The great “socialism” fakeout

Either by ignorance or intent, those opposed to anything progressive, paint every government spending initiative as “socialism.”

So let’s begin by erasing that bit of misdirection:

Merriam Webster, Definition of socialism
1 : any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods
2 a : a system of society or group living in which there is no private property
b : a system or condition of society in which the means of production are owned and controlled by the state
3 : a stage of society in Marxist theory transitional between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done

In short, socialism means government ownership and administration, not merely government spending and aid.

One would think (hope) that the media would understand that before writing negative articles about America’s so-called “socialism,” but the desire to misinform the public on behalf of the rich 1% seems eternal.

Here are excerpts and comments from a typically wrongheaded article from the 7/27/18 issue of the Chicago Tribune:

Spoiled children of America drawn to socialism
Cal Thomas

For the current generation, it appears one thing is more seductive than sex — and that’s socialism.

Sen. Bernie Sanders, I-Vt., and 28-year-old Alexandria Ocasio-Cortez, winner of a New York Democratic primary, are the old and new faces of socialist America.

Their platforms, it appears, hinge on the concept of shared wealth — in other words, handing out free stuff to just about everyone.

Not only does Mr. Thomas express his disdain for fact by claiming “the current generation” is “socialist,” but he also exhibits disdain for narrowing the Gap between the rich and the rest.

He and the rich, dislike “shared wealth.” In his dystopian world, the poor should stay poor, or perhaps become even poorer. How dare they wish for more?

And seemingly, only the rich deserve “free stuff” in the form of massive tax breaks and business subsidies, unavailable to us of the riffraff.

Note to Mr. Thomas: “Free stuff” is not “socialism.” Free stuff is what the federal government provides to the populace, every time it deficit spends.

1. The “free stuff” includes military protection, roads, dams, and bridges, research and development, along with Social Security, Medicare, Medicaid, aids to education, poverty aids, and thousands of other benefits that provide the reasons for the government to exist.

2. The “free” part comes from the fact that our federal government is Monetarily SovereignIt has the unlimited ability to create its sovereign currency, the U.S. dollar. The federal government never can run short of dollars.

(If you doubt this, try to learn how many dollars the federal government has.)

Thus, it does not need to ask anyone for the dollars it creates at will. It doesn’t need to ask you for tax dollars and it doesn’t need to ask China for dollars. And when the government receives those dollars, it doesn’t use them.

U.S. dollars sent to the U.S. government simply disappear from any definition of the world’s dollar supply. Effectively, dollars received by the U.S. government are destroyed.

3. And merely handing out or spending dollars is not “socialism.” It is what the federal government is designed to do. It is the way government functions.

Mr. Thomas’s primary concern seems to be that the not-rich 99% might receive a decent share of federal spending. But rather than honestly stating that concern, he hangs the “socialism” pejorative on it.

Continuing with excerpts from his article.

How far we’ve come from JFK’s admonition not to ask what your country can do for you, but what you can do for your country.

Today, for many, it’s all about what you should expect from your country with little or no reciprocity.

JFK’s admonition was silly on its face. Government is a collection of laws — a tool invented by people.

The entire purpose of government is to benefit people.

Kennedy’s overly poetic line is akin to saying, “Ask not what your hammer can do for you; ask what you can do for your hammer.” Or perhaps more accurately, “Ask not what the law can do for you; ask what you can do for the law.

In a word, senseless.

And yes, the tool should not expect or be given “reciprocity.”

It is undeniable that capitalism has raised more boats than socialism has sunk. Yet, socialism’s appeal continues, despite historical and contemporary evidence that it delivers a bad deal for those who embrace it.

Every government has some elements of socialism, i.e government ownership and control. The federal government owns and controls the military, the FBI, CIA, federal highways, NASA, and a good deal of acreage, particularly in the West.

But those comprise only a small part of the giant U.S. economy, and are a long, long way from a “socialist” government.

