We'll Pay All Those Future Obligations By Impoverishing Everyone

Authored by Charles Hugh Smith via OfTwoMinds blog,

The only way to pay all these future obligations is by creating new money.

I've been focusing on inflation, which is more properly understood as the loss of purchasing power of a currency, which when taken to extremes destroys the currency and the wealth/income of everyone forced to use that currency.

The funny thing about the loss of a currency's purchasing power is that it wipes out every holder of that currency, rich and not-so-rich alike. There are a few basics we need to cover first to understand how soaring future obligations--pensions, healthcare, entitlements, interest on debt, etc.--lead to a feedback loop which will hasten the loss of purchasing power of our currency, the US dollar.

1. As I have explained many times, the only possible output of the way we create and distribute "money" (credit and currency) is soaring wealth/income inequality, as all the new money flows to the wealthy, who use the "cheap" money from central and private banks to lend at high rates of interest to debt-serfs, buy back corporate shares or buy up income-producing assets.

The net result is whatever actual "growth" has occurred (removing the illusory growth that accounts for much of the GDP "growth" this decade) has flowed almost exclusively to the top of the wealth-power pyramid (see chart below).

2. Much of the "growth" that's supposed to fund public and private obligations is fictitious. Please read Michael Hudson's brief comments for a taste of how this works: The "Next" Financial Crisis and Public Banking as the Response.

The mainstream financial media swallows the bogus "growth" story without question because that story is the linchpin of the entire status quo: if it's revealed as inaccurate, i.e. statistical sleight of hand, the whole idea that "growth" can effortlessly fund all future obligations goes up in flames.

Combine that "growth" has been grossly over-estimated with an increasing concentration of wealth and income in the top .1% of 1%, and the only possible conclusion is there's less available to pay fast-rising obligations out of what's left to the bottom 99.9%.

3. We've been paying our obligations with debt for the past decade. Look at the chart below of the debt to GDP ratio--it has skyrocketed as GDP has inched higher while debt has exploded. (Remove the fictitious "growth" in GDP and the picture worsens significantly.)

Look at the chart of federal debt and explain how the steepening trajectory of debt is sustainable in a stagnating real economy with stagnating wages for the bottom 95% of the populace.

4. Recall that the federal, state and local governments pay interest on all the money they borrow to fund deficit spending, i.e. every dollar spent above and beyond tax revenues. All that interest is an increasing obligation that must be paid in the future. Borrowing more to pay interest increases the interest payments due in the future--a classic self-reinforcing runaway feedback loop.

5. Politicians get re-elected by increasing entitlements and obligations without regard to how they will be funded. "Growth" will effortlessly take care of everything--that's the centerpiece assumption of all conventional economics, free-market, Keynesian and socialist alike.

6. The core constituencies of politicians are government employees and contractors, as these interest groups are funded by the government, which is nominally managed by elected officials and their appointees. Nobody's more generous (or demanding) than those feeding directly at the government trough. (By "contractors" I mean the vast array of Corporate America cartels that feed off government spending: defense, Big Pharma, Higher Education, etc.)

7. The obligations that have been promised are expanding at a nearly exponential rate, as healthcare costs continue to soar and the number of government pensioners is rising rapidly. This chart illustrates the basic dynamic: the tax revenues required to fund these obligations are far outstripping the income and wealth of the bottom 95% of the populace.

Consider this chart of real GDP per capita, i.e. per person. Real GDP is adjusted to remove inflation from the picture, so this is supposed to be "real growth." How many people are demonstrably 19% better off than they were in 2000?

Not many, judging by the decline in family financial wealth since 2001:

Income increases flow disproportionately to the top .1%. Adjusted for real-world inflation, the bottom 95% have actually lost ground:

Here's the uncomfortable reality: the means to pay all these future obligations-- the real-world economy, and the wealth and income of the vast majority of the populace-- are far too modest to fund the fast-expanding obligations,which include interest due on the ever-increasing mountain of public and private debt.

The current "everything" asset bubbles have temporarily boosted the wealth and income of corporations and the wealthy, but all bubbles eventually pop as the marginal elements that are propping up the expansion weaken and implode.

Once the asset bubbles pop, the illusion that "taxing the rich" will pay for all the obligations pops along with the bubble. And as I've noted many times, those at the top of the wealth-power pyramid wield political power, so they have the means and the motive to limit their tax burden to roughly 20% or less--(sometimes much less, as in zero.)

