Here are excerpts from the most ridiculous article you will read this week, and that is saying a lot these days.
White House asks Congress to pass emergency funding for disaster aid, Afghan resettlement as well as spending bill to avert shutdownAdministration officials also asked Congress to pass a short-term spending bill to avoid a government shutdown in October.By Jeff SteinThe White House budget office on Tuesday sent Congress an “urgent” spending request asking for tens of billions of dollars in natural disaster relief and Afghanistan resettlement funding as the administration tries to respond to both emergencies.Believe what I tell you.The White House is asking for $14 billion in aid to respond to natural disasters that occurred before Hurricane Ida, as well as $6.4 billion to pay for the ongoing relocation of tens of thousands of Afghans who partnered with the U.S. during the war in Afghanistan. The administration anticipates that another $10 billion will have to be approved in disaster relief for Hurricane Ida as well.As part of the request, White House Office of Management and Budget Acting Director Shalanda Young called for Congress to approve a short-term extension in government funding so that there isn’t a partial government shutdown on October 1..
OK, I get it. Congress should examine how money is used.
And though I can’t say whether $14 billion is the right amount for previous disasters, or whether $6.4 billion is right for protecting the people who helped and believed us, or whether $10 billion is right for reducing the suffering caused by Hurricane Ida, I can say this:
The initiatives themselves are worthwhile
The government has infinite money
It’s better to err on the side of “too much” rather than too little.
There is no downside to spending “too much,” even if some of it is “wasted,” because government spending, even wasted spending, stimulates (by formula) GDP growth, and costs taxpayers nothing.
{Federal taxpayers don’t fund federal spending. Federal taxpayers don’t fund anything.)
So the same Republicans who voted for Trump’s tax cut for the rich, joined by a couple of self-proclaimed “moderate” Democrats, who “work across the aisle,” will prance and preen and pretend to be so concerned about taxpayers.
They will demand that everything be cut by 30%, and later, will blame Biden for not doing enough. Gotcha!
Breitbart and FOX will wring their hands and cry crocodile tears for the Americans who are suffering and for the Afghans who are suffering, though, in today’s bifurcated world, no one seems really to care about anyone else’s suffering. It’s all self-serving righteousness performed on the world’s biggest pulpit.
But the most ridiculous part is the phony threat of a government shutdown.
As the upcoming game of “pretend chicken” plays out, the Republicans will huff and puff their fake fiscal integrity; the Treasury and the Federal Reserve will institute fake “extreme efforts” to keep America from falling into bankruptcy; fingers will point in all directions; and the stock market will crash long enough for the smart-money guys to pick some cheap fallen fruit.
Then, miraculously and heroically, accommodation will be reached; the phony debt ceiling once again will be lifted and rescheduled for six months hence; and the stock market dutifully will provide quick profits to those who weren’t fooled by the blather.
All will self-congratulate for saving America from the potential disaster they themselves created, and the economically uneducated voters will go on believing what they always have been told: The Big Lie that federal finances are just like personal finances so the federal debt must be reduced.
It’s like a football game in which the politicians are the players, and the people are the football. Everyone gets their kicks.
The White House’s request for short-term funding needs comes as it works on unrelated legislation for an approximately $3.5 trillion budget deal that Democrats are seeking to shape this month in Congress. That sweeping package would overhaul the social safety net, authorize new climate change programs, raise taxes on corporations, and achieve a number of other Biden administration priorities.
If overhauling the social safety net included 100% free healthcare for every American, plus Social Security for every American, that would be the greatest use of federal financial power in the past century — perhaps ever.
Sadly, that won’t happen. Not even close. The rich don’t want it because of Gap Psychology, and the public doesn’t know the government can do it all without raising taxes.
Anyway, as everyone knows, the poor are a bunch of lazy takers, who deserve their misfortune, so why help them? Right?
The public also doesn’t understand that climate change is an extinction-level event we are leaving for our children and grandchildren to cope with, so why take any action now to reduce CO2? Let the Chinese do it first.
The Republican’s sole (fake) concern is with unborn children; they have no interest in children already born, and especially no interest in poor children already born. So they march around, displaying huge photos of fetuses, which in reality are the size of your thumb, and worry not about the fate of those unfortunate women and their subsequent babies.
It’s all God’s will.
The Democrats are so busy wallowing in the nobility of their causes, they can’t bring themselves to dare tell the truth about federal finances, or to actually play the politics game.
So they will enjoy continuing to be righteous losers, despite owning a majority of the total voters. After winning the last Presidential election by seven million votes, the Dems brilliantly have managed to position themselves as Congressional underdogs.