In an article for Reason magazine in May, Steve Chapman, a columnist and editorial writer for the Chicago Tribune, referenced a University of Chicago GenForward Survey of Americans, ages 18 to 34.

The survey found that “62 percent believe we need a strong government to handle today’s complex economic problems.” Only 35 percent said “the free market can handle these problems without government being involved.”

Anyone who thinks “the free market can handle complex economic problems without the government being involved,” is a fool.

Is there any time in human history when the anarchy, Mr. Thomas seemingly favors, has benefitted the people?

The survey, noted Chapman, found that “Overall, 49 percent hold a favorable view of capitalism — and 45 percent have a positive view of socialism,” with socialism scoring higher approval among African-Americans, Hispanics and Asian-Americans.

Note the typical, right-wing dig at those “lazy” African-Americans, Hispanics and Asian-Americans.

Sixty-one percent of Democrats have a positive view of socialism, which is not surprising, while 25 percent of Republicans favor it, which is a surprise.

Nothing is surprising when people are asked questions about something of which they know nothing. The respondents were random people, 18 to 34. What percent of those young people know what “socialism” and “capitalism” are?

It is a ridiculous survey, comparable to asking 18-34-year-olds whether they would prefer a “noocracy” or a “kritarchy.” The sole effect is to demonstrate the ignorance of economics lingo by an age group’s (if one can call 18-34 a “group”) .

Continuing with the article:

I have at least three takeaways from this.

Related image
Mr. Thomas’s “spoiled rotten” poor who, seduced by socialism, have not sacrificed blood, sweat and tears.

The first is that it’s likely most of those who favor socialism have never lived in a country where it is practiced.

A few months in Venezuela might be the perfect cure.

Second, people who claim to prefer socialism to capitalism are probably reaping capitalism’s benefits.

This group of misinformed comrades includes parents who gave their pampered millennials a lifestyle they likely would never have enjoyed under a socialist regime.

The third takeaway is that those who favor socialism over capitalism and socialist countries over America are spoiled rotten.

They are part of a generation that has never had to serve in the military and, I would venture to guess, do not know anyone who is serving or has served, other than maybe a grandparent, whose values many seem to have rejected.

People seduced by socialism have likely not had to sacrifice much for their country.

They seem to take it for granted that the freedoms they enjoy, even the freedom to believe in a political and economic system that is anti-freedom, dropped from the sky and were not achieved by the hard work, blood, sweat and tears (which they think is the name of an old rock group) of others.

I have three takeaways from Mr. Thomas’s rant;

First he, like the respondents, not only has no idea what socialism is, so to claim that Americans actually want socialism is disingenuous. No Americans want a government similar to the dysfunctional, Venezuelan government — and Thomas surely knows it.

Second, Mr. Thomas strangely equates economics knowledge with serving in the military and with not being “spoiled rotten.”

I do not know what percent of U.S. soldiers understand the true meaning of socialism, though if they did, they would understand that they receive their pay and instructions from the most socialist organization in America — completely owned, funded, and administered by the federal government.

I also do not know why Mr. Thomas considers soldiers less “anti-freedom,” and less “spoiled rotten” than the rest of America’s workers.

Soldiers do exactly as they are directed and live exactly where they are told, and in return are given room, board, and education. How “free” and “unspoiled” is that?

Third, Mr. Thomas seems to think that people receiving benefits from the government do not have the moral right to those benefits, because they have not worked hard nor sacrificed blood, sweat, and tears.

Really? Yes, that is the right-wing mantra: The poor don’t work as hard as the rich. Does it get any more foolish than that?

And finally, we come to the typical right-wing, pseudo-moralistic rant about the poor receiving federal benefits:

Socialism stifles incentive and makes people dependent on government, not themselves, which appears to be the liberal ideal.

Some would rather get a check than earn one. Look at the TV ads advertising toll-free numbers, free shipping and other free incentives, which are not free at all. Their cost is simply added to the product you purchase.

It’s enlightening to learn that self-reliant Mr. Thomas does not depend on government. Apparently, he will refuse protection from our military and from his local police and fire departments, and from the CIA, FBI, NSA et al.

