The genius of the board game, Monopoly®.

If you have, like I have, spent the most recent 25 years of your life trying to explain to your friends and strangers, something the basics of which an 8-year-old should be able to understand — and like me, you have utterly failed — try using the board game Monopoly® as your example.

First, why do I say 8-year-old? Well, this is the on-line ad:

GREAT FAMILY GAME: This Monopoly board game is fun for families and kids ages 8 and up.

So yes, and 8-year-old can understand Monopoly®.

But, why do I reference Monopoly®?

You, your friends and strangers almost surely have played Monopoly®. Behind chess, checkers, and backgammon, Monopoly® is the world’s most popular board game in history.

So, even the semi-literate universe knows how the game works.

As they will recall, it is a game about buying, improving, renting, and selling real estate. There are players — usually four, plus a Bank.

The players are analogs for the U.S. private sector (aka, “the economy”), and the Bank is an analog for the U.S. Treasury. It doles out money. It collects money that it doesn’t need.

And by law (i.e. by rule), it never can run short of money — just like the Treasury. Here are some of the Monopoly® game’s parallels to reality:

1. The real world and the game use paper “money,” which isn’t really money. The U.S. dollar bill is the title to a dollar,not in of itself a dollar. The actual dollar is merely a bookkeeping notation in the government’s accounting records.

How to play Monopoly without using Monopoly paper dollars. Create a table. THE BANK HAS NO COLUMN BECAUSE IT HAS INFINITE MONEY.

A U.S. dollar has no physical presence. It is just a number in a balance sheet.

Similarly, a Monopoly® paper dollar merely represents game points.

Years ago, I played a game of Monopoly® that did not include any paper “dollars” at all.

We simply used a record of points — a table in which each participant had a column in which his/her winnings and losings were recorded.

The Bank had no column, because the Bank (like the U.S. Treasury), had the infinite ability to create dollars.

Such a column would have made no sense.

The use of the table proves that, like U.S. dollars, Monopoly® dollars have no physical substance. They are just balance sheet numbers.

2. Like the U.S. Treasury, the Monopoly® Bank generally runs a deficit, which is an asset for the private sector.

Just as the U.S. Treasury never can run short of U.S. dollars, the Monopoly® Bank never can run short of Monopoly® dollars.

This is stated in the rules of the game.

Monopoly taxes, which are paid to the Bank, do not fund Band spending. Since the Bank had no column to show how much money it has, all taxes paid to the bank disappear upon payment.

When players pass “GO” and receive $200, no taxpayers are obligated to fund those $200 payments. No one asks, “How will the Bank pay for it?” just as no one should ask, how will the federal government pay for (anything).

3. For historical reasons, based on obsolete gold standards and silver standards, the U.S. federal government keeps track of “deficits” (i.e. the difference between tax income and spending).

In U.S. history, there have been intermittent gold and silver standards, in which the U.S. required itself to store physical gold and silver in dollar amounts equal to those deficits.

“Wait,” you say. “Gold and silver are physical metals, measured in ounces. How can ounces be equal to dollars?”

Answer: The U.S. government, being Monetarily Sovereign, has the unlimited power to fix an ounce of silver and an ounce of gold to equal any number of dollars it wishes.

The government has the unlimited power to fix the price of any commodity vs. the dollar: Iron, corn, cotton, water, oil, etc.

Ever since 1971, when President Nixon took us off the last gold standard, the value of gold vs. dollars has varied wildly.

For that reason, keeping track of deficits no longer is necessary other than to measure dollars going into the economy.

When too few dollars are pumped into the economy we have recessions, and when dollars actually are taken out of the economy we have depressions.

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.

By contrast, the game of Monopoly® does not keep track of the Bank’s deficits. There is no need to, because the deficits do not affect the Bank’s ability to pay, just as federal deficits do not affect the federal government’s ability to pay.

4. Similarly, neither the Monopoly® Bank nor the federal government ever borrows dollars. Being Monetarily Sovereign, they never need to.

The U.S. Treasury issues Treasury certificates (T-bills, T-notes, T-Bonds), which misleadingly are called “borrowing.”

In a typical borrowing situation, someone needs additional money temporarily, so they borrow it from a lender, and later, pay it back.

But, the federal government, having the unlimited ability to create dollars, never is in a  position in which it needs money.

It has the infinite ability to create money, at the touch of a computer screen. Those T-securities, which misleadingly are labeled “borrowing,” are more akin to safe-deposit boxes, into which depositors place values, and later retrieve them.

The sole differences between T-security accounts and safe deposit boxes are:

a. T-security accounts have a maturity date; safe-deposit boxes do not

b. T-security accounts receive interest; safe deposit boxes do not (although negative interest rates for T-security accounts have been discussed, which would make them even more like safe-deposit boxes.)

