How to destroy your excess dollars

It takes only two things to keep people in chains: The ignorance of the oppressed and the treachery of their leaders.

……………………………………………………………………………………………………………..

If you wish to rid yourself of those pesky excess dollars filling your bank accounts, but you can’t find a Nigerian Internet scam to meet your needs, you might wish to go to PayGov.

There, you will find an official U.S. government form that looks like this:

Rather than going through the bother of setting your dollar bills on fire, or shredding them beyond redemption, you are given a handy way to destroy your dollars uselessly, courtesy of the United States government.

When you send money to the federal government, here is what will happen: They will cease to be part of the money supply.  They no longer will be part of “M1,” “M2,” “M3,” or even of “L.”

They will cease to exist. Your dollars will be destroyed.

To “lend” to the federal government, you buy a T-security.  You instruct your bank to move dollars from your checking account to your T-security account at the Federal Reserve Bank.

(When you buy a T-security, you automatically open a T-security account.)

So, the so-called “federal debt” is nothing more than the total of those deposits in T-security accounts. The worrisome “federal debt” is simply interest-paying bank accounts, similar to ordinary savings accounts.

Every day, the federal government pays off some of its so-called “debt” by sending the existing dollars in those T-security accounts back to the checking accounts of the T-security holders.

It’s a simple money transfer, similar to moving dollars from your savings account to your checking account. This does not burden the federal government, which easily could pay off the entire debt tomorrow, simply by transferring all those balances back to the holders’ checking accounts.

So, you might ask, if the federal “debt” is not a burden, what is the purpose of this government website?

Answer: To help make you believe that federal financing is like personal financing.

Our honest federal government wants you to believe that, like you, it can run short of dollars. It wants you to believe that, like you, it needs some form of income, in order to pay its bills.

But the federal government is what is known as “Monetarily Sovereign,” while you are monetarily non-sovereign. It creates its sovereign currency at will and so doesn’t need income.  The U.S. federal government needs neither to borrow nor to tax, in order to spend.

Many dishonest writers talk about “spending taxpayer dollars.” But it is impossible to spend taxpayer dollars; these dollars are destroyed upon receipt.  The federal government spends new dollars, created ad hoc, each time a federal agency pays a bill.

For instance, Social Security benefits are not paid with FICA taxes. When the government sends you your Social Security payment, it actually sends instructions (not dollars) to your bank, instructing your bank to increase the numbers in your checking account.

When your bank obeys these instructions (by pushing a few computer keys) new dollars are created and added to the money supply. Even if FICA collections were zero, the government could continue sending instructions, forever.

Similarly, even if the so-called debt (i.e. T-security deposits) rose to a trillion, trillion dollars, it still would not be a burden on the federal government. There is absolutely no need to pay down the (misnamed) “debt.”

Why does the government want you to believe federal finances are like personal finances?

Answer: The government is bribed by the rich to widen the Gap between the rich and the rest.

The rich want you to believe Social Security and Medicare are running short of dollars. They want you to believe the FICA tax must be increased. They want you to believe the government can’t afford to pay for housing, food and educational benefits for the poor and middle-income people.

(You will hear that because the Social Security “trust fund” — which does not exist – is running out of money, benefits must be cut.  And because Medicare is running short of dollars, we must go to some sort of voucher system, to save the government money. And schools too, must go on a voucher system, also to save money for a government that has no need to save money.)

And the rich want you to believe that even if the government could afford these things, paying for them would cause hyper-inflation (Zimbabwe, Argentina, or the Weimar Republic are favorite — but false — examples).

In short, the rich want you to believe the Big Lie that austerity benefits the economy and that federal taxes pay for federal spending.

That lie is how they justify widening the Gap between the rich and you.

If you feel you have too much money, and your bank account is overburdened with dollars, you would be wiser to send some to that Nigerian prince who is about to inherit a billion or so.

At least the dollars would continue to exist somewhere, rather than being destroyed by the U.S. government.

Or better yet, send your money to me.  I promise to do more good with it than the federal government would.

Rodger Malcolm Mitchell
Monetary Sovereignty

……………………………………………………………………………….
The single most important problems in economics involve the excessive income/wealth/power Gaps between the rich and the rest.

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

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

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

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

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

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

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

MONETARY SOVEREIGNTY