More ignorance from Peter Suderman Thursday, Jul 28 2016 

If you’ve not already read it, or don’t remember it, I invite you to read the January 31, 2015 post: Mr. Suderman, what exactly is the “Welfare State”?.

The article discussed how Suderman, a film critic and Reason.com editor, claimed that benefits to the middle-classes and the poor constitutes a “welfare state.”

(All those tax breaks and other benefits to the rich are just fine, thank you.)

In Suderman’s latest demonstration of abject ignorance about economics, he wrote:

Neither Clinton Nor Trump Would Reduce the National Debt
Clinton’s policies would increase the debt less—but would still leave the budget on an unsustainable path.

Ah, the old “unsustainable” federal debt lie.

By way of reminder, we showed you the annual claims beginning in 1940 (Yes, 1940!) that the federal debt was a “ticking time bomb.”

Well, believe it or not, 76 years later, that ole’ bomb still’s a’tickin.’ It more recently morphed into a “looming collapse,” and now is “unsustainable.”

There is nothing wrong with being wrong. We all do it on occasion, though being wrong consistently for the past 76 years might give one pause, or at least a bit of humility.

No pause or humility for Suderman, however. He’s still shoveling the same old Tea Party bullsh*t.

When he, or others of his ilk, say the “debt” is “unsustainable, notice they never, ever say what “unsustainable” means.

Does it mean the government can run short of dollars, its own sovereign currency it originally created from thin air?

Or does it really mean, the very rich hate that dollars are being spent to narrow the Gap between the rich and the rest?

Well, anyway . . .

Here is a note to Peter: Please allow me to direct you once again to: Monetary Sovereignty, the key to understanding economics, and to: Lunch really can be free, so that at long last you may begin to understand Monetary Sovereignty and the reasons why the so-called federal “debt” is not, and never will be, “unsustainable.”

It’s not even a “debt.”

In the event Peter doesn’t see this post, will someone please contact him and relieve him of the misery of his misunderstandings.

And while you’re at it, please contact your political representatives and local media, so they too can stop disseminating the Big Lie.

You will do your nation and your family a real service, as we may stop talking about unnecessary and harmful reductions in Social Security and Medicare benefits, and about a disastrous reduction in federal deficit spending.

No, the federal deficit and debt are not “unsustainable, ticking time bombs.” No, federal spending is “not funded by federal tax payers.” No, the government cannot “go broke,” and no, the government does not need to “live within its means.”

What you have been hearing from the Suderman’s of the world is a lie, designed to keep you in financial bondage.

The sooner you understand that, and encourage adoption of the Ten Steps to Prosperity, the sooner you can free yourself.

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

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

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

Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

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

MONETARY SOVEREIGNTY

–Why a dollar bill is not a dollar, and other economic craziness Monday, Jun 20 2011 

Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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You may have seen your bank; you may have seen your safe deposit box. But have you ever seen your checking account?

No, you haven’t. Your checking account is not a physical reality. It is an accounting notation. You could travel to your bank, and walk into the lobby, and you would not be one inch closer to your checking account than if you had stayed home.

When you receive a printed checking account statement, you receive evidence you own the dollars in your checking account. But, you never will see those dollars. They too, are not physical realities, but rather, accounting notations. In fact, you never will see a dollar, anywhere. No one on earth ever has seen a dollar.

A dollar bill is not a dollar.

A dollar bill is a piece of paper telling the world the bearer owns a dollar. It can be compared to a title. When you own a car or a house, you have a document telling the world you own that car or house. The document is called a “title.” The title is not the car or house. You can’t drive a title; you can’t live in a title. It’s just evidence of ownership. Your dollar bill is evidence you own that invisible dollar.

A dollar has no physical existence. You can’t hold a dollar. A dollar has no more substance than does a number. You can’t hold the number “one.” You can’t carry the number “ten.” When you write a check, from your invisible checking account, that check is a set of instructions telling your bank to debit your checking account and to credit the payee’s checking account.

One account is debited and another account is credited. No dollars move. They can’t. They aren’t physical. The peso, the euro, the mark, the pound, the yuan, – none of the world’s currencies are physical. They all are accounting notations.

The U.S. federal government has been Monetarily Sovereign since we went off the gold standard in 1971. Money creation no longer is limited by the availability of gold. Our Monetarily Sovereign government can pay any bill of any size at any time, merely by sending instructions to banks to credit bank accounts.

