Donald Trump, being a demonstrated psychopath, is the most frequent liar of any previous American President, perhaps the most frequent of any human in history. His lies, plus his Presidential power, have caused grievous harm to America.

Everything he touches turns to disaster. Soldiers have died. Thousands of other Americans have died. People are homeless. Children are starving. The man walks in chaos. When historians evaluate America’s Presidents, I predict Trump will fall to the bottom.

Bernanke: “Guess what. The Libertarians still claim the government can become insolvent!” Greenspan: “And some people believe it??”

Yet with all that, I submit that the Libertarians and their believers are more harmful to you than he is.

See if you agree. Here are some excerpts from a Libertarian article.

Both Biden and Trump Plan to Spend Well Beyond the Government’s “Means.”
Whether Biden or Trump wins this November, we’re in for big, unaffordable government. How much bigger and how unaffordable are the only real questions. By: )

Immediately, we are confronted with lies.

First, the federal government, unlike state and local government, is Monetarily Sovereign. It has the unlimited ability to create dollars. It has no “means.” It never can run short of its own sovereign currency, the U.S. dollar. It neither needs nor uses tax dollars. It creates dollars at will.

Can you believe it? The Libertarians still claim the government can become insolvent.

Who says so?

Former Fed Chairman, Ben Bernanke: “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.”

Former Fed Chairman Alan Greenspan: A government cannot become insolvent with respect to obligations in its own currency.”

And Greenspan again: There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.”

And the St. Louis Federal Reserve Bank: As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e. unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.”

And then there’s Warren Buffet: “Those who regularly preach doom because of government budget deficits, (as I regularly did myself for many years) might note that our country’s national debt has increased roughly 400 fold during the last of my 77-year periods.”

I inspected J.D. Tuccille’s article very carefully, and nowhere does he define, “Well Beyond The Government’s Means.” And you will find that no other debt “hand-wringer” ever explains that phrase. Tuccille simply refers to “unaffordable government.” But unaffordable for whom? Here’s a hint:

Tuccille: “There are differences between what Republican Trump and Democrat Joe Biden threaten to inflict on us in terms of raising revenue and how to spend it.”

Tuccille claims “revenue (i.e. taxes) pay for federal spending. That would be true of monetarily non-sovereign governments — i.e. state and local governments and euro governments — but it is not true of the federal government. If it were true, then it would be possible for the federal government to become insolvent, and Greenspan, Bernanke, and the St. Louis Fed would be wrong.

So perhaps, Tuccille’s “unaffordable” refers to taxpayers. But since taxes do not fund federal spending, his comment makes no sense.

The federal government does not spend tax dollars. It destroys tax dollars, and creates new dollars, ad hoc, when it spends.

The details are hard to nail down—probably deliberately so on the part of the campaigns—but Trump essentially promises tax cuts (and penalties for those who cross him) while spending too much, and Biden intends to raise taxes while ignoring the idea that spending must be constrained in any way.

When it comes to taxes, Trump continues the Republican Party’s traditional interest in reducing the government’s take.

The Republican Party’s “traditional interest” would be correct, except for two small details. They become interested in tax reductions only when the President is a Democrat, and even then, they want tax reductions only for the rich.

And when federal spending is “constrained,” we have recessions and depressions, which are cured by unconstrained federal spending.

“Without further details or clarification, it is difficult to fully analyze President Trump’s second term tax policy agenda,” Erica York noted last week for the Tax Foundation. “Broad themes of the president’s agenda include providing tax relief to individuals and tax credits to businesses that engage in desired activities.”

“Difficult to fully analyze” is another way of saying, Trump has no tax policy agenda. (He also has no health-care agenda, no immigration agenda, no foreign policy agenda, and no COVID agenda). About the only agenda he consistently has had is, “What’s best for me.”

Also, “tax relief to individuals should read, “tax relief to wealthy Republicans.” Also, “tax credits to businesses that engage in desired activities” should read, “tax credits to businesses whose owners support me.”

The exception is on the matter of tariffs, given that the president has wandered from his party’s long-time support of free trade.

Trump has “wandered” because he believes, or rather, wants us to believe, that American’s import duties are paid by China, when in reality, they are paid by Americans.

“In his first term, President Trump has imposed more than $80 billion of tax increases in the form of tariffs,” adds York. “Recently, the president said he would impose tariffs on companies that do not move jobs back to the United States from overseas. Whether this is a formal policy proposal is unclear, but it indicates the possibility of continued tariffs if Trump wins reelection.”

Trump typically flails wildly at anything or anyone he believes does not support him. His flailing generally punishes Americans.

Biden, too, fulfills the role you would expect of his party affiliation as a Democrat.

“Biden has not released a single formal tax plan, but he has proposed many tax changes and increases connected to spending proposals related to issues like climate change, infrastructure, health care, education, and research & development,” Garrett Watson and Erica York wrote for the Tax Foundation. “Most of these proposals center around raising income taxes on high earners as well as on businesses.”

With a little more detail to analyze, Watson and York “estimate that Biden’s tax proposals would raise about $3.8 trillion over 10 years. The plan would also reduce long-run economic growth by 1.51 percent and eliminate about 585,000 full-time equivalent jobs.”

All federal taxes reduce economic growth because they reduce the supply of money in the economy. The only worthwhile federal taxes are those that narrow the Gap between the rich and the rest. The Gap is even more harmful to the economy than is the growth-reducing effects of money supply reduction.

