Beardsley Ruml – #Monetary Sovereignty

Perhaps you could do three things at once:

Help get the facts out and reduce the amount of false information being disseminated to the American public
Help reduce the damaging belief that federal taxes are necessary to fund federal spending
Help force the government to support programs that will improve the lives and health of the American people

You can help by contacting your local public radio station with the following letter — a letter that I just Emailed to 1a@WAMU.org, one of the content providers to public radio, including my local station WLRN.

If enough of us contacts these stations, that just might begin the end of the false narratives that have hurt America.

Your listeners are being given false information. Today was not the first time, and unless you provide the facts, it won’t be the last.

Today is April 27, 2026. This morning, at about 10:30, Eastern time, station WLRN, on program, “1a,” interviewed “experts” who falsely claimed:

The purpose of federal taxes is to fund federal spending.

The federal deficit is too high

Therefore, federal taxes must be increased, or federal spending must be decreased.

The facts are:

Unlike state and local governments, the federal government is uniquely monetarily sovereign, with the unlimited ability to create U.S. dollars. Even without collecting any taxes, it could keep spending indefinitely by simply creating more dollars.

The sole purposes of federal taxes, rather than funding federal spending, are:

–To control the economy by taxing what it wishes to discourage and by giving tax breaks to what it wishes to reward, and
–To assure demand for the U.S. dollar by requiring that taxes be paid in dollars.

The federal deficit is a measure of the growth dollars the government adds to the economy. When the government fails to add growth dollars, we have recessions (if we are lucky) and depressions (if we are not lucky.)

Every depression in U.S. history began with federal surpluses, and every recession was cured by federal deficit spending.

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.

This graph demonstrates the essentially parallel paths of federal deficit spending and economic growth. Recessions, which begin with reduced deficits, are vertical gray bars.

Increasing federal taxes and/or decreasing federal spending reduces the number of growth dollars in the private sector, which by formula, shrinks the economy, i.e. is recessive.

Gross Domestic Product = Federal Spending + Non-federal Spending + Net Exports

Who agrees with all of the above? For starters, how about:

Alan Greenspan, Former Federal Reserve Chairman: “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. Alan Greenspan: “The United States can pay any debt it has because we can always print the money to do that.”

Ben Bernanke, Former Federal Reserve Chairman: “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.”

Beardsley Ruml, former Chairman of the Federal Reserve Bank of New York . “The necessity for a government to tax in order to maintain both its independence and its solvency is true for state and local governments, but it is not true for a national government. All federal taxes must meet the test of public policy and practical effect. The public purpose which is served should never be obscured in a tax program under the mask of raising revenue.”

Federal Reserve Chairman, Jerome Powell: “As a central bank, we have the ability to 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.”

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.”

Paul Krugman, Nobel Prize–winning economist: “The U.S. government is not like a household. It literally prints money, and it can’t run out.” “The government can always finance its spending by creating money.”

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