Monetary Sovereignty and Gap Psychology: Why the Rich Need The Poor

Monetary Sovereignty and Gap Psychology: Why the Rich Need The Poor

  • Why does the richest nation in history repeatedly claim it cannot afford to provide adequate healthcare, retirement income, education, housing, and food for its people?
  • Why do politicians warn that Social Security and Medicare are running out of money while the federal government continues to create trillions of dollars for other purposes?
  • Why are Americans told that helping the poor requires painful sacrifices, higher taxes, and reductions in other benefits?
  • And why do these supposed financial limitations so often fall most heavily on those who have the least?

To answer those questions, we need to understand two fundamental economic concepts: Monetary Sovereignty and Gap Psychology, two pillars of economics.

Monetary Sovereignty explains the federal government’s relationship with money. Gap Psychology explains an important part of humanity’s relationship with power. One concerns what the government can do. The other helps explain why it doesn’t. Together, they explain some of the most persistent contradictions in American economic policy.

The Gap: Why Being Rich Requires Someone Else to be Poorer

Imagine that you have $1 million. Are you rich? That depends.

If everyone else has $100, you are extraordinarily rich. If everyone else has $1 million, you are average. If everyone else has $100 million, you are poor. Your $1 million has not changed. What changed was your position relative to everyone else.

Thus, rich and poor are comparative terms. They describe relationships, not merely quantities. I call that relationship the Gap. It separates people according to income, wealth, power, status, and other measures of superiority.

And Gap Psychology describes the common human desire to widen the Gap below oneself and narrow the Gap above.

Consider a man who can perform only two chin-ups. He wants to be considered strong. He could exercise until he can perform twenty chin-ups, or he could hang a 300-pound weight from everyone else’s ankles. Suddenly, his two chin-ups might make him the strongest man in the room.

He hasn’t improved himself. He has made everyone else comparatively weaker. That is Gap Psychology. You can increase your relative superiority either by raising yourself or by lowering others. And lowering others sometimes is easier.

This principle extends far beyond money.

The Gap is Everywhere

Gap Psychology operates in two directions. We look up at people with more income, wealth, status, or power than we do, and we want to narrow that Gap. But we also look down at those with less, and we resist their narrowing the Gap with us. These two impulses aren’t necessarily equal. We may enjoy gaining on the people above us, but we can feel something more visceral when the people below us gain on us.

Consider a simple inheritance. A parent leaves one child $2 million. She is delighted—until she learns that her sibling received $2,000,010. She hasn’t lost a penny. She still has the same $2 million that delighted her moments earlier. What she has lost is relative position. Ten dollars changed happiness into resentment, not because of its purchasing power but because of its effect on the Gap.

This may connect Gap Psychology to the well-established psychological phenomenon of loss aversion: losses generally affect us more strongly than equivalent gains. A raise is welcome. Try cutting someone’s salary by the same amount and observe the difference.

But Gap Psychology adds another dimension: We can experience a loss without losing anything at all. If someone below us rises toward us, our income and wealth may remain unchanged while our relative position declines.

Suppose Fred earns $60,000 and Sam earns $40,000. Fred has a $20,000 income Gap below him. Now suppose a government program improves Sam’s economic position by $20,000 while costing Fred nothing. Fred still earns $60,000. In absolute terms, he has lost nothing. But his $20,000 Gap has shrunk to $0. If relative position matters to Fred, he has experienced something that feels like a loss.

This helps explain why Gap Psychology is not merely a theory about the rich. Middle-class people, and even those with relatively low incomes, often oppose programs that benefit people poorer than themselves. Their opposition may seem irrational if we assume that everyone seeks only to maximize their own absolute financial well-being. But it becomes more understandable if relative position also has value. A benefit received by someone below me can narrow my Gap even when it costs me nothing.

Thus, the desire to preserve hierarchy can extend throughout the hierarchy. The billionaire wants distance from the millionaire. The millionaire wants distance from the upper-middle class. The upper-middle class wants distance from the middle class. The middle class wants distance from the poor. Even someone near the bottom may place considerable psychological value on knowing that someone else remains below him.

This helps explain the remarkable durability of caste and class systems. A hierarchy need not provide substantial material benefits to everyone who defends it. Each level except the bottom can receive at least one benefit from the arrangement: the status of not being at the bottom. The system can therefore recruit some of its own victims to help preserve it.

And this may explain something particularly important about political efforts to protect the income/wealth/power Gap. The rich need not persuade middle-income people that making billionaires richer will improve their lives. That can be a difficult sale. It may be far easier to persuade them that improving the lives of people below them will diminish what they have earned, reward people who do not deserve it, or unfairly elevate others to their level.

In that sense, Gap Psychology can turn the hierarchy into a self-protecting system. Those at the top have the greatest economic incentive to preserve it, but people throughout the hierarchy can also gain a psychological incentive to protect or even widen the Gap immediately below them.

We aspire to narrow the Gap above us, but we may fight even harder to prevent others from narrowing the Gap below us. And that may be one reason economic hierarchies survive even when most of the people defending them are nowhere near the top.

Consider intelligence. A child who learns to read at age four may be considered exceptionally intelligent. But if every other child learns to read at age three, that same child may be considered slow.

Consider physical ability. A man who runs 100 meters in twelve seconds is fast compared with most people, but slow compared with an Olympic sprinter.

Consider social status. A person may feel important because of a prestigious job, an exclusive club, an expensive automobile, a distinguished family, or membership in a particular organization. Satisfaction often comes not merely from possessing something desirable, but from possessing something others lack.

