The Search for Reality

I have poor rote memory. Names, dates, places, faces — they all disappear into a fog, and it only has become worse with age.

I learn by analogy.

Gravity & Einstein: Assessing the Rubber Sheet Analogy in Undergraduate Conceptual Physics
Visual analogy of how mass affects light.

In school, I passed tests not by memorizing the material but by analyzing all the questions and trying to imagine what the test creator was trying to acomplish.

This worked especially well with multiple-choice (usually four) question tests, because I had hundreds of questions to compare all at once.

When I was asked, “What is your favorite book?” my answer was the “Miller Analogy Test.” I have a copy on my desk. It contains fourteen hundred questions of this form: “A is to B as C is to ?

We all learn by analogy. You learned the alphabet with a poem that began, “A, B, C…” and our learning was aided by the fact that “G” rhymed with “P.”

Rhyming is a kind of analogy in that words are connected by a similarity of sound. “Beat” is like “meet,” is like “feet.”

We love analogy so much that part of the appeal of poetry is analogy, even when the poems don’t rhyme. It’s not just analogy, but also metaphor and simile that attract us and help us remember.

In school, we learned that an atom is like a miniature solar system, with electrons flying in orbit around the nucleus. Later, we learned that gravity can be compared to a rubber sheet with a bowling ball suspended at the center,

While those analogies helped us visualize, they ultimately were misleading. (All analogies are imperfect, which is what makes them analogies and not the actual thing.)

Learning requires comparisons, which makes quantum mechanics a baffling subject. Physicists speak of the “wave function” and its “collapse,” but there is no wave and nothing collapses. We cannot visualize the quantum world; it is so different from our macro world that our analogies don’t work.

The irony is that we pursue reality through analogies, which, by definition, are not reality.

The primary purpose of this blog is to present economic reality in a world that teaches economic fantasies, such as:

  1. The federal government’s finances are similar to  personal finances
  2. Federal taxes help pay for federal spending
  3. Medicare and Social Security are supported by FICA
  4. The federal government can run short of dollars
  5. The federal debt is unsustainable.

I’ve spent more than two decades presenting facts to counter these fantasies — an attempt at reality — and that is why I often question even the existence of reality.

What is reality?

3 types of optical illusions are a union of science and art - Big Think
What Is Reality?

Your brain creates reality via its translation of stimuli.

You do not see an object. Instead, your brain translates photons into a meaning that it creates. It translates sound waves, odor molecules, and taste molecules into meanings. We call those meanings “reality,” but they are illusions, the opposite of reality.  

Phosphenes as Reality

Phosphenes

Close your eyes. What do you see? Not nothing. You see patterns of light called “phosphenes.”

They are not “real” in the sense of something physical, but they are real to you.

Your brain invents them just as your brain invents everything else you see, hear, taste, or believe.

The patterns of light you see with your eyes closed are a direct demonstration that the brain does not passively receive reality. It generates reality from internal rules and signals.

There is no fundamental reality, at least not one that the human brain can comprehend.  There is an old story that makes the point. (Please don’t stop me if  you’ve heard this one.)

A scientist gives a lecture, explaining that the Earth orbits the Sun, and the Sun is part of the Milky Way, and the Milky Way is part of the Local Group, etc.

Afterward, a person stands up and says: “What you’ve told us is wrong. The world is actually a plate resting on the back of a giant turtle.”

The scientist asks, “What is the turtle standing on?”

She replies: “It’s turtles all the way down.

It illustrates infinite regress — the idea that an explanation depends on another explanation, which depends on another, and so on without end. It tries to explain the nature of reality and answer the question, “What is everything made of?”

If the answer is “atoms and fields,” the question becomes, “What are atoms and fields made of?”

Today, the answer given by many physicists is that a field is the fundamental entity — the thing other things are made of, not the other way around.

A field is a value assigned to every point in space and time.  Not a substance, not a fluid, not particles smeared out — just a function that tells you “what is the value here?”

Examples: Gravitational field: assigns an acceleration vector to each point. Electromagnetic field: assigns electric and magnetic components. Quantum fields: assign amplitudes that tell you the probabilities of particle interactions.

Particles are excitations of fields. Electrons aren’t made of “stuff.” They’re quantized ripples in the electron field. Photons are ripples in the electromagnetic field. Higgs bosons are ripples in the Higgs field.

The fields themselves are the substrate. A field is a mathematical object with physical effects. As far as current theory goes, it has no parts, no internal structure, and no medium carrying it.

Are you able to imagine something that is not composed of anything? A wave that has no substrate? Can you imagine a wave where nothing is waving or a field that is not made of anything, yet has effects?

Think of a magnetic field. It is so strong it can lift cars and trains, but it is not made of anything. And how does the Higgs field give mass to anything?

If you can visualize them, you’re far better than I am, for I cannot. Nor can I visualize how speed can affect time and dimension, yet it does both.

I don’t believe fields are the funamental reality because there are various fields, with various properties, which seems at odds with the notion of “funadmental.” So what is?

I have speculated that gravity is the fundamental substrate and that everything is “made of” gravity. Gravity is everywhere, It affects, and is associated with, everything. It never completely disappears.