The world’s financial structure is based on instructions to banks. When the federal government owes you $1,000, it sends you a check for $1,000, and you send the check to your bank. The check is not money. It is a written instruction to your bank to credit your account. The bank does as instructed, and your account balance is increased by $1,000. The federal government can send such checks – such instructions – endlessly. It doesn’t need to borrow or collect taxes. It merely sends instructions.

The federal government never “prints” dollars. Printing implies a physical creation. But dollars are not physical. Warren Mosler, uses the analogy of a football scoreboard. The government creates dollars by crediting bank accounts; the scoreboard creates points by posting them. The government never can run short of dollars just as the scoreboard never can run short of points.

Is paying a debt a burden to the federal government? Is posting a score a burden to the scoreboard? Does the federal government need to tax or borrow dollars? Does the scoreboard need to tax or borrow points?

Can the government run short of dollars? Can the scoreboard run short of points?

Would the posting of points be “unsustainable” as some claim the federal debt is?

The federal government pays all its bills by typing numbers into a computer – just like a scoreboard.

The dollar bill is an IOU. On its face is printed, “Federal Reserve Note.” The words “bill” and “note” describe debt instruments (as in “T-bill”and “T-note”). These instruments are held by creditors to demonstrate debt.

When you hold a dollar, who owes you what? The federal government owes you full faith and credit, which may not sound like much, but actually is powerful. It means:

1. The government will accept U.S. currency in payment of debts to the government
2. It unfailingly will pay all it’s dollar debts with U.S. dollars and will not default
3. It will force all your domestic creditors to accept U.S. dollars, if you offer it, to satisfy your debt.
4. It will not require domestic creditors to accept any other money
5. It will take action to protect the value of the dollar.
6. It will maintain a market for U.S. currency
7. It will continue to use U.S. currency and will not change to another currency.
8. All forms of U.S. currency will be reciprocal, that is five $1 bills always will equal one $5 bill and vice versa.

Every form of U.S. money is a form of debt. For many people, the word “debt” is threatening. That may be true for you and me and the states, counties and cities, and Greece and Ireland, all of which are monetarily non-sovereign, but not for our Monetarily Sovereign government, which can credit bank accounts endlessly.

Try to think of any U.S. money that is not owed by something to someone. You can’t.

Federal debt is not functionally the total of federal deficits. By law, the Treasury must issue T-securities (aka “debt”) in an amount equal to federal deficits. But that law is obsolete and could be eliminated immediately. Were it eliminated, there still could be deficits, but all federal debt would disappear.

Similarly, the Treasury could issue T-securities (debt), while the government did not run a deficit, or even ran a surplus.

Brief summary: A dollar has no physical reality. Neither does a checking account or any other bank account, debt, deficit, inflation, recession, depression, stagflation or money. All these terms are descriptive of accounting notations. The federal government can change any of these simply by typing into a computer.

Dollars do not physically move, because they don’t physically exist. When the government pays a debt, you may imagine dollars moving out of some government storage place into a creditor’s bank. But, there is no storage place; there is no movement. The government sends instructions to the creditor’s bank. That’s it. A Monetarily Sovereign government never can run out of instructions.

Given all of the above, how is there a debt crisis? How can the federal debt be a “burden” or “unsustainable” or a “ticking time bomb.” as the media love to claim?

One final thought: Debt-hawks typically confuse two questions:
1. How many dollars can the federal government create?
2. How many dollars should the federal government create?

When a debt-hawk is presented with the unassailable proof that the federal government cannot run short of dollars, and easily can pay any bill of any size, the rejoinder often is, “But that would cause inflation,” or “Why don’t we just give everyone a trillion dollars?” These responses indicate a quick switch in subjects, from question #1 to question #2.

This post describes only question #1. Question #2, which involves economic stimulus and inflation, is described in other posts. The answer to #1 is “infinite,” and that is why the federal debt is an obsolete, useless, meaningless, indeed harmful, concept.

Isn’t economics crazy?

Rodger Malcolm Mitchell
http://www.rodgermitchell.com


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No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it ruined my future.”

MONETARY SOVEREIGNTY

–Still clueless in Chicago. The Chicago Tribune emulates the Cubs Saturday, Jun 18 2011 

Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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With each game played, the Chicago Cubs continue to set world records for incompetence. It has been over a century since this team has won the championship of its sport, surely an unmatched record in all of athletics. And the beat goes on.