Exclusivity itself becomes valuable. An exclusive club loses some of its appeal when everyone can join. A luxury brand loses some of its status when everyone can afford it. A title loses some of its distinction when everyone possesses it. The Gap gives these things their comparative value.

People can also gain a sense of superiority through the groups they belong to. Sports provide an example. When the Chicago Bears won the Super Bowl following the 1985 season, their fans celebrated as though they personally had accomplished something extraordinary. I was one of them. I hadn’t blocked a defensive lineman, thrown a pass, or scored a touchdown. Nevertheless, I felt victorious.

Why? Because I identified with the winning group. Their superiority became my superiority. The same psychological mechanism can operate through nationalities, religions, political movements, professions, social classes, and other affiliations.

People seek superiority not only as individuals but also as members of groups. When their group rises, they feel elevated. When a competing group falls, they may experience a similar satisfaction. Gap Psychology helps explain why people sometimes celebrate another group’s misfortune even when that misfortune provides no material benefit to themselves.

From Gap Psychology to Caste and Class

Throughout history, societies have established systems that rank human beings according to ancestry, religion, occupation, race, wealth, and social position.

Caste systems are particularly revealing. Their purpose is not merely to recognize differences among people. They establish differences in status, rights, opportunities, and power. They preserve those differences across generations.

A person born into a dominant caste may possess privileges unavailable to someone born into a subordinate caste, regardless of individual ability. The superiority Gap is inherited.

Religion and group identity also can become vehicles for asserting superiority. Some groups claim special virtue, divine favor, purity, or exclusive access to truth. Such claims can justify treating outsiders as inferior.

Not every religion, club, or social organization behaves this way. But the mechanism recurs: membership in a supposedly superior group provides status, while exclusion helps preserve it.

In her book “Caste: The Origins of Our Discontents”, Isabel Wilkerson examines how hierarchical social systems preserve privilege through inherited status, exclusion, stigma, and institutional power. Gap Psychology provides one possible explanation for the human attraction to such hierarchies.

If my superiority depends on your inferiority, your improvement can feel like my loss. That is the essential psychological problem. And it becomes particularly consequential when applied to economics.

Why the Rich Want to Widen the Gap

The rich possess more than money. They possess economic power. Money can buy goods and services, but wealth also can purchase ownership, influence, access, security, and control over resources.

A wealthy employer may determine whether hundreds or thousands of people have jobs. A wealthy landlord may determine the conditions under which families obtain housing. A wealthy investor may influence which businesses expand and which disappear. A wealthy donor may obtain political access unavailable to ordinary voters.

These forms of power do not depend solely on how many dollars the wealthy possess. They also depend on how economically independent everyone else is.

Imagine two societies. In the first, workers have government-guaranteed healthcare, retirement income, affordable education, and a dependable minimum income.

In the second, workers risk losing healthcare when they lose their jobs. Retirement is uncertain. Education creates debt. Unemployment threatens financial catastrophe.

In which society does an employer possess greater leverage over employees? Clearly, the second. Workers who fear losing essential benefits have fewer practical choices. They may accept lower wages, undesirable working conditions, or mistreatment because leaving their jobs carries unacceptable risks. The employer’s power grows as the worker’s alternatives diminish.

That is the connection between wealth and dependence. The Gap is not merely a difference in dollars. It is a difference in freedom. A wealthy person need not consciously think, “I want workers to remain dependent on me.” But economic incentives can operate without such explicit thoughts.

The result remains. Systems that preserve economic insecurity can preserve the advantages associated with concentrated wealth. And Gap Psychology suggests that preserving relative superiority may itself become a powerful motivation.

Monetary Sovereignty: The other pillar

Now consider an entirely different question. Where does the federal government obtain dollars?

Most Americans have been taught to think of federal finances as though the United States were an enormous household. The federal government collects taxes. It spends the money. If it spends more than it collects, it must borrow the difference. We are told that eventually, the debt grows so large that the government no longer can afford to pay its bills.

This familiar explanation overlooks a fundamental distinction. A household, business, city or state government uses dollars. The United States federal government operates the monetary system that issues dollars. It is Monetarily Sovereign.

The federal government cannot create unlimited doctors, nurses, houses, oil, food, steel, or electricity merely by issuing dollars. Those are real resources. But the monetary system can create the dollars to buy these assets without first obtaining them from taxpayers.

The U.S. Treasury does not have the same financial limitations as a household. Though the federal government can face a shortage of real resources. It never faces an inherent shortage of its own currency. That means federal programs should be evaluated primarily according to their real economic consequences, not on cost.

  • Will they require resources that are unavailable at any price?
  • Will they increase productive capacity?Will they improve people’s lives?
  • Will they cause or relieve inflationary shortages?

Those questions are more meaningful than asking whether the federal government can somehow find enough dollars.

Where the Two Pillars Meet

Now combine Monetary Sovereignty with Gap Psychology. Suppose the federal government possessed the monetary capacity to provide substantially greater economic security to ordinary Americans.

And, suppose those benefits would reduce poverty, improve health, increase educational opportunities, and make workers less dependent on wealthy employers and asset owners. Such policies could narrow the income/wealth/power Gap. That would benefit millions of Americans. But it also could reduce the relative advantages of people whose power depends partly on the economic insecurity of others.

Gap Psychology supplies a possible motive for resisting those policies. Monetary Sovereignty exposes a weakness in the argument that the government simply cannot afford them. Together, the concepts raise an uncomfortable question:

Are Americans being denied benefits because the federal government lacks the monetary capacity to provide them, or because providing them would alter existing relationships of wealth and power?

The answer may differ among particular policies and political actors. But the question deserves far more attention than it receives.

