Goldberg: Culture wars a convenient distraction from spending
You know what you get for spending trillions of dollars you don’t have? More fights over Dr. Seuss, cancel culture and identity politics.
Puleeeze, someone tell Jonah Goldberg the federal government always spends dollars it doesn’t have, for one simple reason. To pay for goods and services, the federal government creates brand new dollars, ad hoc.
No one knows how many dollars our Monetarily Sovereign federal government “has” because it is a nonsense concept. It’s like asking how many laws Congress can create, or how many lies Donald Trump “has.”
The answer to all such questions is “infinite.”
By any measure, the federal government has been on a spending spree for decades. Without getting bogged down in the green eyeshade stuff, suffice it to say Uncle Sam has been spending more than he takes in from tax revenues since the 1990s.
Year-by-year federal debt
In fact, the first dollars the federal government spent in the 1780s were dollars that didn’t exist until the government spent them.
Back in 1929, the federal debt was “only” $17 billion.
Since then, it has risen almost every year, with positive effects, until today it exceeds $28 TRILLION, an astounding 16,470-fold increase.
In those years, the U.S. federal government has spent more than it “has” — about $26 trillion more.
So, where is the crisis that Jonah Goldberg seems to anticipate?
The federal debt is nothing more than the total of deposits into T-Security accounts, which rightly can be considered interest-paying safe-deposit boxes.
Just as your bank doesn’t access the money you may have stored in your safe-deposit box, the federal government doesn’t access the dollars in your T-security account.
We have documented that since 1940, pundits wrongly have referred to the federal debt as a “ticking time bomb.” Jonah seems to fall into that misbegotten group.
We’ve made up those shortfalls by borrowing money. The national debt ($28 trillion) is now considerably larger than the GDP (about $21 trillion).
Unlike state and local governments, the U.S. federal government does not borrow. Having the unlimited ability to create dollars, why would it?
What Jonah Goldberg erroneously terms “borrowing.” actually is the acceptance of deposits into the above-mentioned T-securities. Like the contents of your safe-deposit box, these deposits are not a burden on anyone, not on the government, not on today’s taxpayers, not on future taxpayers.
To service these accounts the federal government simply returns the dollars deposited in them.
The fact that the total of dollars deposited into T-security accounts is greater than the GDP is meaningless. It’s like saying that the amount deposited in a bank’s safe-deposit boxes is greater than the bank spends. It’s a silly comparison.
Reasonable people can differ on how much value we got for all that credit card debt. But that’s not relevant here.
The government has nothing like “credit card debt.” To pay what it owes, it just creates the dollars from thin air, as it always has. That is how it created, from nothing, the very first laws which created the very first dollars.
And the so-called federal “debt” is not really the federal government’s debt.
The real “debt” is the comparatively small amount the government owes suppliers between the time it orders and receives goods and services vs. the time it pays for them. That “debt” lasts a few weeks.
What’s relevant is that when both parties reach a de facto bipartisan consensus that deficit spending is fine — at least when their party is doing the spending — it makes it difficult to argue about overspending or overborrowing in a credible way.
The federal government, unlike state and local governments, cannot overspend, though it continually underspends which is why we have recessions every five years on average. (Yes, federal underspending leads to recessions, and increased spending is what cures them.)
And, unlike state and local governments, the government does not borrow.
Puleeeze tell Jonah Goldberg.
Rodger Malcolm Mitchell Monetary SovereigntyTwitter: @rodgermitchellSearch #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:
- 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:
- Eliminate FICA
- Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
- Social Security for all
- Free education (including post-grad) for everyone
- Salary for attending school
- Eliminate federal taxes on business
- Increase the standard income tax deduction, annually.
- Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
- Federal ownership of all banks
- 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.