Congress is just like professional wrestling

If you ever have watched professional wrestling, you know it is a sham — a lie to please the audience. The “wrestlers” (i.e. actors) play their roles. They express anger, hatred, and agony in their feigned attempt to win. Professional Wrestling | Bleacher Report | Latest News, Rumors, Scores and Highlights

Professional Wrestling | Bleacher Report | Latest News, Rumors, Scores and Highlights

The audience screams in delight when the good guy (the better-looking one) wins, and the bad guy (big, fat, sneaky cheater) claims it was he who has been cheated. It’s all an act. They are professional liars. It’s theater. This brings us to the U.S. Congress and the following article:

GOP senators ready $1T infrastructure counteroffer to Biden By LISA MASCARO and JONATHAN LEMIRE WASHINGTON (AP) — Senate Republicans revived negotiations over President Joe Biden’s sweeping investment plan, preparing a $1 trillion infrastructure proposal that would be funded with COVID-19 relief money as a counteroffer to the White House ahead of a Memorial Day deadline toward a bipartisan deal.

Immediately, we come to the sham — the lie. Federal spending cannot be funded with COVID-19 relief money. That “money” exists, not as money, but only as a law, passed by Congress. The law says the federal government and its various agencies are allowed to create dollars from thin air, to be spent on COVID relief. Some COVID relief dollars do not yet exist; the rest already have been spent. More accurately, the paragraph should read: “Congress would arbitrarily change its law to create fewer dollars for COVID relief and more dollars for infrastructure.”

The administration and the GOP senators remain far apart over the size and scope of the investment needed to reboot the nation’s roads, bridges and broadband — but also, as Biden sees it, the child care centers and green energy investments needed for a 21st-century economy. They also can’t agree on how to pay for it.

Congress will pay for it the same way they pay for everything. They will pass a law that says [fill in the blanks] “The following agencies __________ shall spend __________ dollars, created from thin air, for the purpose of __________ .” The agencies then will pay for goods and services by sending checks or wires to suppliers’ banks, telling the banks to increase the balance in the supplier’s checking accounts by __________ dollars. At the moment the banks do as they are instructed, new dollars are created and added to the nation’s M1 money supply. That is how your federal government creates U.S. dollars.

Biden had dropped his $2.3 trillion opening bid to $1.7 trillion, and Republicans had nudged their initial $568 billion offer up by about $50 billion late last week, but talks teetered as both sides complained the movement was insufficient.

The wrestlers circle one another, growling fake threats. It’s all for the show to impress the audience (i.e. the voters). No one in Congress cares how much money is spent. But they pretend to care because the voters have been brainwashed to care.

The Republicans have uniformly rejected Biden’s plan to pay for the investments by raising the corporate tax rate, from 21% to 28%.

Though state/local taxes pay for state/local government spending, federal taxes pay for nothing. The government creates all the money it spends ad hoc, by sending instructions to banks, not by collecting dollars from the private sector.

Instead, the GOP senators want to shift unspent COVID-19 relief funds to infrastructure, which may be a nonstarter for Democrats. Republicans also want to rely on gas taxes, tolls and other fees charged to drivers to pay for the highways and other infrastructure.

More fakery. The federal government does not “shift” dollars, nor does it “rely” on taxes, tolls, and other fees. It simply creates all the money it uses by passing laws.

“We are anxious to have a bipartisan agreement,” said Sen. Shelley Moore Capito, R-W.Va., who is leading the group of GOP negotiators.

“Bipartisan” means, “I get to take credit for the things my voters like, while I blame the other guy for the things my supporters don’t like.”

A GOP aide who spoke on condition of anonymity to discuss the private talks said the price tag would be $1 trillion over eight years, paid for by tapping funds that have been allocated as part of COVID-19 relief but not yet spent. The aide said about $700 billion remains in unspent virus aid.

If it’s unspent, it doesn’t exist. Money exists only when the federal government sends instructions to banks, telling the banks to credit checking accounts. It is impossible to tap funds that have not been created. The GOP aide really means new laws will have to be written, and if new laws are written, those laws can specify any amount to be spent in any way Congress deems. Congressional lawmaking and spending are not limited by anything, so there is no reason to cut COVID-19 relief.