The Remarkable History of FICA

Social Security provides a revealing example. When President Franklin Roosevelt established Social Security, he insisted that the program include payroll contributions. Why?

Was it because the federal government otherwise would lack the dollars needed to pay retirement benefits? No. Roosevelt’s own explanation suggests something quite different.

In a 1941 conversation recorded by Luther Gulick, Roosevelt explained that payroll contributions were intended to give workers a legal, moral, and political claim to their benefits. He described the taxes as intended to protect Social Security against future attempts to abolish it.

Roosevelt understood something important about human psychology. People are more likely to defend benefits they believe they have earned than benefits portrayed as government charity. Payroll contributions helped transform Social Security from a welfare program into a perceived earned right.

And Roosevelt expected that perception to make the program politically secure. He did not present the payroll tax as a necessary source of dollars that the federal government otherwise lacked.

The irony is extraordinary. A tax intended to protect Social Security politically became part of the argument for limiting Social Security financially. Today, Americans repeatedly hear that Social Security benefits cannot be expanded because payroll taxes and trust-fund balances are insufficient.

The program is described as though it were a private pension fund that must accumulate dollars before distributing them. But that is a statutory financing arrangement, not a fundamental limitation on federal monetary capacity.

Congress could authorize benefits through a different financing system. The federal government would not gain any new power to create dollars. It would exercise an existing monetary capacity under different laws.

Roosevelt intended payroll contributions to protect Social Security from political destruction. He apparently did not anticipate how effectively the resulting financing structure could be used to argue against expanding benefits.

The Trust-fund Illusion

The Social Security and Medicare trust funds reinforce the same misunderstanding. The phrase trust fund suggests a protected pool of money, invested independently and held exclusively for future recipients. Private trust funds operate that way.

Federal trust funds are different. They are legal and accounting arrangements through which the government records designated receipts, expenditures, and obligations. Social Security trust funds hold special Treasury securities. Those securities are assets of the trust funds and liabilities of the Treasury. One part of the federal government holds obligations issued by another part.

The arrangements are legally real. Their balances matter under existing statutes, but they do not represent an independent source of monetary power.

When the federal government redeems a trust fund’s Treasury securities, it makes dollar payments through the same monetary system that makes all other federal dollar payments possible. Congress can change the laws governing trust-fund financing. But it cannot change the fact that the federal government issues the currency in which benefits are paid.

Yet the public repeatedly and falsely is told that trust-fund depletion means Social Security is running out of money. The statement confuses two different propositions. The trust fund may exhaust its authority to support scheduled benefits under existing law. But the federal government always can create new dollars.

The distinction matters because the proposed responses often involve benefit reductions, higher payroll taxes, later retirement ages, or combinations of those measures. Those policies have serious consequences.

Reducing benefits increases recipients’ financial insecurity. Increasing payroll taxes reduces workers’ take-home pay. Raising retirement ages can impose particular burdens on people whose health or occupations make continued employment difficult. And because businesses pay 50% of FICA, this not only reduces economic profits but discourages hiring.

Each policy deserves examination according to its actual effects. But no one should justify these policies by pretending the federal government is financially equivalent to a private pension fund.

Healthcare and the Power of Dependence

Consider employer-sponsored healthcare insurance. Millions of Americans receive health coverage through their employers. That arrangement has advantages, including access to group insurance and employer contributions toward premiums. But it also creates dependence.

An employee contemplating a job change must consider not merely salary and working conditions but also the availability, cost, and quality of health coverage. Economists call this phenomenon “job lock.”

Research has found that employer-linked health insurance can discourage workers from changing jobs or asking for higher wages or improved working conditions.

The Affordable Care Act reduced key problems involving preexisting conditions, but concerns remain about provider networks, coverage differences, premiums, and family benefits. The economic implications extend beyond healthcare.

A worker who can leave an employer without risking medical coverage possesses greater bargaining freedom. A worker whose family depends on the employer’s insurance may feel compelled to remain.

Now imagine Medicare For All.

Healthcare coverage would no longer depend on employment. Workers could change jobs, start businesses, retire, or negotiate without the same fear of losing insurance. The federal government could pay for the program in dollars.

Of course, paying medical bills is not the same as producing medical care. A successful expansion would require adequate doctors, nurses, hospitals, clinics, equipment, medications, and other real resources.

Federal spending to expand those resources would be essential. But the monetary question and the production question are separate. The federal government need not run short of dollars. The healthcare system can run short of healthcare.

That is a real problem requiring a real solution. Declaring Medicare for All unaffordable because the government lacks dollars does not solve it. And the dependence created by employer-sponsored insurance has consequences for the Gap.

Universal Medicare coverage could reduce one important source of employer leverage over workers. That makes healthcare policy a question of economic power as well as medical care.

Social Security For All, Education, and Poverty

The same reasoning extends to other public benefits.

Consider Social Security for All: a federal income floor sufficient to prevent destitution. Such a program would not make everyone wealthy, but it could reduce the desperation that forces people to accept almost any available wage or working condition.

Consider free public college and vocational education, which could provide skills, knowledge, and opportunities. When access depends heavily on family wealth or the willingness to take on debt, existing economic advantages can reproduce across generations. A student from a wealthy family may start adulthood with an education and no debt. A student from a poorer family may have similar abilities but face substantial financial obligations.

The Gap can widen before either student earns a paycheck.

Consider food assistance. A person who lacks adequate food has less freedom to make long-term decisions about education, employment, health, and family life. Reducing hunger can improve both individual well-being and productive capacity.