The most disatant star feels the gravity associated with you (though the effect is extraordinarly slight). That distant star also feels the gravity associated with every other thing in the universe. It’s an incalculable blend of gravitational effects that we ignore but for the most prominent. However, “incalculable” does not mean “nonexistent.”

Gravity may be the base layer of the universe and needs no further explanation except its rules. The “turtles all the way down” ends with gravity, and we have not yet created the language to answer the question, “What is gravity made of?”

A topological effect can be described by a mathematical formula, that itself is not physical.

Each type of particle and field effect represents a distinct mathematical “twist” on gravity, which is analog, not quantum. It exists everywhere as it is fundamental to existence.

Digital measurement is used not because the universe itself is digital, but for several practical reasons.

Digital systems allow for easy error correction, tolerate noise effectively, and can be easily scaled. Additionally, they are easier to design at large scale.

Most importantly, digital technologies give an impression of precision.

I say “impression” because most measures cannot be exact. “Pi” and “e” cannot be exact digital numbers, nor can the Golden ratio and the square root of any number that is not a perfect square

The entire universe is analog, not quantum. Quantum mechanics is our attempt to describe continuous fields and continuous geometry using discrete conceptual vocabulary: Particle, spin, energy level, measurement

In reality (always searching for “reality”), the universe does not have edges, true discreteness, digital bits, or perfect integers. Mathematicians even say that 1 is equal to .9999999999999999 . . .

(We should remember that “equal to” is not the same as “identical with,” an important distinction in some cases. For example, trying to measure the gravitational effect of a distant star on a earthbound grain of pollen.)

We presume that spacetime (gravity?) is curved, and we have no exact digital measure for that curve. Geometry is the visible pattern; information is the substrate that produces the pattern.

Even a single electron a million light years away exerts a tiny, nonzero influence here. Discrete particles exist as patterns, but their effects are continuous.

The universe is analog at its core; discreteness is only a convenient interpretation.

Every particle and field in the universe is part of a single, continuous analog network.

Discrete particles, energy levels, and quantum states are patterns emerging from this analog substrate, and apparent discreteness is a convenient human abstraction.

Entanglement pervades this network, but nearly all of it lies beyond our ability to measure. Measurements, whether with rulers, detectors, or digital devices, are analog approximations of these underlying continuous effects.

The Black Hole Singularity

The universe is fundamentally analog. All fields and particles — gravitational, electromagnetic, electron, quark, and so on —  permeate every point in space.

Every excitation of these fields is a concentrated pattern, a region of higher amplitude that gradually trails off as a smooth gradient, extending infinitely.

No particle has a hard edge; no object is truly separate. What we call an electron, a proton, or a photon is a stable, concentrated pattern in its respective field, with its influence fading continuously into the surrounding space.

Because these fields overlap everywhere, everything is interconnected. The peak of one excitation may appear localized, but its gradient merges subtly with all other excitations, across both near and cosmic distances.

Gravity, as the curvature of spacetime, is universal: it couples to all forms of energy and momentum, connecting every pattern and establishing a global substrate.

From this perspective, the universe is not made of discrete substances, but of patterns of instructions: configurations of field amplitudes, gradients, and interactions.

Everything in the universe affects every other thing.

Mass, charge, spin, and all measurable properties are emergent features of these patterns.

Reality, as we perceive it, is a manifestation of overlapping, concentrated gradients in an analog, globally connected network, with gravity providing the scaffolding upon which all other patterns arise.

The black hole “singularity” is not a point, not a particle, not a substance.

It is the unity of the continuous field itself: an infinitely overlapping substrate from which all localized patterns — all particles, all excitations, all phenomena — emerge.

In one sense, it is related to a universal “butterfly effect,” where a small effect can travel through many iterations to create a significant effect

Our classical experience of distinct objects, boundaries, and separation is  a high-amplitude manifestation of this underlying continuous analog reality.

Gravity and The Unified Field: Patterns, Gradients, and Degrees

Because the fields overlap everywhere, everything “touches” everything, and classical notions of separation lose their absoluteness. What we measure as “distance” is better understood as a degree of influence: how strongly one pattern affects another across the continuous substrate.

A peak far away (i.e., of lesser influence) may exert a subtle effect; a peak “nearby” exerts a strong one. Classical space, with its rigid coordinates, emerges from these degrees of interaction, not the other way around.

Gravity, as the curvature of spacetime, is the universal analog substrate: it couples to all forms of energy and momentum and organizes the global network of patterns.

The universe is a group of instructions for gravity.

From this perspective, the universe is not composed of discrete substances, but of instructions manifested as overlapping gradients.

Mass, charge, spin, and other measurable properties emerge from the structure and dynamics of these patterns. Our classical experience of distinct objects, boundaries, and distances is an emergent perception of high-amplitude configurations in a globally connected, analog field.

A singularity, then, is not a point, particle, or substance. It is the unity of the continuous field itself: an infinitely overlapping substrate from which all excitations emerge.

Reality is a unified concentration gradient of information and degrees of influence.

Concentration Gradients
A concentration gradient looks impossibly complex, but visualize it not as a gradient of distance but of information, where one physical location contains the information that describes the entire gradient — akin to a mathematical formula like Fick’s laws of diffusion.