That 20% is an interesting threshold, as once federal tax burdens rise above 20%, the higher taxes trigger a recession which then crushes tax revenues.This makes sense-- if I pay an extra $2,000 annually in higher junk fees and taxes, that's $2,000 less I have to invest or spend.

Put these dynamics together and you get one outcome: the federal government cannot possibly pay all its obligations out of tax revenues nor can it raise taxes high enough to do so without gutting tax revenues via a recession.

The only way to pay all these future obligation is by creating new money, which in a stagnant, dysfunctional economy can only reduce the purchasing power of the currency, in effect robbing every holder of the currency of wealth and income.

Here's the end-game, folks: Venezuela. The nostrum has it that "the government can't go broke because it can always print more money." True, but as the wretched populace of Venezuela has discovered, there is a consequence of that money-creation to meet obligations: the destruction of the currency, and thus the wealth and income of everyone forced to use that currency.

*  *  *

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Comments

secretargentman 1 Alabama Mon, 08/06/2018 - 09:34 Permalink

I've got a Billion dollar note from Zimbabwe sitting on my desk. Government debt can be paid and government debt growth is sustainable until the wealth of the country is looted and the currency is worthless. 

People who work for the fiat currency are peasants, whether they're rich or poor, because the government (and it's elite controllers) can push the button and take all that wealth any time they like. 

In reply to by 1 Alabama

glenlloyd rf80412 Mon, 08/06/2018 - 15:28 Permalink

"Pay for," that's classic. This shit show is so bad it's so unbelievable that people don't recognize what's going on. We really have become dumber in the course of our evolution.

The idea that you can put in less than you take out, and everyone else can do this, without consequences under the guise the "we'll grow our way out," is amazing.

The only thing that's growing is the 1) debt and 2) the amount of money in circulation (also debt).

People are so easily distracted...

In reply to by rf80412

All Risk No Reward secretargentman Mon, 08/06/2018 - 11:04 Permalink

Charles is wrong, wrong, wrong...  well, at least in that he completely left out the most important part of the equation.

Here is what will almost certainly happen:

1. Blow debt-money bubble to maximum height (max debt). Loot as much as possible along the way.

2. When the debt-money bubble eventually pops, as it must to a 100% mathematical certainty, use government to protect Money Power assets while letting other assets, including government assets, fail.

3. Turn off entitlements for ordinary people.  Perception management will have people mad at projections (white people, black people, immigrants, Jews, Trump, democrats, republicans...  anything but the Money Power Monopolist root cause).

4. In the national bankruptcy, seize the physical assets of government, business, and Main Street.  That means private control over the energy companies, the roads (soon to be toll), the national parks, etc...

5. Once almost every physical asset is rolled up under the Money Power's Mega-Corporatocracy then, and only then, does it make sense for them to hyperinflate to balance their own books and call it "even."

In short, there is a deflationary spike pit ahead of any hyperinflation, JUST LIKE THEIR WAS IN THE GREAT DEPRESSION.

This is NOT the Money Power Monopolist's first rodeo of asset stripping a monetary illiterate American public, and those who don't understand history are bound to be forced into repeating it.

The Money Power Monopolists CONTROL GOVERNMENT, NOT THE OTHER WAY AROUND!

“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.”
~Napoleon Bonaparte

The Money Power will not hyperinflate their trillions in cash and debt paper into billions...  no, they will use it to secure assets then, once they have the assets, they will be incentivized to hyperinflate to "balance their books" and call it "even."

Other errors in Charles' thesis include:

>>Politicians get re-elected by increasing entitlements and obligations without regard to how they will be funded.<<

While it is true politicians do that, THAT IS NOT THE ROOT CAUSE OF HOW THEY GET ELECTED.
The ROOT CAUSE of their election IS MONEY POWER MONOPOLIST FUNDING AND MEDIA SUPPORT.
There is almost certainly less than a 1% chance of being elected without the true root cause in place.

Bankster Agent Trump received $2 billion in free Money Power Monopolist Media Complex advertising for free!  Would Trump be President if he was never allowed on the Money Power financed/controlled major media networks at all?  Nope.  No wonder he said he loves his banks in his first debate with Hellary...

>>The core constituencies of politicians are government employees and contractors<<

Wrong.  That's the psy-op being promoted/parroted by Charles, but it is NOT true.