These programs have different costs, resource requirements, and economic effects. They should not be treated as interchangeable, but they share an important characteristic. They can reduce the degree to which survival and opportunity depend on private wealth. That is why Gap Psychology is so important.

The Tax Code: Another Window Into the Gap

The federal tax code further illustrates how financial policies maintain these hierarchies. While labor income is typically taxed at the highest marginal rates as it is earned, capital gains often enjoy preferential tax treatment and the ability to defer taxation indefinitely. Through deductions, exclusions, and loopholes, the tax system often consolidates wealth at the top, reinforcing the economic divide that Gap Psychology seeks to preserve.

These rules are not distributed equally across economic circumstances. People whose income comes primarily from wages face a different tax environment from people whose wealth comes largely from appreciating assets.

Raising the top ordinary income-tax rate therefore does not necessarily reach all the mechanisms through which enormous fortunes accumulate, nor does it automatically eliminate the political and economic advantages associated with concentrated ownership.

In short, the tax code does more than collect revenue. It influences who accumulates wealth, who retains it, and widens the income/wealth/power Gap. Further, people with substantial wealth have more resources to influence the laws that govern it.

That creates a reinforcing cycle. Wealth provides influence, which helps preserve favorable economic arrangements. Those arrangements preserve or increase wealth, which provides still more influence.

The Question of Motive.

If the federal government possesses the monetary capacity to provide greater benefits, why does the claim that it cannot afford them remain so influential? There are several possible explanations. Some people sincerely misunderstand how the federal government manages money. They apply household financial rules to the federal government because those rules are familiar.

Others understand that federal finance differs from household finance but believe that taxes, borrowing restrictions, and spending limits provide useful safeguards against inflation or excessive political spending.

Still others may find that claims of financial scarcity support policies favorable to their economic interests.

These explanations can coexist. But Gap Psychology preserves relative superiority. People may not acknowledge that motivation, even to themselves. They may describe their preferences in terms of fiscal responsibility, self-reliance, efficiency, fairness, or opposition to government dependency.

Some of those concerns may be sincere; some may be rationalizations, and some may conceal deliberate efforts to preserve economic advantages. But the distributional consequences of policies can be examined by:

    • Who gains or loses?
    • Whose economic independence increases or decreases?
    • Whose relative power grows or shrinks?

Those questions reveal dimensions of economic policy that conventional discussions of deficits and debt often overlook the difference between wanting more and wanting relatively more. Conventional economics often assumes people seek to increase their material well-being, but Gap Psychology adds another consideration. People also seek to improve their position relative to others.

Imagine a wealthy person choosing between two outcomes. Under the first, his wealth increases by 20%, while everyone else’s wealth increases by 40%. Under the second, his wealth increases by 10%, while everyone else’s wealth stays the same.

The first outcome makes him absolutely richer. The second may make him relatively richer. If he values absolute wealth most, he may prefer the first, but if he values relative superiority most, he may prefer the second. That distinction matters enormously.

It suggests that opposition to broadly beneficial policies often stems not from fear that the wealthy will become poorer, but from the realization that such policies would accelerate everyone else’s advancement. Consequently, a policy can increase national prosperity while simultaneously narrowing the social and economic gap—an outcome many find unacceptable because it diminishes their relative standing.

For people who value relative superiority, that narrowing itself may feel threatening. The desire to widen the Gap therefore can conflict with the desire to maximize total prosperity. When those who benefit from a wide Gap have disproportionate political influence, that conflict can prevent affordable programs that benefit the poor.

What About Inflation?

Inflation is the widespread increase in prices. If there is a shortage of bananas, the cost of bananas will rise, but that is not inflation. If food is scarce, the cost of food will rise, and that could be inflation. If there is a shortage of food and oil, the cost of everything will rise, and that absolutely is inflation.

Many people believe, and many economics texts teach, that federal spending increases demand, and that increase causes inflation. The evidence does not support this. See: The inflation myths debunked. It’s never “money-printing.” It’s always shortages.

The article lists historical inflations and their causes. It shows that no major historical inflations have been caused primarily by a government spending “too much.”  Further, the article shows that recessions are caused by a government spending too little.

To prevent and cure inflations, it is not necessary to instigate recessions. Instead, the government should prevent and cure shortages of critical goods and services, most often oil, food and labor. Rather than trying to  prevent inflation via a blanket restriction of federal deficit spending, a Monetarily Sovereign government should:

    • Identify the shortages
    • Increase the supply of scarce goods and services.
    • Invest in productive capacity.
    • Remove unnecessary barriers to production.Train additional workers.
    • Develop technology.
    • Expand infrastructure.

The conventional response to inflation often emphasizes reducing demand by raising interest rates, increasing taxes, or cutting spending. Those policies can reduce inflationary pressure by making purchases more expensive (ironically) and reducing people’s ability to buy. They do not eliminate the underlying shortages.

The current “plan” (if one can call it a plan) is to reduce demand for scarce medical care rather than to produce more medical care. Forcing the sick to go untreated is not a viable anti-inflation program.

There is a difference between making housing unaffordable and building more housing. Making energy unaffordable for some is different from increasing the amount of energy available.

If the problem is a shortage, the lasting solution is to relieve the shortage. Federal spending can reduce inflationary pressure by increasing the supply of what is scarce.

Therefore, the question should not be merely how much the government spends. It should be what the spending accomplishes.

The Purpose of Government

The purpose of government is to protect and improve the lives of the governed.

We do not suggest punishing wealthy people for being wealthy, nor must everyone have the same income, property, or status. People differ in ability, ambition, preferences, circumstances, and accomplishments. Differences in income and wealth will exist.