Distance is not fundamental. What we perceive as distance is the brain’s rendering of an underlying information distribution described by a mathematical object (a formula, field, or rule-set).

A “singularity” looks paradoxical only if we assume distance is real; once distance is seen as emergent, the paradox disappears. All the information that becomes the universe can be encoded in a single informational structure.

The Universe is an Informational Field With Emergent Space

Start with a single underlying thing: an informational field. Not space, matter, energy, or particles. Just information describing structured relationships.

This field is not “in” anything. It does not occupy space, because space hasn’t emerged yet. Physics already accepts some versions of this idea: The universal wavefunction, the holographic principle, the Wheeler–DeWitt view (timeless universal information).

These all are attempts to describe reality without assuming space or distance are fundamental.

I propose a similar idea. Start with the information, not the spacetime. Space, time, matter, and “location” are translations of that mathematical information. This is the key philosophical and scientific step and it is a difficult one because we don’t think about information as a separate entity.

The reality we perceive is a translation of information into experience. Phosphenes—the lights and patterns we see with our eyes closed—show that the brain can generate an entire “world” from nothing.

Quantum mechanics seems strange because we assume information must describe pre-existing objects. However, information comes first, and what we call particles, space, and time emerge from it.

The universe isn’t weird; our intuition about how it “should” work is, because we believe intuit that information has to be about something, not the something itself.

What we experience as distance, size, duration, velocity, mass, fields, and curvature are not fundamental. They are interpretations produced by the informational field itself, the structure of our nervous system (or whatever we define as observers), the rules that make physics appear classical at human scale.

Just as color is a brain’s interpretation of wavelengths, heat is an interpretation of molecular motion, solidity is an interpretation of electromagnetic repulsion, space is an interpretation of informational relationships, and distance is how our brains visualize certain patterns in the underlying field.

Viewed this way, the “singularity problem” disappears. A singularity looks weird only if things need room, points must be separate, and volume must scale with information content.

But if distance is not fundamental, nothing needs to “fit,” nothing collapses to “zero size,” and no paradox arises from “infinite density.”

The singularity is a place where the space-based translation breaks down, not a breakdown in the underlying information.

Everything — past, present, future — is encoded in the informational field

A single rule-set (call it “the universal equation”) contains the contents of the universe, the dynamics of change, all events, and relations. apparent randomness, observers, interpretations

Consider it a form of informational compression similar to how RNA encodes a living body, how a physical law encodes motion, or how a computer program generates a world.

Life does not arise from the four nucleotides of RNA themselves, but from the information encoded in the constraints that determine how those nucleotides can interact.

Mixing A, U, C, and G alone yields no results; what is crucial is the precise ordering and regulatory framework that guides chemical reactions along allowed pathways.

RNA, therefore, is already several steps removed from the true origin of organization—it assumes an underlying informational framework that shapes chemistry into functional structure.

This distinction illustrates a broader principle: reality emerges not from material components, but from the rules that govern their possible arrangements.

Every scientific theory rests on axioms that cannot be derived from anything deeper. Gödel’s incompleteness theorems guarantee that any sufficiently powerful system must contain irreducible assumptions.

Thus, the laws of physics are not “created” or “derived”; they are the primitive informational constraints from which everything else follows.

Physics does not explain why the universe has the rules it does; it only describes the rules of the informational structure we happen to inhabit.

At the most fundamental level, the “laws of nature” are the constraints of this system. There is no deeper layer from which these constraints are derived—they are the bottom turtle, the primitive informational grammar on which all further structure depends.

The universe is the unfolding of the rule. The rule doesn’t need space. Space needs the rule.

Determinism and “the illusion of distance” become the same idea. If everything is encoded in one informational structure, nothing is truly separate, and causation is internal, not spatial. “Near” and “far” are interpretations, not realities.

The whole “movie” of the universe is already in the rules. Distance is a story the brain tells itself so it can navigate information.

Just as consciousness is a response to stimuli, distance is merely a visualization of relational structure. Nothing actually travels anywhere. Information describes merely a transition.

Thus, quantum behavior stops looking weird. If everything is relational information, entanglement is natural. “Instantaneous” correlations are instantaneous because there is no distance. Superposition is a basic property of the information field. Measurement is the process of translating information into classical perception.

Nothing spooky is happening. It only looks spooky if we assume spatial separation is real. The “turtles all the way down” problem is resolved. You don’t find infinite layers of explanation.

You have the informational field (fundamental), the emergent spacetime (our translation), the emergent objects and particles (our further translation), and the emergent consciousness (our perceived responses to stimuli).

While I posit that gravity is the fundamental “substance,” it is created by something even more basic: Information.

Gravity feels fundamentally unique because it is the earliest and simplest way our brains interpret the universe’s informational structure. The four compounds that make up DNA do not create life on their own; it is the instructions that these compounds follow that give rise to life. Similarly, it is the instructions that gravity follows that shape the universe.

Gravity does not require a particle, charge, or medium; it is the shape of what we call “space.” This makes gravity appear as a genuine substance—an all-pervading field that everything else depends on.

And in a sense, that is true: gravity is the first physical phenomenon to appear when raw information is translated into a coherent universe. It is the first emergent property, the first way that the underlying informational relationships become visible when rendered as geometry.