Meanwhile, the universally despised Donald Trump, after leading and losing an election, the swing state of Georgia, and a rebellion against American democracy, continues to be a GOP torch-bearer, because really, what else do they have?
The administration’s request for more funding for the Afghanistan relocation and disaster relief programs is likely to provoke substantial (fake) debate in Congress, where Republicans have hammered the White House for its handling of the withdrawal to end the war.The majority of the $6.4 billion requested by the White House will go principally to fund processing sites for relocating tens of thousands of people in Afghanistan who partnered with the U.S. during the two decades of war there. Of the $6.4 billion, the biggest chunk is for the State Department and Department of Defense relocation process for allies from Afghanistan and support for them to help them integrate into American life. Another substantial amount of funding would go to United States Agency for International Development for Afghans at risk in the regions.Administration officials said Tuesday the request would help plans for resettling as many as 65,000 Afghans who are expected to arrive in the U.S. by the end of September, as well as up to 30,000 Afghans expected to arrive in the U.S. over the next 12 months.
The Republicans, who blasted Biden for not extracting perhaps a hundred Americans and thousands of our Afghan partners to the tender mercies of the Taliban, soon will blast Biden for wanting to resettle the many thousands he was able to extract.
Trump will claim they all are terrorists, criminals, rapists, and unaffordable leaches on the economy, whose children might vote Democrat in future elections. If that sounds familiar, it’s what he said about Mexicans and Muslims. The plot never changes; only the cast of characters changes.
“The operation to move out of danger and to safety tens of thousands of Afghans at risk, including many who helped us during our two decades in Afghanistan, represents an extraordinary military, diplomatic, security, and humanitarian operation by the U.S. government,” Young’s letter said.“We urge Congress to appropriate $6.4 billion to enable the success of this multifaceted, historic mission,” she wrote.
As soon we will hear that “Biden wants to import terrorists” (those same people the GOP pretended to feel so sorry for), we’ll enjoy the grandstanding about the money needed to conduct the vetting to filter out terrorists.
The disaster aid — likely more than $20 billion when the damages from Hurricane Ida are factored in — would help the administration respond to Hurricane Laura and Hurricane Delta, as well as droughts, wildfires, and flooding in other parts of the country. Administration officials said on a call with reporters that climate change is creating more severe stormsand disasters that are impacting a growing number of Americans.
One innocently might imagine disaster aid would be a no-brainer for Republicans. After all, the most hurricane damage occurred in “red” states.
But, the wildfire damage mostly occurred in blue states, and as Donald Trump has told us, global warming is a Chinese hoax, and wildfires are due to poor forest management, which could be prevented by raking the forests (and perhaps with a dose of hydroxychloroquine?)
So, the politics require that anything — ANYTHING –Biden wants to be opposed by the Trump-subservient GOP, no matter how seemingly beneficial.
In short, the entire article is political theater, It’s religious miracles and magic, performed by political clergy to entertain, the masses. But sadly, instead of being entertained, the masses think the whole thing is real.
The people not only believe, but passionately believe, as there is a direct, but inverse, correlation between intelligence and belief in the supernatural.
As this all plays out, prior to next year’s elections, just sit back and enjoy the show. Remember that none of it is real and no one is saying what they mean.
It’s all a put-on, to keep you contributing to your political religion of choice, and returning to the chapel for the holiday elections.
Rodger Malcolm Mitchell
Monetary SovereigntyTwitter: @rodgermitchellSearch #monetarysovereigntyFacebook: Rodger Malcolm Mitchell
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THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.
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:
If you plan to debate a conservative, understand first that in today’s conservative world, the important people are rich, and the rest of us are a drag on the economy.
LEWIS K. UHLER
So when today’s conservatives present their “alternative facts,” be prepared for an onslaught of deliberately wrong, ignorantly wrong, passionately wrong, and humorously wrong gibberish, masquerading as facts.
The success in the conservative world of QAnon, Tucker Carlson, and many conspiracy theoriesis a testament to the strange thought processes rampant.
And with that introduction, I present Lewis K. Uhler, of the Heartland Institute.
In case you’ve not heard of the Heartland Institute, let me give you a couple of quotes:
“Uhler has been at the forefront of the national movements for a Tax Limitation/Balanced Budget Amendment to the United States Constitution””Most scientists do not believe human greenhouse gas emissionsare a proven threat to the environment or to human well-being, despite a barrage of propaganda insisting otherwise coming from the environmental movement and echoed by its sycophants in the mainstream media.”“The claim of “scientific consensus” on the causes and consequences of climate change is without merit. There is no survey or study showing “consensus” on any of the most important scientific issues in the climate change debate.”
By “most”, we assume Uhler is referring to approximately 1% of the world’s climatologists, who think, as Trump does, that global warming is a Chinese hoax.
