The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. Cutting the federal deficit is the most ignorant and damaging step the federal government could take. It ranks ahead of the Hawley-Smoot Tariff.
We all are ignorant of many things, but Congress has managed to demonstrate an inhuman, almost surreal level of ignorance in its wrestling with the debt ceiling. Each day, we read statements from otherwise intelligent people, that somehow manage to exceed in ignorance, the statements from the previous day.
The debt ceiling is Congress’s wooly-brained attempt to limit the spending which it itself authorizes. It’s like a person who goes shopping, and intentionally takes less money than they want to spend, because they know that once in the store, they won’t be able to control themselves. What an admission! Congress tells the world, “The majority of us is so foolish, so imprudent, so clueless, we need an artificial control to prevent our running amok — and we are the foolish, imprudent, clueless people guiding America.” As the kids say, OMG!
Those understanding Monetary Sovereignty know, since 1971 the federal government has had the unlimited ability to create dollars. It cannot “go broke” as House Speaker John A. Boehner often claims. Its debt is not “unsustainable,” as the media like to declare. The government could end all taxes and end all borrowing, while tripling its deficit spending, all with no difficulty. It could redeem every T-security (i.e. pay all debt) tomorrow, without breaking a sweat. So what does “going broke” and “unsustainable” mean?
The sole constraint on federal deficit spending is inflation.
So, the sole “purpose” for the purposeless debt ceiling must be to prevent inflation — and we are nowhere near that. Today, millions do not have health care insurance, and millions more have inadequate health care insurance. Millions of children go to poor schools, live in poor housing or on the street. Roads and bridges are falling apart. States are not paying their bills. Small businesses are failing for lack of payment by government agencies. Research and development has been reduced. And we labor with unemployment and the human suffering it causes, which suffering is exacerbated by a debt ceiling, and could be alleviated with federal support.
Here is a question you may wish to put to your Congressperson: “How, on balance, does having a debt ceiling benefit America more than it harms America?” I’ll be glad to publish their answers, here.
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth.