Who are America’s most dangerous people?

Who are America’s most dangerous people? What’s your opinion?

You might be tempted to name the white supremacists who attacked Congress and attempted to overthrow the U.S. election. Had they succeeded, the America you know and love would be gone.

Or you might list the Trump Republicans who encouraged, then excused, the attempted coup and who still are in our government.

But I offer you another choice:

These are the leaders of an organization called “The Committee for a Responsible Federal Budget” (CRFB).”

They did not cause or join a riot. They did not crash Congress. They did not cry, “Hang Mike Pence.” They are far more clever and subtle.

And that subtlety is what, in my opinion, makes them so dangerous. Even the group’s name, including the words “Responsible federal budget,” makes them sound so . . . responsible.

But the pen is mightier than the sword, and therein lies the real danger.

The CRFB doesn’t march or attack. They write. They talk. They reason. They influence other influencers like politicians, economists, and the media.

The group speaks to the public’s ignorance of federal financing. It draws false parallels between federal funding and personal financing. It even draws false parallels between federal financing and state/local government financing.

The general public does not understand that the parallels are false. So, when the CRFB people say, in essence, “If you do this, the federal government should do it too,” that sounds reasonable to the uninformed mind.

“If you must live within your means, the federal government should live within its means.” “If you can’t afford to borrow, you don’t borrow. The federal government should do the same.” “You have to pay off your debts. So should the government.”

You can’t argue with such logic — unless you understand it’s all a lie. 

Federal financing is nothing like your financing, nothing like state/local government financing, and nothing like business financing. It is unique.

The Federal government is Monetarily Sovereign. It is the creator of the laws that created the U.S. dollar. It cannot run short of laws, so it cannot unintentionally run short of dollars. It can give the U.S. dollar any value it chooses.

No amount of federal spending is “unsustainable.” it does not need tax income or any income. Even if the federal government stopped collecting taxes, it could continue spending forever.

(The purpose of federal taxes is to control the economy by taxing what it wishes to limit and giving tax breaks to what it wishes to encourage.)

The government creates dollars ad hoc when it pays bills.

Even the language describing personal finances and federal finances can be different:

    • The federal government never borrows dollars (It accepts deposits into accounts, the contents of which are privately owned. The government never touches the contents — similar to safe deposit acounts.)
    • Federal debt is not a debt of the federal government. It is the total of the abovementioned accounts.
    • Add to the debt means to add money to the economy. To reduce the debt requires that money in the economy be destroyed.
    • A federal surplus is a deficit for the economy (aka “the private sector”). Similarly, a federal deficit is a surplus for the economy.
    • A trade deficit is money flowing out, with goods and services flowing in. Since trade is assumed to be an equal exchange, the trade deficit also could be called “goods/services income.” For a government having the infinite ability to create dollars, goods flowing in are more important than dollars flowing  out.
    • The notorious “debt limit” does not limit debt; it limits paying for existing debt. It is the equivalent of insolvency.
    • The federal government cannot unintentionally become insolvent. That means no federal government agency (Medicare, Social Security, the military, etc.) can become insolvent unless Congress and the President want it to.
    • Federal “trust funds” are not real trust funds. They merely are record-keeping lines on a balance sheet. They too cannot become insolvent unless Congress and the President want that result.

In any economy, scarcity leads to higher prices. Inflation is a general increase in prices caused by an increase in the scarcity of goods and services.

Most inflations boil down to a scarcity of oil. Today’s inflation has been caused by COVID-related scarcities of oil, food, lumber, steel, rare earths, supply chains, labor, etc.

Federal deficit spending (red) does not cause inflations (blue). The peaks and valleys do not correspond. Reduced deficit growth leads to recessions (vertical gray lines).
Inflation is caused by shortages of key goods and services, primarily shortages of oil (gray line), which translate into shortages of food, transportation, and virtually all other commodities.

Federal deficit spending does not cause inflation. In fact, it could cure inflation if the spending focused on obtaining and distributing scarce resources.

Keep in mind the above facts while you read what the CRFB says:

What Would It Take to Balance the Budget?

It’s encouraging that many in Congress are focusing more on our unsustainable fiscal situation and want a plan to improve the nation’s fiscal outlook.

At no time does the CRFB tell why the fiscal situation is “unsustainable.” The federal government has run a deficit (taxes lower than spending) almost every year since 1940.

