing more than a currency banks hold in reserve to facilitate international commerce. Many currencies function as reserve currencies, including: the euro, Japanese yen, British pound, Chinese yuan, and others.
  31. A federal “deficit” is the difference between dollars the government creates and sends to the economy (aka “the private sector”) vs. dollars the private sector sends to the government.
  32. When federal deficit and debt growth are reduced we experience recessions and depressions.
    1804-1812: Federal Debt reduced by 48%. Depression began 1807.
    1817-1821: Federal Debt reduced by 29%. Depression began 1819.
    1823-1836: Federal Debt reduced by 99%. Depression began 1837.
    1852-1857: Federal Debt reduced by 59%. Depression began 1857.
    1867-1873: Federal Debt reduced by 27%. Depression began 1873.
    1880-1893: Federal Debt reduced by 57%. Depression began 1893.
    1920-1930: Federal Debt reduced by 36%. Depression began 1929.
    1997-2001: Federal Debt  reduced by 15%. The recession began 2001.
  33. Federal deficits enrich the economy and are necessary to grow the economy. They add dollars to the economy, and they help prevent and cure recessions.
  34. Gross Domestic Product (GDP) is a measure of dollars spent in the economy, which is why adding dollars to the economy stimulates GDP growth.
  35. Balanced budgets, though appropriate for personal finances, cause recessions and depressions when attempted by the federal government. To grow, the private sector needs to receive more dollars from the federal government than it pays to the federal government (aka a federal deficit).
  36. The federal government receives dollars from the economy through taxes, fines, and other payments.
  37. All dollars received by the federal government are destroyed upon receipt.
    a. Taxes are paid from the private sector (aka “the economy) checking accounts (Those dollars are part of the “M1” money supply) and are sent to the U.S. Treasury.
    b. When dollars reach the Treasury, they cease to be part of any money supply measure. Because the government has the infinite ability to create dollars, there can be no measure of how many dollars the government has. It has infinite dollars. (Infinite dollars + Tax Dollars = Infinite dollars. No change.)
    c. Because tax dollars do not increase the federal government’s money supply, they are effectively destroyed.
    d. Dollars sent to monetarily non-sovereign state/local governments, businesses, and people are not destroyed. They are deposited into private sector banks and remain part of the M1 money supply.
  38. Monetarily non-sovereign entities (state/local governments, businesses, etc.) create dollars by borrowing and lending.
    a. When a bank lends dollars, it does not lend depositors’ funds. It adds dollars to the borrower’s checking account (M1) and balances its books by counting the borrower’s note as dollars.
    b. Upon consummating the loan, the Bank has dollars (the note), and the borrower also has the dollars it borrowed. Thus a loan creates dollars.
    c. As the loan is paid down, dollars held by the borrower are sent to the lender, and the loan balance loses value.
  39. By contrast, the federal government does not borrow its own sovereign currency, the U.S. dollar. It pays all its bills by creating new dollars.
  40. The federal government collects taxes not to fund spending but to:
    a. Control the economy by taxing what it wishes to discourage and giving tax breaks to what it wishes to encourage
    b. Create demand for the dollar by requiring taxes to be paid in dollars
    c. Create the false impression that taxes are necessary to fund spending so that the public acquiesces to benefit limits.
  41. Import duties are taxes levied on imported goods. These taxes are paid by the purchaser, not by the seller. For example, a duty on imports of Chinese goods is paid by the American consumer, not by the Chinese exporter.
  42. Inflation is a general increase in prices.
  43. Prices increase because supply is insufficient to satisfy demand (scarcity).
  44. Historically, dollar creation has not caused an increase in demand sufficient to cause inflation. Federal deficit spending does not cause inflation.
    There is no relationship between increases in federal deficit spending (red) and inflation (blue)
    A. All inflations have been caused by the insufficient supply of critical goods and services, most often oil and food.
    B. Today’s inflation is caused by scarcities of oil, food, lumber, computer chips, shipping (supply chain), labor, and other COVID-related factors.
    Oil shortages cause most inflations. Curing oil shortages cures most inflations.
    C. These shortages are not caused by money creation and cannot be cured by restricting money creation plans such as interest rate increases. Those plans do not remedy the scarcities that are responsible for inflation.
    D. Curing inflation requires curing shortages, not recessing the economy.
    Federal deficit spending does not cause inflation.