The question is whether those differences should determine access to the necessities of life and the degree of freedom people possess. Should a person be forced to remain in an undesirable job because leaving would endanger the family’s healthcare? Should an elderly person face poverty because a federal accounting arrangement has reached a statutory limit? Should a capable student be denied education because the family lacks money? Should children go hungry in a nation with the productive capacity to feed them?

Monetary Sovereignty tells us that the availability of federal dollars should not be an obstacle. Gap Psychology suggests why reducing those hardships may encounter resistance from people and institutions whose relative advantages depend partly on their continuation.

The two theories therefore illuminate different sides of the same problem. One explains the monetary possibilities. The other examines the human incentives that can prevent those possibilities from being realized.

The Ultimate Gap

The most important Gap is not the difference between two bank accounts. It is the difference between two people’s freedom. One person can leave an unpleasant job without worrying about food, housing, or medical care. Another cannot.

One can pursue education without incurring unaffordable debt. Another cannot. One can survive a financial emergency without losing a home. Another cannot. One can influence public policy through wealth and connections. Another struggles merely to be heard.

These differences are economic, but they also are differences in power. And power can perpetuate itself. People with power can influence the rules under which others acquire power. People without power may lack the resources to change those rules. The Gap therefore can become self-reinforcing.

That is why reducing poverty is not enough. A society can become wealthier while its economic hierarchy becomes more extreme. The poor can gain dollars while losing relative influence. The middle class can earn higher salaries while becoming more dependent on employers, lenders, insurers, and asset owners.

Prosperity and Economic Independence are Not Identical.

A society should be judged not merely by how much wealth it produces but also by how that wealth affects people’s lives and freedoms. Monetary Sovereignty and Gap Psychology approach economics from opposite directions. Monetary Sovereignty begins with the nature of money. Gap Psychology begins with the nature of human comparisons.

Monetary Sovereignty asks what a currency-issuing government can accomplish. Gap Psychology asks how the desire for relative superiority influences people’s decisions.

Together, they help explain why policies that could improve millions of lives may face determined resistance. The familiar claim is that America cannot afford to provide greater economic security to its people. But the more revealing question may be, Who benefits when:

  • Americans believe that claim?
  • retirement remains uncertain?
  • healthcare depends on employment?
  • education requires debt?
  • workers fear unemployment more than employers fear losing workers?
  • people accept economic insecurity as unavoidable?

And who loses power when those insecurities disappear?

These questions don’t require us to assume every wealthy person is selfish, every politician dishonest, or every economist ignorant. They require us to recognize that economic policies influence relative power—and that relative power can influence economic policies.

For too long, Americans have been trapped in a manufactured debate over whether the federal government can “afford” to improve their lives. This framing ignores the reality of our Monetary Sovereignty and obscures the incentives driven by Gap Psychology.

The federal government possesses extraordinary monetary capacity, and our nation holds vast productive potential. Neither guarantees perfect policy, but together they make it essential to ask why so many Americans remain economically insecure.

The answer is not found in national affordability, but in the incentives of powerful interests to maintain the status quo. Monetary Sovereignty shows that federal financial scarcity is a choice, not a constraint; Gap Psychology explains why prosperity’s benefits are intentionally kept unequally distributed.

Together, these concepts lead us to a fundamental question: If our government has the inherent capacity to free its citizens from economic dependence, why do we continue to accept false narratives of financial limitation as a justification for preserving that very dependence?

The greatest obstacle to narrowing the Gap is not a shortage of dollars, but rather the value some people place on keeping the Gap wide.

Rodger Malcolm Mitchell

The Drumbeat of Lies About “Debt” Continues

Here are excerpts from an amazing article. It’s amazing, not just because it is completely wrong, but because the source — Eleanor Pringle and Fortune Magazine — are trusted to get economics right.

Tariffs are only generating 25% of the revenue needed to pay interest on national debt—despite pitch that it would be a silver bullet

Story by Eleanor Pringle, an award-winning senior reporter at Fortune covering news, the economy, and personal finance. Eleanor previously worked as a business correspondent and news editor in regional news in the U.K. She completed her journalism training with the Press Association after earning a degree from the University of East Anglia.

When President Trump announced his plans for a new tariff regime, he said the action was “primarily to pay down debt, which will happen in very large quantity.”

We have grown accustomed to this President spouting nonsense and the MAGA crew lapping it up, like flies on poop, but to have a magazine like Fortune not even question the premise –that tariffs pay down debt — is discouraging.

But fast forward a little under a year, and the revenues generated by customs duties aren’t enough to make a dent in interest payments on national debt—let alone the headline figure.

We could collect $100 trillion in tariffs, and they wouldn’t “make a dent” in interest payment on the national debt for two reasons:

  1. It isn’t debt; It’s deposits into accounts that are similar to bank savings account. The deposits are paid back simply by returning the dollars to their owners, the depositors. It’s a process similar to you transferring dollars from your savings account to your checking account.
  2. Our Monetarily Sovereign federal government does not use taxes to pay down anything. The purposes of federal taxes are:

A. To control the economy by taxing what the government wishes to discourage and by giving tax breaks to what the government wishes to reward (like the rich) and,

B. to assure demand for the U.S. dollar by requiring that taxes be paid in dollars.

Unlike state and local taxes which do fund state and local spending, federal taxes do not fund federal spending. The U.S. Treasury creates new dollars for that purpose. That is the difference between Monetary Sovereignty and monetary non-sovereignty.

As of June 2026, U.S. national debt stands at $39.2 trillion according to Treasury data. That figure is growing by eye-watering sums: For the first eight months of fiscal year 2026, the Congressional Budget Office (CBO) reports the federal budget deficit has totaled $1.2 trillion.