The net total of those deficits approximates $25 trillion. The CRFB has been wrong every year of its existence, and neither it nor its followers have learned anything from these failures. Yet here we are. Sustaining.

Unfortunately, due to continued borrowing over the past several years, the desirable fiscal goal of budgetary balance has become much more difficult to reach, and it is doubtful it could be achieved in a decade or less, notably if revenue, defense, and other parts of the budget are excluded from the solution.

The federal government does not borrow money. Why would it, when it has the infinite ability to create the laws that create U.S. dollars? It can’t run out of laws or dollars.

What the CRFB incorrectly terms “borrowing” is the acceptance of deposits into T-bill, T-note, and T-bond accounts, which are owned by depositors, not by the government.

The government never touches those dollars. It “pays off” the so-called “debt” by returning the dollars to their owners, the depositors.

And why is budgetary balance a “fiscal goal” when it invariably causes recessions and depressions? (See the first graph above.)

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.

In order to achieve balance within a decade, all spending would need to be cut by roughly one-quarter and that the necessary cuts would grow to 85 percent if defense, veterans, Social Security, and Medicare spending were off the table.

Economic growth is measured by Gross Domestic Product (GDP), one formula for which is:

GDP = Federal Spending + Non-federal Spending + Net Exports

Your elementary school algebra should show you what happens to economic growth when federal spending declines. Growth declines.

RECESSION: a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters

DEPRESSION: a prolonged and severe recession in an economy

By definition, the CRFB’s “fiscal goal” is a recession or a depression.

These cuts would be so large that it would require the equivalent of ending all nondefense appropriations and eliminating the entire Medicaid program just to get to balance.

And is that supposed to be a good thing?

Balancing the budget has become increasingly challenging over the past 15 years.

Efforts to show balance too often rely on unrealistically aggressive cuts, unspecified savings, rosy economic assumptions, and other budget gimmicks as a result.

Successful budget actions in recent years have come mainly from more targeted deficit reduction efforts than from trying to meet overly aggressive fiscal goals.

“Successful budget actions in recent years”? One is left to wonder what the CRFB considers “successful.” The only spending reduction in the past 80 years came in the 1998 – 2001 period, the reduction President Clinton is so proud  to boast about.

It caused the recession of 2001, which was cured by increased deficit spending.

President Clinton’s reduced deficit spending led to the recession of 2001, which was cured by increased deficit spending.

When the CRFB refers to “targeted deficit reduction,” they mean less money was spent on specific projects. The CRFB doesn’t explain how those mini-reductions were deemed “successful.”

And with deficits on course to reach $2.4 trillion (6.6 percent of GDP), balancing the budget is now harder than it has ever been.

Balancing the budget is problematic because it damages the economy. The CRFB is aware of this but pretends there is some way to cut Federal Spending while not cutting GDP — a mathematical impossibility.

The exact amount of savings needed for full budget balance is uncertain and will depend both on budget projections in the Congressional Budget Office’s forthcoming ten-year baseline as well as the path of any proposed policies.

In the recent CRFB Fiscal Blueprint for Reducing Debt and Inflation, we estimated achieving balance would require roughly $14.6 trillion of deficit reduction through 2032, including over $2 trillion of policy savings (and nearly $400 billion of interest savings) in 2032 alone.

To achieve these savings without more revenue, we estimate all spending in 2032 would need to be cut by 26 percent; this figure rises to 33 percent if defense and veterans spending is exempted from the cuts.

Cut all spending by “only” 26 or 33%? Think. How would that affect GDP? Then think of the definition of “depression.” The CRFB wants to cause a recession or depression as a “cure” for the non-existent evils of federal spending.

The true purpose is to make the rich richer by widening the Gap between the rich and the rest.

For a sense of magnitude, applying this cut across the board would mean reducing annual Social Security benefits for a typical new retiree by $10,000 to $13,000 in 2032.

It would also mean laying off 1.1 to 1.4 million federal employees (more than two-thirds of the civilian workforce if the military were exempted) and removing 20 to 25 million people from Medicaid eligibility.

Reducing Social Security and firing 1.1 to 1.4 million so that the federal government, which has infinite dollars, is not how to run an economy, though it is a great way to make the rich richer.

Excluding Social Security and Medicare from cuts would make the task of balance even more unrealistic. Without touching spending on defense, veterans, or Social Security, all other spending would need to be cut by 51 percent. Also, excluding Medicare would mean that the remaining spending would need to ultimately be cut by 85 percent.

