Another problem with the income/wealth/power Gap

In our previous discussions, we’ve introduced you to Gap Psychology, a concept that fuels the desire to widen the income/wealth/power Gap below and to narrow the Gap above.

This psychological phenomenon not only perpetuates social disparities but also has dire implications for our environment.

The very rich want wide Gaps because, without Gaps, no one would be rich. We all would be the same. The wider the Gaps, the richer the rich, and the poorer the poor, i.e., “inequality.”

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 our lives.

The rich bribe our thought leaders to tell us wide Gaps are just and necessary, a result of innate superiority and hard work — that the rich and the poor have earned their places.

The rich bribe the media through ownership and advertising dollars.

They bribe economists through university endowments and jobs in think tanks. They bribe politicians through campaign contributions and promises of jobs in the industry.

The rich try to convince us that federal benefits are unaffordable and unsustainable, but we have the power to demand these benefits and make a significant change in narrowing the Gap and protecting the environment.

It’s part of the Big Lie that taxpayers fund such benefits as Medicare, Social Security, poverty aids, college loan forgiveness, and other benefits to the middle- and lower-income groups. (No mention is made of taxpayers funding tax breaks for the rich.)

But in a Monetarily Sovereign government like ours, taxpayers fund nothing. (Taxpayers do fund monetarily non-sovereign state and local government spending.)

All federal spending is funded by federal government money creation, ad hoc. Federal tax dollars, unlike state/local government tax dollars, are destroyed upon receipt.

The sole purposes of federal taxes are:

1. To control the economy by taxing what the government wishes to discourage and by giving tax breaks to what the government wishes to reward.
2. To assure demand for the U.S. dollar by requiring taxes be paid in dollars.

Here are excerpts from a NewScientist Magazine article describing another problem caused by the Gap, aka “inequality”:

We Can’t Get to Net Zero Without Tackling Inequality

Inequality is a major obstacle to sustainability. The super-rich are an environmental horror story that we can’t ignore. By Graham Lawton

According to the United Nations Environment Programme, the average greenhouse gas emissions of someone in the richest 10 per cent of global society are around 20 times the average of someone in the poorest 50 per cent.

Research by Oxfam and the Stockholm Environment Institute found the world’s richest 1 per cent collectively emit the same as the poorest two-thirds.

A new book by Ingrid Robeyns puts this in stark personal terms. In Limitarianism: The case against extreme wealth, she calculates that to get to net zero, the average per capita carbon footprint needs to be 2 tonnes a year. The European average is 8 tonnes.

The top 1 per cent emit over 100 tonnes, with billionaires emitting a mind-blowing 8000 tonnes, mostly through the use of private jets and superyachts.

There are very few billionaires, but their consumption is only part of the equation. Huge inequality is bad for everyone – and the planet.

That much was made plain by the 2009 book The Spirit Level by social epidemiologists Kate Pickett and Richard Wilkinson.

In a recent webinar about the book, Pickett said: “What The Spirit Level showed was that economic inequality, specifically income inequality, was related to a whole range of different problems: health problems, issues to do with human capital development, such as educational attainment and social mobility, and everything to do with relationships.

The crucial point is that inequality seems to affect almost all of society.” In the years since 2009, the evidence for this has only grown stronger.

As for the environment, inequality isn’t just bad for the obvious reasons.

A recent paper in Nature Climate Change makes a compelling case that inequality is a major obstacle to sustainability, because people at the lower end of the income spectrum don’t have the resources – money and time – to make the necessary lifestyle changes.

Not only does inequality limit people’s opportunities to make sustainable choices, it also drives unsustainable consumption at lower income levels.

Humans are hardwired for “social evaluative threat” – anxiety about how we are seen by others.

This threat induces a type of stress called status anxiety. Subconsciously, we are all evaluating where we stand in the economic pecking order and trying to climb to the next rung, or at least not slide down.

One of the easiest ways to alleviate status anxiety is conspicuous consumption.

The cause for “status anxiety” is “Gap Psychology.” You can read more about Gap Psychology here, here, here, and many places elsewhere in this blog.

In any society, the poorest people have the highest levels of status anxiety and the richest the least. But here’s the rub: in more unequal societies, status anxiety is higher across the board.

One study found that in the most equal societies, the poorest have a status anxiety score of 2.2 out of 5, as judged by their degree of agreement with questions such as “others look down on me because of my job situation or income”.

The richest score about 1.8. In the most unequal societies, the scores are 2.7 and 2.1. In other words, the richest people in very unequal societies have roughly the same level of status anxiety as the poorest in more equal ones.

How do people respond to status anxiety? In part by consuming high-status goods.

Multiple research projects have found that people living in highly unequal parts of the US tend to spend more on swanky cars and designer clothes, which have a very large carbon footprint.

“Status competition driving consumerism upward is a huge obstacle to moving towards sustainability,” said Wilkinson in the webinar with Pickett.

Many Western societies are still tolerating, or even encouraging, eye-watering levels of inequality.

People tend to balk at policies that explicitly talk about redistribution, according to Luke Hildyard, author of Enough: Why it’s time to abolish the super-rich.

But they also underestimate the obscene wealth held by a few people who emit more than just greenhouse gases. It is a tough argument to make, but it has to be made.

As Wilkinson said: “We cannot solve the environmental crisis without solving the inequality crisis.”

Gap Psychology dictates that the last thing the rich want is to solve the inequality crisis. It’s what makes them rich.

That is why they bribe the media, politicians, and the economists to tell you various forms of the Big Lie in economics, including such lies as:

1. Social Security and Medicare will run short of money because fewer workers are supporting more older people.
2. To prevent Social Security and Medicare from running short of money, FICA must be increased and/or benefits must be reduced.
3. The federal deficit and debt are unaffordable and unsustainable.
4. Taxpayers pay for federal spending.
5. Comprehensive, no-deductible Medicare for All, Social Security for All, increased poverty aids, free college for all who want it, and other benefits for the middle- and lower-income groups are unaffordable.

All of the above are untrue. They could not exist without the active counter messaging by your information sources.

They want you to believe the Big Lie that the finances of our Monetarily Sovereign government are the same as your personal finances.

The federal government not only can afford to fund all of the benefits to you, while also funding the efforts to counter global warming.

The rich want you to believe that either global warming doesn’t exist, or if it exists, the costs to end it are too great for the government to fund, or for taxpayers to fund. All lies.

The government has the infinite ability to fund anything, without collecting a penny in taxes. To admit that, your information sources also would have to admit paying for your benefits also are affordable.

But that would narrow the Gap and make the rich less rich.

The sole benefits the rich allow are the tax breaks that only they can access. Those supposedly are “affordable” and “sustainable.” 

Meanwhile, life on earth is threatened as the climate becomes less survivable. Eventually, the rich will discover that they need to support more equality for them to remain rich.

But that may be too late to save the world.

There’s still time to contact your Congressperson, tell them you are quite aware that the federal government can create infinite money without taxing or borrowing, and can provide far more benefits than it currently does.

Tell them the Gap is not sustainable, and the rich may have the money, but not the votes. Demand federal benefits for those who are not rich.

Rodger Malcolm Mitchell
Monetary Sovereignty

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

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The Sole Purpose of Government Is to Improve and Protect the Lives of the People.

MONETARY SOVEREIGNTY