Psaki declined to comment on the forthcoming GOP proposal, but Democrats on Capitol Hill were quick to rebuff dipping into coronavirus relief funds, particularly money that had been sent to the states and local governments that now seems less urgent as some jurisdictions reported better-than-expected balance sheets.

In the GOP world, Democrats doing “better-than-expected” is cause for change. Heaven forbid a Democrat’s federal program does better than expected.

The White House is expecting the Republican counteroffer by Thursday and doesn’t want to prejudge what’s in there. But a GOP plan to tap into rescue funds, aides believe, doesn’t work because much of that money has already been exhausted, and it could also diminish the COVID-19 response.

Diminishing the COVID-19 response is the whole point. It would allow the GOP to claim that the Democrats did something wrong. What are a few people’s lives compared to political talking points?

“My view is that we gave that to the cities and states and counties with the understanding that it may take a little time for them to spend it,” said Sen. Chris Van Hollen, D-Md., a longtime congressional budget expert. “I think it’d be a big mistake to try to claw that back.”

It’s a huge mistake, especially since the federal government has no need for the money, and in fact, the government destroys all dollars it receives.

Senate Republican leader Mitch McConnell, who tapped Capito to lead the GOP effort, gave a nod to the latest offer, saying the idea of repurposing the COVID-19 funds was “good advice” from Larry Summers, a Harvard professor.

Larry Summers is a perfect example of the Peter Principle, a man who has risen to his level of incompetence and stayed there.

McConnell has said repeatedly that “100% of my focus” is on stopping Biden’s agenda.

This is the same obstructionist McConnell who prevented a vote for Merrick Garland, and who said his first goal was to make Obama a one-term President, and who is famous for preventing votes on dozens of bills. He is 100% power politics and 0% America. Today’s GOP is compiling a record of mean-spiritedness (immigration policies, abortion policies, hatred of the poor and people of color) and just plain stupidity (Rep. Greene, denying the results of the election, denying global warming, COVID-19, and mask-wearing). They are the people who believe professional wrestling is real, and who cheer for the phony pain being inflicted, not understanding that it is all theater for fools, and that they are the fools. Stupid is sad. Mean is bad. But stupid mean is Republican. 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:

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.

MONETARY SOVEREIGNTY

Does deficit spending cause inflation and unemployment?

The Republican Party has assumed three tasks:

Oppose the Democrats wherever possible on any subject at any time.
Oppose anything that benefits the lower half of the income/wealth/power population.
Support the rich

This unofficial, but very real, platform is referenced in the following article from the May 23rd, 2021 Chicago Tribune”

Biden betting big on wage growth
GOP: President’s policies are already spurring inflation
By Josh Boak Associated Press
WASHINGTON — The Biden administration recently gave a bit of simple advice to businesses that are unable to find workers: Offer them more money.

Businesses are coping with spiking prices for goods such as steel, plywood, plastics and asphalt.

Yet workers, after enduring a year of job losses, business closures and social distancing, are no longer interested in accepting low wages.

Administration officials say the White House is not trying to target a specific wage level for workers. But officials say higher wages are a goal of President Joe Biden and a byproduct of his $1.9 trillion relief package and at least $3.5 trillion in additional spending being proposed for infrastructure and education.

Boosting wages gets at the central promise of the Biden presidency to improve the lives of everyday Americans and restore the country’s competitive edge in the world.

Republicans say that Biden’s policies have already let loose a torrent of inflation that will hurt the economy.

Several economic factors are pushing toward inflation, but wages probably are the least of them.

**Changes in average wages (blue line) do not correspond with changes in inflation (red line).**

For companies that have become more automated, wages have been assuming less and less importance.

Industries vary markedly by expenses as a percentage of revenue. See: HERE. Low margin, low automation business obviously would be affected most by salary increases.

Most businesses should shoot for salaries in the 30 percent to 38 percent range, according to Second Wind Consultants.