It gets dumber and dumber, but the CRFB favors these draconian cuts to benefit the rich.

The figures above do not include additional savings that might be necessary if policymakers choose to extend $3 trillion worth of tax cuts that have expired or are set to expire in the coming years.

To give a sense of just how challenging achieving balance in 2032 by controlling spending is, it would require doing one of the following:

*Eliminating virtually all defense and nondefense discretionary spending programs;
*Cutting Medicaid spending in half while eliminating all other mandatory spending outside of Social Security and Medicare;
*Eliminating all nondefense discretionary spending and ending the entire Medicaid program;
*Repealing Medicare, all income security programs, and all refundable tax credits; or
*Discontinuing all Social Security retirement and survivors’ benefits.

Did you notice what is missing from the above list? Anything that would take from the rich. Because the CRFB is a tool of the rich, something like a 90% tax rate (which America had in 1941 is not even discussed. In 1941, in fact, Roosevelt proposed a 99.5 percent marginal rate on all incomes over $100,000. )

Wanting to balance the budget is an admirable and desirable goal.

No, it is a stupid goal. It would cause a recession if we are lucky, but most likely, a deep depression that only could be cured by massive federal deficit spending. The CRGB goal is based not on economic need but on making the rich richer. That is the CRFB mission.

The first step, of course, is to avoid actions that would worsen our already unsustainable fiscal situation.

The irony is palpable. Here are people recommending taking trillions from the private sector but claiming they want to “. . . avoid actions that would worsen our fiscal situation.” It would be laughable were it not so harmful.

We commend the adoption of a specific and realistic fiscal target.

The realistic target should be to narrow the Gap between the rich and the rest and to provide more human benefits to the populace. The federal government has all the tools it needs to create a paradise on earth, so long as these most dangerous people in America don’t hold sway:

Rodger Malcolm Mitchell
Monetary Sovereignty

Twitter: @rodgermitchell Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell


The Sole Purpose of Government Is to Improve and Protect the Lives of the People.


An example of how the forces of ignorance are relentless

This is frightening. It’s a letter I just received from that notorious disseminator of misinformation, the Committee for a Responsible Federal Budget (CRFB).

Hello Rodger

With economic conditions making fiscal issues impossible to ignore, we hope there will be opportunities to improve our fiscal situation in the coming months.

This past year saw both victories and setbacks, and many policies that would have been far worse were it not for the hard work of the Committee for a Responsible Federal Budget.

Without the support of our loyal donors, none of our work would have been possible.

For the last year, we have worked tirelessly to push back against the narrative that deficits do not matter.

Actually, the narrative is that deficits do matter. Federal deficits are absolutely necessary for economic growth. Without deficits, we have depressions and recessions.

U.S. depressions tend to come on the heels 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.

The measure of our economy, Gross Domestic Product (GDP), is a spending measure, and spending requires the money that deficits provide:

GDP = Federal Spending + Non-federal Spending + Net Exports

The graph below shows the essentially parallel paths of GDP vs. perhaps the most comprehensive measure of the money supply, Domestic Non-Financial Debt:

Vertical gray bars are recessions, which are preceded by reductions in debt growth and cured by increases in debt growth.

Those “tireless efforts” of the CRFB represent efforts against economic growth and for recessions and depressions.

However, as we write this, our national debt is on track to surpass record levels, the federal government is still operating without a budget, and the major trust funds are edging even closer toward insolvency.

The “major trust funds aren’t real trust funds. They do not fund anything, and like the federal government itself, they can become insolvent only if Congress and the President want them to become insolvent.

We could eliminate those fake trust funds today, and that would have no effect on Medicare, Social Security or any other federal program.

How we tackle these challenges will not only impact our nation’s fiscal future but determine what type of country our children and grandchildren will inherit. 

That is true. If we continue to worry about federal debt, deficits, and fake trust funds, our children will inherit a country ruled solely by the wealthy elite. That seems to be the goal of the CRFB.