What we perceive as curved space is the structural pattern of information as interpreted by our sensory and cognitive systems. In this interpretation, mass does not create gravity; instead, gravity creates mass by following the instructions for an informational architecture.

Gravity is the group of rules by which information arranges itself when viewed through the lens of spacetime.

This explains why gravity appears universal, smooth, and unavoidable—it is the baseline translation of information into physical law. To us, gravity looks like the “stuff” the universe is made of.

At the most basic level, gravity is no more fundamental than the shapes we see when our eyes are closed. Both are interpretations created by a brain (or an observer) processing an underlying informational pattern.

Gravity is real in the same way that space is real: as an emergent feature of how information is organized.

SUMMARY of REALITY?

As we have discussed, what we see, indeed, all we sense by any means, is not real. It all is an illusion. What then is the basis for reality? What is the bottom “turtle”?

I suggest that the basis of reality is not physical, but rather the rules — the information — that determines the illusions of the universe in which we live.

Perhaps there are other universes with different rules, yielding different illusions. There may be infinite other universes with infinite other rules and infinite other illusions.

It is the rules — the information — that differentiates our universe. Change any rule, and the universe would be vastly different. If gravity, the strong force, the weak force, or any other field were even slightly different, our universe would be unrecognizable.

Science only can attempt to discover the rules and then accept them as they are. Asking “why” or “how” may prove fruitless. It’s enough to learn “what.”

Rodger Malcolm Mitchell

Monetary Sovereignty

Twitter: @rodgermitchell

Search #monetarysovereignty

Facebook: Rodger Malcolm Mitchell;

MUCK RACK: https://muckrack.com/rodger-malcolm-mitchell;

https://www.academia.edu/

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

MONETARY SOVEREIGNTY

The latest “idea” for health care is a typical Republican dud.

Following Trump’s lead, as always, Senator Rick Scott has proposed a brilliant solution to the healthcare insurance problem: Obey Trump.

Trump says:  “Stop taxpayer money from going to insurance companies and instead give it directly to Americans in HSA-style accounts and let them buy the health care they want.”

Never mind that it isn’t taxpayer moneyfederal taxes do not fund federal spending. All federal spending is funded by new dollars created by the Treasury.

And never mind that the federal government can create dollars endlessly, and never run short, so there is no need to cut federal spending.

And never mind that every dollar spent by the federal government grows the economy, which is demonstrated by the formula: Federal Spending + Nonfederal Spending + Net Exports = Gross Domestic Product.

In short, ignore those facts (which Republicans are good at doing), and just focus on this fact: The Republican idea of giving money to people instead of insurance companies is stupid on its face.

Question: What will the people do with the money?

Answer: Buy healthcare insurance.

Question: From whom?

Answer: From those “money sucking, BIG BAD” insurance companies.

This is a healthcare solution???

Here is the exact wording from Rick Scott’s website.

November 14, 2025

WASHINGTON, D.C. – In case you missed it, Senator Rick Scott spoke to Fox News about his ideas to fix Obamacare and allow Americans to choose affordable health care that fits their needs as Democrats keep fighting to spend billions of tax dollars to mask the costs of the broken system that is failing Americans.

“His” ideas? Funny how, as always, they exactly mirror Trump’s ideas.

Senator Scott highlights real solutions to drive down costs and address the issues of Obamacare, like stopping taxpayer money from going to insurance companies and instead give it directly to Americans in HSA-style accounts and let them buy the health care they want by shopping across state lines.

“. . . stopping taxpayer money from going to insurance companies. . . ” so the people can give it to insurance companies.

See excerpts from the Fox News article, “Rick Scott calls Democrats ‘heartless’ as he pitches new Obamacare fix” below:

The Republicans have spent a decade trying to eliminate Obamacare, without offering a real solution, and they call the Democrats heartless??

“Sen. Rick Scott, R-Fla., said he doesn’t want to blow up Obamacare, but he does want to give Americans another option. ‘Scott and other Republicans contend that simply extending the current subsidies would see billions in taxpayer money funneled to insurance companies, without a dime actually finding its way to the pockets of Americans looking for insurance options.

Let’s parse this:

  1. He doesn’t want to “blow up” Obamacare. Instead, he wants Americans to choose between Obamacare, $2,000, and no insurance. If Americans, in desperate need of food and rent money decide to accept the $2,000, doesn’t that blow up Obamacare”
  2. But wait. If the money actually finds its way to the pockets of Americans,” does that mean it won’t be used to buy insurance from those BIG BAD insurance companies? Can’t have it both ways, Senator. If it goes into Americans’ “pockets,” it won’t be used for insurance.
  3. But wait, again. Later Scott says he “would directly send any kind of Obamacare subsidy money directly to a Health Savings Account (HSA). But he repeatedly has voted against Obamacare subsidy money. Isn’t that why the government shut down?”

So what the hell is he talking about?

‘His plan would ‘let the person be a consumer,’ he told Fox News Digital from an interview in his office. ‘I just think we ought to fix Obamacare,’ Scott said.

How does this “fix Obamacare”? It’s a horrible substitute for Obamacare, not a fix. It’s the usual Republican “replace Obamacare with . . . uh . . . something that doesn’t have Obama’s name on it.”

