Ten Steps to Prosperity: Step 5: Salary for attending school

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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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This is the fifth in the series of posts describing each of the Ten Steps to Prosperity, the previous Steps being:

Eliminate Fica (1)
Federally funded Medicare and long-term care for everyone (2)
Monthly economic bonus for everyone (3)
Free education for everyone (4)

By now, readers know that:

A. People create governments, the purpose of which are to protect and benefit the people, and governments create laws to effect those purposes, not to test the people’s ability to protect and benefit themselves.
B. The federal government being Monetarily Sovereign, never can run short of its own sovereign currency, and for that reason, federal taxes do not fund federal spending. In fact, federal taxes are destroyed — cease to be part of the money supply — upon receipt.
C. The Federal Reserve controls inflation by making the dollar more valuable, which is accomplished by increasing the reward for owning dollars (i.e. interest rates)
D. The Ten Steps are meant to be taken sequentially so the effects of each Step can be analyzed before the next Step is taken, and because each Step affects those that follow.

Step #5, Salary for attending school is nicely described in an original post.  For brevity, we don’t repeat the original post, so after reading today’s background and summary, please take the opportunity to click the link and read the original.

BACJGROUND:
Many years ago, my wife, who was a high school teacher, provided free teaching help to a charity that was both a service and an experiment.

The charity selected a freshman class from a high school in a nearby, low-income area. The students and their families were told this:

We will provide the students with teaching, additional tutoring, and counseling for the next four years. Each student will be given individual, personal attention, with the goal of helping everyone to graduate high school and go on to college.

For those who choose to go to college, we will provide 100% tuition, plus books and materials, plus living expenses. In short, each student will pay nothing to attend the college of his/her choice.

In one sense, the program was a success. A higher percentage graduated high school than did other comparable classes in that same school. The close supervision, counseling and individual tutoring worked. The children not only achieved better grades and attendance, but their overall attitudes about learning were excellent.

In another sense, the program was a failure. We had thought that the biggest problem would be to shepherd the children through high school, but we were wrong.

More students than we hoped, didn’t finish high school.  But more surprising, were those who did finish high school, but opted not to attend or finish college, despite the free opportunities.

We did not anticipate what should have been obvious: The families of the students needed the money the children could have brought in by working. The parents did not want the children to continue schooling.

In the poor communities, education apparently is not considered a passport to future success, when today’s needs are so urgent. If you are starving, you don’t worry about next week’s meal.

It is mathematically probable that at least some of the students, who elected to (or were told to) refuse continuing their education, could have done great things.

Unfortunately, not only did they each personally lose a life’s opportunity, but America lost, too. Who knows what great scientists, mathematicians, leaders, and innovators never came into being?

Many stories have been written about what would have happened if people like Einstein, or M.L. King, Newton, Washington, Edison,  Salk and Sabin, and others never had been born. America and the world would have been much the lesser.

What we cannot know, and never will know, is what we have lost because all those children, who could have been great, did not go on with their learning.

Would one of them have found a cure for cancers or other diseases? Would one have led the world to peace?  Would one have solved the problems of a trip to Mars. Would one have found a way to double human lifespan? Would one of them merely have started a successful business, had he only been able to accept the opportunity?

We never will know. And it is with that thought that Step #5 was born.

The fundamental purpose of paying a salary to students is to encourage school attendance by reducing the motivation to quit school, and by relieving students of the time and effort needed to bring money home.

SUMMARY:

The original post describes a list of problems Step #5 addresses:

1. Reduces the school dropout rate.
2. Adds GDP-growth dollars to the economy
3. Provides workers for our more sophisticated existing industries
4. Provides creators of future sophisticated industries
5. Improves our quality of life by providing more doctors, nurses, scientists, chemists, architects, businessmen, and engineers of all types
6. Reduces the crime level associated with school dropouts
7. Improves the knowledge and voting decisions of the public

The original post also discusses answers to such questions as:

1. Pay a salary to attend what kinds of school? (An accredited school as opposed to a diploma mill or homeschooling.)
2. How much salary? (Above the single person’s poverty guideline for each geographic area.)
3. Should wealth, income or other federal benefits be considered? (No.)
4. What about so-called, “professional students”? The salaries should not be so high as to encourage this behavior.
5. What about scholarships? Schools should not be allowed to consider this salary among their criteria for impoverishment scholarships.
6. Who would administer the program? The states should administer it, and the federal government should pay for it.

Interestingly, the experiment also taught us something about Step #4, “Free education for everyone.”

It demonstrated that giving students close individual attention — teaching, tutoring, involving parents, and counseling has a profound effect on high school attendance and results.

The fact that these things cost money sends a message to all those who denounce federal spending by claiming America’s educational problems cannot be addressed by “throwing money at them.”

Indeed, solutions to many of America’s problems do require “throwing money at them,” and fortunately, the U.S. federal government has an unlimited supply.

It only needs to be applied productively.

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 A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Guaranteed Income)) 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 EVERYONE Five 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