You can’t blame the public for not understanding economics when economists themselves struggle to comprehend it.

Here are excerpts from two articles that demonstrate the incredible ignorance (or perhaps, intentional misleadingness) from people who should (or perhaps do) know better.

The first is from Paul Krugman, who is billed as having won the Nobel Prize (He didn’t. It was the Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ).

The following article ran July 3, 2025.

Trump’s Big Beautiful Debt Bomb

The budget bill is both devastatingly cruel and deeply irresponsible Paul Krugman, Jul 03, 2025 Do readers remember the debt panic of the early Obama years? For a while scare stories about national debt dominated discussion in the media and inside the Beltway.

I got a lot of grief at the time for bucking that consensus, urging people to relax about government debt. The United States, I argued, had lots of “fiscal space” — ability to run up debt without losing investor confidence — so it should focus instead on the importance of restoring full employment, which required running substantial deficits.

So far, so good. He was right to tell people to “relax about government debt.”

His argument, though, about “fiscal space” is troubling, because it  hints that there are times when we don’t have “fiscal space, and should worry about government debt (which isn’t government and isn’t debt.)

The money is owned by the public, not by the government, and resides in Treasury Security deposits. If it were debt, the government would own the money and owe it to the creditors.

Depositing dollars into an account that you own — dollars you always own and the government never touches — does not create “government debt.” (Think of a safe deposit box, and you will have a better understanding of Treasury Securities accounts.)

These days, however, many though not all of the people who were screaming about debt back then have gone quiet. Funny how that happens when there’s a Republican in the White House.

Republicans scream about benefits for the poor and taxes on the rich. Funny how “solutions” to the debt always seem to involve cuts to Medicaid, Medicare, Social Security, food stamps, childcare, and other benefits enjoyed by those who are not rich.

You never hear about the elimination of tax loopholes that benefit the rich.

Yet there is much more reason to be worried about debt now than there was then. On one side, there’s no longer any good economic reason to be running large deficits.

That statement is utterly wrong, diametrically wrong, even more wrong than the notion that Krugman won a real Nobel Prize.

The reasons to run large deficits never change and are quite obvious:

1. Being Monetarily Sovereign, the government can run any size deficits at no cost to anyone — not to you, not to me, and not even to Paul Krugman. All deficit spending is funded not by taxes, but by the creation of new money, which the federal government can do endlessly.
2. The formula for economic growth clearly shows why the government must run deficits. Gross Domestic Product = Federal Spending + Nonfederal Spending + Net Exports. Government deficits fund both bolded terms in the equation.
3. Every depression in U.S. history has resulted from the lack of federal deficits (aka “surpluses.”)
4. Almost all recessions have resulted from deficits that were too small, and all have been cured by increased deficit spending.

Here is the evidence:

Every depression in U.S. history has followed years 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.

On the other, America has changed in ways that have greatly reduced our fiscal space, our ability to get away with a high level of debt.

There is nothing to “get away with.” Not only is the “federal debt” not federal or debt, but running deficits is necessary. What we can’t afford to do is not to run deficits.

And the One Big Beautiful Bill Act, which just passed the Senate and will probably pass the House, will make things even worse.

It is one of the worst bills ever to pass Congress and the President, but not because it causes deficits. That’s the good part. The bad part is that the entire bill is devoted to taking money from the low- and middle-income groups and giving it to the very rich.

Why was I relatively relaxed about debt back in the day? Largely because history tells us that advanced nations can normally run up large debts without experiencing crises of confidence that send interest rates soaring.

Look, for example, at the debt history of the UK, which ran up huge debts relative to GDP during the Napoleonic Wars and the two world wars without losing investor confidence:

Why are advanced countries normally able to pull this off?

Not all advanced countries — only those that are Monetarily Sovereign, like the UK. The euro nations, many of which could be called “advanced” (France, Germany, Italy, et al), cannot run up large debts without experiencing crises of confidence.

However, the Monetarily Sovereign European Union (EU) can incur any amount of debt it wishes without problems. It has the infinite ability to create euros.

First, they’re normally run by serious people, who don’t try to govern on the basis of crackpot economic doctrines and will take responsible action if necessary to stabilize their nations’ debt.

“Serious people”? Do you know what that means? I don’t.

Second, they’re competent: They have strong administrative states that can collect a lot of tax revenue if necessary. The United States collects 25 percent of GDP in taxes, but could collect much more if it chose. Some European nations collect more than 40 percent.