With the fiscal future of our country hanging in the balance, we wanted to share a summary of our work with you. Because of the generosity of our donors, we achieved the following this year:

    • Published more than 150 analyses, including 21 papers and testifying on Capitol Hill;
    • Participated in more than 225 meetings with more than 155 Members of Congress and their staff;
    • Launched our Student Debt Cancellation project and expanded our Trust Funds Solutions Initiative to include new insolvency countdown interactives;
    • Hosted six virtual events with policymakers and experts on timely topics, such as Social Security and inflation, as well as in-person events engaging more than 3,000 people; 
    • Cited more than 1,200 times by hundreds of unique outlets, including CNBC, CNN, The Economist, Fox News, The New York Times, The Wall Street Journal, and The Washington Post.

The massive misinformation keeps coming at us from all sides, with scant voices to protest.

–Student debt cancellation not only would benefit students and not only would benefit America by educating more students. It also would benefit the American economy by pumping dollars into the pockets of Americans.

–The Trust Fund concerns are 100% fake and are a blatant attempt by the rich to reduce benefits to the middle- and lower-income groups.

None of this would have been possible without support from people like you. Will you consider supporting the Committee for a Responsible Federal Budget this year with a tax-deductible donation? 

The people can spread their misinformation on a tax-deductible basis.

Your gift ensures that fiscal responsibility has a champion and a voice during key fiscal moments and debates in Washington.

Looking ahead to 2023, we hope you’ll continue following our work, attending events, and making your voice heard.

While our country faces formidable fiscal challenges, together, there is a lot we can do to meet them. We appreciate any help you can provide,

The Committee for a Responsible Federal Budget Support Our Work

Sadly, there isn’t a Committee for a Truthful Federal Budget (CRTB) that would disseminate such facts that:

  1. The Federal government has infinite dollars. It cannot become insolvent. Even if it collected zero taxes, it could continue spending, forever.
  2. Increased federal deficit spending is necessary for economic growth. The lack of deficit spending causes recessions and depressions which can be cured only by increased deficit spending.
  3. Federal deficit spending is not socialism. Ownership and control, not spending, are signs of socialism.
  4. Inflations are caused by shortages of key goods and services, not by federal debt and deficits. Inflations can be prevented and cured by federal deficit spending that targets shortages.

You and your children already suffer from the lies that reduce federal benefits. The federal government could do so much more; taxes could be so much less.

Is there anyone with the knowledge and financial resources to counter the massive misinformation campaign coming from sources like the CRFB?


Rodger Malcolm Mitchell
Monetary Sovereignty

Twitter: @rodgermitchell Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell


The Sole Purpose of Government Is to Improve and Protect the Lives of the People.



America’s most dangerous and harmful conspiracy theory

It’s not the hammer. My problem is that I have a headache. Get me an aspirin.

What is America’s most dangerous and harmful conspiracy theory?

No, it’s not the idiocy from QAnon. There is no group of Satanists, cannibals, and child sex abusers plotting against Donald Trump.

Only the mentally challenged believe that tripe.

No, it’s not the ages-old, anti-Semitic B.S. that Jews drink children’s blood on holidays. Jews famously love children. Mogen David wine is the preferred imbibement.

And no, it isn’t that Trump was cheated out of the election (though he and the entire GOP already plan to make the same claim if they lose again).

Fifty lawsuits, dozens of judges — some Republican — and numerous recounts have demonstrated the ongoing perfidy of that assertion.

The guy lost by over 7 MILLION individual votes and 74 electoral votes! And still, he whines. What does it take to convince the MAGAs?

Only the bottom segment of America’s intelligence range still believes those ideas.

The single most dangerous and harmful conspiracy theory is believed by the majority of America because it is repeated by the majority of America. Repetition is convincing.

Here is a classic example:

The CRFB Fiscal Blueprint for Reducing Debt and Inflation October 26, 2022

The United States faces numerous economic and fiscal challenges, including surging inflation, rising interest rates, trust funds heading toward insolvency, a broken budget process, and an unsustainably increasing national debt.

The CRFB (Committee for a Responsible Federal Budget) is part of a conspiracy to spread the false theory that these are problems caused by too much federal deficit spending.

The very rich, who support the CRFB, want you to believe that if you would accept less help from Medicare and Social Security while paying more of your salary to FICA, America could survive financially.

You working stiffs who struggle to pay for food, clothing, a car, a few days of vacation, and education for your kids are simply being selfish by asking the government to help you with your medical bills and retirement.

Shame on you, especially when the rich have to scrimp along on the few millions they get from tax loopholes. After all, rich Donald Trump paid minimal taxes in three of the past ten years. What more do you expect?

In order to help the Federal Reserve fight inflation, reduce interest costs, and support economic growth, policymakers should put forward a plan to put the national debt on a sustainable long-term path.