‘So the way I think about it is, look, if you want to buy off the exchange, you know, an Obamacare product, do it. If that’s what you want. I mean, leave that there.’

Sure, but without the federal supplement. And if there is no federal supplement, that $2,000 (that apparently doesn’t count as a supplement) will not buy insurance.

‘But I know what a consumer is going to do,’ he continued. ‘Consumers are going to be way more creative of how they take care of themselves.’

Creative? What does this mean? Are people without insurance expertise going to be “creative” when navigating the various differences in insurance policies?

Are you willing to go through all the paragraphs of every healthcare insurance policy available today?

‘Scott said his idea, in a sea of burgeoning possibilities on what to do next when it comes to answering the healthcare issue raised by congressional Democrats, would directly send any kind of Obamacare subsidy money directly to a Health Savings Account (HSA).

Now, he admits there is a “sea of burgeoning possibilities,” but he wants you to navigate that sea.

His plan, which he’s been working on in the background for some time, was given extra credence when President Donald Trump on Saturday recommended to Senate Republicans that ‘the Hundreds of Billions of Dollars currently being sent to money sucking Insurance Companies in order to save the bad Healthcare provided by ObamaCare, BE SENT DIRECTLY TO THE PEOPLE SO THAT THEY CAN PURCHASE THEIR OWN, MUCH BETTER, HEALTHCARE, and have money left over.’

“Money left over”? Scott mentioned that the money would be deposited into an HSA. There is no surplus left.

An HSA is not a general spending account. The money can be used tax-free only for qualified medical expenses.

Even if there were, how could consumers purchase insurance from the “money-sucking” insurance companies and still have any funds “left over”?

And one final question: What about pre-existing conditions and procedures without prior authorization? The Republicans already are trying to stick Medicare with prior authorization. Scott conveniently says nothing about those benefits.

It’s also an idea that Scott said he had spoken to the president about before. ‘Let the consumer be the buyer of healthcare,’ he said. ‘Any dollars we’re going to give to spend on it go to the consumer and let them buy what they want to buy.’”

Okay, so the idea is beyond stupid. If the idea is to fund healthcare insurance, then the money would have to go to the “blood sucking” insurance companies or Medicare (which is the only sensible solution — one that the Republicans hate.)

The Monetarily Sovereign federal government could and should fund a comprehensive, no-deductible Medicare plan covering every man, woman, and child in America. The government could and should fund such a plan without collecting FICA taxes.

Since the government has unlimited money and can afford a “solid gold” plan for everyone, what is really going on here?

It’s simple.

  1. Trump is envious of Obama and despises anything connected with Obama
  2. Trump is protecting the wealthy. It works like this:

The wealthy are rich only by comparison. That is, widening the Gap between the rich and the rest is what makes the rich richer.

The rich widen the Gap by pretending that the government is not Monetarily Sovereign and cannot afford to pay for benefits. 

Thus, the federal government easily could fund a Medicare for All plan, along with a Social Security for All plan, a Food Supplement for All, a College for All plan, and other programs to benefit those who are not rich — and do it all without collecting even a penny in taxes.

The federal government even could support the states on a per capita basis, and still not collect taxes. This would reduce the Gap between the wealthiest and the poorest, making the wealthiest less wealthy, an anathema for the Party of the Rich, the GOP.

If you support the idea of someone like Elon Musk having ten million times more wealth than you, then the Republican plan is for you.

Rodger Malcolm Mitchell

Monetary Sovereignty

Twitter: @rodgermitchell

Search #monetarysovereignty

Facebook: Rodger Malcolm Mitchell;

MUCK RACK: https://muckrack.com/rodger-malcolm-mitchell;

https://www.academia.edu/

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

MONETARY SOVEREIGNTY

Something too many economists don’t understand: Economics

One would hope that historians, and especially economists, would understand the differences between federal financing (Monetary Sovereignty) and personal financing (monetary non-sovereignty).

Sadly, any such hopes seem dashed by this MSN article.

‘We are guilty of spending our rainy-day fund in sunny weather’: Top economists, historians unite to urge action on $38 trillion national debt.

By Nick Lichtenberg

The national debt has grown to $38 trillion. The United States’ national debt, currently standing at $38 trillion and exceeding 120% of annual economic output, demands action, experts warn.

What about that $38 trillion national debt? To understand what it means, you might wish to review: Historical bullshit about federal “debt.” From September 26, 1940, to August 12, 2025

The article lists and describes the panic-stricken statements from “experts” about the federal debt from 1940 through today. In 1940, it was $43 billion— roughly 44% of GDP at the time.

As debt and the debt-to-GDP ratio rose, the economy grew and prospered. Yet, the panic has continued, and the screams have become ever more strident. Now, the so-called “debt” (that isn’t really debt; it’s deposits) has grown nearly a thousand-fold, the sky has not fallen, and we continue to be pummelled with articles like Nick Lichtenberg’s.

Having learned absolutely nothing in the past eighty-five (!) years, the experts continue to panic and scream, hoping you, too, will panic and scream. For your amusement, and perhaps sorrow, here’s the latest.

The nonpartisan Peter G. Peterson Foundation gathered a series of distinguished national economists and historians from outside the foundation in a collection of essays published Thursday.