    E. Shortages often begin with a disease, weather, war, or government mismanagement. COVID caused many shortages and was the original impetus for today’s inflation.
    F. The famous Zimbabwe inflation began when the government took farmland from experienced farmers and gave it to people who didn’t know how to farm. The resultant food shortage, not Zimbabwe’s money creation, caused hyperinflation.
  45. The federal government can cure shortages by additional deficit spending to obtain scarce goods and services or encourage their creation. 
  46. Eliminating the FICA tax would fight inflation by lowering labor costs and thus the cost of most goods.
  47. There is no economic benefit to privately owned banks. The federal government should own all the banks. Because the federal government doesn’t have a profit motive, there would be none of those risky securities the big banks have dreamed up. These garbage contracts led to the Big Recession of 2008, and because the banks were not punished, no lessons were learned. The same problems are happening today.
  48. More efficient and generous immigration laws would fight inflation by reducing the labor shortage.
  49. Low interest rates are not stimulative.
    Low interest rates (purple) do not correspond with high economic growth (green).
  50. Increasing interest rates can make the dollar more valuable and have some stimulative effect because low rates force the government to pay more interest dollars into the economy. But low rates do not cure shortages. They actually can exacerbate shortages and intensify inflation.
  51. Interest rate increases make private sector money creation (borrowing) more difficult, which can recess the economy.
  52. On balance, high and low interest rates have both stimulative and recessive elements. But they do not cure inflations, and it is the inflations that lead to recessions or “stagflation” (the combination of a stagnant economy and inflation). 
  53. A symptom of this bifurcation is the stock market’s adverse reaction to good economic news. Any good news (low unemployment, high GDP growth, etc.) impels the Fed to raise interest rates, which the public believes will hurt business and depress securities.
  54. Recessions have no agreed-upon definition but often are defined as a decline in real Gross Domestic Product (GDP) for two consecutive quarters. GDP is a measure of spending. Federal Spending + Nonfederal Spending + Net Exports = GDP.
  55. Depressions often are defined as recessions that last at least two years.
  56. The prevention and cure for recessions and depressions is federal deficit spending, which adds dollars to the economy (aka the private sector) and increases GDP. 
  57. Reductions in federal deficit spending or surpluses lead to recessions and depressions, providing the private sector with insufficient growth dollars.
  58. The Fed has no cure for stagflation, though Congress and the President do.
    A. The “stagnation” part of stagflation is cured by federal stimulus spending, as is done to cure every recession.
    B. The “inflation” part of stagflation is cured by federal spending to obtain the goods and services whose scarcity is causing inflation.
  59. Though state and local governments are monetarily non-sovereign concerning the U.S. dollar, nothing stops any entity –you, me or anyone–from creating their own sovereign currency and being Monetarily Sovereign concerning that currency.
    A. The currency would face the problem of demand, i.e., the acceptance of the money in payment, which in part would depend on the “full faith and credit” of the issuer.
    B. Many forms of money exist in America. One example is manufacturer coupons. They are issued by businesses, have a stated value, and are accepted by retailers.
    C. Some aspects of the U.S. dollar’s “full faith and credit” are:
         i. The government will accept only U.S. currency in payment of debts to the government
         ii. It unfailingly will pay all its dollar debts with U.S. dollars and will not default
         iii. It will force all domestic creditors to accept U.S. dollars, if offered, to satisfy any debt.
         iv. It will not require domestic creditors to accept any other money
         v. It will protect the value of the dollar.
         vi. It will maintain a market for U.S. currency
         vii. It will continue to use U.S. currency and will not change to another currency.
         viii. All forms of U.S. currency will be reciprocal; five $1 bills always will equal one $5 bill, etc.
  60. An example of Monetary Sovereignty and full faith & credit can be found in the board game, “Monopoly®.” By rule, the Bank in that game never can run out of Monopoly dollars, and it does not rely on income to pay its debts. Thus, the Monopoly bank is Monetarily Sovereign.
  61. Being Monetarily Sovereign, the Bank has infinite Monopoly dollars, and neither its deficits nor its debt is a burden on the Bank or on the players (corresponding to the real-world economy).
  62. Gold and silver are not, and never have been money. At most, they have been value standards to which the value of money is compared.
  63. Gold or silver never “backed” the dollar. The prices of gold and silver vary wildly, but through the years, the federal government arbitrarily and often has changed the value of dollars vs. gold and silver (which destroys the “backed” claim.) The only thing backing the U.S. dollar is the full faith and credit of the U.S. government.
  64. Lack of money is the mother of street crime. Impoverished neighborhoods endure far more street crime than do wealthy neighborhoods.
  65. The prevention and cure for street crime is not more police or more severe punishment. The prevention and cure for street crime is to reduce poverty.
  66. The federal government has the power to reduce poverty and thus to reduce street crime) by paying for health care insurance (Medicare for All), living expenses (Social Security for All), education (college for all), food (Supplemental Nutrition Assistance Program — SNAP for all), life insurance for all, and housing (rent assistance for all).
  67. “Rich” and “poor” are relative terms. A person having a million dollars would be poor if everyone else had ten million. A person with a thousand dollars would be rich if everyone else had ten dollars. The income/wealth/power difference between those who have more and those who have less is the Gap.
  68. The wider the Gap, the richer are the rich.
  69. To become more prosperous, the rich (who run our world) continually attempt to widen the Gap. They can widen the Gap by gaining more for themselves or by forcing the poorer to have less.
  70. To force the poorer to have less, the rich feed them the disinformation that the federal government cannot afford to pay for benefits, that federal spending causes inflation, or that benefits require taxes. None are true.
    A. The federal government can afford anything (It’s Monetarily Sovereign);
    B. federal spending never has caused inflation (shortages of oil and other goods and services cause inflation);
    C. federal taxes don’t pay for anything (the federal government creates dollars, ad hoc, to pay for all its spending). Federal taxes are destroyed upon receipt.
  71. The rich also spread the disinformation that if the federal government provides benefits, the poor will refuse to work. To debunk this myth, one only needs to look at the rich, or even at the upper middle classes, who continue to work despite receiving massive tax benefits.
  72. Human wants are unlimited. Even the rich wish to be richer, more powerful, more respected, more envied, more admired, and to have more of everything. Most people want a better life for themselves and their children.
  73. Thus, even upon receiving free medical care, housing, food, clothing, education, etc., people will continue to work for more than what is considered “basic” at any moment in time.
  74. To help spread their disinformation, the rich bribe:
    A. Politicians (via political donations and promises of future employment),
    B. Economists (via university donations and jobs in think tanks), and
    C. The media (via advertising dollars and media ownership).
  75. The rich bribe politicians to pass tax laws and other laws favorable to the wealthy and unfavorable to the rest of us, to widen the income/wealth/power Gap.
  76. Congress’s approval of benefits reveals an ugly part of the human psyche: Jealousy. President Biden’s approval of student loan debt reduction elicited cries of “Unfair” from those who already had paid off much or all of their student loan debt.
  77. But all benefits are felt to be “unfair” by those who didn’t receive the benefit before it was begun. This demonstrates the intimate relationship between economics and psychology. 
  78. The European Union (E.U.) is Monetarily Sovereign over the euro and is run by the rich, forcing the euro nations to struggle for lack of euros. This helps widen the Gap between the European rich and the rest.
  79. The United States is a not-very-democratic republic. While we, the people, do elect our leaders, the election system is highly skewed toward rural power. The Senators’ elections and the national Presidential elections give excessive power to rural voters vs. urban voters. This originally was done by our founders to encourage rural states to join the union.
  80. Within the Senate, voting rules give a few Senators, sometimes only one Senator, extreme power. Even the supposedly population-based House of Representatives accomplishes this dubious, undemocratic achievement via gerrymandering,the manipulation of an electoral constituency’s boundaries so as to favor one party or class. 
  81. The Supreme Court, the final arbiter of all laws, proudly pays no attention to what the public wants. Instead, they are nine (currently) unelected people who make national decisions based on their personal and religious philosophies and party affiliation. 
  82. As such, the unelected Supreme Court’s desired impartial functions have been superseded by the Justices’ personal biases. A case could be made for eliminating the Supreme Court and allowing the elected Executive and Legislative branches of government, which more closely reflect the desires of the public, to fill the role. An alternative would be to impose term limits on SCOTUS justices.