Taking a mid-point of 35%, your business grossing $100, would pay $35 in salaries. Giving every employee, say, a 25% raise, would cost you $8.75 per employee.

So, you either would have to cut your profits, raise prices by 8.75%, or find some means to lower costs (via efficiencies, automation, etc.)

But wait. Most of your employees pay the government 15% for FICA, (your business technically pays half, but that cost is passed on to employees as salary costs) so if the federal government merely stopped collecting FICA, that immediately would give each worker a 15% raise paid for by the federal government.

Further, because FICA takes dollars from the private sector (aka “the economy), the elimination of FICA would stimulate economic growth by leaving more dollars in the pockets of consumers.

You would benefit; your employees would benefit; the entire economy would benefit — all at no cost to anyone.

But wait again.

The total cost of health care, including premiums and out-of-pocket costs for employees and dependents, was estimated to average $14,800 per employee in 2019.

And again, because employers consider healthcare costs to be “pass-through” (considered as part of the cost of compensation), that’s another $14,800 each employee does not receive.

And that problem could be eliminated by a federally funded, Medicare for All program.

White House economic adviser Jared Bernstein said the goal is “to pull forward a robust, inclusive recovery that provides good employment opportunities to people who are in the bottom half, who went to work, often in unsafe conditions, or had to stay home to take care of their families and deal with school closures and childcare constraints.”

The New York Federal Reserve reported a 26% increase over the past year in wage expectations by noncollege graduates. The lowest average salary they expect for a new job is $61,483, up more than $12,700 from a year ago.

The wage pressures feeds into some anxiety about inflation.

The Biden team sees the 0.8% month-over-month jump in consumer prices in April as temporary, a sign of consumer demand and the bottlenecks that naturally occur when an economy restarts.

But newly released minutes from the Fed’s April meeting suggest the U.S. central bank could raise interest rates earlier than previously indicated to stamp down inflation and potentially limit economic growth.

We have three primary controls over inflation.

First, there is the month-to-month incremental control: Interest rates. Raising rates makes money more valuable to own, which instantly dials down inflation in small, targeted steps.

Second, for large-scale inflation, which is caused by shortages of key assets like oil and food, we have the federal government’s ability to purchase these assets abroad or to fund their creation domestically, and to distribute them to the populace.

The third control is federal fiat. The government merely says something on the order of, “From now on, the dollar will be worth [a specified exchange rate]. The fiat approach was used on several occasions with regard to the gold exchange rate, but nothing says it couldn’t be used with regard to any basket of foreign currencies.

The popular myth is that raising interest rates “limits economic growth,” and that myth is why the stock market temporarily reacts negatively to interest rate increases.

However, raising rates requires the federal government to pump more interest dollars (i.e. stimulus dollars) into the economy.

So, as is all-too-frequent in economics, this myth is directly in opposition to reality.

**Changes in interest rates (blue line) very closely correspond to changes in GDP (red line). When interest rates go UP, GDP goes UP.**

The Senate’s Republican leader, Mitch McConnell of Kentucky, has told voters that Biden’s decision to provide an additional $300 a week in unemployment benefits and the spending in his relief package are hurting the economy.

He said Thursday on Fox Business that the package “Democrats jammed through on a party-line vote” is “producing both people not wanting to work and raging inflation.”

“People not wanting to work” is the right-wing meme that actually means, “Poor people are lazy. They don’t want to work in the grueling jobs and for the slave wages our wealthy supporters want to pay.”

It is the GOP version of “Starve ’em until they are so desperate they will take any awful job and accept any awful wage.”

Slave wages and slave conditions are why growing cotton was so profitable in the old South.

And as for “raging inflation,” that is a typical, Trump/GOP misstatement unless one considers a 10 year interest rate average below 2% to be “raging.”

To no one’s surprise, rates shot up in the past month, as COVID vaccinations finally freed people to mingle and shop.

But if rates don’t drop, the government still has the unlimited ability to control inflation.

The GOP approach is to give tax reductions to the rich, while starving the rest of the population to whip them to work.