>>The CORE CONSTITUENCY OF POLITICIANS ARE THE MONEY POWER MONOPOLISTS WHO GOT THEM ELECTED IN THE FIRST PLACE.

The only way to pay all these future obligation is by creating new money, which in a stagnant, dysfunctional economy can only reduce the purchasing power of the currency, in effect robbing every holder of the currency of wealth and income.<<

If the goal of government was to be out of debt, GOVERNMENT WOULD CREATE THE MONEY ITSELF AND NOT HAVE ANY DEBT AT ALL, EVER.

THAT'S **NOT** THE GOAL, CHARLES.

The goal is for the Money Power to lord it over all of society...  including government, the corporate infrastructure, and the masses of asset stripped debt-serfs who don't know any better.

Poverty - Debt Is Not a Choice
https://www.youtube.com/watch?v=t7BTTB4tiEU

Renaissance 2.0 The Rise of [Debt-Money Monopolist] Financial Empire
https://www.youtube.com/watch?v=96c2wXcNA7A

Debunking Money
https://www.youtube.com/watch?v=5iBSBVew-3Y

Krugman (and each MIT economist professor) is a Goebbelsian propagandist as he covers the crimes of wolves with his fake sheep suit and lisp.

Krugman to Lietaer: "Never touch the money system!"
https://www.youtube.com/watch?v=Q6nL9elK0EY

In reply to by secretargentman

Amy G. Dala All Risk No Reward Mon, 08/06/2018 - 13:19 Permalink

Okay, so Trump received $2B in free media . . .

Think back to the campaign.  MSM figured if Trump was going to self-immolate, then stay out of his way!  And while we're at it, give him more fuel!  Hell, let's let him torch the entire GOP!  I remember NPR giving him 45 minutes, completely uninterrupted and free of commentary.

Remember MSM crowing, who is going to do the autopsy? 

2020 is going to be a helluva show.  Now they HAVE to cover him.

In reply to by All Risk No Reward

All Risk No Reward BuddyEffed Mon, 08/06/2018 - 15:03 Permalink

BE, yes, resource depletion plays a role, but I think the debt-money bubble economic collapse precedes any serious real resource depletion.  There is a caveat there...  real.  They could generate a fake or contrived resource depletion state through propaganda or attacks on key global shipping locations.

The biggest problem for the Money Power Monopolists is how to efficiently get rid of the "useless eaters" and resource depleters before the depletion actually occurs.

Your imagination is as good as mine...  survival of the fittest, bitchezzzzzzzzzzz!

In reply to by BuddyEffed

All Risk No Reward BuddyEffed Mon, 08/06/2018 - 16:05 Permalink

A debt-based monetary system is inherently fraudulent on its own.  Let me give you an example.

Let's start from scratch with $0 debt-dollars outstanding.

I'm the bank and you need a loan for some property that costs $20.  I lend you $20 @ 5% interest, payable in full in 12 months.

I've created $20 and given it to the seller and you will owe me $21 in a year.

6 months in, you discover a 50 ton vein of gold under your property.

You still will owe me $21 at the end of the year.

You work feverishly for the seller and earn all $20 back, but you need $1 more.  You can only get that $1 from me, but I heard about that 50 tons of gold, so I want to foreclose on you...  no $1 for you.

At 12 months, you pay me $20 of the $21, I foreclose on you, and the $1 deficit is the reason I now own the rights to the 50 tons in gold.

Debt-based money systems offer a veneer of control over reality.  The Banksters learned this a long time ago.  We need to learn it, too.

 

 

In reply to by BuddyEffed

All Risk No Reward Amy G. Dala Mon, 08/06/2018 - 14:58 Permalink

Amy, that's the Debt-Money Monopolist programmed narrative.  And for most compartmentalized minions, it may well be true in their minds.

But the Money Power Monopolists don't shell out $2 billion to a real threat on the hopes he "implodes" (when they know the country is really upset at the status quo).  No, they shell out $2 billion to their operative.

That's why Goldman Sachs took over Treasury and other key positions, which is exactly what you'd expect from any other Bankster hack.  It is also why Trump grovels to the Big Banks.

And I didn't mention the fact that the Money Power Democratic, Inc. administration ran a fake October Surprise on Hellary to help out Trump.  It had already been decided internally that Hellary wouldn't be charged.  Even so, in October they came out with this whole "investigation" that allowed Trump to lie about "lock her up."  It was all staged - fake, phony, nonsense.