This is utterly wrong:

1. While state and local taxes do pay for state and local government spending, federal (Monetarily Sovereign) spending is not funded by taxes. Even if the U.S. federal government collected no taxes, it could continue spending indefinitely. Amazingly, the Nobel winner seems not to understand the differences between Monetary Sovereignty and monetary non-sovereignty.
2. Not only does federal tax collection not fund federal spending, but it reduces GDP by reducing non-federal spending. Federal tax collections are anti-growth.

These factors normally lead investors to give advanced countries the benefit of the doubt, even when they run big deficits. That is, investors assume that the people running these countries will take action to rein in debt once the emergency justifying deficits ends, and that they will be able to take effective action because they have effective governance.

No, smart investors know that Monetarily Sovereign nations easily can fund deficit spending by creating their sovereign currencies.

It isn’t emergencies that justify deficits; it’s economic growth that makes deficits necessary.

And what is the “effective action” Krugman is talking about? In the 65 years since 1960, there has been only one short period when America failed to run a deficit — 1998-2001 — and that caused the recession of 2001.

And, as usual, the recession was cured by — you guessed it — deficit spending.

And that’s why I was a deficit dove in, say, 2011. America needed to run substantial deficits to recover from the 2008 financial crisis.

But I didn’t think this would cause trouble down the road, because we were a serious country run by serious people, easily able to do what was necessary to stabilize the debt once the economic emergency was past.

Again, with the “serious” business? Serious people would understand Monetary Sovereignty.

1. We didn’t “stabilize the debt.” We ran “substantial deficits to recover”, i.e., to grow the economy, after the 2008 financial crisis. (Why we should wait for a financial crisis to grow the economy, never is explained.)
2. We ran larger deficits than ever, which coincided with substantial GDP growth and low inflation.

But that, as I said, was then.

Right now we are running big budget deficits even though we aren’t fighting a war, facing high unemployment, or dealing with a pandemic. We should be taking action to bring those deficits down.

Why? What is the supposed harm that deficits are causing? There is none. Why turn off the engines when the plane is flying well?

Instead, Republicans have rammed through the One Big Beautiful Bill Act, which will add trillions to the deficit even as it causes mass misery.

I think he means “adding trillions to the debt,” but either way, this is one of the few good parts of the Bill — deficit spending to add growth dollars to the private sector.

The bad part is that not only with the rich get more money, but the poor will get less. When an economy widens the Gap between the rich and the rest, there always is much suffering among the millions while a few thousand prosper.

Money aside, the way Congress was bullied into passing that bill and the lies used to sell it show that we are no longer a serious country run by serious people.

Republicans are using transparently dishonest accounting to hide just how much they’re adding to debt — hey, we aren’t really cutting taxes, just extending tax cuts that were scheduled to expire.

And they’re also claiming that the OBBBA’s tax cuts (the ones that they say aren’t really happening) will generate a miraculous surge in economic growth.

If there were real tax cuts they would, in fact, stimulate economic growth. But Trump’s tariffs will hurt the economy in two ways:

1. Tariffs are taxes that remove dollars from the economy. We Americans pay Trump’s tariffs out of our pockets. Foreigners do not pay our taxes. Trump is hitting us on the head with a tariff hammer, to punish them.
2. Tariffs also are inflationary, affecting the prices of all products, even those not directly subject to a tariff.

I’ve had my differences with the Committee for a Responsible Federal Budget, but it’s an honest, highly competent think tank, and its (appropriately) incredulous analysis of Trump officials’ economic projections is titled “CEA’s fantastical economic assumptions.”

The CRFB is honest and competent if you agree with their endless calls to cut benefits to the middle- and lower-income groups as a way to grow the economy. Otherwise, one might think they are a group of wealthy individuals catering to the greed of other wealthy individuals.

Add in Trump’s bizarro claims about what his tariffs will achieve. Again, do we look like a serious country run by serious people?

Moreover, mass deportation and incarceration of immigrants, aside from being a civil liberties nightmare, will inflict severe economic damage and significantly worsen our debt position.

Totally agree. Is this the same Donald Trump whose party complains Americans are not having enough children to support a growing economy — so he’s sending away immigrants who do the work and pay taxes, but receive few benefits??? Absolutely senseless.

Finally, how long will we have an effective government that can collect taxes when necessary? Elon Musk’s DOGE failed to find significant amounts of waste, fraud and abuse, but it did degrade the functioning of the federal government and demoralize hundreds of thousands of civil servants.

Like little puppets, the Republicans mouth the phrase “waste, fraud and abuse.” It’s always exactly the same — “waste, fraud, and abuse.” Never, “fraud, abuse, and waste.” Never “abuse, waste, and fraud.”

