Point by point, why you should receive federal benefits and not have to pay federal taxes.

    1. In the beginning, there was no money. Money does not exist in nature. Money is the creation of a  human Issuer, who creates the laws and rules that create money.

      IRS Form 1040 - The CT Mirror
    2. In the millions of years preceding 1776, there were no U.S. dollars. Then in the 1780s, the U.S. federal government created laws from thin air and those laws created U.S. dollars from thin air.
    3. The government created as many laws and dollars as it wished, and gave the dollars the value it wished. This was completely arbitrary and under the absolute control of the U.S. government.
    4. Subsequently, the U.S. government has continued to create as many laws and dollars as it wished, from thin air, and continue to give the dollars whatever value it wished.
    5. There are many forms of money in addition to U.S. dollars: Canadian dollars, Australian dollars, British pounds, Chinese Renminbi, Euros, Japanese Yen, Mexican Pesos, Monopoly dollars, Bitcoin, etc. — all of which are created by laws and rules.
    6. The laws and rules are arbitrary. They are the blueprint for money. The Issuer of money has the infinite power to create laws and rules in any form he chooses. The Issuer never can run short of laws and rules.
    7. Thus, the Issuer of money can create as much or as little money, in any value he chooses, and in any form he chooses.
    8. Because laws and money are arbitrarily created from thin air, they have no physical presence. You cannot see, feel, smell, taste, or hear laws or money. They exist only as abstractions. Lawbooks and dollar bills only represent laws and money, but they themselves are not laws and money.
    9. Because laws and money are merely arbitrary abstractions, the Issuer never can run short of his own laws and money. The federal government has the infinite power to issue laws and money.
    10. Having the unlimited ability to create his own sovereign money, the Issuer of money does not need taxes or borrowing to supply him with his own money. Because the U.S. government is the Issuer of U.S. dollars, it cannot unintentionally run short of dollars and does not need taxes or borrowing to obtain spending dollars.
    11. Gross Domestic Product (GDP) is the economic measure of an economy. The formula is: GDP = Federal government spending + Non-federal spending + Net exports.
    12. A growing economy requires a growing supply of money. By formula, reduced federal spending or non-federal spending is recessionary, and so shrinks the size of the economy.
    13. The federal government, having the unlimited ability to create dollars, has the unlimited ability to grow the economy.