The implication as that a growing “debt” (i.e. deposits into T-accounts) is a danger or burden on the government or on taxpayers. It is not.

The implication also is that the federal deficit — the difference between taxes and spending, and therefore the number of growth dollars the government has added to the economy — somehow is a negative. It is not.

In fact, when we don’t run deficits, we have recessions and depressions. The reason is that by definition, a growing economy requires a growing supply of dollars, and federal deficits are an important source of those dollars.

In its monthly budget review published last week, the CBO also broke down the government’s incomings versus its outgoings. For the first eight months of the fiscal year (which ends in September), the government raked in $3.66 trillion but spent $4.9 trillion.

Translation: The federal government, which has unlimited dollars, added 1.34 trillion growth dollars (minus net imports) to the economy. And this is supposed to be bad news???

Income rose quicker than spending, the CBO reported, with revenues increasing by $174 billion while spending crept up $57 billion.

However, income would need to rise significantly to have any impact on the value of interest payments the Treasury is paying to maintain debt levels.

Again, the implication is that the $174 billion income for the government (that came out of the pockets of the American public) is a good thing because it helps pay for interest. (It doesn’t.)

Comparing these interest payments to income, the CBO reports that so far this fiscal year, tariffs have generated $189 billion, a little over a quarter of the payments required merely to service the debt.

Translation: Tariffs are taxes on buyers. So, the American public paid an extra $189 billion, which did nothing whatever to help the government pay interest. The government pays all its obligations by simply pressing computer keys and creating new dollars.

That said, the tariff regime suffered some setbacks, which means revenues may have come in under initial expectations: In February this year, the U.S. Supreme Court ruled against a tranche of tariffs the White House had rolled out in 2025 under the International Emergency Economic Powers Act (IEEPA). The government was ordered to pay them back some $129 billion, according to Congressional documents.

That $129 billion will be added to the economy’s growth.

The figures did demonstrate that, before the ruling, tariffs were having a meaningful impact on the bottom line.

Finally, an accurate statement in the article, though not what Ms. Pringle might think: “tariffs were having a meaningful impact on the bottom line.” The “meaningful impact,” of the tariffs was to deduct billions from America’s Gross Domestic Product, the formula for which is: GDP = Federal and non-federal spending + Net Exports.

A new take The president has also indicated a new perspective on national debt. Previously, the White House had talked about paying down the debt, and using tariffs or visa revenues to do so.

Just as a reminder, this is what happens every time we have “paid down” the federal debt:

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 reason is easy to see, even for professional economists: Eliminating federal deficits mathematically reduces two of the three factors in the equation:

Gross Domestic Product (the measure of the economy)=Federal Spending + Non-federal Spending + Net Exports.

In a recent interview with Fortune’s Editor in Chief, Alyson Shontell, Trump also shared an alternate view: That the nation’s debt is really not so bad if you see it through the lens of a real estate mogul.

The debt versus the total value of America and its natural assets, such as the Grand Canyon or surrounding oceans. “If you put down the value of these things, it’s like hundreds of trillions of dollars,” Trump says, and by that measure, “if you kept [the national debt] at $40 trillion, you’re way under-levered.”

His math is ridiculous, but he’s almost right about one thing. The debt is “not so bad.” On the contrary, it’s only bad compared to what it should be, because increasing the federal debt grows GDP. That is called algebra, which sadly seems to be alien to many economic experts.

Debt hawks are continuing to push for fiscal responsibility. The Committee for a Responsible Federal Budget (CRFB) is urging lawmakers to keep deficit reduction in mind as discussions over advancing a third budget reconciliation bill in Congress progress.

The CRFB, along with other representatives of the ultra-wealthy, has been pushing the same narrative for years. If you’ve ever wondered why the rich always push for less federal spending, here’s why:

“Rich” is a relative term.

Someone with $100 in the bank would be considered rich if everyone else had only $1. But that same person would be poor if everyone else had $1,000.

What defines wealth is the financial gap between those at the top and those below. The bigger the gap, the richer they are. So, to increase their wealth, the rich have two options:

  1. Grab more for themselves and/or
  2. Make sure those below them get less.

Number 1 is accomplished partly by twisting the tax laws so that the very rich pay less than the average person, which is how billionaire Trump managed to pay only a few hundred dollars is taxes for years.

Number 2 is accomplished by pretending that Medicare, Medicaid, Social Security and other benefits to average people are called “unaffordable,” “unsustainable,” and “insolvent,” and need to be fixed.

This is where the Big Lie in Economics comes into play — the lie that the federal government will run out of money and that we’ll have inflation unless federal spending for Social Security and Medicare benefits is cut.

The CRFB is calling for savings of at least $600 billion, adding: “The last two reconciliation bills are projected to add nearly $5 trillion to the debt through 2035.

Translation: Cut social benefits by $600 billion (but don’t cut tax loopholes for the rich) because the current bills will pump $5 trillion growth dollars into the economy, and those dollars will help average people. We can’t have that.

The upcoming budget resolution should instead facilitate the passage of legislation to reduce deficits, as reconciliation is intended to do.”

Final translation: “The upcoming budget resolution should instead facilitate the passage of legislation to reduce benefits to those who are not already rich.”

That’s how the rich have twisted the words “debt” and “deficit” to make themselves wealthier leaving you poorer. Ignorance comes at a high price.

The facts: Medicare, Social Security and other social benefits could be doubled or tripled, while FICA is eliminated, and the federal government still would not run out of money.

But Eleanor Pringle, Alyson Shontell, and Fortune Magazine do not tell you that.