Notice how Tuccille admits that taxes “reduce long-run economic growth,” then still talks about the government spending beyond its means. This reflects the knee-jerk, government hatred bythe Libertarians. To them, all government is too big and all government spending is too much. The reality of Libertarianism is that it always devolves to anarchy.

Whether or not a government is taxing too little, enough, or too much is relative to how much it plans to spend and how much ruckus taxpayers kick up in response to the legalized mugging. For both legacy-party candidates, lots of spending well beyond the government’s means is part of the plan.

Yes, yes, again the government’s non-existent “means.” In 1940, the federal debt was about $40 billion. Today, it is above $20 trillion, a 500-fold increase. For 80 years, the U.S. government has been spending beyond its non-existent “means,” and Tuccille still hasn’t caught on.

In Trump’s case, we know he isn’t shy about cutting checks. “Under Trump’s signature, before any true crisis hit, the annual price tag of government went up by $937 billion in less than four years,” Reason’s Matt Welch recently wrote.

For his 2021 budget (a theoretical document, since the federal government has given up on formal budgets), President Trump proposed continuously increasing federal spending, though slower growth than was originally forecast.

Libertarians and those of similar ilk, love to complain about “federal spending,” but when it comes to specifics, they strangely are mute (except for proposing cuts to spending that benefits the not-rich. They generally are happy to see cuts to Medicare, Social Security, and other anti-poverty initiatives.

“The federal deficit would be $2.1 trillion smaller under the President’s budget than in CBO’s baseline over the 2021–2030 period,” the Congressional Budget Office (CBO) projected earlier this year. That certainly sounds like an improvement, but the budget consistently spends more than the government collects to leave the country with a cumulative $11 trillion deficit instead of the baseline anticipated $13 trillion deficit.

There it is again. He admits that the government consistently spends more than it taxes — almost every year for the past 80 years — and yet here we are. The government has been spending beyond its “means” and nothing is unaffordable.

How do Libertarians explain the absence of insolvency? They ignore history and facts, and keep screaming that the sky is falling, or soon will fall, or us just about to fall. And still, it doesn’t fall.

Then again, that seems almost realistic when compared to what Trump’s main rival, Joe Biden, plans in terms of increased expenditures and benefits.

“From a variety of sources—campaign releases, independent analyses, media stories and the Congressional Budget Office—I have constructed a rough estimate of what it would cost to cover all the new benefits,” The Washington Post’s Robert Samuelson recently tallied. “The additional 10-year spending totals $7.74 trillion.”

“But wait, we’re not finished yet,” wrote Samuelson. “To these costs ought to be added the projected budget deficits under existing policies. For the period from 2021 to 2030, CBO figures that’s another $13 trillion. The grand total comes to $20.7 trillion (the $13 trillion, plus the $7.7 trillion).”

I should add here that the CBO recently admitted that it “has tended to overestimate revenues in its projections—especially those that extend further into the future.” That means we should expect deficits to be higher than all of this number-crunching predicts, with larger debt to result.

Oh, woe. The federal government, which has infinite money, plans to pump more money into the economy. And this is supposed to frighten us? You know what frightens me? The notion that someday again, a Libertarian idea might take hold in the federal government, and we again would have this:

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.

Bill Clinton, the faux Democrat, was hailed by Libertarians (and by himself) for cutting the debt in the 1997-2001 period. Clearly, that didn’t turn out well. (What, Mr. Tuccille, you’re surprised that taking money out of the private sector led to a recession?)

And all of this is before we take into account the damage wrought by the pandemic and by government-imposed lockdowns.

And what does Mr. Tuccille want to do about that “damage”? He wants to cut federal spending at just the time when millions are jobless and starving. It’s classic Libertarian craziness.

Economic activity “appeared to have declined at a historically rapid rate in the second quarter,” the Federal Reserve conceded in July, adding that “the pace of declines in the unemployment rate, over the second half of this year were expected to be somewhat less robust than in the previous forecast.”

A smaller, struggling economy in which people are scrambling to rebuild businesses, jobs, and wealth isn’t going to surrender as much revenue as government types would like. It’s also likely to be more vulnerable than a thriving economy to burdensome taxes and tariffs.

All taxes and tariffs “burdensome.” Why? Because they all reduce the supply of dollars in the economy — which is exactly what the Libertarians wish to do.

Whoever wins the presidency—realistically, either Biden or Trump—we’re in for big, unaffordable government. How much bigger and how unaffordable are the only real questions.

No, the only question is: When will the Libertarians, the Democrats, the Republicans, and the media tell the American people that:

  1. A growing economy requires a growing supply of money
  2. Federal deficit spending supplies those growth dollars.
  3. The U.S. federal government, being Monetarily Sovereign, has infinite dollars. It never can run short. It never can be insolvent. The federal government never can be unaffordable.

But then, if the Libertarians admitted it, there would be no raison d’etre for Libertarianism, would there? And the populace, who understood it, would demand Gap-narrowing benefits, which the rich who run America don’t want.

So perhaps the real question is, What will it take to teach the Libertarians, the politicians, and the populace, what really should, at long last, be obvious?

Rodger Malcolm Mitchell

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

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. 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:

1. Eliminate FICA

2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone

3. Social Security for all or a reverse income tax

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