If you want a lovely picture of the economics version of The Big Lie, in all its glory, here it is:
The Big Lie in economics is: “Federal taxpayers fund federal spending.” It is 100% false.
Now, when the U.S. economy is in great danger of falling into a depression, the GOP and such cartoonists as Michael Pramirez, try to convince you that deficit spending to prevent a depression should not happen.
What Michael Pramirez and other GOP cartoonists don’t understand, or don’t want you to understand, is that you federal taxpayers do not fund federal spending.
State taxpayers do fund state spending. County taxpayers do fund county spending. City taxpayers do fund city spending.
States, counties, and cities are monetarily non-sovereign, meaning that they do not spend their own sovereign currency.
Ben Bernanke: Right, “the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”
They spend dollars, which are the sovereign currency of the United States federal government, a Monetarily Sovereign entity.
Monetarily non-sovereign entities require some form of income in order to spend.
This income can come in the form of earnings, taxes, and/or borrowing.
That is why states et al, spend taxpayer money.
Monetary Sovereign entities, like the U.S., Japanese, Canadian, and Australian governments have the unlimited ability to create their own sovereign currencies.
They never can run short of their sovereign currencies.
Even if the U.S. government collected $0 taxes, it could keep spending, forever.
Rep. Pelosi asks for an additional $3 trillion to prevent an oncoming depression. These funds will cost you nothing. They will cost your children and your grandchildren nothing.
They merely will be part of what erroneously is termed, “the federal debt,” which never needs to be paid down. Never.
Today’s federal “debt” (actually just deposits into Treasury Security accounts) is above $20 trillion. It has grown almost every year for 80 years.
It has had no adverse effect on the economy, nor will it ever have. It is just a number on a balance sheet, a number that the federal government could erase tomorrow if it chose.
By contrast, the depression Pelosi is trying to prevent, will cost you and your descendants greatly
In summary, pay no attention to those who claim that you and other taxpayers will have to pay for federal spending. It is nothing more than The Big Lie in economics.
Federal deficit spending is necessary to grow the economy and to prevent recessions and depressions.
U.S. depressions tend to come on the heels of federal surpluses.
1804-1812: U. S. Federal Debt reduced 48%. Depression began 1807.
1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.
1997-2001: U. S. Federal Debt reduced 15%. Recession began 2001.
It’s time to learn from history and from mathematical fact: By formula, adding dollars to the private economy increases GDP.
Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell
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THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.
The most important problems in economics involve:
- Monetary Sovereignty describes money creation and destruction.
- Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”
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 Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:
Ten Steps To Prosperity:
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 the rest.
MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
The 1804-2001 graphic can’t be coincidence. But there is still the old problem of the at-first-glance, gut reaction to “deficit and surplus”; the former is good and the latter BAD. The Clinton surplus had a big time-lag before it came back to sting Bush #2. That’s the bad thing about macroeconomics; it takes a long time to realize bad moves, and people forget too easily who really caused what to happen.
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True. Some people still refer to the Clinton surplus with admiration.
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Old Bill was an academic brain but he knows when to keep his mouth shut.
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Good article:
http://digitaledition.chicagotribune.com/infinity/article_share.aspx?guid=27a783fd-67f2-4d55-8ebb-6a109f59b0aa
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Rodger: Michael P. Ramirez is the editorial cartoonist for the right leaning rag, the Las Vegas Review-Journal.
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A great source of misinformation and disinformation.
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