The federal government never touches the contents of safe-deposit boxes or of T-security accounts, and to “pay them off,” the owner simply retrieves the contents of the T-security accounts and the safe-deposit boxes.

There is no bank or government obligation to “pay off” safe-deposit boxes or T-security accounts. The sole financial purposes of T-securities are:

a. To provide a safe place to store unused dollars, which stabilizes the dollar

b. To assist the Federal Reserve to control interest rates, which helps control inflation

T-securities do not provide spending funds for the federal government. Every time you think of federal government financing ( which is nothing like state/local government financing) think of the Monopoly® Bank.

That will help you visualize why federal deficits and debt are not a burden on the government or on taxpayers. Compare that with the contents of the following article from the Committee for a Responsible Federal Deficit (CRFB):

The Nation’s Upcoming Fiscal Challenges APR 29, 2021 | BUDGETS & PROJECTIONS
Record Debt Levels: Debt held by the public will total 108 percent of Gross Domestic Product this fiscal year. After the previous record of 106 percent of GDP, set in 1946 just after World War II, policymakers ran years of balanced budgets to bring debt down to manageable levels. We now face large structural deficits and an ever-rising debt-to-GDP ratio.

The “debt” / GDP ratio is meaningless. It predicts nothing. It has nothing to do with the federal government’s ability to pay its debts. It does not say anything about the health of the economy.

The End of Discretionary Spending Caps: Since 2012, discretionary spending caps have been in place (though in practice, these caps have often been increased and in some instances violated).

“Increased” and “violated” because they serve no function.

These caps expire at the end of this fiscal year, leaving appropriators without a legal constraint on discretionary spending and thus creating the opportunity for a spending free-for-all.

Obviously, caps that are “increased” and “violated” are not caps at all, and do nothing to prevent Congress from spending as much as it wishes. Further, there are no economic reasons to restrict Congressional spending. On the contrary, federal spending stimulates economic growth.

Predictable Expirations and Fiscal Deadlines: President Biden’s agenda, like those who came before him, will be in many ways dictated by a series of expirations and deadlines.
This year alone, the country will have to deal with the return of the debt limit (August 1), the end of expanded unemployment benefits (September 6), the expiration of numerous program authorizations (September 30), and the end of the expanded Child Tax Credit and other tax breaks (December 31).

The “debt limit” is one of the least intelligent laws passed by Congress, and that is saying something. The “limit” does not limit debt. It limits payment for debt already contracted.

It’s a “stiff your creditors” law, that has no economic purpose. Zero. Zilch. None. The fact that every time it is reached, Congress raises it, should reveal something to even the least educated among us.

Policymakers must also address the statutory Pay-As-You-Go scorecard if they choose to avoid an across-the-board sequestration. 

“Pay-As-You-Go” is a system by which the federal government would add net zero dollars to the economy, thereby guaranteeing a depression. Not smart, which is why the CRFB likes it.

Major Trust Funds Are Headed Toward Insolvency: Four major trust funds are projected to deplete their reserves within the next 14 years: the Highway Trust Fund in FY 2022; The Medicare Hospital Insurance trust fund in FY 2026; Social Security’s retirement fund in calendar year 2032; and the Social Security Disability Insurance trust fund in calendar year 2035.
Given this tight timeline, all of these trust funds should ideally be secured during President Biden’s time in office.

Just as federal “debt” is not debt, federal “trust funds” are not trust funds, and they cannot “deplete their reserves” unless Congress and the President want them to.

Just as the federal government cannot run short of dollars, no agency of the federal government can run short of dollars, again, unless Congress and the President want them to.

See if you can learn when the non-existent trust funds for the military, the Supreme Court, the White House, the Senate, and the House of Representatives will face insolvency. Oh, they have no trust funds? Ask yourself, “Why not?”

IN SUMMARY The board game, Monopoly®, is similar to the U.S. economy.

The Monopoly® Bank resembles the U.S. government, and the Monopoly® players resemble the U.S. economy.

Just as the Monopoly® Bank never can run short of dollars, the U.S. government never can run short of dollars.

Just as the Bank does not borrow dollars, the U.S. government does not borrow dollars.

Federal Treasury securities, misnamed “borrowing,” actually are similar to safe deposit boxes. Just as your bank doesn’t touch what you put into your safe deposit box, the federal government doesn’t touch what you put into your T-security account.

To “pay off” that misnamed “debt,” the federal government simply allows you to take back the contents of your T-security account, in the same way as you would take back the contents of your safe deposit box. No tax payers or tax dollars are involved.


Rodger Malcolm Mitchell [ Monetary Sovereignty, Twitter: @rodgermitchell, Search: #monetarysovereignty Facebook: Rodger Malcolm Mitchell ]


  • 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:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. 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.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s