Why is the vast majority of the public so ignorant about even the most basic elements of economics?
Why do people believe the federal government, Medicare, and Social Security are running short of dollars?
Why does the harmful and financially ignorant debt ceiling persist?
Why is there poverty in America? Why is there so much street crime?
Why do the rich grow richer while the poorer fall further behind?
The wrong answers to all these questions stem from what is taught in our schools, by our so-called thought leaders.
Just as religious leaders teach from never-changing bibles, too many economics professors teach from never-changing assumptions.
But, what may be acceptable for religion is unacceptable for science.
Surprisingly few economics professors are willing to learn, understand, or teach the following facts.
- Financial debt is money, and money is debt. They are two sides of the same debt/money “coin.”
- Eliminating debt means eliminating money, which always is a recessionary/depressionary economic plan. GDP growth (by formula) requires debt/money growth. (GDP=Federal Spending + Non-federal Spending + Net Exports.)
- Gap Psychology dictates that the rich get richer (widen the Gap) not only by increasing their ownership of debt/money, but by reducing the not-rich’s ownership of debt/money.
- Federal “debt” is not debt, but rather it is deposits into privately-owned T-security accounts. The Treasury does not use those dollars. The accounts are paid off simply by returning their balances to the account owners. No tax dollars are involved. Thus misnamed federal “debt” is not a burden on the government or on future taxpayers.
- The federal government is Monetarily Sovereign. It has the infinite ability to create dollars. Thus, it does not borrow dollars. It accepts deposits into T-security accounts, the purposes of which are not to provide spending funds, but rather to stabilize the dollar and to help the Fed control interest rates.
- For the same reasons, federal taxes do not fund federal spending. Even if all federal tax collections totaled $0, the federal government could continue spending, forever. Federal taxes are destroyed (i.e. cease to be part of M1 or any other money supply measure) the instant they are received by the Treasury. That is why no one can answer the question, “How much money does the Treasury have?” The best answer is, “Infinite,” which remains “infinite” whether or not tax dollars are received.
- The purpose of federal taxes is not to provide spending funds, but rather to control the economy by discouraging what the government doesn’t like and encouraging what it does like.
- The income/wealth/power Gap is what makes the rich rich. Without the Gap no one would be rich; we all would be the same. The wider the Gap, the richer are the rich. The best way to narrow the Gap between the rich and the rest is for the federal government to provide benefits to the rest, which the federal government has the infinite ability to do.
- Street crime is a function of poverty. The best way to reduce street crime is not via increased policing, but rather by reducing poverty.
- There is no public benefit to private ownership of banks. All banks should be nationalized.
- Federal spending is not socialism. Federal ownership (as with, for instance, VA hospitals and national highways is socialism.)
- No inflation in history has been caused by “excessive” federal spending. All inflations are caused by shortages of key goods and services, most notably shortages of food, energy, and labor. Federal spending actually can eliminate inflation by increasing the availability of the scarce goods and services.
Where does all the misinformation come from? It begins with, and is promulgated by, the “experts,” the economists.
Blame the incurious, intellectually lazy economics professors, who do not question what they were taught in college, but rather parrot it to their students, who continue the endless circle. Add to those pejoratives the word “greedy,” since this all is financed by the rich as a way to widen the Gap.
Thus today, we continue to see the same old misguided, disproven worries about federal “debt” and federal deficits, federal government “insolvency,” benefit “unaffordability,” government spending as a cause of inflation and “socialism,” and the false need for federal taxes to finance federal spending.
Remember all of the above as today, you hear the specious arguments about the “debt ceiling,” exacerbated by the stubborn partisanship that could crash the American economy and the economies of the world.
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.
One thought on “Who is to blame for the endless failure of economics.”
We can always find money for Daddy War Bucks if we say, ostensibly, it’s about “freedom from foreign enemies.” That argument has come full circle. Remember who was dead set against FDR’s New Deal, and who hustled an apolitical Eisenhower to become a Republican, and then strongly advised him to dismantle the New Deal once he became president, and are still trying to do so to this day. Now 70 years later we’re fighting the GOP again as a domestic enemy. Now those huddled GOPhers in Congress must choose between blind loyalty to liars or loyalty to their conscience. Ironically, they’ll fearfully choose liars and lying,
So what if the liars win big in ’22 and ’24? You can then add that final straw to the list of growing problems on Atlas’ shoulders…and there’s no “Eisenhower” savior that I can see.
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