The above points are merely summaries of broader truths about the U.S. economy. Most have been discussed at greater length in this blog’s preceding posts.

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.

MONETARY SOVEREIGNTY

It breaks my heart to see this headline. It should break your heart, too.

[Why would any sane person take dollars from the economy and give them to a federal government that has the infinite ability to create dollars?]

It breaks my heart to see the following headline. It should break your heart, too.

Millions of vulnerable Americans likely to fall off Medicaid once the federal public health emergency ends
By Amy Goldstein

This image has an empty alt attribute; its file name is image-1.png
“Pay no attention to those many trillions behind me. I’m too broke to help you (unless you’re rich.)”

Begin with two central facts: The U.S. federal government is Monetarily Sovereign, and a Monetarily Sovereign entity cannot unintentionally run short of its own sovereign currency.

The federal government has infinite dollars.

Thus, your federal tax dollars do not fund federal spending.

Even if all federal tax collections totaled $0, the federal government could continue spending, forever.

All federal taxes are destroyed upon receipt.  Your M1 money-supply tax dollars cease to be part of any money-supply measure, once they reach the Treasury. They effectively are destroyed.

The government creates new dollars, ad hoc, every time it pays a bill. That is how the federal government creates dollars. The more debts the government owes, the more money it creates.

Contrary to what you repeatedly are told, your grandchildren are not liable for the federal “debt.” Not now, not ever.

WASHINGTON — The bipartisan spending deal that Congress cleared last week provides billions of dollars in aid for Ukraine, but it cuts other humanitarian programs meant to address mounting hunger crises elsewhere in the world, including Afghanistan and West Africa.