Balanced federal budgets always lead to recessions
“Every dollar spent by Washington is a dollar earned somewhere else. It matters not that the dollar was earned in Idaho, it is still a dollar extracted from taxpayers who are already shouldering a $28 trillion national debt.”
(Here, the Heartland writer demonstrates its ignorance about the differences between federal funding vs. state/local/personal funding. Federal spending is not extracted from federal taxpayers.)
Now that you understand the Heartland, right-wing mentality, Check out the following article, ostensibly written by Uhler, that is guaranteed to get a hearty laugh from anyone who actually understands economics.
Begin with the hilarious headline:
We need a Reagan tax revolt to counter today’s big-government spendingLewis K. UhlerJack Kemp (R-N.Y.) and Sen. Bill Roth (R-Del.) – significantly cut the top income tax rates from 70 percent to 50 percent, reduced and indexed for inflation business and capital gains, and ushered in more than two decades of unprecedented economic prosperity.
How do the Reagan tax cuts for the rich (aka “tax revolt”) reduce federal spending? They don’t, of course. But Uhler uses the right-wing’s alternative facts, which are based on how he wants the world to have been, not how the world really was.
It’s the typical, GOP, right-wing “trickle-down” theory: Give money to the rich and claim it will trickle down to the rest. Sadly, the “trickle” seems to stop at the top, and the Gapbetween the rich and poor widens — just as the rich want.
And yes, there was “economic prosperity,” but only if you eliminate Reagan’s first and last years — the 15-month recession that came at the beginning of Reagan’s two terms, and the 9-month recession that came at the end.
Reagan served from January 20, 1981, until January 20, 1989 (vertical gray bars.)
By widening the Gap between the rich and the rest, Reagan effectively made the rich richer and the poor poorer.
(“Rich” is a comparative. The wider the Gap, the richer are the rich).
And that “big-government spending,” Uhler hates: It was for benefits (Medicare, Social Security, poverty aids) to the middle and the lower-income groups. Being a GOP right-winger, Uhler despises giving these groups anything.
These achievements were founded initially in the crucible of the California Tax Revolt which then-Gov. Reagan led. He understood the power of (state) tax cuts and the resultant unleashing of American capital and innovation. In the early ’70s,Reagan asked me to lead a group to devise a California government spending and tax reform measure, which eventually became Proposition 1 on the 1973 state ballot.
Here, Uhler reveals his intentional or unintentional ignorance of Monetary Sovereignty and the differences between federal government and local government finances.
While there is a direct connection between monetarily non-sovereign finances and taxes — taxes fund state/local spending — there is no connection at all between federal finances and taxing. Federal taxes do not fund federal spending.
Even if all federal taxes were eliminated, the federal government could continue spending, forever, even at double or triple the current level. In fact, all federal tax dollars are destroyed the instant they are received by the U.S. Treasury.
Uhler’s references to “tax revolts” are completely irrelevant to federal finances.
That citizen initiative was our first attempt at reining in government’s penchant for out-of-control spending and tax increases, and although this initiative fell short of passage, it touched a political undercurrent that sparked a much larger (state) taxpayer movement, ultimately leading to the passage of Proposition 13 to limit (state) property taxes and Proposition 4, the Gann Limit, which indexed (state) government growth to population and inflation.
Uhler demonstrates the single biggest problem in economics: The failure to understand the financial differences between the finances of the Monetarily Sovereign federal government vs. the finances of monetarily non-sovereign entities like state/local governments, businesses, and individuals.
If you don’t know the difference between butter and a butterfly, your articles about cooking are apt to be quite wrong-headed, just as Uhler’s article is.
And here, Uhler succinctly displays that ignorance:
More importantly, these achievements had the profound impact of proving the truth of supply-side economics and the power that a national tax revolt can provide to a nation.Reagan instinctively understood, first as governor of California and then as president, the nature of government spending and its potentially ill effects on people.
Because there is no connection between federal taxes and federal spending, Uhler is half right and half wrong.
A national tax revolt to would reduce federal taxes on the middle- and lower-wealth groups would benefit America. But, of course, that is not what Uhler wants. Being a right-winger, he wants tax cuts on the wealthy.
Rather than doing what is best for the nation — for example, eliminating FICA, America’s most regressive tax– Uhler wants to cut top-level taxes.
And his complaints about government spending and “big government” are directly aimed at benefits for the middle- and lower-wealth groups.
In short, Uhler is trying to convince you that making the richer richer and the poorer poorer will benefit you and all of America.
That is exactly what “trickle-down economics” aka “big government” aka “out-of-control spending” aka “supply-side economics” all mean.
Each time you read any of those terms, realize this: The author is talking about a system that enriches the rich, impoverishes the rest, and so widens the Gap.
