Those who understand Monetary Sovereignty are familiar with these basics:
- The federal government, being Monetarily Sovereign, has the unlimited ability to create its sovereign currency, the U.S. dollar.
- Thus, unlike state and local governments, which are monetarily non-sovereign, the federal government cannot unintentionally run short of U.S. dollars.
- The federal government pays for all its spending by creating new dollars, ad hoc.
- It creates dollars by sending instructions, (“Pay to the order of”) to each creditor’s bank, instructing the bank to increase the balance in the creditor’s checking account.
- The instant the bank obeys those instructions, new dollars are created and added to the M1 money-supply measure.
- So, even if all federal tax collections ceased, the federal government could continue spending, forever.
- In fact, no form of income, whether taxing or borrowing, provides spending dollars to the federal government.
- Tax dollars sent to the federal government leave the economy. They leave the M1 money-supply measure and effectively are destroyed upon receipt.
- The purpose of federal taxes is to control the economy, by taxing what the government wishes to discourage, and by giving tax breaks to what the government wishes to encourage. That is why the very rich, who own Congress and the President, are given such generous tax breaks that the richest pay little or no taxes at all.
In essence, you might as well throw your tax dollars into a bonfire, for all the good they do to prevent federal government insolvency.
In return for your obeying the law, the Treasury does you the service of throwing your dollars into that federal bonfire, so you don’t have to bother.
The Committee for a Responsible Federal Budget (CRFB), in bemoaning the lack of tax-payment compliance in America, has published the following graph.
Presumably, the graph is meant to make you feel outrage about so many people having refused or neglected to throw their dollars into the IRS bonfire.
In reality, the outrage you feel should be directed at the politicians and groups like the CRFB.
They are the ones who claim that the federal government either can’t afford to, or must raise taxes to, provide free Medicare for All, Social Security for All, College for All, reduced carbon emissions, improved infrastructure, air, water, and land, narrowed Gap between the rich and the rest, etc.
The U.S. Congress, having unlimited disposable dollars, could and should be doing so much more to improve your life.
Instead, they argue about whether spending by the federal government has exceeded the government’s “means” (It has no “means” to exceed), or whether federal spending is “socialism” (It isn’t), or whether the poor will refuse to work if given financial aid (They won’t refuse if the aid is on top of, rather than instead of salaries).
President Richard Nixon, a Republican, gave us Monetary Sovereignty by eliminating the last gold standard, so it is a special disgrace that the current Republican Party now refuses to use the most valuable asset any nation can have: Unlimited money.
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:
- 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.