Part of the dispute between Biden and Republicans is on how economies grow. The administration has embraced a philosophy of investing in workers and providing them with benefits to make it easier for them to juggle life responsibilities and jobs.

Republicans believe the key is to minimize taxes and other barriers for employers so that lower operating costs lead them to invest and hire.

In other words, if you give people no benefits, and the only available jobs are sweat labor at starvation wages, people will have to take those jobs, and the corporate executives will grow richer.

Republicans see the $300-a-week federal unemployment payment as discouraging people from working because they can earn more money by staying unemployed. Their view is that this limits how many jobs can be created and how high wages will rise.

There are 23 states — all with Republican governors and GOP-controlled legislatures — that plan to block the enhanced federal benefits in June, under the belief that the loss of income will cause people to take jobs.

Yes, that does work. Loss of income forces people to take bad jobs.

Aaron Sojourner, a labor economist at the University of Minnesota, warned that scrapping the benefits could reduce families’ incomes and possibly encourage employers to pay less such that workers’ incomes might be depressed.
“Lower wages is exactly the premise of the Republican position,” Sojourner said.

Sadly, the Democrats have not had the courage to tell what they surely must know:

Taxpayers do not fund federal spending.
The federal government has the unlimited ability to pay for benefits
The economy, and the people living in it, are much healthier during periods of federal deficit spending.
The GOP and their wealthy backers want to starve the populace so that the rich will grow richer.

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.”

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest. MONETARY SOVEREIGNTY

Point by point, why you should receive federal benefits and not have to pay federal taxes.