Trump is the perfect Bankster candidate for right now.  He's a lightening rod of emotional attention.  He will make the perfect scapegoat when the debt-money system begins to topple and people's economic futures are wiped out for good.  He's fake aligned with the alt-right in order to take them down by association.

Whatever is done, the name of the game is to not blame the fraudulent debt-based monetary system for the economic collapse.  I can think of no better Bankster candidate on planet Earth than Donald J. Trump.  That's why he's there.

The Money Power, like Caesars of old, know all about providing bread and circus to the masses while they are systematically oppressed.

Here's a hint - A MONEY POWER MONOPOLIST OPERATIVE WINS THE NEXT ELECTION, TOO.

In reply to by Amy G. Dala

HopefulCynical Amy G. Dala Tue, 08/07/2018 - 08:17 Permalink

Perception management will have people mad at projections (white people, black people, immigrants, Jews, Trump, democrats, republicans...  anything but the Money Power Monopolist root cause).

And pray tell, what is the primary driver, the wellspring, if you like, of that Money Power? There is only ONE group in your list that's ever been consistently assigned the culpability for the creation and maintaining of the International Money Mafia.

In reply to by Amy G. Dala

All Risk No Reward venturen Mon, 08/06/2018 - 11:07 Permalink

No, the Money Power Monopolists have ruined the country.  Paying cops that much money is just an effect...  it generates lots of debt to enslave the state.  Those pensions will eventually be cut, just like the Money Power has done all over the world.

I do agree it is egregious, but the root cause is the root cause.  Societal enslaving debt-money generation has to have some "collateral beneficiaries" along the way.

Of course, the greed of the union members helped pave the way for this agenda, so they are culpable, too.

In reply to by venturen

Endgame Napoleon All Risk No Reward Mon, 08/06/2018 - 11:32 Permalink

If the US goes Venezuela, like this article suggests, a lot of things will have to be cut, not just pensions, but austerity will not necessarily generate renewed prosperity. Give some examples of when it has. 

Here is one way to reduce the widespread misery:

Mommas of the fake-feminist era: Do the unthinkable, raising your own kids again, rather than putting that work on the backs of your elderly parents, $9-per-hour babysitters or low-wage daycare workers.

Non-daycare-raised kids might yield better social results than our current society, in which there is a 300% increase in the frequency of mass shootings, including by school kids.

It would also free up some breadwinner jobs for millions of single, childless citizens and single parents with kids over 18 who are welfare-ineligible and have ONLY earned income from one stream to cover all household bills, including rent that soaks up more than half of their earned-only monthly income. 

If one parent raised the kids that the couple voluntarily produces, many parents would not be keeping under one roof two jobs with rent-covering wages and “employer-provided” benefits, made possible by a $260-billion tax exclusion for their employers—a MASSIVE social-engineering tax cut, which, in turn, undergirds Medicare, while reducing access to healthcare for the working-age population.

https://www.taxpolicycenter.org/briefing-book/how-does-tax-exclusion-em…

But hey, the important thing is that momma has a house with a cathedral ceiling and an above-firing “voted-best-for-moms” job, with a TON of family-friendly time off beyond PTO and pregnancy leave. All the commercials, advertising vacation packages feature beleaguered working families for a reason. The “cash-strapped” parents are the ones taking most of the vacations. They have 1) the excused time off in their crony-parent jobs  and 2) the extra money. 

‘Cause the labor market at the top and the bottom of the wage pool is rigged for parents, not to mention the tax code, except in the case of a few jobs, where very young, pre-child-bearing-age applicants reign supreme. Except for the tech jobs, those are mostly low-wage churn jobs.

In reply to by All Risk No Reward

All Risk No Reward Endgame Napoleon Mon, 08/06/2018 - 14:48 Permalink

EN,

Austerity is designed to constrict a debt-money bubble blown condition.  This will always lead to marginally more ordinary people forced into bankruptcy and the conveyance of their collateral up the Money Power food chain.

That is the UNSTATED PURPOSE of austerity.

"A man always has two reasons for doing anything: a good reason and the real reason."
J. P. Morgan

Banksters lie...  it is what they do.  We need to stop being so gullible.

>>Here is one way to reduce the widespread misery:<<

That is antithetical to the goal of the Money Power Monopolists.  In fact, the debt-money system siphoned off so much money from Main Street (while piling on debt), that this has effectively forced the necessity of two income households.