I am often reminded of his quote on the dangerous essence of government spending: “No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth.”
In the right-wing Uhler-world, the federal government is bad (except when it gives tax breaks to the rich).
Big-government advocates, Reagan also once remarked, must be forced to curb their profligate ways.
Why must the federal government be forced to curb spending? No reason is given and none can be given, especially since by formula all federal spending increases Gross Domestic Product.
GDP = Federal Spending + Nonfederal Spending + Net Exports
That was the precept under which we lived as we launched the tax revolt – and we should be reminded of now, as we ponder a modern-day correction to the reckless economic course that Joe Biden’s administration has set for America.It’s no surprise that big-government tax-and-spenders once again have led our nation into high inflation and economic malaise with outrageous spending. Yet, Reagan’s work charted a course to follow that would steer clear of the rocky shoals into which the left is determined to lead us.
Contrary to popular myth, federal spending never causes inflation. Inflation, and its big brother, hyperinflation always are caused by shortages, most often a scarcity of food and energy.
In short, inflation is not caused by “too much money chasing too few goods and services” as the saying goes. Inflation always is caused by too few goods and services. Period.
How is inflation cured? Not by federal deficit cuts, which actually lead to recessions. Inflations are cured by federal deficit spending to obtain and distribute to scarce goods.
On Aug. 13, we celebrated the undeniable economic prosperity evidenced by Reagan’s signing of the Economic Recovery Tax Act. This anniversary ironically came in the same month that Senate Democrats were moving us in the opposite economic direction with a $1 trillion infrastructure bill and $3.5 trillion budget.
What Uhler “forgets” to mention is that Reagan’s “Economic Recovery Tax Act marked the beginning of the 15-month recession, started in the 3rd Quarter of 1981 and didn’t end until the 4th Quarter of 1981, when increased federal deficit spending cured finally cure the recession.Gray area is the 15-month recession that began with Reagan’s Economic Recovery Act.
One of the most important legacies of the Reagan tax reform effort were follow-up state pro-growth policies, which are alive and well in many places.
Again, Uhler demonstrates that he does not understand the differences between federal financing and state financing. The two are opposite in that states use tax dollars for spending and can run short of dollars, while the federal government does not use tax dollars for anything, and never can run short of dollars.
In essence, Uhler is using butterflies, when the recipe calls for butter.
“Simple fairness dictates that government must not raise taxes on families struggling to pay their bills,” Reagan said on many occasions. “You can’t be for big government, big taxes and big bureaucracy and still be for the little guy.”These are words that Democrats would be wise to pay attention to. The supply-side movement he championed 40-some years ago is still right for our nation today – and some would argue, even more urgent.
The differences are that:
Big federal government costs taxpayers nothing.
Big federal taxeson the not-rich are bad for the economy, but big taxes on the upper .1% would help narrow the Gap between the rich and the rest.
And big federal bureaucracy is needed for a big economy. Further, federal payments to all those government workers help stimulate the economy, while costing taxpayers nothing.
In short, Uhler is a mouthpiece for the very rich, and virtually everything he says is a lie directed to that purpose. Otherwise, he may be a nice guy.
Rodger Malcolm Mitchell
Monetary SovereigntyTwitter: @rodgermitchellSearch #monetarysovereigntyFacebook: Rodger Malcolm Mitchell
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THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.
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:
The Chicago Tribune, a mighty newspaper having substantial resources for information-gathering, repeatedly promulgates the “Big Lie” in economics — the lie that because U.S. federal finances are just like state/local government finances, business finances, and personal finances, the federal deficit must be cut and/or taxes increased to “pay for” it all.
In truth, federal finances have almost nothing in common with the finances of other entities, not even the finances of Germany, France, Italy, et al.
Here are some excerpts from a Tribune editorial dated 7/19/2021:
Spend-borrow-repeat will be the ‘debt’ of usMark Lennihan/AP National governments worldwide — ours in the forefront — have fought the pandemic and its side effects with borrowed money. Much of this new debt will fall not only on today’s children and grandchildren, but also on our descendants not yet born.
Wrong: “Today’s children and descendants not yet born” will not pay for any part of the so-called “debt,” just as you have not paid anything for the $25 trillion already accumulated.
It’s not debt. The misnamed “debt” is nothing more than the total of deposits into Treasury Security accounts, which resemble bank safe deposit accounts.
The government never touches those accounts, except to deposit interest, and the “debt” easily is paid off simply by sending the money back to the depositors. No tax dollars ever are involved.
So we were concerned if not surprised by a Wall Street Journal news story headlined “Governments world-wide gorge on record debt, testing new limits.” The Journal reports: “The U.S. government is on course for a budget deficit of $3 trillion for the second year in a row.”