They analyzed risks to U.S. economic strength, dollar dominance, and global leadership.

Ah, yes, distinguished national economists and historians — distinguished by their misunderstanding of the difference between federal government financing vs. state/local government financing. The former is Monetarily Sovereign; the latter is monetarily nonsovereign — two different animals.

The experts also explored the national debt’s impact on interest rates, inflation, and financial markets, with some characterizing this moment in history as a crisis.

A crisis of ignorance.

Collectively, they argue that the nation is operating under a dangerous fiscal gamble.

Assessing the mounting liabilities  delivered a stark judgment: “In simpler terms, we are guilty of spending our rainy-day fund in sunny weather.” Meaning, the government has little “dry powder” left to fund a major military effort or stimulate the economy during a crisis.

And what exactly is our “rainy-day fund”? How much is it? Where is it stored? And that “dry powder,” how much is it and where is it stored?

Feel free to ask Council on Foreign Relations President Emeritus Richard Haass and NYU professor Carolyn Kissane. However, they won’t know, because the fund and powder do not exist, not in real or even metaphorical terms.

Well, in one sense, they do exist in the Monetary Sovereignty of the U.S. government, which has the infinite ability to create dollars (and dry powder) merely by pressing computer keys.

Who says so? A few real experts, not the self-proclaimed, self-aggrandized, overly anointed kind:

Former Fed Chairman Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency. There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody. The United States can pay any debt it has because we can always print the money to do that.”

Former Fed Chairman Ben Bernanke: “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. It’s not tax money… We simply use the computer to mark up the size of the account.”

Fed Chairman Jerome Powell: “As a central bank, we can create money digitally.”

Statement from the St. Louis Fed: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.”

Former Secretary of the Treasury Paul O’Neill: “I come to you as a managing trustee of Social Security. Today, we have no assets in the trust fund. We have promises of the good faith and credit of the United States government that benefits will flow.”

Nobel Prize–winning economist Paul Krugman: “The U.S. government is not like a household. It literally prints money, and it can’t run out.” — Numerous op-eds/blog posts.

Economist Hyman Minsky: “The government can always finance its spending by creating money.”

Economist Eric Tymoigne: “A sovereign government does not need to collect taxes or issue bonds to finance spending. It finances directly through money creation.”

Now, back to the fun:

The debt crisis has reached a critical threshold. The U.S. now spends approximately $1 trillion annually servicing its debt—a figure that surpasses its defense spending.

And why is spending more on interest than on defence significant? It isn’t. Spending is spending. All federal spending adds to GDP. The phrase was just a desperate attempt to shock you. It shouldn’t.

The federal government can pay infinite interest, and the more it pays, the healthier the economy is. Here’s the evidence:

Gross Domestic Product = Federal Spending + Nonfederal Spending + Net Exports

Get it? The more the federal government spends, and the less it taxes (i.e., the greater the deficit), the more Gross Domestic Product grows.

What would be truly shocking is if the federal debt declined. History shows us examples of that decline:

Every Depression in U.S. History Came On the Heels of a Reduced Federal Debt

1804-1812: U. S. Federal Debt reduced 48%. Depression began in 1807.

1817-1821: U. S. Federal Debt reduced 29%. Depression began in 1819.

1823-1836: U. S. Federal Debt reduced 99%. Depression began in 1837.

1852-1857: U. S. Federal Debt reduced 59%. Depression began in 1857.

1867-1873: U. S. Federal Debt reduced 27%. Depression began in 1873.

1880-1893: U. S. Federal Debt reduced 57%. Depression began in 1893.

1920-1930: U. S. Federal Debt reduced 36%. Depression began in 1929.

1997-2001: U. S. Federal Debt reduced 15%. The recession began in 2001.

Economist Heather Long wrote that the 2020s are “fast becoming the era of big permanent deficits” with annual budget gaps projected to remain high (around 6% of GDP) even though unemployment is low, a startling departure from U.S. historical norms.

Let us pray for an “era of big permanent deficits.”  The alternative is small deficits or surpluses (which lead to recessions or depressions).

When deficit growth decreases, we have recessions (vertical gray bars), which are cured by increases in deficit growth.
Economists warn that solutions that worked in the past—such as the post-World War II debt reduction or the 1990s surpluses—are unavailable today. Economist Barry Eichengreen explained that the debt’s steep decline after World War II was supported by a highly favorable interest-rate-growth-rate differential (low real interest rates and fast GDP growth). Likewise, the 1990s reduction was fueled by the “peace dividend,” enabling deep cuts in defense spending. “None of these facilitating conditions is present today.”

The only necessary “facilitating conditions” for economic growth are increased federal deficit spending — exactly the thing that creates economic growth.

The Threat to National Security and the Dollar

Eichengreen, for his part, noted that current security threats from Russia, Iran, and the South China Sea create pressure for defense spending increases, not cuts.

Defense spending increases, if they occur, will grow the economy.
Compounding the problem is political polarization, which is cited as the most robust determinant of unsuccessful fiscal consolidation.

“Successful fiscal consolidation” is economics-speak for reduced deficit spending, which causes recessions and depressions.

With major entitlement programs politically protected, this fiscal gridlock leaves raising additional revenue as the most viable path, given that the United States is a low tax-revenue economy compared to its peers.

