There is a much bigger lie than “Trump won the election.”

The lie that the election was stolen from Donald Trump is pretty big. Still, it’s a lie that was started by “30,000+ Lies Trump,” promulgated by Fox News, QAnon, and other lying sites, and is believed only by the increasingly ignorant and twisted MAGA crowd.

By contrast, there is a really, really BIG LIE that began at least in 1940 or earlier, a lie promulgated by virtually every news medium, politician, and economist in America, and a lie that is believed by possibly 99% of everyone.

We refer to the BIG LIE that:

  1. Federal financing is like personal, business, and state/local financing
  2. The federal government can run short of dollars.
  3. Your federal taxes fund federal spending.

One of the prominent purveyors of that BIG LIE is the Committee for a Responsible Federal Budget (CRFB). The lies which we have quoted many times on this site.

Here is what they say now on their own site:

Why High and Rising National Debt is a Problem

High and rising national debt will threaten economic growth and the standard of living for all Americans. High debt will slow the growth of the economy and wages.

As debt rises, higher interest payments will crowd out important investments in areas like education, infrastructure, and research that can help grow the economy.

Getting the debt under control once the crisis is over will be very beneficial for generations to come, from higher wages to increased investment to lower borrowing costs for families and businesses.

The Congressional Budget Office predicts that the economy will grow faster with debt on a declining path as opposed to a rising one.

Every single sentence in the above quote is a CFRB lie, with the possible exception of the last one. That one, if true, would be a Congressional Budget Office lie.

Let’s go through the lies, point by point.

“High and rising national debt will threaten economic growth” and “slow the growth of the economy.”

Wrong: Economic growth generally parallels federal deficit spending (aka “national debt,” except during recessions when debt increases to cure the recession.

The reason for the parallel is quite simple. Federal deficit spending adds dollars to the economy, and dollar growth yields economic growth. A growing economy requires a growing supply of dollars.

As federal debt (red) rises, Gross Domestic Product (blue) rises.

And as for the national debt “slowing the growth of wages,” it simply isn’t true. It’s just a part of the Big Lie.

Wage growth generally parallels federal deficit spending growth.

Adding dollars to the economy doesn’t slow the growth of the economy or of wages. Instead, federal debt growth stimulates economic growth.

Moving on to the next LIE: 

“As debt rises, higher interest payments will crowd out important investments in areas like education, infrastructure, and research that can help grow the economy.”

Translation: The federal government has only a limited amount of money, so spending on interest payments reduces the amount the government can spend on other things.

This lie assumes the federal government is like you and me, businesses, and state/local governments. It isn’t. The federal government uniquely is Monetarily Sovereign. A Monetarily Sovereign entity has the unlimited ability to create its own sovereign currency. It never unintentionally can run short.

Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”

Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

Quote from former Fed Chairman Ben Bernanke when he was on 60 Minutes:
Scott Pelley: Is that tax money that the Fed is spending?
Ben Bernanke: It’s not tax money… We simply use the computer to mark up the size of the account.

Statement from the St. Louis Fed:
“As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.”

Press Conference: Mario Draghi, President of the Monetarily Sovereign ECB
Question: I am wondering: can the ECB ever run out of money?
Mario Draghi: Technically, no. We cannot run out of money.

Not only do federal interest payments not “crowd out” other investments, but by adding dollars to the economy, federal interest payment increase the private sector’s ability to invest in “education, infrastructure, and research that can help grow the economy.”

Now for the next lie:

“Getting the debt under control once the crisis is over will be very beneficial for generations to come, from higher wages to increased investment to lower borrowing costs for families and businesses.”

Translation: “Getting the debt under control” requires reducing the federal debt or at least reducing the size of deficits. Here is what happens when we reduce the federal debt:

U.S. depressions tend to come on the heels of federal surpluses.

1804-1812: U. S. Federal Debt reduced 48%. Depression began 1807.
1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819.
1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837.
1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857.
1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873.
1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929.
1997-2001: U. S. Federal Debt reduced 15%. Recession began 2001.

Here is what happens when we reduce the federal deficit:

Each recession was preceded by reductions in federal deficit growth. Recessions are marked by vertical gray bars.

The only part of the CRFB’s statement that sometimes can approximate fact is: “. . . lower borrowing costs for families and businesses.”

The CRFB is confusing interest paid with interest rates. Although increased federal debt will increase total federal interest paid, it does not equal interest rates.

It is a rise in interest rates that increases borrowing costs.

There is no relationship between changes in federal debt (red) and interest rates (blue).

Interest rates do not just happen. They are set arbitrarily by the Federal Reserve.

The peaks and valleys do not match. In fact, a case might be made for an inverse relationship.

We’ll end with the final lie, this one supposedly from the CBO:

The Congressional Budget Office predicts that the economy will grow faster with debt on a declining path as opposed to a rising one.

Translation: “Debt on a declining path” requires federal surpluses. But we already have seen that federal surpluses beget depressions. The statement attributed to the CBO is diametrically wrong.

IN SUMMARY

The claim that Donald Trump won the most recent Presidential election is a big lie. Still, it pales compared to the really BIG LIE that has affected us since at least 1940, and probably before: The lie that federal deficits and debt should be reduced.

The BIG LIE is not promulgated by ignorance. It has a purpose, which is to widen the income/wealth/power Gap between the rich and the rest. If there were no Gap, no one would be rich. We all would be the same. The wider the Gap, the richer are the rich.

So the rich who run America try to widen the Gap by convincing the public that the federal government can’t afford to give them benefits (the same benefits the rich already receive.)

It’s the ultimate con job. It’s the BIG LIE.