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

How even the government lies to you about the federal debt and the debt/GDP ratio

I posed a question to the AI Copilot. It had to do with something I read on a government website regarding the federal Debt/GDP ratio: https://fiscaldata.treasury.gov/americas-finance-guide/national-debt/#the-growing-national-debt,

I asked Copilot about the following explanation by the government:

“Comparing a country’s debt to its gross domestic product (GDP) reveals the country’s ability to pay down its debt.

This ratio is considered a better indicator of a country’s fiscal situation than just the national debt number because it shows the burden of debt relative to the country’s total economic output and therefore its ability to repay it.

The U.S. debt to GDP ratio surpassed 100% in 2013 when both debt and GDP were approximately 16.7 trillion.”

Copilot’s response:

The Treasury’s explanation is operationally false for a monetarily sovereign government. It reflects political messaging and gold standard era framing, not how the modern U.S. monetary system actually works.

But let’s break it down carefully, because this is exactly where public communication diverges from monetary reality.

1. The Treasury’s statement is based on a false premise. They say: “Debt to GDP reveals the country’s ability to pay down its debt.”

This is not true for a currency issuing government. A monetarily sovereign nation (U.S., U.K., Japan, Canada, Australia) ssues its own currency, cannot run out of that currency, cannot involuntarily default, does not need revenue to spend, does not need to “repay” its debt with taxes, creates dollars when it spends, and deletes dollars when it taxes.

So, the idea that GDP determines “ability to repay” is nonsensical in a fiat system. It would be like saying, “An airline’s ability to issue more airline points depends on its revenue.”

No. It issues the unit, as many as it chooses, and makes all the rules regarding the unit.

2. Why does the Treasury still say this? Because public facing explanations are political, not operational. The Treasury is simplifying for a public that overwhelmingly believes that the government is like a household, taxes fund spending, borrowing is needed to finance deficits, debt must be repaid, and that high debt is dangerous.

If the Treasury wrote the operational truth it would say: “Federal debt is simply the total of Treasury security deposits at the Fed, and the U.S. can always create dollars to redeem them.”

But Congress would melt down, and half the political system would accuse them of endorsing “unlimited spending.” So, they stick to the old narrative because it is familiar, politically safe, rhetorically useful, and aligned with public intuition

It is not aligned with monetary operations.

3. The real operational meaning of “federal debt”: Federal “debt” = total Treasury security deposits at the Fed.

These are interest bearing dollars, held in securities accounts, created by keystrokes, and redeemed by keystrokes. They are not borrowed funds. They are not a burden. They are not something the government must “pay back” with taxes.

They are the private sector’s savings.

4. Why debt/GDP is not a measure of ability to pay. Because the U.S. government does not use GDP to obtain dollars, does not need income to spend, does not need to “earn” dollars, does not need to “save up” dollars, and does not need to “repay” anything in the household sense

The U.S. can always credit reserve accounts to redeem securities.

Japan proves this: Its Debt/GDP ≈ 260%. Its inflation ≈ low, interest rates ≈ near zero, and solvency risk ≈ zero

If debt/GDP measured “ability to pay,” Japan would have collapsed decades ago.

5. So what does debt/GDP actually measure? Not solvency. Not ability to pay. Not financial risk.

It measures how many interest-bearing dollars the private sector has chosen to store at the Fed relative to annual economic output.

That’s it. It is a ratio of stock to flow, not a measure of capacity.

6. The clean takeaway: The Treasury’s explanation is obsolete. Debt/GDP does not measure ability to pay. It measures nothing about solvency. It persists because it is politically convenient and publicly intuitive.

It is the economic equivalent of continuing to teach that the Sun revolves around the Earth because it’s easier for people to understand.

Then I asked Copilot what it thought about this comment on the Committee for a Responsible Federal Budget’s website: “The Medicare Trustees project that the Medicare Hospital Insurance (HI) trust fund will be insolvent in 2033 with a 75-year shortfall of 0.56% to 1.38% of payroll.”

CoPilot AI said:

1. “Medicare HI trust fund insolvency” is an accounting fiction, not an operational constraint The Medicare Hospital Insurance (HI) “trust fund” is not a real savings account. It is a ledger inside the Treasury — a bookkeeping device created by statute.

It does not contain: money, assets, investments, anything that can “run out.” It contains numbers. When CRFB says the trust fund will be “insolvent,” they mean the accounting balance will hit zero under current law.

But operationally, Medicare payments are made by the Treasury. Treasury payments are cleared by the Fed. The Fed marks up bank accounts. The U.S. cannot run out of keystrokes. So “insolvency” is a legal constraint, not a financial one. Congress can change the law at any time.

2. The U.S. government does not need payroll taxes to fund Medicare. CRFB says the shortfall is “0.56% to 1.38% of payroll.” This implies Medicare is funded by payroll taxes.

Operationally, that is false. Payroll taxes do not fund Medicare, do not fund Social Security, do not fund federal spending at all. They simply delete dollars from the private sector.

Medicare spending is funded the same way all federal spending is funded: by the Treasury instructing the Fed to credit bank accounts. There is no pile of money that must be refilled. 

3. Why does CRFB talk about “insolvency”? Because CRFB is a deficit hawk advocacy group whose mission is to promote spending cuts, entitlement cuts, and fiscal austerity. Their framing is political, not operational.

They rely on household analogies, trust fund myths, gold standard thinking, and fear of “running out of money.”

This is persuasive to the public but it’s not how federal finance works.

4. What actually happens if the HI trust fund hits zero? Two possibilities:

A. Congress changes the law. This is what has happened every time in history. Congress simply authorizes continued payments.