The deficit (the difference between taxes and spending) is not a real deficit. Federal taxes have no relationship to federal spending; all federal taxes are destroyed immediately upon receipt.
When you pay your federal taxes, you take dollars from your checking account (which is part of the M1 money supply), and you send them to the federal government, where they are destroyed. That is, they cease to be part of any money measure. They cease to exist.
The federal government does not use your tax dollars to pay its bills. It creates new dollars, ad hoc.
Even if the federal government collected zero taxes, it still could continue spending forever. The main purpose of federal taxes is to control the economy. The government taxes what it wishes to discourage, and it gives tax breaks to what it wishes to encourage.
We mention this as our government’s Internal Revenue Service delivers the first of several child tax credit payments to single parents earning up to $95,000, and to couples earning up to $170,000. Meanwhile, Senate Democrats say they intend to pass a sweeping social, educational and environmental package they price at $3.5 trillion. A trillion of anything befuddles many Americans, journalists included. The temptation is to toss one’s fidgety hands in the air and mutter that these debts belong not to us individual Americans but to a faceless federal government.
That last paragraph is true. The misnamed “debt” is just a notation on the federal government’s books. It is completely unrelated to individual Americans or to taxes.
No one is liable for paying off the federal “debt,” which is paid off by returning dollars already in the T-security accounts.
Ah, problem already. That government is essentially a big checking account with a standing army; it collects and spends tax dollars.
Wrong. Although the government does collect tax dollars, it does not spend tax dollars.
It has the unlimited ability to create new dollars and that is what they use when paying their bills.
No one has said it better than former Fed Chairman Alan Greenspan:
Absolutely correct.
The U.S. government uniquely is Monetarily Sovereign — it is sovereign over the U.S. dollar. It can create as many as it pleases at any time it pleases, for any purpose it pleases, and give them any value it pleases.
As our national debt rises daily toward $29 trillion, the government’s perpetual printing of new dollars threatens to cheapen the currency. In short, we — or our progeny — have to repay every dollar now being lent to Washington by China and other buyers of U.S. bonds.
Mark Lennihan, the author of the editorial, publishes two errors in one paragraph. “Cheapen the currency” refers to inflation. Lennihan is claiming that the rising national “debt” (deposits into T-security accounts) causes inflation.
He is wrong. The “debt” has risen, in the past 80 yearsfrom about $40 billion to about $25 trillion (depending on who’s counting), a gigantic increase. But in those 80 years, inflation has been modest.
The red line is federal debt growth. The green and blue lines are different measures of inflation.
Further, being Monetarily Sovereign, the federal government retains absolute control over the value of the dollar. It can change the value at will, as it has done many times in the past, the most recent being in 1971.
Maybe the accumulation of debt continues indefinitely without consequence. Or maybe critics cited by the Journal are right to warn that our spending is excessive, “risking an overheated economy and a lasting rise in inflation and interest rates.”
If federal debt caused inflation the two lines should essentially be parallel. As you can see they are nowhere near being parallel. There is no relationship between federal debt and inflation.
The accumulation of debt has continued without consequence for 80 years, despite repeated (and wrong) warnings from debt fear-mongers. Inflation has been modest — close to the Fed’s 2% annual target.
Which raises a question we hope Illinoisans will direct to their members of Congress: When does necessary spending on pandemic relief mutate into optional spending on the desirable but unaffordable?We argue that unchecked cycles of spend-borrow-repeat eventually enfeeble any nation. That may not happen while interest rates are as low as today’s. But those rates — the relentless cost to taxpayers of carryingso much debt — now are likelier to rise than to fall.
Nothing is “unaffordable” for the federal government. It has infinite money. The author is confusing federal finances with personal finances or state/local government finances.u
Federal taxpayers have not and will not “carry” any of the federal debt. Tax dollars are destroyed upon receipt. They do not fund the debt.
Thus far in the pandemic, global securities markets happily support all of our borrowing; because of its prosperity, America is a safe haven for investors.
The federal government, having the infinite ability to create dollars, never borrows.More confusion by the author of the editorial.
But as Robert Rubin, the treasury secretary under President Bill Clinton, warned in a 2018 op-ed published in the Tribune: “The European financial crisis that began in early 2010 shows how markets can ignore unsound conditions for a long time — until they don’t. For many years, Greeksovereign bonds traded at virtually the same yields as their German counterparts, which made no sense. Then, when the bond markets suddenly focused on the fiscal problems plaguing Greece and the other weaker countries, interest rates spiraled into crisis.”