Though there is no one single “correct” fiscal metric, the higher the debt-to-Gross-Domestic-Product (GDP) ratio and its growth trajectory, the more vulnerable the U.S. economy is.

If you believe those two sentences, you have been royally conned. They are lies.

You have been fed the same baloney since at least 1940 when the “debt” first was called a “ticking time bomb.” The so-called “national debt” was only $40 billion back then.

Today, it’s somewhere in the neighborhood of $25 TRILLION, an astounding 62,400% increase. Yet here we are. Still sustaining. How is that possible?

First, the so-called national debt isn’t really a debt; second, it is infinitely sustainable. The federal “debt” is two different things united by an unnecessary law.

I. The so-called “debt” is the net total of federal deficits, i.e., the difference between federal income (mainly tax collections) and federal spending.

But, while state/local government taxes fund state/local government spending, federal taxes do not fund federal spending. The Monetarily Sovereign federal government destroys every tax dollar it receives, and it funds all its spending by creating new dollars, ad hoc, every time it pays a bill. It works like this:

When you pay taxes, you take dollars from your checking account. Those dollars are part of the “M2” money supply measure.

When those dollars reach the U.S. Treasury, they suddenly are not part of any money supply measure. Because the federal government has infinite dollars, there is no measure of the government’s money. 

Your tax dollars disappear from existence. They effectively are destroyed.

State/local governments, being monetarily non-sovereign, put tax dollars into banks, where they continue to be part of the M2 money supply measure. While state/local government debt really is debt, the federal government has infinite money, so it has no measurable debt.

II. The so-called “debt” is the total of deposits into Treasury security accounts resembling bank safe deposit boxes. You put money into your T-security account, the government adds some money, and later, when the account matures, the government returns the dollars already in your account — just like your safe deposit box.

The contents of the boxes are yours, from beginning to end. The government doesn’t “owe” them to you because you never lose ownership of them. The government isn’t indebted to you for those dollars any more than the banks are indebted to you for the box’s contents.

In both cases, the bank and the government do not touch the contents of the “account box.” The government and banks simply store them for you.

Another reason why that misnamed “debt-that-isn’t-a-debt” is infinitely sustainable: The federal government, being Monetarily Sovereign, has the infinite ability to create its sovereign currency, the U.S. dollar. 

It never, never, never can unintentionally run short of dollars.

Quote from former Fed Chairman Ben Bernanke when he was on 60 Minutes: Scott Pelley: Is that tax money the Fed is spending? Ben Bernanke: It’s not tax money… We simply use the computer to mark up the size of the account.

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.”

In plain English, the federal government does not borrow dollars. Nor does it rely on taxes. It creates dollars, at will, by pressing computer keys.


Even if the misnamed “debt” doubled or tripled tomorrow, that would have zero effect on the federal government’s ability to pay its bills.

And what goes for the government as a whole also goes for federal agencies. Medicare cannot run short of dollars unless that is what the President and Congress want.

Similarly, Social Security cannot run short of dollars unless that is what our leaders want.

The next time you hear some Congressperson expressing anguish about the “debt” or the “debt ceiling,” you can be sure he/she is lying or ignorant about federal finances.

And when you hear that the Medicare or Social Security fake “trust funds” are running short of money, you will know you are hearing the most dangerous and harmful conspiracy theory in America.

The conspiracy theory continues:

Ideally, debt should be gradually reduced to its half-century historical average of about 50 percent of GDP.

The “debt”/GDP ratio is 100% meaningless. It has no predictive value. It tells you nothing about the federal government’s ability to pay its bills. “Debt” is a measure that accounts for the full lifetime of America. GDP is a one-year measure.

“Debt” is the difference between federal income and federal spending. GDP is total spending (federal + non-federal) + net exports. They are as comparable as apples vs. Apple computers.

Here are the nations having the lowest Debt/GDP ratios: Suriname, United Kingdom, Mauritania, Costa Rica, Tunisia, Brazil, El Salvador, Croatia, Sao Tome/Prin, Austria, Belize, India, Bahamas, Hungary, Morocco, Slovenia, Albania, Qatar, Mauritius, Yemen, Trinidad/Tobago, Sierra Leone, Montenegro, South Africa, Sudan

Here are the nations having the highest Debt/GDP ratios: Japan, Greece, Lebanon, Italy, Singapore, Cape Verde, Portugal, Angola, Bhutan, Mozambique, United States, Djibouti, Jamaica, Belgium, France, Spain, Cyprus, Bahrain, Jordan, Egypt, Canada, Argentina.

What generalizations can you make about these nations? What does the Debt/GDP ratio tell you about their financial health? Absolutely nothing.

Yet it is quoted frequently by those who either want to fool you or are ignorant about national finances.

Every time you see or hear someone quoting that ratio as having some importance, know this: That person should not be listened to.

Given political constraints, we suggest at least stabilizing the debt at its current level within a decade, requiring roughly $7 trillion in savings.

The CRFB wants to reduce the “debt” by $7 trillion — about 25% — guaranteeing a depression that would make 1929 look like Christmas. What the CRFB doesn’t want you to know is every time we reduce the “debt,” we have a recession or a depression:

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.

The Great Depression, which some “experts” claim was caused by “excessive speculation” or some other myth, actually was caused by federal surpluses.

The federal surplus President Clinton loves to boast about led to a recession that President Bush had to deal with.

Mathematically, a growing economy requires a growing supply of money, but federal surpluses take dollars out of the economy and destroy them, which leads to reduced economic growth or negative economic growth.


America's money supply growth (red) parallels GDP growth (blue)
America’s money supply growth parallels America’s GDP growth.

(The CRFB) blueprint puts forward a framework to achieve these goals through a combination of revenue and spending changes – with savings from health care, tax reform, discretionary spending caps, energy reforms, Social Security solvency, and other changes to the budget.

About 40 percent of the deficit reduction comes from revenue and 60 percent from changes in spending.

And virtually all of the deficit reduction comes from the middle classes and the poor.

Translation: The CRFB wants to cut Medicare (“health care”), increase the FICA tax (“tax reform”), reduce aids to the poor (“discretionary spending caps”), ignore global warming (“energy reforms”), and cut Social Security (“Social Security solvency”).

The very rich are laughing all the way to the bank.


Rodger Malcolm Mitchell
Monetary Sovereignty

Twitter: @rodgermitchell Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell


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


You can rely on the CRFB to get it wrong. But why?

[Why would any sane person take dollars from the economy and give them to a federal government that has the infinite ability to create dollars?]

The Committee for a Responsible Federal Budget (CRFB) is a fountain of misinformation, or should we say, “disinformation”?

Clearly, they are providing misinformation, i.e. wrong information, but the real question is, do they know it’s wrong, i.e disinformation?

Because they do extensive data analysis, I believe they simply must know their information is wrong. So why do they promulgate so much nonsense?

Before we answer that question, let’s see what they get wrong. Here are some excerpts from their website.

Gas Tax Holiday Would Take A Wrong Turn
FEB 15, 2022 | TAXES
The White House and some in Congress are reportedly considering suspending the 18.3 cent federal gas tax for the remainder of 2022.

The Committee for a Responsible Federal Budget recently estimated that such a proposal would reduce gas tax revenues by $20 billion and, without the general revenue transfer proposed in recent legislation, would advance the Highway Trust Fund insolvency date from 2027 to 2026.

Assuming their numbers are correct, what they really are saying is: “The proposal would reduce the amount of money taken out of the private sector (also known as ‘the economy’) by $20 billion.”

Adding dollars to the private sector is stimulative: taking dollars out of the private sector is recessive. In short, the reduced gas tax revenues would be a $20 Billion economic stimulus.

The CRFB seems to hate anything that stimulates the economy, especially if it directly benefits the middle- and lower-income groups as a reduced gas tax would do.

Further, the so-called Highway Trust Fund is not a real trust fund (see “The Phony Trust Fund Controversy”) and it cannot become insolvent unless Congress and the President want it to become insolvent.

The U.S. government, the creator of the U.S. dollar, cannot run short of dollars. Thus, no agency of the U.S. government can become insolvent, unless that is what Congress wants.

(Former Fed Chairman, Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”)

To prevent the insolvency of any agency, Congress merely passes a law that provides the agency with more dollars. Congress has the infinite ability to pass such laws.

The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:

With inflation at a 40-year high, policymakers are appropriately focused on how to bring prices under control.

But new tax cuts aren’t going to stop this inflation; after all, excessive tax cuts and spending are part of what caused high inflation.

