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.
Puleeeze tell Jonah Goldberg that Uncle Sam has been spending more than he takes in for much longer than the 1990s.
Year-by-year federal debt
Source: The Balance.com
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.
While federal debt (red) has risen massively, inflation (blue) has risen modestly.
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.
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:
You always know what you’re going to get from Breitbart: Extreme right-wing red meat for those hypnotized by Donald Trump.
According to Wikipedia: Breitbart News Network is an American far-right syndicated news, opinion, and commentary website founded in mid-2007 by American conservative commentator Andrew Breitbart, who conceived it as “the Huffington Post of the right”.
Its journalists are widely considered to be ideologically driven, and some of its content has been called misogynistic, xenophobic, and racist by liberals and many traditional conservatives alike.
The site has published a number of conspiracy theories and intentionally misleading stories.
Breitbart News aligned with the alt-rightunder the management of former executive chairman Steve Bannon, who declared the website “the platform for the alt-right” in 2016.
In 2016, Breitbart News became a virtual rallying spot for supporters of Donald Trump’s 2016 presidential campaign.
The company’s management, together with former staff member Milo Yiannopoulos, solicited ideas for stories from, and worked to advance and market ideas of,neo-Nazi and white supremacist groups and individuals.
After the election, more than 2,000 organizations removed Breitbart News from ad buys following Internet activism campaigns denouncing the site’s controversial positions.
If you’re misogynistic, xenophobic, and racist, you’ll love Breitbart. If you fall for conspiracy theories and intentionally misleading stories you’ll be an avid reader of Breitbart.
That said, the following Breitbart article makes some interesting points:
Today’s Top Stories From the Breitbart News Desk – Alex Marlow & John Carney Breitbart News Network
President Biden on Wednesday released the outline of his enormous $2 trillion tax and spending bill. It comes wrapped in the packaging of an infrastructure bill, but only a fraction of the bill is for rebuilding infrastructure as it is commonly understood.
Virtually all large bills passed by Congress contain a variety of laws, some of which do not match the ostensible “main purpose” or title of the bill. This is the norm that Breitbart is trying to spin into a crisis.
It gives politicians nightmares because it forces them to vote for things they don’t like in order to vote for things they do like.
A benign bill to aid widows and orphans may also contain a paragraph supporting wife-beating. The politician can vote against widows and orphans or for wife-beating. Either way will subject him to criticism from across the aisle.
This Hobson’s choice is, however, a fact of politics. It gives the opposition something to carp about.
By some estimates, the corporate tax hikes are three times the size of the 2017 corporate tax cuts. They would return the U.S. to the highest statutory rate in the developed world. The OECD average is 23.59 percent.
Yet corporate America—which has become increasingly vocal on leftwing issues—has barely objected.
The CEO of Delta feels free to attack Georgia’s voter integrity laws but has not spoken up against this enormous tax hike.
Breitbart attempts to create hypocrisy when there is none. The Georgia voter laws have nothing whatsoever to do with federal tax hikes.
The real hypocrisy is that Breitbart even compares them, and in the same sentence.
There are at least three reasons for this silence.
One, our biggest corporations do not pay the statutory rate. That’s for the suckers with small businesses and without armies of lawyers and lobbyists.
Second, corporate executives are rewarded for outperforming other executives. So long as everyone’s tax rate moves in the same direction, there’s not much to object to. In fact, high taxes with lots of loopholes are best for corporate leaders.
Importantly, there is so much spending in this bill that it easily dwarfs whatever paintax hikes might inflict. There is $174 billion to subsidize electric vehicles and the related charging infrastructure, more than enough to buy off the compliance of automakers.
The deeper purpose of this bill is to remake the economy, with the government playing a much larger role in almost every aspect of business and employment.
Giving corporations tax cuts (which is what the GOP did during the Trump administration) is overall financially the same as the federal government buying more goods and services from the private sector.
In either scenario, the entire economy as a whole receives more net income, courtesy of the federal government. The difference lies in which part of the economy receives the money, i.e. the rich or the poor.
Breitbart does not want you to realize that it approves of giving money to the rich while deriding payments that help the poor.
As the Wall Street Journal explained, the spending program “would reverse Reagan-era tacit understanding that public sector is less efficient than the private in allocating resources.”
Big government, in short, is not just back—it’s going to be everywhere if this bill passes.
The notion that big business is more efficient than big government, is a widespread belief that never has been substantiated.
From an organizational standpoint, businesses have a profit motive, and governments have an election motive. Businesses function to increase profits and executive compensations, while government agencies function to accomplish the agencies’ goals and politicians’ re-elections.
The profit motive and election motive both compel actions in direct conflict with “efficiency” and with honesty.
Big businesses and big government are composed of people, each of whom has their own desires, fears, and motives, that may not directly align with the presumed motives of the business or government agency.
There is nothing implicitly wrong with a big nation having a big government. “Big” is not a disadvantage, whether referring to businesses or governments.
In fact, even the term “big” has different definitions, depending on the context.
“Big” can mean number of employees. “Big” can mean amount of income. “Big’ can mean amount of spending.
When talking about “big government,” are Breitbart and others who lean Libertarian, concerned about the number of employees or the amount of spending?
In truth, they should be concerned about neither.
Presumably, the fear related to “big government” should be about an overpowering, ruthless, lying, dictatorial government, that is concerned only with the welfare of the rich, and cares nothing for the middle-classes and despises the poor (Think Trump).
But that has nothing to do with the number of government employees or with the amount of government spending. It has to do with the quality of leadership and with the laws they pass.
“Big government” is a phony bogeyman used by Libertarians and the right-wing attempt to scare voters into accepting less service from the federal government.
In that vein, we bring you this headline from the Libertarian site, REASON:
Someone should mention to Mr. Moore, that “paid for by users” adds no stimulus money to the economy, and federal taxes, which deplete the private sector’s money supply, pay for nothing.
But infrastructure projects that are paid for by federal spending add stimulus dollars to the economy, and therefore are indeed an economic boost.
This is no reason why $2 trillion may be too much to add to the economy, and it very well may prove to be too little.
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:
#Monetary Sovereignty - Mitchell 