Astoundingly, the treasury secretary did not understand the differences between a Monetarily Sovereign government (the U.S.) and monetarily non-sovereign governments (euro nations, Greece, Germany, Italy et al)
Greece, Germany and all the other euro nations do not have the ability to create their sovereign currency at will. Like you, and me, and our cities and states, they do not have a sovereign currency. They use the euro, which is the sovereign currency of the European Union, not of any individual nation. (It’s similar to the way American states are not sovereign over the dollar.)
All of us can run short of money. The U.S. government cannot. Anyone who does not understand the difference, does not understand economics.
Many Tribune readers are smarter than their government: Chastened by the Great Recession in which the inability to pay mortgage debt cost people their homes, Americans have attacked private-sector debt even as their politicians raised public-sector debt.
Again, Mr. Lennihan demonstrates a shocking ignorance of economics. He confuses personal (monetarily non-sovereign) finances with federal (Monetarily Sovereign) finances. It is amazing that he receives such a nationwide platform to spew such nonsense.
A classic example of citizens taking to heart the admonition, “Don’t try this at home.”To reiterate arguments you’ve read here before: We write often about debt in part to counteract the popular (and in Illinois, political) tendency to see borrowed money as free manna that somebody else will worry about, someday. The truth is that, whether it’s enforced or nominally forgiven, someone always pays.
The admonition, “Don’t try this at home” is correct, because “home” is not Monetarily Sovereign.
Since it’s not real debt, but rather it’s deposits, no one pays. However, the federal government always pays its creditors — with newly created dollars.
When America’s debt inevitably grows too onerous for taxpayers to bear or global investors to tolerate, expect a furious blame game: Why did our politicians let this happen?
America’s debt is not borne by taxpayers. If it were, the debt could not have reached $25 trillion. It already would have been “borne.”
The “blame game” only will occur if we have a recession, which would be caused by too little deficit spending.
We voters didn’t demand that spending not exceed revenue, that debt not be allowed to pile up like snow atop a mountain. A long line of presidents and Congresses have talked about preventing the avalanche. But we voters have let them get by on that lip service alone.
When spending doesn’t exceed revenue, we have recessions if we are lucky, and depressions if we are not lucky.
1804-1812: U. S. Federal Debt reduced 48%. Depression began 1807.
1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.
1997-2001: U. S. Federal Debt reduced 15%. Recession began 2001.
A growing economy requires a growing supply of money. If the money supply shrinks, or even grows too slowly, we have recessions or depressions.
Their greatest sin thus far is abject failure to reform the debt-manufacturing entitlement programs such as Medicare (whose hospital coverage trust fund is projected by its trustees to run dry in 2026) and the Social Security retirement fund (projected as empty in 2034).
Finally, toward the end of his editorial, Mr. Lennihan reveals the true purpose of his Big Lie:He wants to cut the benefits that would go to the masses.
Why? Because that is what the very rich, who really run America, want.
It’s called Gap Psychology, the desire to distance oneself from those below. The rich are rich only because of the Gap. If there were no Gap, no one would be rich; everyone would be the same. And the wider the Gap the richer are the rich.
To widen the Gap, the rich bribe the media (via ownership and advertising dollars). They bribe the politicians (via campaign contributions and promises of lucrative employment, later.) They bribe the economists (via university endowments and promises of employment with “think tanks.)
So as members of Congress and President Joe Biden ponder a massive expansion of social, educational and environmental spending, we have a request:Whatever the final shape of your package, pay for it rather than borrow for it. Because given how you’ve behaved — especially since the pandemic struck — your binge of spend-borrow-repeat will be the debt of us.
Fear, not Mr. Lennihan, it all will be paid for in exactly the same manner as always. No, the federal government will not borrow its own sovereign currency. It will create new dollars, ad hoc.
Now we have a request: Stop disseminating the Big Lie, either by ignorance or intent.
If you don’t understand Monetary Sovereignty, read up on it before writing anything more.
If you do understand it, and still are spreading the Big Lies, retire immediately in ignominy. You don’t deserve to have any of your work published.
Rodger Malcolm Mitchell
Monetary SovereigntyTwitter: @rodgermitchellSearch #monetarysovereigntyFacebook: Rodger Malcolm Mitchell
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THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.
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:
The U.S. federal government has all the tools it needs to control the value of the U.S. dollar.
You can have it all. We all can have it all. Nothing prevents it other than our own ignorance.
How is your imagination? Imagine a world in which:
We have no poverty
We have is no violent crime
We all can afford the best health care
We all can afford as much, and as fine an education as we wish
There is no air, water, or land pollution, nor shortages of pure water
Global warming does not exist
Our entire infrastructure is kept current
Our government is run to benefit all of us, not just the very rich
We actually do have the power to create this paradise on earth. We can have it all.