The Chicago Tribune of “Dewey Defeats Truman” headline fame, continues in the same tradition of incompetence. Consider how much wrong information is crammed into these four sentences from June 18th Tribune editorial titled, “Lo and behold,” just the latest in a long, long string of utterly wrongheaded pieces.

The national debt threatens to crush our economic future . . . The members of the House and Senate have to curb every part of government including entitlements such as Medicare and Medicaid. They have to make much more painful cuts than ethanol subsidies. And they have to stop such claptrap as the argument that ending the ethanol subsidy would be a “tax increase.”

Lets examine each sentence:

“The national debt threatens to crush our economic future.”
Forget that the Tribune never has explained how this crushing will occur. Instead focus on the fact that the so-called “debt” is not functionally related to federal spending. It merely is an artifact of the gold standard, when the government was not Monetarily Sovereign and needed to borrow its own dollars.

Contrary to popular myth, the federal government could spend $100 trillion tomorrow and not incur even one penny’s worth of “debt.” The “debt” merely is a legal requirement that the federal government create T-securities from thin air, then exchange them for dollars it previously created from thin air – in the amount of dollars it newly creates from thin air. The U.S. could end the debt today, merely by changing the law, and not creating any T-securities. No T-securities = no debt. And no “crushing.”

“The members of the House and Senate have to curb every part of government, including entitlements such as Medicare and Medicaid.”
Again, as always, no reason is given for the destruction of programs designed specifically to help the middle and lower classes. How does it benefit America for people, who cannot afford private health insurance, to be denied health care? Presumably, this editorial was written by someone in the upper 1% income category. How about, “Let them eat cake,” Chicago Tribune?

“They have to make much more painful cuts than ethanol subsidies.”
While I hold no special brief for ethanol subsidies, and there are good arguments against them, one thing they do accomplish is adding money to the economy, which is stimulative. But what are these other “painful cuts,” and why do we want to inflict pain on the American public? What is the benefit of the agony the Tribune favors? How do federal spending cuts benefit us? The Tribune never has said.

“And they have to stop such claptrap as the argument that ending the ethanol subsidy would be a ‘tax increase.’”
Ah, does their incompetence never cease? Ending the ethanol subsidy would reduce the federal deficit, which functionally is identical with a tax increase. Whether the government spends less or takes in more, the arithmetic is the same: The economy winds up with less money.

Yes, the Chicago Tribune editors and the Chicago Cubs both are incompetent, and have been for a long time. There is one important difference, however. I believe the Cubs actually try to get it right, despite the difficulty of defeating all the other teams. The Tribune editors seem not to care less, despite the ease with which they could publish the truth. It’s just less work to parrot the popular myths than to endure the pain of actually learning something. Or is this a reflection of cowardice, the fear of coming out against common opinion?

Either way, the beat goes on.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com


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No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it ruined my future.”

MONETARY SOVEREIGNTY

A Debt Parable. How ignorance and superstition destroyed our wonderful land Friday, Jun 17 2011 

Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
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Ignoring all facts and evidence to the contrary, America’s Congress, our President, our media, and most of our old-line economists intuitively knew the earth is flat, and if an American boat sailed far enough it would fall off the edge.

So to protect our shipping from this never-seen edge, Congress installed a barrier, preventing our boats from sailing too far.

Every few years, Congress moved the barrier farther out to sea, and while no American boat ever had fallen off the edge, nor had any American even experienced an edge, many wise men predicted this would happen “eventually,” and the repeated movement of the barrier was “unsustainable.” The media termed the edge of the world a “ticking time bomb.” They derided those who wanted to end the barrier with invective and such sarcasms as: “Are you saying ships can sail forever?”

Some foreign boats that were not seaworthy – rowboats, rafts and the like – had sailed out beyond the horizon, and never seen again. Proponents of the American barrier offered this as absolute proof the barrier was needed, and the edge actually existed.

Though the barrier prevented American boats from circling the earth, which limited our trade, and hurt our nation’s economy, and though we already were in a recession, Congress decreed the barrier would be moved no more. No American boats were allowed to sail beyond it. Our economy was not allowed to grow.

Meanwhile, other nations discovered the edge of the world was a myth. They did not limit their ships. Their trade expanded and these nations grew wealthy, as America slipped steadily into a deepening depression, until we were no more.

And that is how ignorance and superstition destroyed our wonderful land.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com


==========================================================================================================================================
No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetary Sovereign, , and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it ruined my future.”

MONETARY SOVEREIGNTY

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