      Recessions (vertical gray bars) come when federal debt growth (red line) declines. Recessions are cured by increases in federal debt growth.
    14. Any entity can be an Issuer of money. Any person, any nation, any business, any human organization arbitrarily can create money in any form it wishes and in any amount it wishes, and give it any value it wishes.
    15. Coupons represent money created by businesses. Chips represent money created by casinos. Tickets represent money created by entertainment venues.
    16. Businesses, casinos, entertainment venues, etc., have the infinite ability to create their own sovereign currency.
    17. You too have the unlimited power to create unlimited amounts of money, call it anything you wish, and give it any value you wish.
    18. Money is a debt of its Issuer, who owes the User of its money whatever its arbitrary laws and rules specify.
    19. All debt requires collateral.
    20. The primary collateral for money is the full faith and credit of the Issuer.
    21. The acceptance of money is based on the perceived value of its collateral.
    22. If you were to create, for instance, “Mybucks” as your chosen form of money, “Mybucks” will be used and accepted by those who value your full faith and credit.
    23. You could create all the laws and rules regarding “Mybucks” and give “Mybucks” any value you choose and create them in any amount you choose.
    24. As the Issuer of “Mybucks,” you never could run short of “Mybucks,” nor would you need to borrow or tax anyone to obtain “Mybucks.”
    25. As the Issuer of U.S. dollars, the U.S.  government does not need to levy taxes to obtain dollars. Just as the U.S. government cannot unintentionally run short of dollars, no agency of the U.S. government can unintentionally run short of dollars.
    26. Social Security and Medicare are agencies of the U.S. federal government. As such, Social Security and Medicare, and every other federal government agency cannot run short of U.S. dollars unless the U.S. government wishes it.
    27. Contrary to popular myth, these agencies are not supported by taxes, but rather by the laws and rules of the U.S. government. Any time you hear or read that Social Security and Medicare are running short of money, know that is not true.
    28. Though FICA taxes ostensibly are collected to support Social Security and Medicare, the federal government has no use for those, or any other, taxes. The dollars you send to the government are destroyed upon receipt.
    29. Tax dollars are sent from checking accounts as part of the M1 money supply. Upon arrival at the U.S. Treasury, they cease to exist as part of any money-supply measure. Instead, the federal government pays for Social Security, Medicare, and all other initiatives by creating new dollars, ad hoc.
    30. The same can be said of federal “debt.” The federal government never unintentionally can fail to pay what it owes. Even if the federal debt totaled hundreds of trillions of dollars, the federal government easily could service it or pay it off today.
    31. The misnamed federal “debt” actually is the total of all deposits into Treasury Security accounts. When you buy a T-bill, T-note, or T-bond, you open your T-security account and deposit money into it.
    32. The federal government never takes dollars from your T-security account, though it does deposit interest dollars into that account.
    33. The purpose of T-security accounts is not to provide the federal government with dollars: Instead, these accounts (misnamed “borrowing” or “debt”) provide a safe, interest-paying parking place for unused dollars, and to help the Federal Reserve control interest rates.
    34. The sole financial purpose of federal taxes is not to fund the federal government but rather to help the government control the economy. The government taxes what it wishes to discourage and gives tax breaks to what it wishes to encourage.
    35. This leads to the question: Why does the federal government tax salaries and business profits? Does it wish to discourage salaries? Does it wish to discourage business profits?
    36. The secret purpose of federal taxes is to discourage the public from asking for benefits, by telling the people that the Social Security and Medicare agencies cannot afford to pay benefits without a tax increase.
    37.  Why does the federal government wish to discourage the public from asking for the benefits the federal government easily can fund without levying taxes? The reason has to do with the rich, who run the government, and with “Gap Psychology.”
    38. “Rich” is a comparative term, not an absolute term. Someone having $100 would be rich if everyone else had $1, but someone having $1,000 would be poor if everyone else had $10,000.
    39. The differences between richer and poorer are the “Gaps.” The wider the Gaps, the richer or poorer a person is.
    40. If you are rich and wish to be richer, you must widen the Gap between you and those who have less than you and narrow the Gap above you.
    41. There are two ways to accomplish this: Either obtain more money for yourself or force those below you to have less money.
    42. The desire to widen the Gap below you and to narrow the Gap above you is known as “Gap Psychology.”
    43. Convincing the poor not to demand increases in Social Security, Medicare, and other social benefits is one way to widen the Gap below you, i.e. to make yourself richer.
    44. This is why the rich have bribed our politicians, our media, and our economists — your primary sources of economic information — to tell you falsely that taxes are necessary to fund such federal agencies as Social Security, Medicare, and all aids to the lower-income groups.
    45. The rich bribe politicians via political contributions and promises of lucrative employment, later.
    46. The rich bribe the media via ownership and advertising revenue.
    47. The rich bribe the economists via contributions to universities and promises of lucrative work for think tanks.
    48. When shown that federal government spending is not constrained by tax collections or any other availability of money, the retort often is “But that would cause inflation.” It is an insidious half-truth that does not reflect reality.
    49. Using January 1, 1947 as a base, in the 73 succeeding years, the federal debt has increased to 6,945 (69-fold) while inflation has increased only to 1,150 (11-fold).
      While federal debt (red line) has increased massively, inflation (blue line) has increased moderately.

      From the end of the “Great Depression of 2008-2009, the comparison between federal debt and inflation is even more startling:

      A massive increase in federal debt has been coincident with only a modest increase in inflation — below the Fed’s target of 2% annually.
    50. Over a multi-year time period, there is no relationship between federal deficit spending and inflation. But even on an annual basis, the lack of a relationship is clear:

      The red line (changes in federal debt) does not correspond with the blue line (changes in inflation).
    51. Yet another excuse used by the rich, to prevent the rest from receiving federal benefits is, “If given money and benefits, the middle-class and the poor will refuse to work.”
      This promulgates the false belief that the lower-income groups are congenitally lazy and do not have the same desires for advancement as do the rich.
    52. But what the rich really mean is, “If given money and benefits, the lower-income groups will refuse to work in the unpleasant jobs we offer, for the slave wages we pay.”
    53. The rich do not want to admit that “There but for the grace of God, go I,” and how much a role luck plays in the accumulation of wealth — the luck of being born to wealthy parents, the luck of being in the right place at the right time, the luck of being sent to the right college or working in daddy’s business.
    54. This denial is due to Gap Psychology, the overriding desire to distance oneself from those below on the social scale and to come closer to those above.