Background: The Problem Begins With Poverty
Money is not the root of all evil. Lack of money is.
Have you noticed that street crime — robbery, burglary, assault, murder, rape, shoplifting, drug-pushing — is most prevalent in impoverished neighborhoods? Of course, you have.
Before becoming a resident of Florida this year, I lived 60+ years north of Chicago, in what locally is known as “The North Shore.” It includes mostly upscale, “bedroom” communities, one of which is Wilmette, Illinois, where I lived.
Wilmette home prices are not only among the most expensive in Illinois, but Wilmette real estate also consistently ranks among the most expensive in America.
Wilmette is a decidedly white-collar village, with fully 94.76% of the workforce employed in white-collar jobs, well above the national average. Overall, Wilmette is a village of professionals, managers, and sales and office workers.
Wilmette is home to many people who could be described as “urban sophisticates”. Urban sophisticates are people who are both educated and wealthy, and thus tend to be older, richer, and more established than young professionals.
“Urban sophisticates” is not just about being educated and well-off financially: it is a point of view and state of mind, one that you might call ‘urbaneness’. But such people can and do regularly live in small towns, suburbs and rural areas, as well as in big cities. They read, support the arts and high-end shops, and love travel.
Do you have a 4-year college degree or graduate degree? If so, you may feel right at home in Wilmette. 83.23% of adults here have a 4-year degree or graduate degree, whereas the national average for all cities and towns is just 21.84%.
The per capita income in Wilmette in 2018 was $87,576, which is wealthy relative to Illinois and the nation. This equates to an annual income of $350,304 for a family of four.
Can you visualize Wilmette?
Google “Murder in Wilmette,” and you might possibly find a half dozen references from the past 50 years. Here is what violent crime looks like in Wilmette, in Illinois, and in the whole United States.
Get the picture?
What is the fundamental difference among Wilmette, Illinois, and the U.S., which can account for the massive differences in crime rates, education rates, and home prices?
Money.
No people are born murderers, rapists, robbers, burglars, and attackers. But lacking money, people are far more likely to grow up as street criminals.
And please spare yourself the anecdotes about impoverished kids who ultimately became pillars of society. Yes, there are plenty of them, and somewhere in their lives occurred fortuitous events that led to their achievements.
Perhaps nature provided them with the necessary brains or brawn to succeed, despite the odds. Or some mentors took them under wing and provided them with the leadership to find success.
And yes, there are rich people who commit crimes, though most often of the white-collar variety. Scant exceptions do occur, but the relationship between poverty and crime, especially violent crime, cannot be denied.
I am as opposed to the proliferation of guns as anyone, but I now do not believe guns are an important cause of crime, though they are an important facilitator of crime (and an even more important facilitator of suicide).
I have come to the conclusion that America could enact the most draconian gun laws on the planet, and that would not solve our crime problems.
We are at the stage in which gun ownership is an addiction, similar to alcohol and drug addictions. The time long has passed when we legally could prevent gun ownership and usage, any more than we were able, via laws, to prevent alcohol ownership and usage during Prohibition, or prevent drug ownership and usage during the “War on Drugs.”
We once could have prevented the disease, but now we are too infected for a cure.
We simply cannot stop gun crime by using the brute force of prohibitive laws. That mule will not respond to the stick. At long last, we must learn to use the carrot — the federal government’s infinite ability to create dollars– and thus cure the poverty that is the root cause of violent crime.
Our primary problem is: People who are not impoverished resent the government giving to the poor. It’s a state of mind that each day is fostered by wealthy propaganda.
Additionally:
The U.S. federal government has the financial power to provide a generous form of Social Security to every man, woman, and child in America, instantly eliminating poverty.
The U.S government has the financial power to eliminate not only most federal taxes (including the onerous, regressive FICA tax), but importantly to reduce the need for state and local taxes — those sales and use taxes that disproportionately affect the less wealthy — by simply giving state and local governments money.
The U.S. government has the power to eliminate the financial impoverishment caused by lack of insured health care, simply by providing no-deductible, comprehensive Medicare for All.
The U.S. government has the financial power to provide schooling to all Americans who want it — grades K through advanced education, thereby not only reducing the costs of college, but by reducing the need for local K-12 school taxes.
The U.S. government has the financial power to reduce global warming by supporting not only net-zero energy use and production, but also by supporting carbon-removal technology usage, research, and development
The U.S. government has the financial power to support water recycling and desalination usage, research and development. There is plenty of water on earth, but too little is fresh, drinkable water, and we rapidly are reducing those supplies.
The U.S. government has the financial power to repair and modernize our infrastructure — our roads, bridges, dams, sewers, electric grid, telecommunication, tunnels, transportation, parks, beaches, etc.
