Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
Lately I’ve been seeing this image published more often, in various media.
This surely is the most misleading, downright untruthful sign you ever will have the misfortune to encounter. It’s untruthful because it shows the gross federal debt, which includes money the federal government borrows from itself.
Example: For convenience, my wife and I have separate checking accounts. When we are not together, she can write checks and I can write checks, and it’s easier to balance than if both tried to write checks from the same checkbook. Periodically, if one account is low, we transfer money from one account to the other (the government would call that “borrowing,” but it’s just debiting one account and crediting the other), so both accounts will have positive balances. I don’t feel I’m in debt to my wife, nor she to me. I never would consider these periodic internal transfers to be “debt.”
Similarly, the federal government’s internal “creditors” (i.e. Social Security et al) are not going to dun the federal government for payment of its “debt.”
While the Gross Federal Debt is around $14 trillion, the net debt is only about $8 trillion — well below the debt ceiling (another misleading, untruthful gimmick). Sadly, Congress and the President do not understand that. So they bicker and injure our economy about something that isn’t real. For their own selfish, political reasons, these politicians do more harm to America than al qaeda ever could. (I wish there could be a law precluding these traitors from standing in front of an American flag when they speak.)
The misleading part of the sign has to do with the words, “Your family share.” Most people interpret those words to mean their family owes a share of the gross federal debt, which as we have seen, is a fake number. But worse, your family does not owe a share even of the net federal debt. Your family could more accurately be said to own a share of the debt.
The federal so-called “debt” is the total of outstanding T-securities. When the government “borrows” it debits the “lender’s” checking account and credits the lender’s savings account (aka T-security account) at the Federal Reserve Bank. No dollars are shipped anywhere. It’s just an asset exchange accomplished by a debit and a credit.
When the government pays its “debt,” the process is reversed. The checking account is credited and the savings account is debited. At no time are taxes involved so at no time do you or any other taxpayers owe anything. Whether taxes are $0 or $100 trillion, the federal government’s ability to debit and credit bank accounts does not change.
You could be said to own a share of the debt, because federal debt is a measure of money in the economy. You are part of the economy, so that money indirectly benefits you. The greater the “debt,” the healthier the economy.
I don’t know whether the Durst family, which owns and maintains the clock, knows what it really means. They may be forerunners of the Tea Party, those clueless folks who hate government but love their Social Security, Medicare and Medicaid checks, their safe food and drugs, their highways, army protection, scientific research, FDIC security, homeland security and the myriad other perks provided by the federal government.
It’s enough you to know that every time you see that sign, you see economic ignorance at work.
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.