    In Summary
    The federal government has the unlimited ability to fund all social programs. It can do so without collecting taxes, without borrowing, and without causing excessive inflation. The rich hide this fact in order to grow richer by widening the Gap between the rich and the rest.

    Thus, all the excuses for not implementing social programs are based on false propaganda promulgated by the rich and accepted as fact, by the rest.


    Rodger Malcolm Mitchell

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


    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.


15 thoughts on “Point by point, why you should receive federal benefits and not have to pay federal taxes.

  1. Brilliant Rodger. Absolutely brilliant. Everything you need to know about Monetary Sovereignty in one blog post. Thanks! I’ll be reposting.


      1. It is amazing Rodger and it is its simplicity that causes people not to believe it initially. Even those who believe in it (like Zen below) still believe in the frame that all poor people are lazy and will be satisfied living on a “basic” amount of money.


        1. The right-wing promulgates the notion that while “we” (upper class, superior beings) are motivated to be great and to do great things, “they” (lower class, inferior beings) are sloths, satisfied to lounge about, collecting federal minimum benefits.

          Thus we are force-fed the picture of “Food-Stamp Momas” as lazy wretches, though in fact, unmarried women with children generally struggle just to survive, working much harder than the supercilious masters of the universe.

          Compassion for the poor is sorely lacking in America, and probably in most other places. There, but for the grace of God, go I.


  2. It can’t be more clear than this. Thanks Rodger.

    Question is, how do we maintain the productive capacity of our economy if all the basic needs (food, clothing, shelter, health, education) of every man woman and child is guaranteed or subsidized by the federal gov’t.


      1. Ok, so if I have the money courtesy of our federal gov’t to afford me the provision of my food, clothing, shelter etc., what would persuade me to still report to my 9 to 5 work at, say, a food processing facility?

        In other words, why would I still bother to contribute my labor in the production of goods and services (where my boss is an inveterate slave driver anyway) if I have all the money needed to sustain my basic needs?

        What would motivate me to become a goods producing member of our community/society/country?

        Should wage labor be replaced by voluntary work?

        If so, how do we ensure that the bread, candies, meat, and electronic gadgets we consume continue to roll out from our factories?


          1. The motivation to report to my 9 to 5 job to avoid starvation and immediate threat of homelessness is probably greater than the motivation to report to the same job in order to afford a vacation in the Maldives or continue my membership at a Golf and Country Club.


          2. Human behavior, such as it is, cannot be quantified in a uniform spectrum. Different folks, different strokes. It would be rather difficult to predict the motivational behavior of millions of individuals comprising our population. There are currently something like 143 million Americans employed across different sectors that make up the economic engine of goods and services production. How many of them will report back to work once we have instituted the guaranteeing of their existential needs is anybody’s guess.

            In such a situation the best possible outcome perhaps is for employers, assuming affordability, offering better wages and benefits.


  3. Guaranteed income, no strings attached, has been tried in Stockton California and was recently televised. People given $500/month do better with respect to overall health and don’t quit work. Their outlook on life is also improved. People do not want something for nothing, nor are lazy.
    A world of guaranteed income would produce a world of good workers thankful to a system that truly cares for them. No way would they bite the hand that feeds.


    1. California is monetarily non-sovereign, so taxpayers would be funding this. I firmly believe in GI, or what I prefer to call it, “Social Security for All” (Step 3 of the 10 Steps), with funding by the federal government, so taxpayers are not punished.


  4. In this particular case, taxpayers were punished a little, but we all found out the truth; a worthwhile investment as an experiment in human nature. The super rich are wrong. The masses care about the whole system, while the super rich are into it for themselves. They fear the truth as well as their loss of control and upper class status, even though they’ll suffer no monetary loss. The bottom is raised without touching the top.


  5. Gap Psychology: The super-rich don’t lose dollars. In fact they gain dollars, when the not-rich purchase more from the businesses the super-rich own.

    However, to the degree the Gap would be narrowed, the super-rich would become less RICH.


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