1. In the beginning, there was no money. Money does not exist in nature. Money is the creation of a human Issuer, who creates the laws and rules that create money.
  UNNECESSARY
2. In the millions of years preceding 1776, there were no U.S. dollars. Then in the 1780s, the U.S. federal government created laws from thin air and those laws created U.S. dollars from thin air.
3. The government created as many laws and dollars as it wished, and gave the dollars the value it wished. This was completely arbitrary and under the absolute control of the U.S. government.
4. Subsequently, the U.S. government has continued to create as many laws and dollars as it wished, from thin air, and continue to give the dollars whatever value it wished.
5. There are many forms of money in addition to U.S. dollars: Canadian dollars, Australian dollars, British pounds, Chinese Renminbi, Euros, Japanese Yen, Mexican Pesos, Monopoly dollars, Bitcoin, etc. — all of which are created by laws and rules.
6. The laws and rules are arbitrary. They are the blueprint for money. The Issuer of money has the infinite power to create laws and rules in any form he chooses. The Issuer never can run short of laws and rules.
7. Thus, the Issuer of money can create as much or as little money, in any value he chooses, and in any form he chooses.
8. Because laws and money are arbitrarily created from thin air, they have no physical presence. You cannot see, feel, smell, taste, or hear laws or money. They exist only as abstractions. Lawbooks and dollar bills only represent laws and money, but they themselves are not laws and money.
9. Because laws and money are merely arbitrary abstractions, the Issuer never can run short of his own laws and money. The federal government has the infinite power to issue laws and money.
10. Having the unlimited ability to create his own sovereign money, the Issuer of money does not need taxes or borrowing to supply him with his own money. Because the U.S. government is the Issuer of U.S. dollars, it cannot unintentionally run short of dollars and does not need taxes or borrowing to obtain spending dollars.
11. Gross Domestic Product (GDP) is the economic measure of an economy. The formula is: GDP = Federal government spending + Non-federal spending + Net exports.
12. A growing economy requires a growing supply of money. By formula, reduced federal spending or non-federal spending is recessionary, and so shrinks the size of the economy.
13. The federal government, having the unlimited ability to create dollars, has the unlimited ability to grow the economy.
  Recessions (vertical gray bars) come when federal debt growth (red line) declines. Recessions are cured by increases in federal debt growth.
14. Any entity can be an Issuer of money. Any person, any nation, any business, any human organization arbitrarily can create money in any form it wishes and in any amount it wishes, and give it any value it wishes.
15. Coupons represent money created by businesses. Chips represent money created by casinos. Tickets represent money created by entertainment venues.
16. Businesses, casinos, entertainment venues, etc., have the infinite ability to create their own sovereign currency.
17. You too have the unlimited power to create unlimited amounts of money, call it anything you wish, and give it any value you wish.
18. Money is a debt of its Issuer, who owes the User of its money whatever its arbitrary laws and rules specify.
19. All debt requires collateral.
20. The primary collateral for money is the full faith and credit of the Issuer.
21. The acceptance of money is based on the perceived value of its collateral.
22. If you were to create, for instance, “Mybucks” as your chosen form of money, “Mybucks” will be used and accepted by those who value your full faith and credit.
23. You could create all the laws and rules regarding “Mybucks” and give “Mybucks” any value you choose and create them in any amount you choose.
24. As the Issuer of “Mybucks,” you never could run short of “Mybucks,” nor would you need to borrow or tax anyone to obtain “Mybucks.”
25. As the Issuer of U.S. dollars, the U.S. government does not need to levy taxes to obtain dollars. Just as the U.S. government cannot unintentionally run short of dollars, no agency of the U.S. government can unintentionally run short of dollars.
26. Social Security and Medicare are agencies of the U.S. federal government. As such, Social Security and Medicare, and every other federal government agency cannot run short of U.S. dollars unless the U.S. government wishes it.
27. Contrary to popular myth, these agencies are not supported by taxes, but rather by the laws and rules of the U.S. government. Any time you hear or read that Social Security and Medicare are running short of money, know that is not true.
28. Though FICA taxes ostensibly are collected to support Social Security and Medicare, the federal government has no use for those, or any other, taxes. The dollars you send to the government are destroyed upon receipt.
29. Tax dollars are sent from checking accounts as part of the M1 money supply. Upon arrival at the U.S. Treasury, they cease to exist as part of any money-supply measure. Instead, the federal government pays for Social Security, Medicare, and all other initiatives by creating new dollars, ad hoc.
30. The same can be said of federal “debt.” The federal government never unintentionally can fail to pay what it owes. Even if the federal debt totaled hundreds of trillions of dollars, the federal government easily could service it or pay it off today.
31. The misnamed federal “debt” actually is the total of all deposits into Treasury Security accounts. When you buy a T-bill, T-note, or T-bond, you open your T-security account and deposit money into it.
32. The federal government never takes dollars from your T-security account, though it does deposit interest dollars into that account.
33. The purpose of T-security accounts is not to provide the federal government with dollars: Instead, these accounts (misnamed “borrowing” or “debt”) provide a safe, interest-paying parking place for unused dollars, and to help the Federal Reserve control interest rates.
34. The sole financial purpose of federal taxes is not to fund the federal government but rather to help the government control the economy. The government taxes what it wishes to discourage and gives tax breaks to what it wishes to encourage.
35. This leads to the question: Why does the federal government tax salaries and business profits? Does it wish to discourage salaries? Does it wish to discourage business profits?
36. The secret purpose of federal taxes is to discourage the public from asking for benefits, by telling the people that the Social Security and Medicare agencies cannot afford to pay benefits without a tax increase.
37. Why does the federal government wish to discourage the public from asking for the benefits the federal government easily can fund without levying taxes? The reason has to do with the rich, who run the government, and with “Gap Psychology.”
38. “Rich” is a comparative term, not an absolute term. Someone having $100 would be rich if everyone else had $1, but someone having $1,000 would be poor if everyone else had $10,000.
39. The differences between richer and poorer are the “Gaps.” The wider the Gaps, the richer or poorer a person is.
40. If you are rich and wish to be richer, you must widen the Gap between you and those who have less than you and narrow the Gap above you.
41. There are two ways to accomplish this: Either obtain more money for yourself or force those below you to have less money.
42. The desire to widen the Gap below you and to narrow the Gap above you is known as “Gap Psychology.”
43. Convincing the poor not to demand increases in Social Security, Medicare, and other social benefits is one way to widen the Gap below you, i.e. to make yourself richer.
44. This is why the rich have bribed our politicians, our media, and our economists — your primary sources of economic information — to tell you falsely that taxes are necessary to fund such federal agencies as Social Security, Medicare, and all aids to the lower-income groups.
45. The rich bribe politicians via political contributions and promises of lucrative employment, later.
46. The rich bribe the media via ownership and advertising revenue.
47. The rich bribe the economists via contributions to universities and promises of lucrative work for think tanks.
48. When shown that federal government spending is not constrained by tax collections or any other availability of money, the retort often is “But that would cause inflation.” It is an insidious half-truth that does not reflect reality.
49. Using January 1, 1947 as a base, in the 73 succeeding years, the federal debt has increased to 6,945 (69-fold) while inflation has increased only to 1,150 (11-fold).
  While federal debt (red line) has increased massively, inflation (blue line) has increased moderately.
  From the end of the “Great Depression of 2008-2009, the comparison between federal debt and inflation is even more startling:
  A massive increase in federal debt has been coincident with only a modest increase in inflation — below the Fed’s target of 2% annually.
50. Over a multi-year time period, there is no relationship between federal deficit spending and inflation. But even on an annual basis, the lack of a relationship is clear:
  The red line (changes in federal debt) does not correspond with the blue line (changes in inflation).
51. Yet another excuse used by the rich, to prevent the rest from receiving federal benefits is, “If given money and benefits, the middle-class and the poor will refuse to work.” This promulgates the false belief that the lower-income groups are congenitally lazy and do not have the same desires for advancement as do the rich.
52. But what the rich really mean is, “If given money and benefits, the lower-income groups will refuse to work in the unpleasant jobs we offer, for the slave wages we pay.”
53. The rich do not want to admit that “There but for the grace of God, go I,” and how much a role luck plays in the accumulation of wealth — the luck of being born to wealthy parents, the luck of being in the right place at the right time, the luck of being sent to the right college or working in daddy’s business.
54. This denial is due to Gap Psychology, the overriding desire to distance oneself from those below on the social scale and to come closer to those above.
In Summary The federal government has the unlimited ability to fund all social programs. It can do so without collecting taxes, without borrowing, and without causing excessive inflation. The rich hide this fact in order to grow richer by widening the Gap between the rich and the rest. Thus, all the excuses for not implementing social programs are based on false propaganda promulgated by the rich and accepted as fact, by the rest.
………………………………………………………………………… 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:
1. Monetary Sovereignty describes money creation and destruction.
2. 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:
The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest. MONETARY SOVEREIGNTY