Contrary to popular wisdom, no inflation in history ever has been caused by excessive tax cuts or spending. All inflations are caused by shortages of key goods and/or services.

Interest rates (blue) and inflation (green) have trended down, while federal debt (red) has increased.

For the past 10 years, federal deficit spending has increased massively, with minimal inflation. Now, suddenly, inflation has increased. Why?

Clearly, the cause is not deficit spending, otherwise it would have happened sooner.

Inflations are caused by shortages of key goods and services..

Today’s inflation is caused by the sudden confluence of several factors, all shortages: Labor, food, gasoline, computer chips, transportation, sand, among others.

(Yes, I said “sand.” U.S. Shale Production Hindered By Sand Supply Crunch.)

While massive federal spending has been with us for at least a decade, what has changed recently to cause the sudden change in inflation from low to high?

The answer: COVID.

The worldwide impact of the disease has caused the shortages that lead to inflation.

The only thing that will cure the inflation is to cure the shortages. And that can be accomplished by more federal spending to obtain the needed goods and services:

More federal spending to encourage oil drilling and/or renewable energy.
More federal spending to support farming
More federal spending to support chip manufacture
More federal spending to support transportation
More federal spending to support hiring (i.e. the elimination of FICA taxes and the reduction of income taxes at the lower end)

Reduced federal deficit spending will lead only to recessions, as it always has.

Reductions in federal debt growth lead to inflation
When federal deficit spending (blue) is reduced, we have recessions (vertical gray bars), which are cured by increases in federal deficit spending.

While a gas tax holiday might provide some temporary relief, much of the benefit may flow through to oil producers or lead to higher prices in other sectors of the economy.

It makes no sense for low gas prices to cause price increases elsewhere. While low gas prices may cause an increase in demand for cars, every industry would see lower production costs, which will ease inflation.

Benefitting oil producers is not something to be avoided. Financially encouraging them to pump more oil will ease the scarcity of oil.

By boosting demand in an already over-stimulated economy, the holiday would likely boost inflation in 2023 once it ends. The holiday will also undercut the Administration’s efforts to address climate change.

The CFRB would like you to believe the economy is “overstimulated.” No one knows what an “overstimulated” economy means, but it sure sounds terrible, doesn’t it?

Presumably, it means companies are making more profits so that they will hire more people and pay more salaries to the lower- and middle income people, thereby narrowing the income/wealth/power Gap between the rich and the rest.

Presumably, it means unemployment is low, so there are fewer impoverished children and their parents, again narrowing the Gap between the rich and the rest.

“Gap Psychology” is the desire to widen the Gap below and to narrow the Gap above. All groups are subject to Gap Psychology, but the very rich are the most expert at effecting it.

As for climate change, yes, encouraging more oil production will increase climate change, in the short term. But financially encouraging more use of renewables will have long-term climate benefits.

Meanwhile, the federal government would be out $20 billion this year alone – and much more if the holiday were extended.

The federal government has infinite money. Infinite minus $20 billion, still is infinite. The federal government always will have the infinite ability to write laws, and those laws have the unlimited ability to create dollars.

The CRFB cries crocodile tears for the infinitely rich U.S. government, but no tears for you. They want you to pay the infinitely rich government more of your scarce dollars.

The Highway Trust Fund is just five years from insolvency, and the last thing we need is to cut its primary revenue source or paper over shortfalls with yet another general revenue transfer.

No, the last thing we need is liars telling us that the federal government is running short of its own sovereign currency, so you poor folks need to pony up more dollars, or receive fewer, benefits.

“Insolvency” is the big, fake bogeyman with which the rich try to scare you.

The Big Lie in economics is: “Federal taxes fund federal spending.” While state and local taxes do fund state and local spending, the federal government, being Monetarily Sovereign, does not rely on, or even use, tax dollars.

In fact, the U.S. Treasury destroys all tax dollars upon receipt. It creates new dollars, ad hoc, every time it pays a creditor.

(How does the Treasuy destroy tax dollars? The dollars in your checking account are part of the M1 money supply. When the Treasury receives those dollars, they disappear. They no longer are part of any money supply measure. They effectively are destroyed.)

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, the federal government has infinite dollars; it can’t run short; and telling people to give the government more and to accept less is just an example of how the Big Lie works.

As it stands, the gas tax will only cover half of highway and transit spending by the time the trust fund runs out.

In fact, the gas tax covers none of transit spending. Those tax dollars are destroyed. All federal spending, including federal transit spending, is funded by ad hoc, federal money creation.