Rodger Malcolm Mitchell
Monetary Sovereignty

Twitter: @rodgermitchell Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

MONETARY SOVEREIGNTY

7 thoughts on “There is a much bigger lie than “Trump won the election.”

  1. I’m not a Republican, I’m not a Qanon and I watched the poll workers take me and my wife’s ballot out of the sleeve and look at who we voted for and I believe Biden stole the election. We complained about it and nothing happened. I thought it was supposed to be a secret ballot?

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    1. So you saw what you believe to be someone looking at your ballot, and on the basis of that, you think Biden stole the election?

      You ignore Trump’s 50 losing lawsuits in which the claim was investigated 50 times, and you ignore the repeated recounts that found no evidence of widespread stealing?

      You also ignore the fact that Biden won the popular vote by more than 7 million?

      Instead, you believe the unsupported claims of a proven liar (35,000 documented lies), convicted tax-evader, draft-dodger, who cheated on three wives, cheated lenders, cheated students of his fake Trump U., hired illegal aliens to build his casinos, and cheated them out of their wages?

      That’s your source of information other than QAnon and Fox News?

      You are a perfect MAGA.

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      1. No, my wife and I watched the women, right in front of our faces (no “”I thought” involved), pull both of our ballots out of the sleeve because she took them out of our hands before we were able to slide them into the ballot box, and looked at them. And no, I’m not a Trump supporter, and no, I don’t watch Fox News or CNN, or any of the other “news” trash on TV. Maybe you shouldn’t trigger so easily when someone tells you what happened to them at the polls? It wasn’t my fault. I didn’t do anything wrong. And maybe you shouldn’t make assumptions without knowing the facts before accusing someone else about where they got their facts from? You proved just by your statement why our country is in the state it’s in. Triggered people like you. Exactly the reason I’m no longer a Democrat! It’s not a political party, it’s a mental condition. Personally, I think Trump AND Biden are flip sides of the same coin.

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  2. I see. You’re “not a Trump supporter.” But, you “watched a poll worker take your and your wife’s “ballot out of the sleeve and look at who we voted for”

    So on the basis of that one woman, you “believe Biden stole the election.”

    And you don’t watch “news trash on TV.” And you hate triggered people. And you’re not a Democrat.

    Got it. You don’t make assumptions. So where did you get the information that didn’t trigger you but convinced you Biden stole the election? And exactly what was the information that didn’t trigger you to believe something Trump told you?

    Oh, and by the way, Trump and Biden are not “flip sides of the same coin.” I’ll only agree with you when Biden:
    –leads an insurrection against the U.S. government
    –refuses a peaceful transfer of power and disregards the life of his own vice president
    –creates a fake university to cheat students
    –creates a fake foundation to cheat on his taxes
    –cheats lenders to his casinos
    –hires illegal immigrant workers for his casinos
    –cheats those illegal workers our of their wages
    –cheats on three wives and repeatedly beds hookers
    –tells more than 35,000 lies during his Presidency
    –gets kicked off social media for lying too much
    –claims COVID is only the common cold, and delays taking action, which causes hundreds of thousands of US deaths
    –steals classified documents and hides them in his house
    –repeatedly denies he even has the documents, despite repeated requests to return them
    –installs his unqualified children in important US government jobs
    –one of his kids receives $2 BILLION from the Saudi government as a bribe
    –spends most of his time as President playing golf, rather than keeping abreast of reports prepared for him
    –illegally goes on TV to sell a brand like Goya
    –surrounds himself with convicted criminals
    –hires total incompetent sycophants to run federal agencies
    –attempts to take healthcare insurance from the poor
    –attempts to outlaw all abortions, including jailing doctors for performing them
    –gives tax breaks to the rich while claiming the government can’t afford benefits for the poor
    –boasts about being the greatest at everything and denies fault for anything
    –writes a script for a doctor to say he’s in the best physical condition of any previous President
    –uses a sharpie to lie that a hurricane was going where the weather service said it was not.
    –buries his former wife on his golf course so he can claim the course is a cemetery for tax purposes
    –foments bigotry against blacks (from “shithole countries”)
    –claims Mexicans are rapists
    –foments bigotry against gays
    –foments bigotry against Muslims

    When Biden does all those things, I’ll agree he and Trump are “flip sides of the same coin.”

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  3. Big lie since at least 1940: Would imagine Henry Hazlitt had a hand in starting it. https://en.wikipedia.org/wiki/Economics_in_One_Lesson

    From 1934 to 1946, Hazlitt was the principal editorial writer on finance and economics for The New York Times, writing both a signed weekly column and most of the unsigned editorials on economics, producing a considerable volume of work. Following World War II, he came into conflict with Arthur Hays Sulzberger, publisher of The New York Times, over the newly established Bretton Woods system which created the World Bank and the International Monetary Fund. Hazlitt opposed the Bretton Woods agreement, primarily fearing the risk of inflation. After agreeing not to write on the topic, he looked for another venue for his work, deciding on Newsweek magazine, for which he wrote a signed column, “Business Tides”, from 1946 to 1966.

    According to Hazlitt, the greatest influence on his writing in economics was the work of Ludwig von Mises, and he is credited with introducing the ideas of the Austrian School of economics to the English-speaking layman. https://www.hazlitt.org/e-texts/wisdom/ch19.html

    Surely RMM remembers Hazlitt [1894-1993]: “In 1981, President Ronald Reagan in his speech before the Conservative Political Action Conference (or “CPAC”) named Hazlitt as one of the “[i]ntellectual leaders” (along with Friedrich Hayek, Ludwig von Mises, Milton Friedman, Russell Kirk, James Burnham and Frank Meyer) who had “shaped so much of our thoughts…”

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