This is frightening. It’s a letter I just received from that notorious disseminator of misinformation, the Committee for a Responsible Federal Budget (CRFB).
Hello Rodger
With economic conditions making fiscal issues impossible to ignore, we hope there will be opportunities to improve our fiscal situation in the coming months.
This past year saw both victories and setbacks, and many policies that would have been far worse were it not for the hard work of the Committee for a Responsible Federal Budget.
Without the support of our loyal donors, none of our work would have been possible.
For the last year, we have worked tirelessly to push back against the narrative that deficits do not matter.
Actually, the narrative is that deficits do matter. Federal deficits are absolutely necessary for economic growth. Without deficits, we have depressions and recessions.
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.
The measure of our economy, Gross Domestic Product (GDP), is a spending measure, and spending requires the money that deficits provide:
GDP = Federal Spending + Non-federal Spending + Net Exports
The graph below shows the essentially parallel paths of GDP vs. perhaps the most comprehensive measure of the money supply, Domestic Non-Financial Debt:
Those “tireless efforts” of the CRFB represent efforts against economic growth and for recessions and depressions.
However, as we write this, our national debt is on track to surpass record levels, the federal government is still operating without a budget, and the major trust funds are edging even closer toward insolvency.
The “major trust funds aren’t real trust funds. They do not fund anything, and like the federal government itself, they can become insolvent only if Congress and the President want them to become insolvent.
We could eliminate those fake trust funds today, and that would have no effect on Medicare, Social Security or any other federal program.
How we tackle these challenges will not only impact our nation’s fiscal future but determine what type of country our children and grandchildren will inherit.
That is true. If we continue to worry about federal debt, deficits, and fake trust funds, our children will inherit a country ruled solely by the wealthy elite. That seems to be the goal of the CRFB.
With the fiscal future of our country hanging in the balance, we wanted to share a summary of our work with you. Because of the generosity of our donors, we achieved the following this year:
- Published more than 150 analyses, including 21 papers and testifying on Capitol Hill;
- Participated in more than 225 meetings with more than 155 Members of Congress and their staff;
- Launched our Student Debt Cancellation project and expanded our Trust Funds Solutions Initiative to include new insolvency countdown interactives;
- Hosted six virtual events with policymakers and experts on timely topics, such as Social Security and inflation, as well as in-person events engaging more than 3,000 people;
- Cited more than 1,200 times by hundreds of unique outlets, including CNBC, CNN, The Economist, Fox News, The New York Times, The Wall Street Journal, and The Washington Post.
The massive misinformation keeps coming at us from all sides, with scant voices to protest.
–Student debt cancellation not only would benefit students and not only would benefit America by educating more students. It also would benefit the American economy by pumping dollars into the pockets of Americans.
–The Trust Fund concerns are 100% fake and are a blatant attempt by the rich to reduce benefits to the middle- and lower-income groups.
None of this would have been possible without support from people like you. Will you consider supporting the Committee for a Responsible Federal Budget this year with a tax-deductible donation?
The people can spread their misinformation on a tax-deductible basis.
Your gift ensures that fiscal responsibility has a champion and a voice during key fiscal moments and debates in Washington.
Looking ahead to 2023, we hope you’ll continue following our work, attending events, and making your voice heard.
While our country faces formidable fiscal challenges, together, there is a lot we can do to meet them. We appreciate any help you can provide,
The Committee for a Responsible Federal Budget Support Our Work
Sadly, there isn’t a Committee for a Truthful Federal Budget (CRTB) that would disseminate such facts that:
- The Federal government has infinite dollars. It cannot become insolvent. Even if it collected zero taxes, it could continue spending, forever.
- Increased federal deficit spending is necessary for economic growth. The lack of deficit spending causes recessions and depressions which can be cured only by increased deficit spending.
- Federal deficit spending is not socialism. Ownership and control, not spending, are signs of socialism.
- Inflations are caused by shortages of key goods and services, not by federal debt and deficits. Inflations can be prevented and cured by federal deficit spending that targets shortages.
You and your children already suffer from the lies that reduce federal benefits. The federal government could do so much more; taxes could be so much less.
Is there anyone with the knowledge and financial resources to counter the massive misinformation campaign coming from sources like the CRFB?
Anyone?
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.
MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
Rodger – Please post a link to that Fed chart. I can’t read the small print in your image.
It’s a very interesting chart, but I’m not sure it means what you think it means. 🙂
Thanks.
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https://fred.stlouisfed.org/graph/fredgraph.png?g=p9JD
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Hi Rodger,
If you could convince Warren Buffet and/or Charlie Munger that Fed deficits are necessary. Munger has acknowledged that Japan is still a civilized nation in spite of high deficit government spending. 🙂
I don’t really think gap psychology is a valid complaint. They just believe
the big lie and the trickle down economy.
They blame the cycle of poverty on Fed spending ie President Johnson’s great society. Fed regulations ie gun control anything that interferes with states rights personal rights.
Thanks, Penny
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https://www.cnbc.com/2022/12/05/supreme-court-tackles-biden-student-loan-plan.html How is this illegal and other write-offs by the Federal Government aren’t?