Many of the above initiatives are being attempted by elements of local government and the private sector, all of which have limited funds,
But, for the federal government, money is unlimited and free, created at the touch of a computer key.
Will so much federal spending cause inflation? No, as we have demonstrated here, and here,and here, inflation is not caused by federal deficit spending. Inflation is caused by shortages of goods and services, and often can be cured by federal deficit spending to reduce shortages.
Will so much federal spending be a burden on future taxpayers? No, federal taxes do not fund federal spending. The Monetarily Sovereign federal government pays for its spending by creating dollars, ad hoc. The sole purpose of federal spending is to control the economy by taxing what the government wishes to discourage, and by giving tax breaks to what the government wishes to encourage.
(This is different from state and local government taxes which do fund state and local spending.)
Will so much federal spending be socialism? No, socialism is not funding; socialism is control.
Consider Social Security. It spends billions but it is not socialism. It doesn’t control. It merely funds. Similarly, Medicare has very little control over your medical services other than the amounts it funds.
It does not tell you what doctor to see, what hospital to visit or what medicines to take. It does not control what your doctor diagnoses or treats. Medicare does not fund every procedure, but it does not control your financial ability to have the procedure.
Being Monetarily Sovereign, the American federal government has the financial ability to create paradise on earth. We lack only the knowledge and the will to do it.
The populace has been led to believe slogans like “Too good to be true,” and “No such thing as a free lunch,” which replace facts with a world of disinformation and cynicism, making us surrender before we begin.
As for the will, the government is blocked by the very rich, whose “Gap Psychology” goal is to widen the Gap between the rich and the rest. No matter how rich they are, the rich seem always to want to become even richer, and that requires ever-widening the income/wealth/power Gap. — and that requires pushing down those who are not rich.
In Summary:
The more you experience life’s failures, the more you tend to believe cynically, that a perfect world cannot exist, and that attempts to create perfection are fruitless, wasteful, naive, and even harmful. You have grown to expect disappointment.
So, when you are told the U.S. federal government has the infinite power to create U.S. dollars, and do it without adverse side effects, your knee-jerk response is to deride the idea. Thus, the “too good to be true,” and “no such thing as a free lunch” responses.
Yet, when you are told the U.S. government has the infinite power to create laws, and that U.S. dollars are nothing more than legal creations, not physical creations, you may pause that knee-jerk response.
Just as a federal law can say anything the federal government wishes it to say, the U.S. dollar can be anything and worth anything the law says it is, i.e. anything at all.
Throughout American history, federal law has stated that U.S. dollars were worth varying amounts of silver and gold, a process one hopes finally will have ended in the Nixon year 1971. But the U.S. government could pass a new law stating that the U.S. dollar is worth anything at all — a 1-carat diamond, or a pound of salt, or a quart of pure water. The value of the dollar, i.e. inflation, is in the hands of the government.
Beginning in 1971, the government has allowed the U.S. dollar to “float,” i.e. to allow the public to decide the exchange rate (vs. other currencies) of the dollar.
For that reason, there now can be no real answer to the question, “What is a dollar worth?” You can express it only with regard to other currencies, whose worth is equally vague.
Because a dollar is, in reality, a debt owed by the U.S. government, its value, like the value of all debts, is determined by its collateral, and the full faith and credit of the debtor, the U.S government.
Without gold, (or even with gold), the real collateral for the U.S. dollar is the full faith and credit of the U.S. government — not our “spacious skies or amber waves of grain” — just our full faith and credit.
If you were to try to drill down below exchange value to find the “real” value of the U.S. dollar, you would have to determine the “real” value of the full faith and credit of the U.S. government, an impossible task.
All of the above is meant to show you the truly amorphous nature of the U.S. dollar. It is what the government says it is, and it is worth what the government says it is — and there is no limit to the number of dollars the government can create. The dollar is the offspring of the government’s laws.
In short, there is no limit to what the government can spend to purchase paradise.
Working together, we have all the tools we need to create our paradise.
This simple fact makes a mockery of the President’s and Congress’s “struggles” to pass spending legislation, against those who falsely claim the government cannot or should not spend so much money.
In addition to interest rate control, which affects the market demand for money, and Federal Reserve bond purchases and sales, the federal government can revalue or devalue the dollar, at will.
We created a Monetarily Sovereign federal government and gave it all the power it needs to make America a paradise on earth. It is not constrained by money. It has infinite money and infinite control over the value of its money.
Our world is constrained only by our intellect, our imagination, our will, and our honesty.Barring a meteor strike or the sun failing us, we always will have exactly the world we create for ourselves — exactly the world we deserve.
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:
#Monetary Sovereignty - Mitchell 