Always exactly the same words, which not only are symptoms of rehearsed madness but have also been proven untrue.

Republicans have done all they can to eviscerate the IRS and make tax evasion great again. Even if control of the government is eventually returned to people who want to govern the country rather than pillage it, it will take years to recover competence in taxing faith in America.

I don’t mourn for the IRS. Federal taxes pay for nothing at all. The sole purposes of federal taxes are:

1. To control the economy by taxing what the government wishes to discourage and by rewarding what the government wishes to encourage.
2. To assure demand for the U.S. dollar by requiring taxes be paid in dollarsl
3. To widen the Gap between the rich and the rest by providing tax loopholes only the rich can crawl through, allowing them to pay a lower percentage of their incomes than the rest of us do.

Get it? Federal taxes don’t fund federal spending.

But I don’t think they fully realize, even now, that the risk of a U.S. debt crisis is vastly higher now than it was when Republicans were yelling about Obama’s deficits.

There was no “debt crisis” then. There is no “debt crisis” now.

The issue is that we have a dangerous, hateful criminal as President, a group of unethical supporters in Congress and the Supreme Court, and a sufficient number of misinformed voters to enable it.

And then there was this article:

Here Are House GOP Holdouts’ Objections to Senate-Passed Megabill

A concern of conservative Republicans is that the bill adds to both the national debt and deficit,Jackson Richman,Josep h Lord, Nathan Worcester,  7/2/2025

WASHINGTON—House Republicans appear stuck on July 2 when it comes to advancing President Donald Trump’s One Big Beautiful Bill Act.

House Republicans are working overtime to bring their ideologically-divided caucus—split between moderates and conservatives who often want opposing outcomes—on board with the mammoth bill. With Republicans controlling 220 seats to Democrats’ 212, House Speaker Mike Johnson (R-La.) can spare no more than three defections.

Here are some of the biggest unresolved divisions in the bill.

Pricetag

Many conservatives have expressed concerns about the bill’s impact on the national debt as well as the deficit.

“The changes the Senate made to the House passed Beautiful Bill, including unacceptable increases to the national debt and the deficit, are going to make passage in the House difficult,” Rep. Marlin Stutzman (R-Ind.) wrote on X.

Mathematically, they are talking about “unacceptable increases in Gross Domestic Product.” Crazy or ignorant? You decide.

The conservative Freedom Caucus said in an X post on June 30: “The Senate’s version adds $651 billion to the deficit—and that’s before interest costs, which nearly double the total. That’s not fiscal responsibility. It’s not what we agreed to.”

It is not “fiscally responsible” to assume federal financing is the same as personal financing. How are people so ignorant of economics elected to Congress?

Rep. Ralph Norman (R-S.C.), a caucus member, told The Epoch Times on July 1 that he would vote against the legislation. Norman and other fiscal hawks have called for at least $2 trillion in spending cuts, while the bill delivers $1.5 trillion in cuts.

Translation: Norman and other fiscal hawks have called for at least $2 trillion in cuts to economic growth.

There are also concerns about the Congressional Budget Office’s (CBO) prediction of a $3.2 trillion deficit increase under the bill.

Translation: There are also concerns about the Congressional Budget Office’s (CBO) prediction of a $3.2 trillion increase in Gross Domestic Product

Rep. Jeff Van Drew (R-N.J.) took a different perspective.

“People are going to have more money to spend, the economy is going to do well, and people are going to be happy,” Van Drew told reporters.

OMG! Is Van Drew the only member of Congress who understands that federal deficits put money into people’s pockets?

Johnson and Trump have argued that the bill will reduce the deficit by kindling economic growth and have criticized the CBO numbers for relying on a lower growth rate .

Translation: Johnson and Trump have argued that the bill will reduce the deficit by increasing taxes, which somehow will grow the economy.

Cut Provisions

Rep. Chip Roy (R-Texas), who also voted against advancing the bill through the House Rules Committee, posted on X that the Senate eliminated provisions passed in the House version of the legislation

This included getting rid of “provisions to terminate the ‘green new scam’ subsidies in the House bill,” removing “key provisions we put in the bill to stop illegal aliens from getting Medicaid,” and eliminating “key provisions we put in the bill to stop taxpayer funding of transgender surgeries.”

Translation: The government should spend fewer growth dollars to cut global warming and healthcare, but don’t cut tax loopholes for the rich.