Plus, your child needs to be programmed by the Money Power social engineers...  and they need those toxic metal shots that acts as a flocculant to clog your capillaries and impair your bodily functions (among other dastardly things).

A key ingredient to this debt-money chit show is that ordinary people are short term greedy...  so that point is well taken.

In reply to by Endgame Napoleon

Bemused Observer venturen Mon, 08/06/2018 - 11:11 Permalink

The problem is that no one ever talks about these specific pension abuses...no names given, no investigation done into HOW someone would get a 76,000 a month pension...

But they DO bitch about 'the pensioners'. The MAJORITY of those pensioners are NOT getting anywhere NEAR that, in fact, many barely get by.

Wrong target! Go after the SPECIFIC ABUSERS, BY NAME. These thieves hide behind the regular folk, as if they were one of them, but they ARE NOT!

But to trash the guy collecting a modest pension after many years of service is just wrong, wrong, wrong! And it plays right into the hands of the people who are STEALING YOUR MONEY!

By that, I mean the REAL THIEVES. So Venturen, let's have the NAME of that 76,000 per month guy, his union, and what he did to 'earn' that obscene amount of money...not "a guy in Oregon". That pension check is not being written to 'a guy in Oregon', there is a NAME on it. 

Let's have it.

In reply to by venturen

Endgame Napoleon Bemused Observer Mon, 08/06/2018 - 11:42 Permalink

Even for highly educated professionals, the pensions are NOT anything like that—-please—-and pensions for low-wage employees are laughably low, sort of like the “tax credits” for childless, single, low-income workers.

The issue with pensions is the same as the issue of assortative mating and the labor market. Parents double up on the breadwinner jobs with benefits in crony gangs of above-firing, “needs-the-job” parents.

They also double up on pensions.

In previous generations, moms did not work in the paid workforce, albeit SS was designed to rightly acknowledge the unpaid work of stay-at-home moms. SS benefits are much less generous than SOME pensions, but in the case of today’s glorified dual-earner parents, most marry someone with a similar, high salary—not creating any new jobs but keeping two of the few decent-paying jobs under one roof. 

When they retire, they have two SS checks per household, plus two sets of pensions. 

In reply to by Bemused Observer

jemlyn Endgame Napoleon Mon, 08/06/2018 - 17:51 Permalink

Speaking of two sets of pensions...  The system has caused another change in our culture (and or morality).  Seniors (widows and widowers) do not marry when they find a new mate.  They just live together.  That way they do not lose the pension coming to the widow from her diseased husband's pension or soc. security.  Of course they don't have more children so they don't have to explain to them why they don't have daddy's name.  What earlier would have been immoral now becomes accepted.

In reply to by Endgame Napoleon

tictawk Bill of Rights Mon, 08/06/2018 - 10:28 Permalink

The assumption here is that the govt will attempt HYPERINFLATION however it seems to me that the debt markets (bonds) will collapse ergo borrowing and lending will cease = DEFLATION.   While the govt attempts status quo (debt monetization) via printing, the flip side is that if confidence in the currency wanes, interest rates will skyrocket and lending will cease.   

In reply to by Bill of Rights

TeethVillage88s swissthinker Mon, 08/06/2018 - 08:49 Permalink

Pensions are collapsing. Jim Willie just did a long interview 2 days ago. He makes some good points. The System is gamed by those with power, while pensions, retirements disappear and planned inflation starts to collapse the USD & US Economy... subtract inflation from GDP and what you have is 10 years of negative 4%-5% each year in US Economy. http://thehill.com/opinion/finance/369652-new-york-city-is-putting-poli… https://www.iif.com/publication/global-debt-monitor/global-debt-monitor… https://www.credit-suisse.com/corporate/en/articles/news-and-expertise/…

- $1 Trillion for MICC
- $1 Trillion for Social Security Admin Agency
- $1.2 Trillion for HHS Admin & Medicare/Medicaid
- $.3 to run rest of Federal Govt

In reply to by swissthinker

TeethVillage88s silverer Mon, 08/06/2018 - 10:03 Permalink

Locally I see a credit union a few credit unions expanding. I wonder how and why. There is money spent here, but kind of hard to pin down how dependent the economy is on govt or big business. I heard that Transportation funding has helped draw in new chain restaurants and retail stores. I'm kind of cynical here. Bank of North Dakota sounds good. We can do it if we are transparent.

