In the quite unlikely event, that I, a 91-year-old, were to decide to run for President, here is what I would tell America:
My fellow Americans; you are constantly warned that the federal debt is “too high,” “unsustainable,” or a “ticking time bomb.”
Yet none of these warnings take into account the most important fact: The United States government creates dollars at will. It never can run short of dollars to pay its bills.
The federal government is not like a household, a business, or local government. Households must obtain dollars before they can spend. The federal government creates dollars by spending. The more the federal government spends, the more spending dollars it has.
Federal taxes do not provide the government with spending money as local taxes fund cities or states.
In short, federal spending creates economic growth dollars, while federal taxation removes growth dollars from the economy, and so, is recessionary.
This means the so-called “federal debt” is not debt in the ordinary household sense. It is largely the accumulated total of federal deficits over time — the net number of dollars the government has already added to the economy.
Treasury securities, like T-bills, T-notes, and T-bonds are interest-bearing accounts at the Federal Reserve system. They are assets to the economy.
U.S. dollars and Treasury securities are the same. They all are federal obligations. The only difference between a dollar and a T-bill is that a dollar doesn’t pay interest and doesn’t have a maturity date.
Worrying about the federal “debt,” is the same as worrying about the number of dollars in the U.S. economy. Keep in mind that a growing economy requires a growing supply of dollars.
As the population expands, businesses grow, production increases, and savings rise, more money is needed to support the larger volume of economic activity.
When the federal government fails to add sufficient dollars to the economy, we have recessions and depressions.
History repeatedly demonstrates that economic downturns occur when our government pursues austerity policies. By contrast, periods of strong federal spending lead to economic expansion.
That is why; to cure recessions, the government increases spending.
Critics warn that excessive federal spending causes inflation. But inflation is not caused by the existence of federal debt. Debt is merely an accounting record of past deficits. A debt accumulated over decades cannot suddenly consume steel, wheat, doctors, or gasoline merely because the number grows larger.
The real issue is whether new spending exceeds the economy’s current ability to produce goods and services.
In other words, inflation is fundamentally a shortage problem. If too many dollars chase too few goods, prices rise. But the important part of that sentence is not “too many dollars.” It is “too few goods.”
Historically, major inflations have come from shortages caused by wars, oil shortages, supply-chain breakdowns, crop failures, or collapses in productive capacity. The problem was not that the government “spent too much money.”
The problem was that something — a war, weather, pandemic, regulations — something restricted the supply of key goods and/or services, so there were shortages, and they caused prices to rise.
Today’s inflation is yet another example. It was not caused by excessive government spending. It was caused by the Iran war that is causing an oil shortage, that in turn, is causing inflation.
This distinction matters enormously when America treats the theoretical threat of inflation as more frightening than the very real suffering caused by poverty, inadequate healthcare, failing infrastructure, homelessness, and economic insecurity.
During World War II, the United States proved that when the nation decides something is urgent, productive capacity can expand rapidly. Factories appeared almost overnight. Millions of workers were trained. Ships, planes, tanks, and weapons flowed from newly created assembly lines.
Today you have been that told that universal healthcare, stronger Social Security benefits, modern infrastructure, or ending poverty are “unaffordable.” Yet the same country that mobilized for World War II still possesses the ability to mobilize resources when political will exists.
The true question is not: “Is the federal debt too high?” The true question is: “Is the government using its ability to create money that creates the supply of important goods and services?” Is the federal government providing enough funds for the productive, healthy, educated, and stable society we are capable of creating?”
My fellow Americans, you have been told we cannot afford healthcare for all, dignified retirement, good schools, modern infrastructure, scientific leadership, and economic security for ordinary citizens.
Yet somehow, there is always enough money for war, enough money for tax cuts favoring the wealthy, enough money for bailouts, and enough money for anything the powerful decide is important to them, personally.
I am here to tell you a simple truth: The United States government cannot run out of dollars. We create dollars, as many as we want, instantly, just by pressing computer keys.
The real limits are not financial. The real limit is the myth that money is limited.
The fuel for the American economic engine is money. The federal government could and should provide that fuel and stop pretending it can’t.
During World War II, America faced an existential threat. Experts said we lacked the factories, workers, ships, planes, and weapons needed to win. But the American people mobilized. Factories appeared almost overnight. Millions went to work. The impossible became possible because the nation understood the urgency of the moment.
Today we face other existential threats: poverty, sickness, unaffordable housing, decaying infrastructure, crushing insecurity, and the widening gap between the rich and everyone else.
These are not acts of nature. They are political choices made by those who wish to reserve power for themselves.
So here is what I, as President Mitchell, will do if you elect me. Under my administration:
We will stop pretending the federal government is a household with a maxed-out credit card. We will recognize that federal spending is not constrained by tax collections, but by the nation’s real productive capacity.
We will fund healthcare through Medicare for every American of all ages.
We will help fund new businesses that create jobs. We will eliminate the FICA tax that unfairly burdens salaried workers and discourages hiring.
We will fund Social Security directly, in the same way that we fund Congress, the White House, the Supreme Court, the military and most other federal initiatives, so that Social Security provides good livable benefits and so aging is not a sentence to poverty.
We will fund the expansion of medical schools, hospitals, nursing programs, and research centers so that healthcare capacity grows with demand.
We will provide funds for the world’s best education based on students’ abilities and desires, not on the size of their pocketbook.
We will rebuild roads, bridges, power systems, water systems, and public transportation. We will invest in science, clean energy, education, and technology.
And if inflationary pressures appear, we will fund cures for the actual shortages causing them: the energy shortages, the housing shortages, the labor shortages, the transportation bottlenecks, and the other supply constraints that all can be cured by targeted federal spending.
Today’s oil shortage would be far less impactful if we had been funding solar, wind, geothermal and research into other renewable energy sources.
And rather than hiding behind walls and deporting good, hardworking, immigrant families, the very workers and consumers who built America, we will vet them and provide a pathway to citizenship, so they can continue to help build our great nation.
We will solve problems instead of claiming they are unsolvable or blaming some groups for failures they didn’t cause. Claiming and blaming never solved anything.
America is not poor. America is rich beyond historical imagination. The tragedy is not that we lack money. The tragedy is that we have allowed ourselves to believe we are helpless while our millions suffer needlessly.
The purpose of a modern economy is not to protect accounting myths. The purpose of a modern economy is to improve the lives of its people.
That is the America I believe in. And that is the America we can build together.
Thank you, and God bless America.
Rodger Malcolm Mitchell
#Monetary Sovereignty - Mitchell 