The initial House-passed bill and one offered in the Senate, written by majority Democrats, would have largely fulfilled the White House’s humanitarian funding request.

In interviews and statements, foreign aid advocates said they were “embarrassed” and “flabbergasted” that Congress reduced funds for dealing with the worst refugee displacements since World War II and other crises caused by mounting natural disasters and manmade conflicts.

The cuts to nonemergency humanitarian spending, as well as the lack of any international COVID-19 assistance in the omnibus, are a “self-inflicted wound” to America’s ability to recover from the pandemic and to pursue its long-term national security interests, said Liz Schrayer, president of the bipartisan U.S. Global Leadership Coalition.

Independent budget analysts have pinned blame on Republicans’ insistence that any increases in nondefense spending be kept roughly equal to increases in defense spending.

“We have more people who are hungry and people who are hungrier getting hungrier and we have no grain. It is absolutely catastrophic,” Peña said. “SFOPs got the raw end of the stick.”

The Senate’s lead foreign aid appropriator issued a similar view in an uncharacteristically blunt statement for a congressional appropriations cardinal criticizing his own bill.

Everywhere you turn, the phony belief that the federal government must operate under restrictive budgets, like you and I must, is a self-inflicted wound on America.

The so-called “federal debt” is not a debt (It is deposits in T-security accounts), and it is not a burden on anyone. (The “debt” is paid off simply by returning those deposits.)

Our federal government, having unlimited resources, pretends it is limited, and the public believes the lie.

The sole purpose of the lie is to keep you from asking for the same federal benefits that the rich (who pay no taxes year after year) receive.

So long as you are kept ignorant, the rich will keep getting richer and you will keep paying.

WHAT ABOUT INFLATION?
In addition to the lie about the federal debt being a burden, there is the lie that federal deficit spending causes inflation. It is widely believed, but it is a flat-out lie backed by no facts.

There is no relationship between federal deficit spending (red line) and inflation (blue line).

Inflations are caused by shortages, most often shortages of oil.

Today’s inflation is caused not only by shortages of oil but also by scarcities of food, shipping, labor, computer chips, vital minerals, lumber, and many other COVID-induced problems.

For many, many years, the US had massive deficit spending with low inflation, but now, with the effects of COVID and the Putin war, we suddenly see inflation. Clearly, deficit spending was not the cause.

The Fed’s attempt to address inflation by raising interest rates will not succeed while the real causes, shortages of oil et al, persist. Congress can address these shortages by spending more to facilitate the supply of all scarcities.

One good step would be to eliminate the harmful FICA tax, which doesn’t fund Medicare or Social Security but does discourage hiring by increasing the cost of labor.

And this is what breaks my heart. A Congress that never has to worry about having enough to eat, or a place to sleep, or good schools for their children, has decided America “can’t afford” to provide these things to the “lazy” poor.

Of course, the “can’t afford” meme is a blatant lie. America can afford anything that costs dollars.

But the rich, who bribe and control our government, don’t want the Gap between them and the rest of us to narrow. The wider the Gap, the richer are the rich, so widening the Gap is the way our spineless Congresspeople vote.

“Spineless” is the only way to describe the 100% refusal of one party to approve spending for the poor. These subservient sheep do exactly as they are told by the rich, then collect their excessive salaries and bribes, while the less fortunate among us pay the price.

So long as you believe that your federal taxes fund federal spending and that federal spending causes inflation — so long as you believe those two lies — then the rich will have won and you will have lost.

Ignorance has its costs.

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

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

The most important problems in economics involve:

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

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

Ten Steps To Prosperity:

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

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

MONETARY SOVEREIGNTY

The only way to teach children right from wrong

“Right” and “wrong” are social conventions that differ among societies. Canibals think eating people is just fine. Aztecs supposedly enjoyed ripping out hearts. Slavery was de rigueur in America.

You were not born knowing right from wrong. You learned from your family and friends. You learned from your schools and other outside sources.

There is only one way to teach children right from wrong. Children must be taught what is right and taught what is wrong. They must be taught the truth.

So, for instance, if your family and friends were bigots — — i.e. intolerant of people because of their race, religion, or sexual orientation — and your schools said nothing about bigotry, you probably would have become a bigot.

Why would your family and friends teach you bigotry? Because their families and friends taught them bigotry, a chain extending down through the generations, families and friends teaching bigotry as a standing tradition.

Why would your schools say nothing? Perhaps because of laws that prevented them from teaching you right from wrong, for fear you would find such teaching “uncomfortable.”

Although you, like most people, probably harbor some forms of bigotry in your heart, you probably also agree that bigotry, in general, is a sin. How do we solve that dichotomy and break the historical chain?