Pinocchio gets four Pinnochios

I’m not sure why, psychologically, it’s so satisfying to see someone hoist with their own petard. Wile.E Coyote Blown Up

The school bully gets bullied. The “A” student braggart is caught cheating. The terrorist gets blown up by the bomb he was making.

Then there’s the Washington Post.

Don’t get me wrong. The Washington Post is a great, investigative newspaper.

Without the Washington Post, the NY Times, et al, we wouldn’t have learned half of what we know about the crooked Trump administration; And heaven forbid, that incompetent liar still might be President.

But sadly, WP (unintentionally, I assume) helps promulgate the Big Lie in economics, that federal financing is like your personal financing.

For example:

The Washington Post
Rep. Omar’s off-kilter comparison of defense and health-care spending
Glenn Kessler

“If we can afford to give the Pentagon $2B every day, we can afford Medicare-for-all.”

Actually, Omar is correct, in a way, because the federal government can afford to give the Pentagon $2B every day, and also can afford Medicare for All. In fact, being Monetarily Sovereign, the federal government could give double those amounts, even while cutting federal taxes.

But now, the WP introduces the Big Lie in economics:

Anyone taking an introductory macroeconomics course is quickly introduced to the “guns versus butter” model.

It is a framework for discussing how much can be spent on a nation’s military budget vs. social programs.

There’s a finite amount of money available, and so the concept illustrates the tension between defense spending and civilian spending.

No, Mr. Kessler, there is not a “finite amount of money available.” There is, in fact, an infinite amount of money available.