He will refuse Social Security benefits and Medicare benefits. He will refuse to ride on the highways, streets, and roads built by governments. He will not take medicines or eat foods judged safe by government agencies.

He will not fly in airplanes, because they all are supervised by a federal agency.  His children will not attend school grades 1 – 12, most of which are government owned and directed. Nor will any attend federal military colleges.

He will refuse FDIC protection for his money, and indeed, he will not use U.S. dollars, for they are created by the federal government.

And of course, he never, never will use a toll-free number or accept that free shipping he loathes.

The list goes on and on about all the things Mr. Thomas will forego to maintain his unique, manly, and moral self-reliance.

And just when you believe his nonsense has reached its apex, Mr. Thomas ends his article with a bit more:

Socialism is little more than mutually shared poverty, a version of “spreading the wealth around” with government taking from the productive and giving to the nonproductive.

Progressivism is not socialism, and absolutely is none of the above. Rather than mutually shared poverty, it is mutually shared prosperity. (See The Ten Steps to Prosperity.) It does not involve the government taking from the productive (presumably the 1%) and giving to the nonproductive (we folks of the 99%.)

But Mr. Thomas acts clueless about that, though at the very end of his article, he makes one good point:

Do Democrats really want to embrace socialism heading into the next two elections? If so, they can expect the same defeats they have suffered in the past — think George McGovern and Walter Mondale.

Each thought the American people were taxed too little and that big government was the answer.

It isn’t, and it never will be.
Tribune Content Agency

Messrs. McGovern and Mondale were not socialists, nor did they think the American people were taxed too little, two common, right-wing lies.

They believed the gap between the rich and the rest is too wide, and that the federal government should obey its mandate of benefitting the people by narrowing that gap.

This does not require increasing federal taxes for the simple reason that federal taxes do not fund federal spending.

Because the federal government cannot run short of U.S. dollars, it does not need taxes. Even if all federal taxes were $0, the federal government could continue spending forever.

But Mr. Thomas is right about one thing: The public has been misled, and does not understand the meaning of “socialism,” “capitalism,” and “Monetary Sovereignty.”

So progressives wrongly are tarred with the “socialist” label, which costs them votes.

Lying that federal benefits are socialism is the way the wealthy keep the 99% down, and Mr. Thomas is just a pawn in their chess game.

The GINI ratio measures income inequality. Higher ratio = more inequality.  US inequality is the highest in 50 years, and perhaps ever.

In summary, equating progressivism with socialism is a Big Lie, the sole purpose of which is to widen the Gap between the rich and the rest.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell


The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.

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 economics.

Implementation of The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:

(Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.

(H.R. 676, Medicare for All )

This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”

(The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Guaranteed Income)) Or institute a reverse income tax.

This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.

Five reasons why we should eliminate school loans

Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.

Salary for attending school. Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.

Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce your personal income.

7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and business taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.

There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.

(Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.

10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.


13 thoughts on “The great “socialism” fakeout

  1. Rodger, what would be the best way for Venezuela to get their inflation under control? This is not a trick question. I am a long time reader and would really like to know.


    1. I’m not intimately informed about Venezuela’s inflation, but I suspect that like all hyperinflations, it’s caused by shortages, probably food. That’s the common element in hyperinflations.

      Since Venezuela is Monetarily Sovereign, I’d imagine they would have to follow a routine something like this:

      1. Recognize that they are Monetarily Sovereign, so have the unlimited ability to create bolivars.
      2. Create a new currency, trade new bolivars for old, and demand that all payments be made in the new currency
      3. Stop all government external borrowing, but issue bonds internally (to help control interest and to reassure the world that the bolivar will become stable for foreign exchange.) Venezuela will continue to need U.S. dollars.
      4. Do something akin to the Ten Steps to Prosperity, particularly steps 2-6, 9,10. It’s important to get money into the people’s hands, so they can fund their demand.
      5. Fund the farmers so they can grow. Also fund industries that produce things that are in shortage.
      6. Maintain high interest rates at about 20%, to create demand for the new bolivars. (They probably are way higher than that, so rates will have to come down.)