I was reminded of that question when some years ago, on a visit to Germany, I toured the Dachau concentration camp.

Dachau’s commandant, Theodor Eicke, introduced a system of regulations which inflicted brutal punishments on prisoners for the slightest offenses, while scientists there conducted cruel experiments.

Prisoners were subjected to injections of malaria and tuberculosis, and the untold thousands that died from hard labor or torture were routinely burned in the on-site crematorium.

As Allied units approached, at least 25,000 prisoners from the Dachau camp system were force-marched south.

During these death marches, the Germans shot anyone who could no longer continue; many also died of starvation, hypothermia, or exhaustion.

When American forces liberated Dachau, they found more than 30 railroad cars filled with bodies.

I was able to tour the camp because the German government neither hid nor denied the existence of the horrors committed there. In fact, they use the camp as a reminder of the past, to help prevent a repeat.

A movie describing in detail, the horrors of the camp, is shown to daily busloads of German school children as a right-vs.-wrong lesson.

The German people, but for a small minority, do not celebrate the misdeeds of Naziism. There are no statues of Hitler in Germany. The Holocaust is revealed and decried.

The Germans do not fear admitting this dark period of their history. In fact, they actively teach it.

I think of that approach to the shameful parts of Germany’s heritage when I compare it to the American — or rather, the right-wing — approach to the horrors of our past and even of our present.Nearly 100 Confederate Monuments Removed In 2020, Report Says; More Than  700 Remain : NPR

Slavery was an abomination that was celebrated by statues which, at long last, were pulled down despite claims of “Southern heritage.”

And today, in America, “well-meaning, good citizens,” protest against teaching the parts of our past that shame us. Their stated concern is that such reminders and revelations would make their children “uncomfortable.”

But ignorance is uncomfortable. Bigotry is uncomfortable. Denial does not change reality.

Today, our black families continue to undergo hardship. No, it isn’t of Holocaust levels, but still is terribly destructive and wholly unnecessary in our wealthy nation.

GOP advocated denial is the worst approach because it teaches no lessons. It condemns us to repeat the sins of the past.

Those who cannot remember the past are condemned to repeat it.”
George Santayana, The Life of Reason, 1905. From the series Great Ideas of Western Man.

We neither can, nor should try, to erase the blemishes of our past. Nor should anyone blame our children for our sins or for the sins of those who came before us. Leveling such blame would, in itself, be bigotry.

The purpose of teaching history is not to lay blame or to create guilt, but to help us know our own successes and foibles, and the circumstances that can move a nation to bigotry and hatred.

We are not pure. No nation is. Pretending purity is blindness and naivete. Let us be honest with ourselves. To some degree, we all receive mistreatment at times, but in America people of color have been, and still are, disproportionately mistreated. 

We allow the teaching of the Holocaust, and even have museums dedicated to that education. Few object, because it was the Germans, and to a degree, the Poles, Austrians, French and others who committed those crimes.

But the teaching of racism in America is an anathema to some Americans, because it is we, or more correctly, some of us, who are the perpetrators. And to hide that historical fact, we countenance angry denial.

This brings us to something called “Critical Race Theory,” perhaps the most reviled yet least understood and least taught academic subject in education.

Critical race theory (CRT) is an academic concept that is more than 40 years old. The core idea is that race is a social construct, and that racism is not merely the product of individual bias or prejudice, but also something embedded in legal systems and policies.

One example: In the 1930s, government officials literally drew lines around areas deemed poor financial risks, often explicitly due to the racial composition of inhabitants. Banks subsequently refused to offer mortgages to Black people in those areas.

Scholars who study critical race theory in education look at how policies and practices in K-12 education contribute to persistent racial inequalities in education, and advocate for ways to change them.

Among the topics they’ve studied: racially segregated schools, the underfunding of majority-Black and Latino school districts, disproportionate disciplining of Black students, barriers to gifted programs and selective-admission high schools, and curricula that reinforce racist ideas.

Solving racial inequalities first requires admitting that they exist and then admitting that they should be solved. 

And that requires study.

Sadly, there are those who deny any study is necessary, deny such inequalities exist to be solved, and claim any such equalities are the fault of the Black students — a “blame-the-victim” rationalization.

The Catholic confessional begins, “Forgive me father for I have sinned.” The confession of sin is the first necessary step for absolution. Without realization and confession, the sin compounds.

The Germans seem to have understood that the denial of sin is in itself a sin.

“Forgive America, father, for we have sinned.” Those are the words of the truly moral, truly righteous.

An evil man, like Donald Trump, would have you deny the obvious. He would have you deny the clear fact that people of color have received worse treatment in America than white Christians. That denial compounds the evil.

