Stated simply, the Big Lie in economics is: “Federal taxes fund federal spending.” Suckers believe it.
The Big Truth in economics is: Federal taxes don’t fund a damn thing. In fact, they are destroyed upon receipt at the Treasury.
No federal tax dollars are spent. The federal government creates new dollars, ad hoc, to pay all its bills.
The federal government never can run short of dollars. It has infinite dollars. Even if the federal government didn’t collect a penny in taxes, it could continue to spend, forever.
To the federal government, which created the first US dollars from thin air, dollars are not physical things. They simply are numbers on balance sheets, and the government controls the balance sheets.
The government can put any numbers it wishes on those balance sheets. In short:
- The government never can run short of numbers
- The government never can run short of laws.
- The government never can run short of dollars.
If you sent $100 trillion dollars to the federal government, it wouldn’t help to pay for anything, not even one little bit.
In the letter, dated Monday, the governors wrote that they “fundamentally oppose (Biden’s) plan to force American taxpayers to pay off the student loan debt of an elite few.”
Calm down, fellow taxpayers; we won’t pay any of that student loan debt.
So why does the GOP claim it? Because they want you to help them widen the Gap between the rich and the rest of us
Note the words “elite few” in their letter? That’s part of the GOP con job. The party that gave a giant tax break to the rich wants you to believe they are all for the poor.
No, they don’t want the poor and middle classes to be able to afford college at all. They want the only people to afford college to be the “elite few.”
They create a phony culture war to make you believe the federal government can’t afford to pay for your benefits.
The rich falsely claim Social Security is going broke; Medicare is growing broke; the government can’t afford food stamps and other anti-poverty measures — and it’s all crap to widen the Gap.
Why widen the Gap? Because it’s the Gap that makes the rich rich. Without the Gap, no one would be rich, and the wider the Gap, the richer they are. Widening the Gap is a way for the rich to become richer.
The Republicans, including Texas Gov. Greg Abbott and Florida Gov. Ron DeSantis, also claimed that Biden’s plan would harm low-income families – writing, “hourly workers will pay off the master’s and doctorate degrees of high salaried lawyers, doctors, and professors. … Simply put, your plan rewards the rich and punishes the poor.”
What an ironic sham. Essentially, they say, “Federal aid to the middle and poor harms the middle and poor.” And people believe it!!
White House spokesperson Abdullah Hasan said, “These same Republican governors didn’t seem to object when their Republican colleagues in Congress passed a $2 trillion tax giveaway for the rich or had hundreds of thousands of dollars of their own small business loans forgiven.”
“While Republican elected officials try to keep working middle-class Americans in mountains of debt, President Biden is committed to delivering relief to the borrowers who need it most,” Hasan wrote in an email sent to USA TODAY Wednesday afternoon.
Hasan is absolutely correct. But so long as people believe the Big Lie that federal finances are like state and local government finances, and specifically, that federal taxes fund federal spending, the BIG LIE will continue to be told.
Federal taxes have three purposes:
- To help control the economy by discouraging what the government wishes to limit and by encouraging what the government wishes to increase.
- To provide demand value to the US dollar by required taxes to be paid with dollars.
- And the most important one: To help the rich become richer by providing tax breaks available only to the rich. (which is how billionaire Donald Trump paid less taxes than you did.)
Hey, it works. The rich keep getting richer, and the suckers keep voting against federal spending that would help them.