Politics is a unique system by which pigeons and dupes demand to give their money and trust to crooks, liars, and hypocrites.
In one sense, medical doctors should appreciate illness, for without illness the doctors would have no jobs.
Similarly, teachers should appreciate ignorance, police should appreciate crime, and firefighters should appreciate fire.
And, by the same logic, I appreciate the CRFB (Committee for a Responsible Federal Budget) for spreading disinformation. Without the economic ignorant, I would have no reason to write this blog.
Here is the latest example from my favorite doofi.
Though most COVID relief has already been spent, several policies continue to provide ongoing financial support and could be renewed again by Congress or the President.
In particular, the federal government continues to offer increased payments to Medicare providers, forbearance for student loan borrowers, and an enhanced Medicaid matching rate(a form of aid to states).
Get it? The CRFB wants to cut federal support for Medicare, students, and Medicaid, all of which benefit those who are not rich.
Though some spending to specifically address the pandemic may still be warranted, policymakers should wind down these COVID relief policies rather than continuing to extend them.
In this piece, we show that continuing these three policies would be:
Costly – the policies would cost a total of $160 billion in 2022 if continued and roughly $2 trillion over a decade if made permanent, based on our estimates.
Unjustified – the economy is saturated with demand, household incomes are well above pre-pandemic levels, the unemployment rate is near historic lows, hospital finances are strong, and state governments are flush with cash.
Inflationary – the policies would be responsible for adding 14 to 68 basis points (0.14 to 0.68 percentage points) to this year’s inflation rate if in effect for the full year, based on our estimates.
Let us analyze the three lies:
The CRFB objects to the federal government pumping 160 billion growth dollars into the economy this year, and $2 trillion over 10 years. (Not sure how that math works.)
Those are dollars that could narrow the Gap between the rich and the rest, a Gap which the CRFB apparently is paid to widen.
Because the federal government has the infinite ability to create dollars, the word “costly” does not apply. Nothing is “costly” for the federal government.
The federal government creates dollars by spending. That is the method by which the federal government creates its own sovereign currency, not with a printing press but with a computer key.
When the government pays a creditor, it sends instructions to the creditor’s bank, instructing the bank to increase the balance in the creditor’s checking account. (“Pay to the order of”).
When the bank does as instructed, it the M1 money supply measure increases. In short, federal spending creates the dollars ad hoc, that pay for the spending.
Unlike you and me, and unlike state and local governments, the federal government cannot unintentionally outspend its supply of dollars.
Despite what you may have been told by devious politicians, the federal government even could eliminate all federal taxes and still have no difficulty spending that $160 billion or $2 trillion.
Taxes do not fund federal spending. Money creation funds federal spending.
Tax dollars are destroyed upon receipt by the government. Tax dollars move from the M1 money supply measure (i.e. your checking account) to no money supply measure at all. There is no measure of how many dollars the federal government has because it has infinite dollars.
There is no specific answer to the question, “How much money does the federal government have?” At any moment in time, it has as much or as little as it wishes to have. That is the meaning of “Monetary Sovereignty.” The government is sovereign over the U.S. dollar. It creates dollars at will.
The economy is not “saturated” with demand, nor has it ever been “saturated.”
The economy is experiencing shortages, and those shortages are claimed by the CRFB to result from too much demand.
But shortages of food do not imply “too much” demand for food. (Do we really demand too much food?)
Shortages of oil do not imply “too much” demand for oil. Shortages of labor do not imply “too much” demand for labor. (Does anyone believe we “demand” too much labor?)
Shortages of computer chips and lumber do not imply “too much” demand for chips and lumber. Shortages of shipping do not imply “too much” demand for shipping.
The whole foolish concept of “too much” demand, implies that the economy is too healthy and is growing too fast.
Where was this “too much” demand during the past decade, when the federal government spent massively and inflation was very low?
“Saturated with demand” is a ridiculous notion, especially when millions of Americans still live in poverty, and millions more are unable to afford good housing, good medical care, a good education, and good food.
Because the CRFB is funded by the rich and is in fact a mouthpiece of the rich, it closes its eyes to the needs of those who are not rich.
This old saw is widely believed but unsupported by data. There is no historical relationship between federal spending and inflation.
All inflations are caused by shortages. The current inflation was not suddenly caused by the massive federal spending of the past decade.
The current inflation suddenly was caused by the sudden COVID-related shortages of oil, food, labor, shipping, lumber, etc.
The CRFB, supported by the conservative rich, promulgates the lie that to combat inflation we must cut spending to further impoverish the poor and the middle.
They tell you we must cut federal support for healthcare, education, food, housing, and retirement. These cuts would impact your life, but not the lives of the rich, who can afford the best of everything, even during recessions.
The conservatives prefer cuts that would widen the income/wealth/power Gap between the rich and the rest of us, effectively making the rich richer.
(It is the Gap that makes the rich rich, for without the Gap, no one would be rich. We all would be the same. The wider the Gap, the richer are the rich.)
That, of course, is the CRFB conservative plan: To make the rich richer.
Gap Psychology dictates that people generally wish to widen the Gap below them and to narrow the Gap above them.
This includes the rich, who always wish to be richer by widening the Gap below them.
Notice that the rich do not want to cut the military or the police or border control, for those are protections for the rich that take their orders from the rich.
In short, while every spending cut demanded by conservatives is designed to widen the income/wealth/power Gap between the rich and the rest, the few spending increases backed by conservatives are designed to reward and protect the rich.
And then there’s this:
White House officials say U.S. has exhausted funds to buy potential fourth vaccine dose for all Americans
As a congressional stalemate stretches into its third week, officials warn it will hurt pandemic readiness
By Dan Diamond, Rachel Roubein and Yasmeen Abutaleb