For you who are religious, here is are reminders:

John 1:9 If we confess our sins, he is faithful and just to forgive us our sins and to cleanse us from all unrighteousness.
James 5:16 Therefore, confess your sins to one another and pray for one another, that you may be healed. 
Proverbs 28:13 Whoever conceals his transgressions will not prosper, but he who confesses and forsakes them will obtain mercy.
Psalm 32:5 I acknowledged my sin to you, and I did not cover my iniquity; I said, “I will confess my transgressions to the Lord,” and you forgave the iniquity of my sin.
Romans 3:23 For all have sinned and fall short of the glory of God
James 4:17 So whoever knows the right thing to do and fails to do it, for him it is sin.

Perhaps you are one of those rare souls who has not sinned and has not felt bigotry in your heart. But to deny, or even to countenance the sins of others against strangers is in itself a sin.

Discomfort is not an excuse for denial.

Children must be taught about the existence of sin so they can recognize it and learn to avoid it. Without this teaching, the children can be sucked into sin by evil persons.

We are not born bigots. We learn to be bigots, unless we first learn about the evils of bigotry.

The people who object to the teaching of racism in America often blame their children’s sensitivity. But this is a false excuse. The real reason is, they are ashamed of our past, and want to bury it.

But the past has become the present, and it cannot be buried so long as it still lives. The only way to end the shame is to recognize it and to speak against it, else it will not only continue but multiply.

Perhaps, the real problem lies not in the reluctance to admit that bigotry exists but rather in the fear of the cures.

“Affirmative action” often has involved establishing racial quotas or preferences to “even out” representation in school admissions or job hiring. The problem here is that it invariably requires the less qualified to take precedence over the more qualified, and always will be seen as unfair.

Affirmative action” also stigmatizes the very people it is supposed to help — the “You got in only because you are black” appearance, which further adds to the bigotry rather than reducing it.

Once we recognize the bigotry problem itself, and once we determine to solve it, the solution lies not at the top but at its foundation: Money and poverty, i.e. the income/wealth/power Gap at the bottom of the financial scale.

Lacking money, such minorities as Blacks and Latins suffer poorer primary schools, more crime, less family stability, poorer housing, poorer nutrition, and a desperate culture, where immediate needs take precedence over future plans.

These all lead to poorer primary-school academic results which, in turn, lead to less-educated older students and less qualified job- and college applicants.

The solution lies not in taking from the top to give to the bottom (which always will be fought by America’s most powerful), or in giving solely to the bottom (which will be viewed as unfair by America’s middle).

Rather, the solution is to lift the lower levels far enough above subsistence so that the problems of poorer primary schools, more crime, less family stability, poorer housing, poorer nutrition, and desperation culture cease to impact even the least fortunate among us.

This would be a “rising tide” approach that lifts all boats. Examples can be found in the “Ten Steps to Prosperity” (below). For example:

  1. Eliminate the FICA tax
  2. Offer free Medicare to All who want it.
  3. Offer Social Security to All who want it.
  4. Offer free College to All who want it.

Offering the same money to everyone, regardless of current income or wealth, will not affect the lifestyles of the rich, but can lift the poor to levels where school and job achievements are seen as being in reach.

It will not evoke cries of “unfairness” and “discomfort” that currently plague the accurate teaching of America’s history.

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[Why would any sane person take dollars from the economy and give them to a federal government that has the infinite ability to create dollars?]

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

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

The most important problems in economics involve:

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

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

Ten Steps To Prosperity:

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

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

MONETARY SOVEREIGNTY

You can rely on the CRFB to get it wrong. But why?

[Why would any sane person take dollars from the economy and give them to a federal government that has the infinite ability to create dollars?]

The Committee for a Responsible Federal Budget (CRFB) is a fountain of misinformation, or should we say, “disinformation”?

Clearly, they are providing misinformation, i.e. wrong information, but the real question is, do they know it’s wrong, i.e disinformation?

Because they do extensive data analysis, I believe they simply must know their information is wrong. So why do they promulgate so much nonsense?

Before we answer that question, let’s see what they get wrong. Here are some excerpts from their website.

Gas Tax Holiday Would Take A Wrong Turn
FEB 15, 2022 | TAXES
The White House and some in Congress are reportedly considering suspending the 18.3 cent federal gas tax for the remainder of 2022.

The Committee for a Responsible Federal Budget recently estimated that such a proposal would reduce gas tax revenues by $20 billion and, without the general revenue transfer proposed in recent legislation, would advance the Highway Trust Fund insolvency date from 2027 to 2026.

Assuming their numbers are correct, what they really are saying is: “The proposal would reduce the amount of money taken out of the private sector (also known as ‘the economy’) by $20 billion.”

Adding dollars to the private sector is stimulative: taking dollars out of the private sector is recessive. In short, the reduced gas tax revenues would be a $20 Billion economic stimulus.