The Freedom Caucus document alleges that the Senate watered down a House provision to cut waste, fraud, and abuse from the Supplemental Nutrition Assistance Program (SNAP), which issues food stamps, as “it fails to prevent blue states from gerrymandering counties and cities to get around the work requirements.”

There are those words again, in the exact order, as spoken by zombie puppets: “Waste, fraud, and abuse,” which DOGE failed to find.

Translation: Cut the food stamps that save children in blue states from starvation, because they help Democrats.

Medicaid While the Freedom Caucus sought deep Medicaid cuts, this is a concern for moderates such as Rep. Don Bacon (R-Neb.). The Senate cut Medicaid by more than $1 trillion, while the House version cut it by $800 billion. Both figures are over the span of a decade.

Translation. Rep. Don Bacon is concerned about health, but he will vote for the bill because Trump told him to.

In a June 24 letter to Senate Majority Leader John Thune (R-S.D.), a group of moderates wrote that the “House’s approach reflects a more pragmatic and compassionate standard.”

Translation: To Republicans, “pragmatic and compassionate” means cut healthcare, but a bit less.

They also wrote that they are “concerned about rushed implementation timelines, penalties for expansion states, changes to the community engagement requirements for adults with dependents, and cuts to emergency Medicaid funding” as “these changes would place additional burdens on hospitals already stretched thin by legal and moral obligations to provide care.”

Translation: Yes, cut all those benefits to the poor; just do it slower, until after the midterm elections.

Rep. Dusty Johnson (R-S.D.), a leader in the moderate Main Street Caucus, said he and many other moderates had, nevertheless, had their concerns assuaged by their meeting with Trump.

Asked about the meeting, Johnson said Trump “and particularly [Centers for Medicare & Medicaid Services Administrator] Dr. [Mehmet] Oz did a good job of working through some of the specifics.”

“The president is the best closer in the business, and he got a lot of members to ‘Yes’ in that meeting,” he said.

Translation: “Concerns assuaged by Trump” means “he won’t campaign against me or put up a competing candidate.”

Rep. John McGuire (R-Va.), a supporter of the bill, said that Republicans’ changes to the currently “unsustainable” program will ensure that it’s “available for people who need it for future generations.”

Translation: McGuire falsely claims the government can run short of dollars, so we have to cut benefits to the poor while giving the rich more tax loopholes. And please don’t ask us to cut tax loopholes. Why do you think we cut IRS staffing?

Rep. Greg Murphy (R-N.C.) told reporters: “We’re going after waste, fraud, and abuse. People shouldn’t be on the system who are not eligible.”

“Waste, fraud, and abuse,” again. All rich people are eligible. The people who do the actual labor are not eligible.

Additionally, an issue with the bill, according to the document, is that it does not phase out quick enough the green credits under the Inflation Reduction Act as it “guts the benefit by including a last-minute carveout for projects that ‘begin construction’ a year after enactment, which will create a race to do the minimum 5 percent construction spending to lock in subsidies well past 2027.”

Translation: Those Democrats will sneak in measures to reduce global warming if we don’t phase out benefits for those who pollute less. Anyway, global warming doesn’t exist, and if it does exist it isn’t a threat to the rich, so why should we care?

Finally, an issue with the bill, according to the document, is that it includes $50 billion for rural hospitals—which they call a “slush fund”—and a “100 percent tax deduction for meal expenses on Alaskan fishing boats, and special lower thresholds for waivers for Alaska for SNAP work requirements and state cost share requirements, even after giving them a blanket waiver through 2028.”

Translation: “How awful. How can we increase benefits for the rich if we help rural hospitals, provide deductions for meal expenses on fishing boats, and make it easier for starving children to get food?”

I don’t blame the Republicans or even Trump for this monstrosity of a bill — a bill that will sicken and starve millions of innocent people.

I blame the ignorant, cruel, un-American voters, who carry their bigotry and hatreds into the voting booth with them. They think the rich Republicans will protect America from the black, brown, yellow, gay, poor, lazy, non-Christian foreigners who are “trying to take over.”

The MAGA version of the Statue of Liberty doesn’t carry the welcoming torch of freedom. She gives the middle finger to all those self-proclaimed “good Christians,” who actually are polar opposites of Christ.

Ironically, poetically, the red-state voters who are not wealthy will suffer the most. I do not feel sympathy for them. They will receive what they deserve. deserve.

I feel bad for their children, who will be harmed by the wanton cruelty foisted upon them by their parents.

Rodger Malcolm Mitchell

Monetary Sovereignty

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A Government’s Sole Purpose is to Improve and Protect The People’s Lives.

MONETARY SOVEREIGNTY