–The BIG LIE and the Highway Trust Fund

Twitter: @rodgermitchell; Search #monetarysovereignty
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Mitchell’s laws:
●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor,
which ultimately leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive,
and the motive is the gap.

The BIG LIE is the claim that federal finances are like personal finances, so the federal government can run short of dollars to pay its bills.

But, being Monetarily Sovereign, the federal government never can run short of its own sovereign currency, unless Congress and the President wills it.

The purpose of the BIG LIE is to widen the GAP between the rich and the rest. The BIG LIE is perpetuated by a Congress and a President that have been bribed via campaign contributions and promises of lucrative employment, later.

Every time you read or hear that some federal spending is “unaffordable,” or “unsustainable,” or that federal taxes must be increased to support some federal project, you are hearing the BIG LIE.

Here is the latest in a long, shameful and destructive series:

Here Comes Congress’ Next Big Economic Crisis, And It Could Be Even Worse Than The Fiscal Cliff
REUTERS/Jason Reed

The Highway Trust Fund, a transportation and infrastructure fund financed by gasoline taxes, is set to run out by the end of the summer.

The article begins with an immediate reinforcement of the BIG LIE. The so-called “Highway Trust Fund” is nothing more than an accounting file, created by the federal government. This file can contain any numbers the government wishes it to have. It cannot “run out.”

Thus far, Congress has not come up with a solution, and both sides are beginning to dig in. By July, thousands of projects and contracts could be put on hold amid the uncertainty — right in the middle of summer construction season. In one economic analysis released last week, the Obama administration warned 700,000 jobs tied to the fund and its uncertain future are at stake.

The solution would be for the federal government merely to pay for these projects, just as it pays for all White House expenses, all of Congress’s expenses, all of the Supreme Court’s expenses and all other federal initiatives.

No taxes or “trust funds” needed.

“Right now, there are more than 100,000 active projects paving roads and rebuilding bridges, modernizing our transit systems,” Obama said Wednesday in remarks near the Tappan Zee Bridge in Tarrytown, New York, where a $3.9 billion effort to replace the current aging structure is underway.

“States might have to choose which ones to put the brake on. Some states are already starting to slow down work because they’re worried Congress won’t untangle the gridlock on time. And that’s something you should remember every time you see a story about a construction project stopped, or machines idled, or workers laid off their jobs.”

What you should remember is that this is all a charade by Congress and the President. They want you to believe they are oh, so helpless to solve this oh, so difficult problem.

They neither are helpless, nor is there a problem. Congress and the President intentionally have created a situation in which workers “must” be unemployed and/or taxes “must” be raised — in short, the GAP must be widened.

The fundamental problem is that gasoline taxes alone are no longer enough to finance the Highway Trust Fund, due to declining fuel use across the U.S. However, neither the White House nor Congress wants to raise those taxes, and there is a disagreement about how to fill the fund without them.

Oh woe! We, the bribed politicians, simply don’t know what to do. Yes, we know that even if all federal taxes fell to $0, the federal government still could pay any bills of any amount.

But we don’t want you chump voters to know that. So we wring our hands in mock agony, to show you we really care about you.

Simply put, spending on transportation and infrastructure now exceeds gas taxes taken in. During recent testimony before the Senate Finance Committee, Joseph Kile, the assistant director for microeconomic studies at the congressional budget office, laid out two politically painful potential solutions — either cut spending in the fund’s two accounts by 30% and 65%, or raise the gas tax by 10 to 15 cents per gallon.

Or, they just could pay the bills without raising taxes. But then you chump voters would realize that federal finances are not like personal finances, not like state finances, not like local finances and not like business finances.

And then you would begin to understand the difference between a Monetarily Sovereign entity and monetary non-sovereign entities. And if you had that knowledge, how would we widen the GAP?

When he issued his dire warnings Wednesday, Obama advocated for his solution to the fund fiasco — a four-year, $302 billion transportation and infrastructure plan. Warning the “cupboard will be bare,” he urged Congress to act on his plan — but that too seems unlikely.

No, the cupboard will not be bare. There is no cupboard. Unlike you and me, the federal government creates dollars by spending. The more it spends, the more dollars there are.

“Both parties are miles apart on how to replenish the Highway Trust Fund,” said Greg Valliere, an analyst at Potomac Research.

Here is what Potomac Research says about itself:

Potomac Research Group’s team of top-notch analysts deliver an unrivaled product to institutional investors. Coupled with superior customer service from sales directors, our research helps mutual funds, pension funds, and hedge funds understand the impact of legislation and regulation on markets, industries and companies.

In other words, “Our clients are rich people.”

And then we have Guggenheim Partners:

For Chris Krueger, an analyst at Guggenheim Partners in Washington, the obvious solution is raising the gas tax.

Here is what Gugenheim Partners says about itself:

“Guggenheim Partners is a privately held global financial services firm with more than $210 billion* in assets under management.”

In other words, “We are rich people; we like rich people; we suck up to rich people; and we will do anything to advance the interests of rich people.”

And raising the gas tax is an obvious solution to widening the gap between the rich and the rest, because that tax impacts the rest far more than it impacts the rich.

And the BIG LIE is alive and well in Congress, the White House, Potomac Research Group and Gugenheim Partners.

Rodger Malcolm Mitchell
Monetary Sovereignty

Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
9. Federal ownership of all banks (Click here)

10. Tax the very rich (.1%) more, with much higher, progressive tax rates on all forms of income. (Click here)


10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt

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.
Two key equations in economics:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports

Monetary Sovereignty Monetary Sovereignty

Vertical gray bars mark recessions.

As the federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise. Federal deficit growth is absolutely, positively necessary for economic growth. Period.


6 thoughts on “–The BIG LIE and the Highway Trust Fund

  1. All leading towards the path to privatization of major highways and toll booths for their use. A much more direct means of stealing money from the commons than the more round-about method of taxation.


  2. We have heard the argument how the debt will be passed down to our grandchildren. What our grandchildren should really be afraid of, is being passed down crumbling bridges and brokem roads. And when our grandchildren are plummetting into the waters as bridges collapse, will the republicans remind everyone that we didn’t saddle them with government debt.


    1. that’s right, because the debt is something we made up like the Easter bunny. A busted bridge is real and we made that too.


  3. What I find frustrating is all the coverage we see of the internet “news” and stories of courage, scientific findings– like another planet we never knew existed, or the latest “tell all” book trying to make money for some author with inside information. All the stuff that’s “fit to print” i.e. safe.

    But not word one of MMT or MS. I am constantly reminded of how dangerous it is for anyone with the proper credentials to mention monetary sovereignty. In my memory I’ll never forget David Gregory, host of Meet The Press, discussing the federal debt with a panel of journalists and experts, one of whom was Alan Greenspan. Out of frustration and his own understanding of monetary sovereignty he simply blurted out to Gregory, “The United States can’t run out of money. We will always be able to pay our bills.” But what I remember most is Gregory’s reaction. His jaw dropped and he went stone silent for about a second then quickly changed the subject rather than force Greenspan to elaborate on his point. All he would have had to say was, “How do figure?”

    These guys who love to display their love of truth, their Sam Donaldson-toughness, quickly turn into stuttering spineless chickens when faced with uncomfortable truth. There are no Caroline Kennedy, Profiles in Courage Awards going out to MS people–only to those who represent something safe that we can all relate to and shed a tear over maybe; but truth in macroeconomics, forget it. Why hell, the average person can’t even spell it.


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