- In South America you see high prices, lower growth unless the govt agrees to new big debt... becomes a typical Western Debtor Nation... but also you see very poor people and a gulf between expensive shops and the wealthy. Guns and body armor. But I noticed many public banks collapsed in past decade or so. I wondered if they were set up to fail or infiltrated to bring them down. I now wonder if growth of Credit Unions provides cover of some kind for the Big Banks. Poor people put money in public banks and they money disappeared... at least in one country

In reply to by silverer

Endgame Napoleon swissthinker Mon, 08/06/2018 - 10:34 Permalink

The Reagan appointees on here are among the only ones telling the truth about the US employment scene, which is what undergirds the non-contributory welfare labyrinth that pays citizens & noncitizens—including those illegally in the USA—to have sex and reproduce.

The non-contributory, completely free system of womb-productivity-based welfare ensures that their major household bills (rent, food, electricity) are covered by unearned income when they have instant-citizen US-born kids, in addition to monthly cash and an up-to $6,431 cash wage booster from the progressive tax code called a refundable child tax credit. It is for womb producers in single-breadwinner households who do not pay income tax.

Single moms also get daycare assistance to accommodate them in working part time, or to facilitate them in working a series of temp jobs, that keep them under the income limits for welfare.

Only problem: When welfare-hoisted womb producers work a strategically low number of hours, accepting rock-bottom wages, just to stay under the income limits for free EBT food, free rent and other 100%-free [non-contributory] stuff, it does not generate much tax revenue for the [contributory] social programs, namely SS and Medicare.

America's 42 million “employed,” womb-productive welfare-eligible citizens, legal immigrants and illegal aliens only pay into those contributory programs at 7.65% on PART-TIME hours. You cannot qualify for welfare without working part time. Even a full-time job at minimum wage puts you over the income limits for the multi-layered programs. 

The 78 million [self-employed] gig pieceworkers who are NOT mostly welfare-eligible womb producers with “voted-best-for-moms” jobs and .gov-covered monthly bills, eliminating the rent expense that consumes more than half of the earned-only income of non-womb-productive / non-welfare-eligible single / childless citizens and single parents with kids over 18, are supposed to pay into SS at twice the rate of [employees]: 15.3%. 

The 101 million American citizens of working age who are out of a labor force, where hard work and productivity pays FAR less than part-time work and womb productivity, pay into SS and Medicare at 0.00% 

Wonder if the offshoring by US-owned corporations of over 6 million breadwinner jobs to cheap-labor nations between 2000 and 2010, not counting the outsourced jobs and the millions of jobs that American-owned companies have taken to foreign countries since 2010, have anything to do with the declining tax base for SS and Medicare. 

Elites pay into these contributory programs at 7.65% or 15.3% up to the SS taxation cap of $128,400. The cap has been raised 4 or 5 times in the short period that I have been looking it up on the internet.

https://www.consumerreports.org/cro/magazine/2013/02/made-in-america/in…

In reply to by swissthinker

Endgame Napoleon dark fiber Mon, 08/06/2018 - 10:59 Permalink

Wonder if—due to a wanton system of paying citizens and noncitizens for sex and reproduction—Greece has produced the biggest generation of young, working-age citizens in their history, like the underemployed US Millennials, a generation second in size only to the Generation Z whose parents met their womb-output quotas even better. 

Much of that womb productivity was made possible by the single-breadwinner households of part-time workers, staying under the income limits for multi-pronged programs in a system of monthly welfare that covers the major household of single moms and legal / illegal immigrants in single-breadwinner households. They do it by working few hours at low wage levels.

On a monthly basis and at tax time, cash handouts are also provided for the parents to spend on anything they want. Up to $6,431 in refundable child-tax-credit cash is added to their other non-contributory welfare. They call it their “taxes,” even though they do not pay income tax. 

How about taxing the non-contributory monthly welfare and the refundable child tax credits to generate some revenue for the contributory programs of SS and Medicare?

Perhaps, that would discourage moms from spending that extra cash on arms full of $900 tattoos, trips to the beach to copulate with a boyfriend, master bedroom furniture and salon-nail jobs, all of which they boast about at work, telling non-welfare-eligible citizens whose rent absorbs more than half of their earned-only income what they spend their “taxes” on. 

https://www.google.com/amp/www.pewresearch.org/fact-tank/2018/03/01/mil…

https://www.google.com/amp/s/amp.businessinsider.com/generation-z-profi…

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-cr…

 

In reply to by dark fiber

besnook Mon, 08/06/2018 - 08:39 Permalink

inflation has always been the key to the functioning ponzi scheme that the usa dollar is. without inflation the dollar would have died in 1971.

SunRise brushhog Mon, 08/06/2018 - 09:16 Permalink

True, but credit is not money.  Credit is a claim on future production.  Money is the storage of past production, i.e. Capital.  Money is present.  Credit is a future promise.  Since all fiat currencies are future promises to pay, some crafty sleight-of-hand is hollowing out the Capital stock.

In reply to by brushhog

All Risk No Reward the baldrick Mon, 08/06/2018 - 11:13 Permalink

>>Money cannot be both Debt and money<<

But money can be created through the issuance of debt (not trying to be hypercritical about the definition of "money," suffice it to say it is what you will pay the grocer today).

Debt receipts are used as money today.  Notes are debt receipts.

BTW, the system is a fraudulent zero-sum game that makes anyone with a net positive monetary position an "inextinguishable debt slave generator."

Think about that for a moment.

The mechanics work like this:

Let's say I, the private international banking cartel, loan you, society, $20 @ 5% interest.

In one year, you will owe me $21 due to double-entry bookkeeping adjustments that add $1 interest liability to your balance sheet and $1 interest asset to my balance sheet.

Let's summarize:  In one year you will have access to $20, you will owe me $21, AND I WILL CONTROL THE $1 YOU NEED TO PAY ME BACK, OTHERWISE, PAYBACK IS IMPOSSIBLE.

BTW, the 5th grade level math works the same even if you add millions, billions, trillions, or quadrillions after the amount.

Behold, the Debt-Money Artificial Zero-Sum Monetary System Game where the debt-money instantiators collect interest on the world's money supply.

Who said there isn't money for nothing and chicks for free!

In reply to by the baldrick

the baldrick All Risk No Reward Mon, 08/06/2018 - 12:13 Permalink

You may enjoy this from the great Merrill Jenkins book 'Money, the greatest hoax"

IN 1933 AS IT WAS:
A MERCHANT EXCHANGED WEALTH FOR DOLLARS, BORROWED FROM THE BANK—

AND COULD EXCHANGE DOLLARS FOR WEALTH AT THE BANK.

A BANK WAS OBLIGED TO REDEEM DOLLARS FOR WEALTH ON DEMAND, THEREFORE—THE BANK HAD TO HAVE A PLEDGE OF WEALTH FROM THE BORROWER BEFORE LENDING ITS DOLLARS.

40 YEARS HAVE ELAPSED AND IN 1973 AS IT IS:
A MERCHANT EXCHANGES WEALTH FOR DOLLARS BORROWED FROM THE BANK—

BUT CANNOT EXCHANGE DOLLARS FOR WEALTH AT THE BANK.

THE BANK IS NOT OBLIGED TO REDEEM DOLLARS FOR WEALTH ON DEMAND, BUT— THE BANK STILL INSISTS ON A PLEDGE OF WEALTH FROM THE BORROWER BEFORE LENDING ITS DOLLARS.

PLEASE—JUSTIFY— OR FIND THE ERROR! IT CANNOT BE JUSTIFIED—AND THERE ISN’T ANY ERROR!

IT IS SIMPLY PROOF POSITIVE THAT THE PUBLIC IS NOT AWARE OF THE OPERATIONS OF ITS MONETARY AUTHORITY AND COMMERCIAL BANKS.

In reply to by All Risk No Reward

All Risk No Reward the baldrick Mon, 08/06/2018 - 14:37 Permalink

TBR, nice quote, but I wish "wealth" was precisely defined.

Someone could argue that they could hire bank labor (wealth) for money, but that doesn't really apply to a bank the same way it applies to, say, a restaurant.

The main issue issue is the zero-sum nature of debt instantiated money coupled with the control wielded by a small Money Power cabal that controls the vast majority of debt-money creation and accumulated interest.

I'll check out that book.  I enjoyed and recommend Syndrome of Control by Lindsay Williams.

"If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is. It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon."
by: Robert Hemphill, Credit Manager of Federal Reserve Bank, Atlanta, Ga.
Source: In the foreword to a book by Irving Fisher, entitled 100% Money (1935)

In reply to by the baldrick