The federal government has the exclusive legal power to create U.S. dollars, infinitely. As former Fed Chairman, Ben Bernanke said,

“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.”

“. . . as many dollars as it wishes . . .” It couldn’t be clearer, could it? There is not just a finite amount of money available. There’s “as many dollars as the federal government wishes” available.

Omar’s tweet is a perfect distillation of this concept, as she questions why money is being spent on defense when it could instead be spent on a single-payer health-care system, popularly known as Medicare-for-all.

Why “instead.” What is the purpose of that word “instead,” when the government can produce as many dollars as it wishes?

We originally thought Omar was proposing to eliminate spending on “guns” to maximize the “butter.” But her spokesman, Jeremy Slevin, says that is not the case.

“The point, which progressives have made repeatedly, is that we prioritize spending on hundreds of military bases, ground wars and weapons contracts instead of basic needs like health care, housing and nutrition,” he said.

There’s that word “instead” again. The Washington Post believes it. Omar believes it. Slevin believes it. They all believe there only is a finite amount of money to spread around, and that is the Big Lie of economics.

Still, this tweet calls for a review of the numbers. It may be news to Omar, but the U.S. government already spends more on health care than on defense.

So what if the government spends more on health care than on defense. What does spending on one have to do with spending on the other/

Some things, by their nature, cost more than other things. A diamond ring can cost more than a house, but that doesn’t mean a diamond ring is more important than a house.

Defense outlays in 2021 are expected to be about $733 billion, according to the Congressional Budget Office. Omar’s tweet — $2 billion a day on defense — suggests the annual budget is about $730 billion, so that’s on target.

Assuming no money was spent on defense, that would give you $7.3 trillion in extra cash to spend on a single-payer system for the next 10 years.

No, no, and no. Eliminating money for defense does not give you even one extra dollar to spend on a single-payer system.

The federal government could spend the $2 trillion on defense — or $20 trillion — and still spend as much as it wishes for single-payer health care.

That sounds like a lot of money, but it’s chicken feed compared with what the nation already is projected to spend on health care.

Just in 2028, annual health-care spending is projected to be $6.2 trillion.

Right now, individuals and companies pick up a lot of that tab. A national health-care system would require the federal government to pick up more of the cost.

Wrong, again. If the WP is referring to federal taxes, then none of that money is used to “pick up the tab.”

What “tab” do individuals and companies pick up? If you count the cost of private insurance as part of the tab, that’s a cost individuals pick up.

And if you count the fundamental human and business costs of illness, those are tabs individuals and companies pick up.

But, because federal taxes do not fund federal spending, individuals and companies pay taxes, but those tax dollars do not fund Medicare.

According to the CBO, federal subsidies for health care would increase between $1.5 trillion and $3 trillion a year — far more than any annual savings for eliminating the military. The nation’s national health-care expenditures would increase slightly or decline as much as 10 percent.

(Obviously, one way to increase the size of the pie available for health-care spending is to boost taxes. Nothing in life is ever free, and neither is free health care.)

Once again the Big Lie in economics is presented to you. The WP says nothing is free, but Ben Bernanke says the government can create all the money it wishes “at essentially no cost.”

And Ben is correct.

The WP writer is just quoting the old trope about there not being any such thing as a free lunch, and claiming it’s a fact of economics. But tropes aren’t facts, no matter how clever they may seem.

The Pinocchio Test
Omar appears to have been making a rhetorical point, not a mathematically sound one, so we will leave this unrated.

But in the continuing debate over guns vs. butter, it’s important to remember that butter at the moment has the upper hand.

There needn’t be any debate about guns vs. butter. The federal government easily can pay for both at the touch of a computer key.

I award the Washington Post its own new ranking, the bottomless Pinocchio, for this article and all the others like it.

Meet the Bottomless Pinocchio, a new rating for a false claim repeated over and over again - The Washington Post

The “Bottomless Pinocchio, the Washington Post’s new ranking for a false claim repeated over and over, again.

…………………………………………………………………………

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.”

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.

MONETARY SOVEREIGNTY

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