      I suspect that Venezuela has been acting like a monetarily non-sovereign entity, borrowing externally and threatening default, which in itself devalues its currency.


      1. BINGO. Venezuela has indeed been borrowing quite heavily from other countries, most likely denominated in foreign currencies, which basically was their Mistake #1. Add a dysfunctional politicial system, foreign currency speculators, and threats of default, and POW! Instant hyperinflation. They lost their “full faith and credit” in their currency, basically.


    2. I’m not Roger, but if I were them I would stop with all the price-controls and all the other meddlesome idiocies that is keeping supply out of stores.

      They’ve created a whole bunch of scarcity but did nothing, and can do nothing, about demand so prices have shot up.

      If the idiots get out of the way, supply will go back to normal and prices will fall.


  2. On single-payer the left shot itself in the foot.

    By insisting on an insurance-type structure with premiums and co-pays and deductibles instead of just an agency that pays the bills they made it over-complicated and easy to politically attack.

    And the idea that some bureaucrat, whether employed by the government or by an insurance company can deny a person a care option based on some computer algorithm is abhorrent. Even if that was over-stated by the opposition to Hillarycare or the ACA it is still a huge negative for people and drove a lot of the resistance to these plans.

    If medicare-for-all (or whatever it ends up being called) is to happen the general public has to be convinced that the only part of the process government bureaucrats are involved in is paying the provider.

    That is there is no one at the government end approving or denying care options.

    And no one needs a plan or to pay any premiums or worry about deductibles or whether they can be denied. Just go to the hospital or clinic or dentist or eye guy or whatever. Whatever your need, just have it taken care of.

    You need care, you get care. Your part is done. The provider provides the care, then bills the government and gets paid (the normal market rates, none of this having to take less crap). That’s it, the loop is closed.

    That’s how it has to be sold.

    Also, if the government were to buy up and cancel all the outstanding medical debt in this country and perhaps even retroactively pay for people’s already paid out-of-pocket medical costs going back say five years (upon receipt of verified payment history) that would really help push the idea forward. Plus be very stimulative.

    Of course people are going to wonder how to keep providers from over-charging and or engaging in outright fraud and there would be a division in the agency to handle those issues but they would not have any influence on what care anyone receives. The patient would never, ever have to deal with them in the normal course of events.


    1. Yes. Current Medicare already knows how to deal with the problems you mentioned. All that needs be done is for the federal government to fund Medicare for every man, woman, and child in America. The process already exists. It’s just the funding that is needed.


    2. It’s too bad that the US did not adopt the Canadian system years ago. It works well (I lived there 5 years and used healthcare frequently) and is actually efficient – which is not important. I even had my own PCP in little Prince Edward Island!


      1. The Canadian healthcare system is indeed superior to the American system overall–no thanks to the Tories’ austerity back in the 1990s. If there are any negative aspects of the Canadian system (such as supposedly longer wait times than the USA), they can all be traced entirely to such austerity, which creates artificial scarcity.

        The old saying about “cheap, quick, and good–pick two out of three” is just as true for healthcare as it is for anything else. Even if single-payer is inherently cheaper and more efficient than a multi-payer, for-profit system, there is still such a thing as too cheap. Fortunately, for a Monetarily Sovereign government (at least one that acts like it), money is literally no object, so there is really no need to cut corners to do it on the cheap.

        Too bad neither country really acts like it.


  3. Bingo. After Trump beats Sanders in 2020, all the exit poll interviews will go like this “As bad as Trump is, I just couldn’t see myself voting for Socialism”.


  4. Excellent article as usual, Rodger! If I were to make a list of the most widely and heavily abused words in the English language, “socialism” would have to be in the top ten if not the top five, along with “debt”, deficit”, “surplus”, and, coming in at #1, “entitlement”.


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