The Pandemic Response Accountability Committee (PRAC) tracks how pandemic relief funds, including PPP loans, are used. Its most recent update on PPP loans was posted on Aug. 24, 2022.
More than 10 million out of 11.5 million loans issued had been partially or fully forgiven as of July 4, 2022, according to the PRAC. The committee also found that the average amount of loan forgiveness was $72,500 – over $50,000 more than the maximum amount of student loan forgiveness.
Also, while I am thinking about it didn’t Thomas Edison and Henry Ford make a joint statement about MS (though they didn’t exactly call it that) sometime in the early 1920’s?
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Hmm, I know the two men were raving bigots, but I’m not familiar with the joint statement. Please don’t tell me that Hitler also was a fan of MS. That would be too much for me.
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In a New York Times [page 6] interview Dec. 6, 1921, Thomas Edison advocated financing the proposed Muscles Shoals Dam [North Alabama on the Tennessee River] by issuing currency instead of floating bonds.
“On the point of Mr. [Henry] Ford’s suggestion to the Government for financing the completion of the dam, Mr. Edison reiterated his belief … that it was a good plan and that if only the currency method is tried in raising money for public improvements, the country will never go back to the bond method.”
“Now, as to paper money, so-called, everyone knows that paper money is the money of civilized people. The higher you go in civilization the less actual money you see. It is all bills and checks. What are bills and checks? Mere promises and orders. What are they based on? Principally on two sources – human energy and the productive earth. Humanity and the soil – they are the only real basis of money.”
“But here is the point: if our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good, also. The difference between the bond and the bill is that the bond lets the money brokers collect twice the amount of the bond and an additional 20 per cent., whereas the currency pays nobody but those who directly contribute to Muscle Shoals in some useful way.
“If the Government issues bonds, it simply induces the money brokers to draw $30,000,000 out of the other channels of trade and turn it into Muscle Shoals; if the Government issues currency, it provides itself with enough money to increase the national wealth at Muscle Shoals without disturbing the business of the rest of the country. And in doing this it increases its income without adding a penny to its debt.
“It is absurd to say that our country can issue $30,000,000 in bonds and not $30,000,000 in currency. Both are promises to pay; but one promise fattens the usurer, and the other helps the people. If the currency issued by the Government were no good, then bonds issued would be no good either. It is a terrible situation when the Government, to increase the nation’s wealth must go into debt and submit to ruinous interest charges at the hands of men who control the fictitious value of gold.
“Look at it another way. If the Government issues bonds, the brokers will sell them. The bonds will be negotiable; they will be considered as gilt-edged paper. Why? Because the Government is behind them, but who is behind the Government? The people. Therefore it is the people who constitute the basis of Government credit. Why then cannot the people have the benefit of their own gilt-edged credit by receiving non-interest bearing currency on Muscle Shoals, instead of the bankers receiving the benefit of the people’s credit in the form of interest-bearing bonds?”
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Thanks for reminding me about this. I actually was aware of it, but had forgotten it was Edison who said it. That key phrase, “If our nation can issue a dollar bond, it can issue a dollar bill,” is absolutely correct.
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One of JG Wray’s associates wrote this: https://eh.net/book_reviews/harvesting-gold-thomas-edisons-experiment-to-re-invent-american-money/
Hammes, D.L.; Wills, D.T. (2006). “Thomas Edison’s Monetary Option”. Journal of the History of Economic Thought. 28 (3): 295. In 1922, Thomas Edison publicly introduced his latest invention—a new type of money, a commodity-backed currency that he believed was the long-term solution to America’s monetary woes. “I want to cast the variable out of money. This gold money is not good enough. It’s a fiction” he boldly proclaimed (New York Times 1922). https://web.archive.org/web/20150401103428/http://faculty.washington.edu/dtwills/resources/Edisons-Monetary-Option.pdf Brings to my mind Robert ‘flat tax’ Hall’s 1982 ANCAP proposal: https://en.wikipedia.org/wiki/ANCAP_(commodity_standard)
Edison/Ford 12/06/1921: https://web.archive.org/web/20210314171007/https://timesmachine.nytimes.com/timesmachine/1921/12/06/98768710.pdf
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The Inflation Reduction Act will increase taxes on oil and gas which will increase costs for everyone.
Isn’t this itself inflationary? And then of course they want to reduce deficit spending!!!
“Oil and gas companies will have to pay more taxes under the Inflation Reduction Act of 2022, according to accounting analysts at Moody’s Investors Service. While the law includes provisions aimed a tackling climate change and health care policies, it also increases taxes for large companies.Sep 7, 2022”
I think it’s better to incentivize changes to energy : “High-Efficiency Electric Home Rebate Act” offers low- to medium-income families as much as $14,000 per year in point-of-sale discounts for …
The Inflation Reduction Act of 2022 is a landmark United States federal law which aims to curb inflation by reducing the deficit, lowering prescription drug prices, and investing into domestic energy production while promoting clean energy
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We repeatedly have demonstrated that inflations are not caused by federal deficit spending. Inflations are caused by shortages of key goods and services, usually oil and food.
Curing inflation by making products more expensive (via taxes) is stupid to the nth degree. Our politicians want to reduce food and oil costs by taxing them to make them more expensive. It’s bizarre.
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