- Freedom from government control
Romina Boccia - Affordability of government spending
1. Freedom: Every law reduces someone’s freedom. For absolute freedom, there would be no laws. Libertarians hate laws when their own freedom is reduced but accept laws that protect any of their freedoms.
A true Libertarian thinks people should be free to carry any weapon anywhere. Does that include machine guns, bazookas, flame throwers, drone bombs, poison gas?
Should people be free to keep slaves, spread smallpox, steal, kill, and kidnap? Well, no, that’s too much freedom. So, how much freedom should people have? Ask two Libertarians, and you’ll get five opinions.
Thus, Libertarians claim their right to tell you how much freedom you should have, and whatever they decide is based on their personal desires and their definition of Libertarianism.
2. Affordability: Because Libertarians feign ignorance about Monetary Sovereignty, they claim the thing called “federal debt” is like state/city debt, personal debt, monetarily non-sovereign debt, and business debt.
It isn’t. States, counties, cities, people, businesses, and euro nations can run short of whatever currency they use to pay their bills. The U.S. government cannot.
The finances of the Monetarily Sovereign U.S. government are unique. It alone can afford anything that can be purchased with U.S. dollars. Whether an obligation totals $1 or a hundred trillion dollars or any other number makes no difference to the federal government’s ability to pay for it.
The U.S. federal government pays for everything by creating U.S. dollars ad hoc. It never unintentionally can run short of dollars. Even if the government didn’t collect a penny in taxes, it could continue spending forever.
Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”
I suggest that Libertarian leaders are well aware of #1 and #2 above, and that there is a different reason for their objections to government spending. I suggest that the Libertarian party is a proxy for the Republican party in being tied to America’s richest 1%. “Rich” is a comparative, relying on the width of the Gaps between the top vs. the middle and bottom. Widening the income/wealth/power Gap between the richest and the rest of us makes the rich richer. Narrowing that Gap makes the rest of us richer.You are rich if you have $1,000, while everyone else has $10. But you are poor if you have $1,000 while everyone else has $10,000. It is the Gap that determines how rich or poor you are. The wider the Gap below you and the narrower the Gap above you, the richer you are.
The Libertarians, as proxies for the Republicans, work to widen the Gap between the rich and you, making the rich richer. It is reflected in Gap Psychology, the desire to widen the Gap below you and to narrow the Gap above you. Keep this in mind as we review excerpt from the following Libertarian article:These programs primarily benefit those who are not rich. Therefore, they are fair game for the Libertarian budget-cutters, who seldom express concern about tax loopholes for the rich but constantly complain about benefits to the rest of us.Don’t Let the Government-Shutdown Charade Distract You From the Debt Crisis America’s biggest fiscal challenge lies in the unchecked growth of federal health care and old-age entitlement programs.
Here are the facts:With the Senate and now the House reopening for business, Congress is resuming its negotiations over annual spending on discretionary programs. As Washington tinkers around the edges of the behemoth federal budget, members are steering clear of the biggest budget items—the ones sending U.S. debt to unprecedented heights.
- The U.S. debt is not the dollars the U.S. government owes. It is the total of dollars deposited into T-security accounts. The so-called “debt” is not a debt of the government any more than your deposit into your safe deposit box is a debt of your bank.
- When you open your T-security (T-bill, T-note, T-bond) account and deposit it, the dollars belong to you. The government never touches them other than periodically to add interest dollars.
- When your T-security matures, those dollars are returned to you, just as the contents of your safe deposit box are returned to you.
- Finally, almost every year, the U.S. debt moves to “unprecedented heights.” With rare exceptions, it has been doing that since 1940, and every year, those ignorant (intentionally or otherwise) about Monetary Sovereignty complain. Yet here we are, with a healthy economy and the federal government having no difficulty paying its bills.
To the Libertarians, “fiscal responsibility” and “government waste” refer to benefits received by the middle- and lower-income groups. Tax benefits that allow billionaires like Donald Trump to pay virtually $0 in taxes seldom concern Libertarians.Discretionary means that Congress hasn’t put these programs on autopilot, unlike so-called mandatory programs. Instead, Congress must vote to either continue or alter the spending. Otherwise, discretionary program funding expires.
While controlling discretionary spending is important for fiscal responsibility, for reducing government waste, and for negotiating the proper size and scope of federal activities, the current shutdown debate is largely symbolic.
Oh, woe! Sick and elderly Americans, especially poor Americans, are receiving more money. To Libertarians, this is outrageous. Never mind that the federal government has the infinite ability to create the dollars that fund these programs. The Libertarians’ concern is not affordability. The federal government can afford anything. The real concern is that the poor and middle classes receive dollars, narrowing the Gaps between the rich and the rest. The rich hate that because it makes them less rich. And what the rich hate, the Libertarians and the Republicans also hate.America’s biggest fiscal challenge lies in the unchecked growth of federal health care and old-age entitlement programs.
Alan Greenspan: “There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.”
In the Libertarian world, “reforming” means “cutting.”Repeated shutdown fights and a slew of temporary continuing resolutions have gotten us no closer to reforming Social Security and Medicare.
The federal government has infinite dollars. What, then, is the purpose of “modest fiscal restraints”? The sole purpose is to impoverish the great mass of people so that the rich can continue to rule.Those paying attention to the debt limit debate that ended in early June may be wondering what all the shutdown fuss is about, given that Congress and the White House agreed to new spending limits just a few months ago.
Those limits, specified in the Fiscal Responsibility Act, were a sham from the beginning. Secretive side deals undermined the stated goals of the bipartisan agreement before the ink was dry.
