Plenty of money for a wall; not enough for Social Security and Medicare

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

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

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Republicans embrace building of Mexico border wall, despite cost

Republicans on Capitol Hill say they don’t need to wait for Mexico to make good on President-elect Donald Trump’s central campaign promise: building a southern border wall.

In fact, they are happy to underwrite the wall themselves, at a potential cost of many billions of dollars.

The GOP’s willingness to fund Trump’s border wall with taxpayer money could put the party’s deeply held desire to rein in government spending in conflict with its long-standing goal of cracking down on illegal immigration and toughening border security. Nonetheless, many Republicans do not see an inherent conflict.

“It would be a proposal that would cost billions of dollars* to get done, but if it’s an appropriate priority for our country, it’s worth spending that kind of money,” said Rep. Luke Messer, R-Ind., chairman of the House Republican Policy Committee.

*A study in July from Bernstein Research put the total cost at $15 billion to $25 billion.

The Republicans are telling you the truth — sort of. For a Monetarily Sovereign nation (See: The key to economics), money is not a problem.

Paying for the wall won’t be with taxpayer money. Unlike state and local governments, a Monetarily Sovereign government (See: “Free lunch”) does not spend taxpayer money.  It creates money, ad hoc, by paying invoices.

The U.S. federal government absolutely, positively never can run short of its own sovereign currency, the dollar. Never.

What the Republicans aren’t telling you is where that government money will go. Read on.

Trump to Order Mexican Border Wall and Curtail Immigration
By JULIE HIRSCHFELD DAVIS, DAVID E. SANGER and MAGGIE HABERMANJAN. 24, 2017
WASHINGTON — President Trump on Wednesday will order the construction of a Mexican border wall.

So, whether or not Trump will stick with his “alternative fact” that Mexico will pay for the wall, he will go ahead and build it, despite the cost.  Why not? The federal government, uniquely being Monetarily Sovereign, can afford anything.

But who will get the money needed to build the wall?

Trump’s Budget Nominee Still Thinks Social Security Is A Ponzi Scheme
And he wants to raise the retirement age. 

WASHINGTON ― President Donald Trump’s choice to manage the federal government’s budget admitted Tuesday that Social Security is in fact constitutional, but he was still not willing to renounce his description of the program as a “Ponzi scheme.”

Rep. Mick Mulvaney (R-S.C.), the nominee to head the Office of Management and Budget, also refused to say at his confirmation hearing whether he’d push Trump to keep his campaign pledges to not cut Medicare, Medicaid and Social Security.

“I wouldn’t read too much into the description of it as a Ponzi scheme. It’s simply describing to people how the cash flows,” Mulvaney said.

He said his earlier remarks merely refer to the fact that fewer workers are now supporting each Social Security recipient than in the past, which he argues means that eventually some people will be left holding the bag.

And the alternative facts, aka the Big Lie (See: Big Lie) just keep on coming.

A Ponzi scheme is a scam in which money put in by later joiners is used to pay earlier joiners. Eventually, there are not enough later joiners to support the earlier joiners, and the scheme collapses.

Social Security, by contrast, does not use taxpayers’ money to pay benefit recipients.  Even if there were not a single individual in America paying FICA, Social Security could continue paying benefits forever.

And not just paying forever — SS and Medicare could pay larger benefits, and pay them to every man, woman, and child, forever. (See: “Medicare for all”)

So here is a summary of the Republicans (and to a lesser extent, the Democrats) position:

1. Federal finances are the same as state and local finances. They all need to live within their means.
2. We will build the wall, no matter what it costs. The government has plenty of money for that.
3. We will cut Social Security (and Medicare and Medicaid) because there isn’t enough money for them, and they are headed for insolvency.

Point #1 is absolutely false. The federal government is Monetarily Sovereign. State and local governments are monetarily non-sovereign. The federal government has no “means” to live within.

The former cannot run short of dollars and does not use taxpayers’ dollars to pay its bills. The latter can run short of dollars and does use taxpayers’ dollars to pay bills.

Point #2 is true with regard to the federal government having plenty of money (unlimited money, in fact) to build a dozen walls, although the need for such a wall is doubtful.

However, the real purpose of the wall is to shovel billions of dollars into the pockets of construction company owners — the friends and peers of Donald Trump.

Point #3 is absolutely false. FICA does not fund Social Security and Medicare. The federal government cannot become insolvent, nor can any of its agencies.FICA dollars are destroyed upon receipt by the government; they disappear from every measure of the money supply. Being no longer part of the money supply, they cannot pay for anything.

FICA dollars are destroyed upon receipt by the government; they disappear from every measure of the money supply. Being no longer part of the money supply, they no longer exist and cannot pay for anything.

So what’s the real story, politicians?

–Is there plenty of money or are we running short?

–Is buying a wall more important, or less important, than paying Social Security and Medicare benefits?

–Is the real purpose of the wall to keep out families who hope for a better life, or is it to enrich President Trump’s fellow construction company owners?

One final note: The Republicans can hardly wait to privatize some or all of Social Security and Medicare. “Privatize” is government-speak for providing a windfall to the wealthy owners of businesses at the expense of the public.  (See: The Great Privatization Scam“)

In short, rather than having the government pay for something, at no cost to you, privatization requires you to pay for it, usually more than even the government would have paid.

How will you know the privatization scam is underway? Look for the word “vouchers.”

Rodger Malcolm Mitchell
Monetary Sovereignty

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

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

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

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

MONETARY SOVEREIGNTY