As the real economists — Greenspan, Bernanke, and Powell — stated above, the federal government neither needs (nor even uses) revenue. It creates all its spending money in three easy steps:

  1. Congress votes.
  2. The President signs
  3. Federal employees press computer keys

And voila, all the millions and billions of dollars the federal government spends are magically created. No tax dollars are involved. It’s all bookkeeping notations.

The debt is framed not just as a financial strain but as a direct threat to security. Haass and Kissane emphasized that money spent on borrowing is “money not available for more productive purposes, from discretionary domestic spending to defense,” a classic case of crowding out.

The above statement is ridiculous on its face, for two, what-should-be-obvious reasons:

  1. The federal government has the infinite ability to create dollars and,
  2. The dollars the government spends go into the economy, where the private sector can use them for productive purposes.

There never has been “crowding out,” and never will be. The government can’t run short, and every dollar spent is added to the economy, boosting spending.

Other underfunded programs—including cybersecurity and public health—hollow out internal capacities that protect the homeland.

It is unclear how an entity with the unlimited ability to create dollars can be “hollowed out,” nor is it explained how an economy that receives more dollars is being “hollowed out.”

I imagine there is no explanation simply because it cannot be explained. It is utter nonsense.

The crisis was characterized by Haass and Kissane as moving in “slow motion,” the most challenging type for democratic governments to address effectively. Avoiding a sudden “cliff scenario” in which bond markets crash, experts argue, is not avoiding the crisis itself; they added: “The day will come when the boiling water finally kills the frog.”
Ah, yes, “slow motion” because it isn’t happening yet, even though we’ve been predicting it for 85 years. And that darn old frog simply doesn’t understand that it’s supposed to have died by now.
The institutional integrity undergirding the U.S. dollar is also at risk. Historian Harold James wrote that he sees the situation as “the middle of a very dangerous experiment with the U.S. dollar, and with the international monetary system, whose fundamental driver is a fiscal gamble.” Erosion of the rule of law, accountability, and transparency raises the “specter of political risk in U.S. sovereign bond markets,” making it harder to maintain dollar dominance. Disturbingly, the potential for political interference in institutions, such as the Federal Reserve or the tampering with national statistics—as seen in Argentina’s cautionary tale—further erodes confidence.

Historian Harold James probably doesn’t realize it, but he’s not talking about the federal debt. Instead, he’s talking about dictator wannabe Donald Trump, and a cowardly do-nothing Congress, plus the morally compromised right wing of the Supreme Court.

They are the ones — not the essential debt growth –who are creating and countenancing the fall of the American economy, .

James’ colleague, Princeton politics professor Layna Mosley, cited the famous comment from the French statesman Valéry Giscard d’Estaing, who described the “exorbitant privilege” the U.S. enjoyed on the back of the dollar. She noted that, by virtue of the global role of the U.S. dollar and the U.S. leadership of the international financial system, the U.S. government has been able to borrow significant amounts on generous terms. But now, government actions and policy generate uncertainty and instability and “undermine the rules-based liberal international order from which the U.S. benefited greatly.”

Sounds frightening, except for one small detail. The U.S. federal government does not borrow.

As the representative of the St. Louis Fed correctly stated (above), the government is not dependent on credit markets to remain operational.”

The federal government creates all the dollars it spends just by pressing computer keys. The government neither needs nor uses any income, whether from borrowing or taxes.

Rather than providing spending money, the purposes of federal taxes are to:

  1. Control the economy by taxing what the government wishes to discourage and by giving tax breaks to what it wishes to reward.
  2. Assure demand for the U.S. dollar by requiring taxes to be paid in dollars.
The purposes of Treasury securities (T-bills, T-notes, T-bonds) are to:
  1. To help the Fed control interest rates by providing a “floor” rate.
  2. To provide dollar holders with a safe, interest-paying place to store unused dollars, which supports the value of dollars.
This loss of credibility empowers bond markets, and their displeasure can lead to sudden, painful economic consequences for everyday Americans through surging mortgage and loan interest rates. Haass and Kissane turned to another metaphor, saying the situation is akin to “forgoing fire or automobile insurance just because the odds are you will not suffer from a fire at home or an accident on the road.”

The above metaphor is a backward attempt to explain why all those “doomsday” predictions have been wrong. The better advice would be: “Don’t bet your life savings on misinformation from the media, the politicians and many economists, because for 85 years, you’d have lost.”

Learn from experience. The only loss of credibility will be endured by the noted historians and economists who, once again, as they have for the past eighty-five years, will be forced to come up with excuses for why the economy does not obey their dire predictions.

Rodger Malcolm Mitchell

Monetary Sovereignty

Twitter: @rodgermitchell

Search #monetarysovereignty

Facebook: Rodger Malcolm Mitchell;

MUCK RACK: https://muckrack.com/rodger-malcolm-mitchell;

https://www.academia.edu/

……………………………………………………………………..

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

MONETARY SOVEREIGNTY

Trump stopped 7 wars (or 6 or 8 or some other number)

Donald Trump is a psychopath whose mental illness manifests in an insatiable lust for praise. It is well known in domestic and international circles that getting what one wants from America requires flattery of “Dear Leader.”

