If you believe that black is white, up is down, and income is outgo, you will love the short article that recently appeared in The Week online.
You will continue to read similarly misinforming articles prior to the November, ’18 elections.
The federal deficit is now projected to top $1 trillion in 2018
For anyone harboring hopes that massive tax cuts pay for themselves . . .
Translation: “For anyone harboring hopes that taking less money from your pocket (i.e. tax cuts) will be matched by taking more money from your pocket . . .” (i.e. pay for themselves). . .
Sure, paying more taxes to pay for a tax cut is what we all hope for, isn’t it? Peter Weber seems to think so.
. . . the nonpartisan Congressional Budget Office has some bad news. The CBO said Tuesday that the federal deficit hit $895 billion in the first 11 months of fiscal 2018, an increase of $222 billion, or 32 percent, over the same period of 2017.
Translation: “Bad news. The federal government will pump 895 billion economic growth dollars into the private sector, in the first 11 months of this fiscal year, an increase of 222 billion economic growth dollars over the same period of 2017.”
The private sector, which requires income to grow, will receive $895 billion from the federal government, which has the unlimited ability to create dollars, and needs no income. So, why is this “bad news”?
The only “bad” part is that the amounts are too low. If instead of $895 billion, the amount were closer to $2 trillion, That would yield more economic growth and put more dollars into your pocket.
GDP = Federal Spending + Non-federal Spending + Net Exports. GDP cannot grow without federal deficits. Period.
The tax cuts Republicans pushed through in December plus spending increases pushed government outlays up about 7 percent while revenue grew by 1 percent, the CBO said.c
The federal government, being Monetarily Sovereign, neither needs nor uses any income, including tax income. Your tax dollars are destroyed upon receipt.
Why? Because the federal government has the unlimited ability to “print” its own sovereign currency, the dollar. It produces all the dollars it needs and uses.
No reason to ask anyone else (including you) for U.S. dollars.
The government took in about $105 billion more in individual and payroll taxes but $71 billion less in corporate taxes.
You, the public, paid more taxes, but the corporations paid less. The GOP’s new tax laws will exacerbate that imbalance, with the rich making out like bandits — yes, exactly like bandits.
Spending on interest on the public debt increased by $55 billion, or 19 percent.
This is one reason why, contrary to what you have been told, raising interest rates is stimulative for the economy, and gives you more money.
The deficit will near $1 trillion by the end of fiscal 2018 and almost certainly top it by the end of the calendar year.
That’s another $1 trillion added to the economy. The rich people want you to believe that’s bad for the economy, to prevent you from asking for federal benefits.
It’s all a gigantic con job, perpetuated, either in ignorance or intent, by writers like Peter Weber.
The myth that tax cuts, and federal deficits and debt are bad for the economy, and that your children will pay for the debt, and that we’ll become Zimbabwe and Argentina, has been foisted on you for almost 80 years, and amazingly, after all this time, most of the public still believes the lie.
At least, you don’t.
Rodger Malcolm Mitchell
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:
1. Eliminate FICA
2. Federally funded medicare — parts a, b & d, plus long-term care — for everyone
3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)
4. Free education (including post-grad) for everyone
5. Salary for attending school
6. Eliminate federal taxes on business
7. Increase the standard income tax deduction, annually.
8. Tax the very rich (the “.1%) more, with higher progressive tax rates on all forms of income.
9. Federal ownership of all banks
10. Increase federal spending on the myriad initiatives that benefit America’s 99.9%
The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.
4 thoughts on “Black is white. Up is down. Income is outgo.”
Great overview of the article. I had replied to a thread concerning this same article using a graph from Stephany Kelton showing how sectoral balances reflected the dynamics of the money supply. You can image how that went with trollisphere!
They agree the economy NEEDS money.
They agree the government can “PRINT” (create) money.
So why would they think the federal “debt” is a burden on the government or a burden on taxpayers?
It makes zero sense, yet incredibly that is what these people think, which once again proves the truth of the H.L Mencken comment, “No one in this world, so far as I know—and I have researched the records for years, and employed agents to help me—has ever lost money by underestimating the intelligence of the great masses of the plain people. Nor has anyone ever lost public office thereby.
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I read Quora every day. The number of questions about government debt and the deficit never ceases to amaze. I set ’em straight but then it’s asked again. It just shows that George Lakoff’s theory about framing is indelibly etched into nearly everyone’s conscious and unconscious thinking. This is going to be monumentally difficult to correct. Still, we try, as you do.
“Why would people think the federal “debt” is a burden on the government or a burden on taxpayers?”
Because, as the previous poster said, “FRAME-ing is indelibly etched into nearly everyone’s conscious and unconscious..”
The word debt is confused. Our national debt isn’t the same as all other debt, public or private. One, the latter, must be paid back; the other need not.
We keep getting pounded from childhood to be responsible and pay our debts, but, thanks to fearful/insecure teachers and other professionals, we are, ironically, kept in the dark, rather than the light of a functional, truthful education.
The education profession is very conservative and ruled by administrators and Boards of Education who will throw you out should you dare challenge the status quo, and that includes the books they purchase to reinforce popularly held be-lie-f patterns.
Our best hope is for students to rely on the internet computer teacher, NOT the scared stiff, status quo obedient, b.s. degree and job seeking human puppet.