The CRFB seems to hate anything that stimulates the economy, especially if it directly benefits the middle- and lower-income groups as a reduced gas tax would do.

Further, the so-called Highway Trust Fund is not a real trust fund (see “The Phony Trust Fund Controversy”) and it cannot become insolvent unless Congress and the President want it to become insolvent.

The U.S. government, the creator of the U.S. dollar, cannot run short of dollars. Thus, no agency of the U.S. government can become insolvent, unless that is what Congress wants.

(Former Fed Chairman, Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”)

To prevent the insolvency of any agency, Congress merely passes a law that provides the agency with more dollars. Congress has the infinite ability to pass such laws.

The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:

With inflation at a 40-year high, policymakers are appropriately focused on how to bring prices under control.

But new tax cuts aren’t going to stop this inflation; after all, excessive tax cuts and spending are part of what caused high inflation.

Contrary to popular wisdom, no inflation in history ever has been caused by excessive tax cuts or spending. All inflations are caused by shortages of key goods and/or services.

Interest rates (blue) and inflation (green) have trended down, while federal debt (red) has increased.

For the past 10 years, federal deficit spending has increased massively, with minimal inflation. Now, suddenly, inflation has increased. Why?

Clearly, the cause is not deficit spending, otherwise it would have happened sooner.

Inflations are caused by shortages of key goods and services..

Today’s inflation is caused by the sudden confluence of several factors, all shortages: Labor, food, gasoline, computer chips, transportation, sand, among others.

(Yes, I said “sand.” U.S. Shale Production Hindered By Sand Supply Crunch.)

While massive federal spending has been with us for at least a decade, what has changed recently to cause the sudden change in inflation from low to high?

The answer: COVID.

The worldwide impact of the disease has caused the shortages that lead to inflation.

The only thing that will cure the inflation is to cure the shortages. And that can be accomplished by more federal spending to obtain the needed goods and services:

More federal spending to encourage oil drilling and/or renewable energy.
More federal spending to support farming
More federal spending to support chip manufacture
More federal spending to support transportation
More federal spending to support hiring (i.e. the elimination of FICA taxes and the reduction of income taxes at the lower end)

Reduced federal deficit spending will lead only to recessions, as it always has.

Reductions in federal debt growth lead to inflation
When federal deficit spending (blue) is reduced, we have recessions (vertical gray bars), which are cured by increases in federal deficit spending.

While a gas tax holiday might provide some temporary relief, much of the benefit may flow through to oil producers or lead to higher prices in other sectors of the economy.

It makes no sense for low gas prices to cause price increases elsewhere. While low gas prices may cause an increase in demand for cars, every industry would see lower production costs, which will ease inflation.

Benefitting oil producers is not something to be avoided. Financially encouraging them to pump more oil will ease the scarcity of oil.

By boosting demand in an already over-stimulated economy, the holiday would likely boost inflation in 2023 once it ends. The holiday will also undercut the Administration’s efforts to address climate change.

The CFRB would like you to believe the economy is “overstimulated.” No one knows what an “overstimulated” economy means, but it sure sounds terrible, doesn’t it?

Presumably, it means companies are making more profits so that they will hire more people and pay more salaries to the lower- and middle income people, thereby narrowing the income/wealth/power Gap between the rich and the rest.

Presumably, it means unemployment is low, so there are fewer impoverished children and their parents, again narrowing the Gap between the rich and the rest.

“Gap Psychology” is the desire to widen the Gap below and to narrow the Gap above. All groups are subject to Gap Psychology, but the very rich are the most expert at effecting it.

As for climate change, yes, encouraging more oil production will increase climate change, in the short term. But financially encouraging more use of renewables will have long-term climate benefits.

Meanwhile, the federal government would be out $20 billion this year alone – and much more if the holiday were extended.

The federal government has infinite money. Infinite minus $20 billion, still is infinite. The federal government always will have the infinite ability to write laws, and those laws have the unlimited ability to create dollars.

The CRFB cries crocodile tears for the infinitely rich U.S. government, but no tears for you. They want you to pay the infinitely rich government more of your scarce dollars.

The Highway Trust Fund is just five years from insolvency, and the last thing we need is to cut its primary revenue source or paper over shortfalls with yet another general revenue transfer.

No, the last thing we need is liars telling us that the federal government is running short of its own sovereign currency, so you poor folks need to pony up more dollars, or receive fewer, benefits.

“Insolvency” is the big, fake bogeyman with which the rich try to scare you.

The Big Lie in economics is: “Federal taxes fund federal spending.” While state and local taxes do fund state and local spending, the federal government, being Monetarily Sovereign, does not rely on, or even use, tax dollars.

In fact, the U.S. Treasury destroys all tax dollars upon receipt. It creates new dollars, ad hoc, every time it pays a creditor.