Trump has surrounded himself with sycophants, toadies and other incompetents, and yet even these are not enough.

He has devolved into his own best flatterer, continually praising himself with claims that normally would be considered humorous were they not so harmful and damaging. 

Of course, with a psychopath, there is no “normal,” and in Trump’s case, the abnormality is unrelenting. When he’s not pardoning criminals who attempted a coup, he’s pardoning criminals he never even heard of (his claim) for reasons he can’t explain.

WASHINGTON — President Donald Trump on Sunday said he did not know anything about Changpeng Zhao, the billionaire crypto exchange founder with close ties to the Trump family’s own crypto empire — despite the fact that he he pardoned him last month.

“I can only tell you this. My sons are into it,” Trump added. “I’m glad they are, because it’s probably a great industry, crypto. I think it’s good.”

“I know nothing about the guy,” Trump said again when pressed.

He claimed that Zhao, also known as “CZ,” was the victim of the “weaponization” of the Justice Department, without providing further details. At the time of the guilty plea deal, federal prosecutors said Zhao caused “significant harm to US national security.”

Trump’s acknowledgement that he knows very little about one of his own pardon recipients comes as the president and his Republican allies continue to attack former President Joe Biden, claiming that he wasn’t aware of many of his official acts as president — including pardons — because his staff used an autopen signature.

“I guarantee you he knew nothing about what he was signing, I guarantee you,” Trump said in July.

The unfettered ability to pardon, to tariff, to punish and reward represent psychopathic Trump’s desperate and increasing need for power, praise, and prestige.

And yes, Trump’s sons (and Trump himself) are into crypto. Donald Trump discloses $57mn earnings from crypto venture. Ethics filing shows hundreds of sources of income for the US president, including property and books.

The conflicts of interest are staggering. No President in American history has made so much money by way of his Presidential power, than Donald Trump.

He loves to boast that he gives away his Presidential salary of $400K, while he makes billions from crypto and pardons a crypto criminal.

Here are excerpts from an online article from CBS News:

Trump says he’s ended 6 or 7 wars. Here’s what the record shows.

In recent weeks, President Trump has repeatedly claimed he deserves credit for ending six or seven wars during his first months in office, arguing that he should receive the Nobel Peace Prize for his work.

“I stopped seven wars, and they were, they’re big ones too,” Mr. Trump said Friday. 

“I’ve settled six wars, and a lot of people say seven because there’s one that nobody knows about,” he said in an August 19 interview.

A White House official provided a list of seven conflicts the president is referring to: Israel and Iran, Rwanda and the Democratic Republic of the Congo, Armenia and Azerbaijan, Thailand and Cambodia, India and Pakistan, Egypt and Ethiopia, and Serbia and Kosovo.

“There has been more progress towards peace than ever before because of this President’s leadership,” the official wrote.

Foreign policy experts say that while Mr. Trump has helped broker ceasefires, including one between Israel and Iran, several of the foreign conflicts cited by the administration were not full-scale wars — and many remain unresolved.
 
The White House did not respond to a request for clarification on why the president has repeatedly labeled all seven conflicts as settled wars.
 
“A war that nobody knows about”???
 
Here is a summary of the facts that praise-hungry Donald twists:
Conflict / “War” Trump Claimed to End What Trump Claimed What Actually Happened
India vs. Pakistan (Kashmir) Said he “prevented a war” after tensions over Kashmir in 2019. The U.S. urged restraint; tensions eased mainly through back-channel diplomacy and mutual deterrence — no formal peace or U.S.-brokered deal.
Armenia vs. Azerbaijan (Nagorno-Karabakh) Claimed credit for ending fighting in 2020. A cease-fire was brokered primarily by Russia, not the U.S.; hostilities later resumed in 2023.
Israel vs. Iran (or regional conflicts involving Israel) Claimed to have stopped Middle East wars through the Abraham Accords. The accords normalized relations between Israel and several Arab states but didn’t end any active war; conflicts with Iran and Palestinians persist.
Serbia vs. Kosovo Said he ended “hundreds of years of fighting.” The U.S. hosted a 2020 economic agreement; it was not a peace treaty, and tensions continue over Kosovo’s independence.
Egypt vs. Ethiopia (Nile Dam dispute) Claimed to have prevented war over the Grand Ethiopian Renaissance Dam. The U.S. mediated briefly, but no resolution; tensions remain.
Thailand vs. Cambodia (border disputes) Claimed to have “solved” that one. No record of significant U.S. involvement or any change tied to Trump’s diplomacy; minor border tensions persisted.
Rwanda vs. Democratic Republic of the Congo Claimed credit for preventing war there. No verified U.S. mediation; fighting in eastern Congo continues.

It’s just another in a long line of false claims, made by a psychopath, supported by a cowardly and immoral Republican Party and defended by an ethically compromised Supreme Court. 

Situation normal these days.

Rodger Malcolm Mitchell

Monetary Sovereignty

Twitter: @rodgermitchell

Search #monetarysovereignty

Facebook: Rodger Malcolm Mitchell;

MUCK RACK: https://muckrack.com/rodger-malcolm-mitchell;

https://www.academia.edu/

……………………………………………………………………..

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

MONETARY SOVEREIGNTY