As inflation subsides, we should either raise that tax or find a new funding source to supplement or replace it.

We don’t need to find a new funding source. And we certainly don’t need to raise taxes. The federal government is the best funding source:

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.”

As we’ve stated, the CRFB, acts repelled by the fact that federal spending helps narrow the income/wealth/power Gap between the rich and the rest.

A well-designed carbon tax could generate ample tax revenue while substantially reducing carbon emissions and tempering excessive demand.

A well designed carbon tax might be a good idea from an ecological standpoint. But it’s a silly idea if the purpose is to give private sector dollars to a government that has the infinite ability to create dollars.

The pain Americans are feeling at the gas pump – and with rising costs throughout the economy – should be taken seriously and addressed thoughtfully.

The gas price pain will be eased by raising gas taxes??? That’s the utter nonsense the CRFB wants you to believe.

While cutting the gas tax may have political appeal, it would move in exactly the wrong direction, worsening rather than improving our nation’s economic challenges.

The rising costs should be taken seriously, which is why the cost of gasoline should be reduced — by cutting the gas tax.

Inflation takes dollars out of your pocket. The CRFB’s method of taking inflation seriously” is by taking even more dollars out of your pockets via tax increases.

Why does the CRFB act this way?

Because the rich, who run America, also run the CRFB, and support it with donations. The rich and the CRFB want to widen the income/wealth/power Gap between the rich and the rest.

The rich always wish to be richer. The only way to be richer is to widen the Gap. There are two ways the rich can widen the Gap: Obtain more money for themselves and/or make sure you have less money by paying more taxes.

Either one will make the rich richer, and the CRFB seems to be doing everything it can to reach that goal.

In that vein, I just received this Email from CRFB:

Trust Fund Solutions
Featuring Senators Angus King (I-ME) and Mitt Romney (R-UT)

Committee For a Responsible Federal Budget - Our Maya MacGuineas testified before the House Budget Committee yesterday on fiscal goals. Read her testimony http://crfb.org/papers/maya-macguineas-testimony-setting-fiscal-goal. Watch the video https://www ...
Maya MacGuineas:Paid by the rich to tell you that the federal government’s trust funds soon will be insolvent.

The major government trust funds for Social Security, Medicare, and Highway spending face insolvency in the next decade-and-a-half.

Policymakers need to act sooner rather than later to prevent abrupt across-the-board benefit cuts, assure a more sustainable debt path, promote faster economic growth, and achieve a number of important policy goals.

How raising taxes will help “promote faster economic growth” is a mystery the CRFB never really explains.

Trust Fund Solutions will feature opening remarks from Senator Angus King (I-ME) and a discussion between Senator Mitt Romney (R-UT) and Committee for a Responsible Federal Budget president Maya MacGuineas.

The event will also feature a panel of experts, one focused on each trust fund.

The Committee for a Responsible Federal Budget will also debut its new Trust Fund Solutions website and educational tools.

You can bet that the “solutions” for the mythical “Trust Funds” will involve tax increases (for which the rich will given loopholes) plus benefit decreases, both of which will widen the Gap between the rich and the rest.

Widening the Gap is what the rich pay the CRFB to do.

1. The Big Lie in economics is that the U.S. federal government can run short of its own sovereign currency, the U.S. dollar. Not only does the govarnment itself have access to infinite dollars, but no agency of the government can run short of dollars unless Congress and the President want that.

2. The government neither needs nor uses tax dollars, which are destroyed by the Treasury upon receipt.

3. Federal deficit spending never causes inflations (scarcities are what cause inflations). Federal deficit spending can cure inflations by curing scarcities. Reductions in federal deficit spending lead to recessions or depressions.

4. The rich grow richer by widening the Gap between the rich and the rest. Gap widening has two paths: Gaining more for the rich and/or forcing the rest to accept less.

5. The CRFB is paid to aid the rich by convincing the populace to accept Gap widening.

Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell



The most important problems in economics involve:

  1. Monetary Sovereignty describes money creation and destruction.
  2. Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics. Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

  1. Eliminate FICA
  2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
  3. Social Security for all
  4. Free education (including post-grad) for everyone
  5. Salary for attending school
  6. Eliminate federal taxes on business
  7. Increase the standard income tax deduction, annually. 
  8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
  9. Federal ownership of all banks
  10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.