(How does the Treasuy destroy tax dollars? The dollars in your checking account are part of the M1 money supply. When the Treasury receives those dollars, they disappear. They no longer are part of any money supply measure. They effectively are destroyed.)

Statement from the St. Louis Fed:
“As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills.

In this sense, the government is not dependent on credit markets to remain operational.”

Thus, the federal government has infinite dollars; it can’t run short; and telling people to give the government more and to accept less is just an example of how the Big Lie works.

As it stands, the gas tax will only cover half of highway and transit spending by the time the trust fund runs out.

In fact, the gas tax covers none of transit spending. Those tax dollars are destroyed. All federal spending, including federal transit spending, is funded by ad hoc, federal money creation.

As inflation subsides, we should either raise that tax or find a new funding source to supplement or replace it.

We don’t need to find a new funding source. And we certainly don’t need to raise taxes. The federal government is the best funding source:

Former Fed Chairman Ben Bernanke“The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

As we’ve stated, the CRFB, acts repelled by the fact that federal spending helps narrow the income/wealth/power Gap between the rich and the rest.

A well-designed carbon tax could generate ample tax revenue while substantially reducing carbon emissions and tempering excessive demand.

A well designed carbon tax might be a good idea from an ecological standpoint. But it’s a silly idea if the purpose is to give private sector dollars to a government that has the infinite ability to create dollars.

The pain Americans are feeling at the gas pump – and with rising costs throughout the economy – should be taken seriously and addressed thoughtfully.

The gas price pain will be eased by raising gas taxes??? That’s the utter nonsense the CRFB wants you to believe.

While cutting the gas tax may have political appeal, it would move in exactly the wrong direction, worsening rather than improving our nation’s economic challenges.

The rising costs should be taken seriously, which is why the cost of gasoline should be reduced — by cutting the gas tax.

Inflation takes dollars out of your pocket. The CRFB’s method of taking inflation seriously” is by taking even more dollars out of your pockets via tax increases.

Why does the CRFB act this way?

Because the rich, who run America, also run the CRFB, and support it with donations. The rich and the CRFB want to widen the income/wealth/power Gap between the rich and the rest.

The rich always wish to be richer. The only way to be richer is to widen the Gap. There are two ways the rich can widen the Gap: Obtain more money for themselves and/or make sure you have less money by paying more taxes.

Either one will make the rich richer, and the CRFB seems to be doing everything it can to reach that goal.

In that vein, I just received this Email from CRFB:

Trust Fund Solutions
Featuring Senators Angus King (I-ME) and Mitt Romney (R-UT)

Committee For a Responsible Federal Budget - Our Maya MacGuineas testified before the House Budget Committee yesterday on fiscal goals. Read her testimony http://crfb.org/papers/maya-macguineas-testimony-setting-fiscal-goal. Watch the video https://www ...
Maya MacGuineas:Paid by the rich to tell you that the federal government’s trust funds soon will be insolvent.

The major government trust funds for Social Security, Medicare, and Highway spending face insolvency in the next decade-and-a-half.

Policymakers need to act sooner rather than later to prevent abrupt across-the-board benefit cuts, assure a more sustainable debt path, promote faster economic growth, and achieve a number of important policy goals.

How raising taxes will help “promote faster economic growth” is a mystery the CRFB never really explains.

Trust Fund Solutions will feature opening remarks from Senator Angus King (I-ME) and a discussion between Senator Mitt Romney (R-UT) and Committee for a Responsible Federal Budget president Maya MacGuineas.

The event will also feature a panel of experts, one focused on each trust fund.

The Committee for a Responsible Federal Budget will also debut its new Trust Fund Solutions website and educational tools.

You can bet that the “solutions” for the mythical “Trust Funds” will involve tax increases (for which the rich will given loopholes) plus benefit decreases, both of which will widen the Gap between the rich and the rest.

Widening the Gap is what the rich pay the CRFB to do.

SUMMARY
1. The Big Lie in economics is that the U.S. federal government can run short of its own sovereign currency, the U.S. dollar. Not only does the govarnment itself have access to infinite dollars, but no agency of the government can run short of dollars unless Congress and the President want that.

2. The government neither needs nor uses tax dollars, which are destroyed by the Treasury upon receipt.

3. Federal deficit spending never causes inflations (scarcities are what cause inflations). Federal deficit spending can cure inflations by curing scarcities. Reductions in federal deficit spending lead to recessions or depressions.

4. The rich grow richer by widening the Gap between the rich and the rest. Gap widening has two paths: Gaining more for the rich and/or forcing the rest to accept less.

5. The CRFB is paid to aid the rich by convincing the populace to accept Gap widening.

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

……………………………………………………………………..

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

The most important problems in economics involve:

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

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

Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all
  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