President Joe Biden has requested $40 billion in additional emergency supplemental spending, with the Senate adding several more billion to its appropriations bills, a glaring attempt to evade even modest fiscal restraints.
Alan Greenspan: “The United States can pay any debt it has because we can always print the money to do that.”
Three lies in just eleven words, a remarkable record:The debt limit deal did succeed in allowing both Democrats and Republicans to claim political victory while suspending the debt limit for more than 18 months.
The losers are the American people, as excessive federal spending and unchecked entitlement growth drive up inflation and interest rates and undermine stronger economic growth.
- Federal spending does not “drive up inflation.” All inflations are caused by shortages of critical goods and services, most often oil and food. Today’s COVID-induced inflation resulted from a scarcity of oil, food, transportation, metals, lumber, computer chips, labor, and other goods and services.Federal spending to cure these shortages, not interest rate increases, has been moderating inflation.
- Federal spending does not “drive up interest rates.” Interest rates are up because the Federal Reserve falsely believes low interest rates lead to inflation, and high rates cure it. This is utter nonsense. Adding high interest to the cost of goods makes those goods more costly. The sole effect of high rates is to stagnate the economy by transferring dollars from borrowers to lenders. A stagnant economy is known as a “recession” or a “depression,” and neither recession nor depression is the opposite of inflation. Apparently, the Fed never heard of “stagflation,” the combination of inflation and a stagnant economy.
- Stronger economic growth is defined as increased growth in Gross Domestic Product. (GDP). The formula for GDP is: GDP = Federal Spending + Nonfederal Spending+ Net Exports. Now I ask the Libertarian geniuses, given that formula, what can the federal government do to increase GDP growth? If you know basic algebra, your answer was “increase Federal Spending.” Seemingly, this is beyond the abilities of the Libertarians.
Hmm. “Raise the debt limit” by “stabilizing the debt growth.” If that makes sense to you, you are far wiser than me. By setting up a functional impossibility, the Libertarians make sure they always will have something to complain about.A more responsible way to raise the U.S. debt limit would have paired such an increase with a credible fiscal plan to stabilize the growth in the debt.
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.”
Look again at the formula for GDP. Federal spending does not “consume” part of the economy but adds to it. By simple, mathematical formula, increased Federal Spending increases GDP. It also increases Non-federal Spending by adding dollars to the private sector. Thus, IF one wishes to increase economic growth, the last thing would be to cut Federal Spending. The word “if” is accented because increasing economic growth is not a Libertarian goal. They want to widen the Gap between the rich and the rest, a goal that often can be met by recessions or even by depressions.The longer Washington waits to fix autopilot spending, the more damage they’ll do. The Congressional Budget Office’s latest long-term budget outlook projects that U.S. government spending will consume nearly 30 percent of the economy by 2053—almost 40 percent higher than the historical average.
Quote from former Fed Chairman Ben Bernanke when he was on 60 Minutes: Scott Pelley: Is that tax money that the Fed is spending? Ben Bernanke: It’s not tax money… We simply use the computer to mark up the size of the account.
Recessions and depressions provide opportunities for the rich to become richer. At those times, the rich can snap up assets at bargain prices while forcing labor to slave at meager salaries.More lies from the Libertarians. The federal government, having the infinite ability to create U.S. dollars, never borrows. Never.Congress is expected to rack up more than $100 trillion in additional deficits over those 30 years—more than four times what the U.S. government has borrowed over its entire history. Who will lend the U.S. government such vast sums?
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.”
Thus, no one lends to the federal government. Those dollars spent on T-securities do not go to the federal government. They go into T-security accounts, which are owned by the depositors. Those accounts provide a safe place to store unused dollars. This stabilizes the dollar. It does not give the federal government spending dollars, of which it already has infinite.Yet another lie. All financial obligations of the U.S. government are “unfunded” until the government funds them by creating new dollars ad hoc. Federal taxes do not fund federal spending. Unlike state/local tax dollars, which remain in the private sector by being deposited into private banks, federal tax dollars are destroyed. When they reach the U.S. Treasury, they cease to exist in any money supply measure. (No money supply measure includes federal dollars because the federal government has infinite dollars. Thus, your federal tax dollars cease to exist once received by the Treasury.) The Libertarians define a “serious reform effort” as anything that takes dollars from the poor and the middle classes.The main drivers of this increase are heightened interest costs and the growth in health care and Social Security spending.
With Medicare and Social Security responsible for 95 percent of long-term unfunded obligations, according to the Treasury Financial Report, there’s simply no way any serious fiscal reform effort can leave these programs untouched.
A “Christmas tree bill” is the Libertarian’s intentionally misleading description of anything that provides more money to the poor and middle classes.The most likely outcome from the current standoff is a continuing resolution into December, followed by a spending-laden Christmas tree bill before year’s end. This shutdown debate matters only so much, considering the huge fiscal challenge confronting the United States.
The Cato Institute claims it promotes “individual liberty, limited government, free markets, and peace, an honest description of an organization that wants the rich to rule. Nothing in that description is about reducing poverty, feeding the malnourished, educating the masses, narrowing the Gap, or being charitable. Quite the opposite. “Individual liberty” means the rich do whatever they want, and the rest do whatever the rich want. “Limited government” and “free markets” mean there will be no laws to prevent the rich from cheating and enslaving the rest of us. And as for “peace,” those angry protests by the poor can be messy. The Libertarians want the downtrodden to accept their lot in life, peacefully. What a perfect society the Libertarians try to force on us. Rodger Malcolm Mitchell Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm MitchellBy ROMINA BOCCIA , the director of budget and entitlement policy at the Cato Institute.
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The Sole Purpose of Government Is to Improve and Protect the Lives of the People.
MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 