B. Payments continue anyway. Even if Congress did nothing, the Treasury can still make Medicare payments because the U.S. cannot run out of dollars; the Fed clears all payments; the trust fund is not a funding mechanism

The only thing that stops payments is Congress choosing to stop them. Not insolvency. Not lack of money. Not debt levels. Not debt/GDP. Not trust fund balances.

5. The clean takeaway Medicare cannot become insolvent in any financial sense. The “trust fund” is an accounting construct, not a real funding source. CRFB’s framing is political, not operational. 

The only real constraint is Congressional willingness, not financial ability.

Tell this to your Congresspersons each time they lie to you about the federal government’s financial need to raise your taxes and/or to cut your benefits. FICA could be zero; Benefits could be tripled; And the government would remain solvent.

If you don’t complain, they’ll keep lying, and you’ll pay for those lies, day after day after day. It’ s very expensive to sit back and simply hope things will change.

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

How the economists have failed America

The economists have failed America by promulgating “flat earth” theories that prevent economic growth or support for the people.

Government can be costly, but it’s worth the expense if it works to protect and enhance people’s lives. Unfortunately, today’s economists have completely failed in their duty to guide the government’s financial choices.

Economics suffers from a language problem so severe that it reverses cause and effect.

Why would I need your tax dollars? Why would I worry about deficits? Why would any debt be “unsustainable” for me? I can create all the dollars I need at the touch of a computer key.

The economists tell us that the federal government “borrows” dollars, can “run out of money,” must rely on taxes for “revenue,” and carries a crushing, unsustainable “debt” burden that someday must be “paid back.”

All of them are false, whether intentional or not. They’re “flat earth” claims showing ignorance at best and malice at worst.

From these assumptions come endless false claims that America cannot afford Medicare for All, universal education, infrastructure renewal, or Social Security expansion.

The United States government is not a household, business, or state government. It is the issuer of the U.S. dollar. It creates dollars every time it spends, which uniquely, it can do endlessly.

Federal spending occurs when the government instructs the banking system to credit bank accounts. New dollars are created by that process. Taxes do not provide those dollars.

Federal taxes serve other purposes. They create demand for the currency because taxes must be paid in dollars. They can discourage certain behaviors, and tax breaks encourage other behaviors.

Taxes can shift purchasing power, but unfortunately, current tax laws are regressive, moving money from the poor to the wealthy. Take FICA, for example—it’s collected only from lower earners and, in truth, doesn’t actually fund Medicare or Social Security.

Taxes don’t fund federal spending. The government doesn’t spend “taxpayer money” or wait for tax revenue before making expenditures. Instead, it simply instructs banks to increase the balances in creditors’ checking accounts to pay for goods and services.

Even if the federal government didn’t collect a single penny in taxes, it still could continue to pay its bills, forever.

Treasury securities – T-bills, T-notes and T-bonds – are not forms of borrowing. They are nothing like corporate or even state bonds. They are interest-bearing accounts at the Federal Reserve system. They are better understood as savings accounts than loans necessary for spending.

A T-bill is like a dollar bill. Both “bills” are government financial obligations. Both are equally backed by the full faith and credit of the U.S. government.

The sole difference is that the dollar bill doesn’t pay interest or have an expiration date. So, when someone says they want to reduce federal “debt,” they’re actually saying they want fewer dollars in the economy.

And, by formula, reducing dollars causes recessions and depressions. Gross Domestic Product = Federal Spending + Non-federal Spending + Net Exports. Reduce the dollars in the economy and you reduce GDP, i.e., cause a recession or depression.

The federal government spends first and issues Treasury securities afterward. The purpose of Treasuries is to provide a safe place to store dollars and to help the Fed control interest rates — not to acquire dollars the government supposedly lacks.

This misunderstanding infects nearly every discussion of deficits.

Large federal deficits are not inherently bad; they mostly are necessary and good. Their value depends on what they finance. The government has the infinite ability to fund deficits of any size, and all deficits pump growth dollars into the economy.

A trillion dollars spent on an unnecessary war may produce little public benefit. A trillion dollars spent building hospitals, training doctors, modernizing the electric grid, expanding housing supply, supporting Social Security, or advancing energy technology may increase productive capacity and benefit all Americans.

Debt and deficit size alone tells us almost nothing. The obsession with the numerical size of the federal debt ignores the crucial question: What real resources are being created, expanded, repaired, or consumed?

The often-cited “Debt-to-GDP ratio” doesn’t say anything about the government’s finances. Economists sometimes panic if the ratio goes over some arbitrary threshold, like 100% or more. But in reality, it tells nothing about a nation’s solvency or its ability to pay its bills, which is essentially limitless.

Inflation is routinely misunderstood. We are told inflation results from “too much money” or “excessive aggregate demand.” But demand for what? Prices do not rise in the abstract. Prices rise only where scarcity exists.

Housing prices rise when housing is scarce. Energy prices rise when energy is constrained. Food prices rise when crops fail or transport breaks down. Healthcare prices rise when doctors, nurses, hospitals, or pharmaceuticals are insufficient.

So-called “excess demand” means demand relative to limited supply. The Federal Reserve cannot create oil, build houses, train nurses, repair ports, or produce semiconductors. Its principal tool is the manipulation of interest rates.

The Fed claims that higher rates “cool” the economy by reducing borrowing and weakening spending pressure. But in the real world, “cooling” means slowing construction, discouraging investment, or increasing unemployment.

Ironically, higher interest rates can worsen shortages. In housing, for example, higher borrowing costs may reduce homebuilding, which further constrains supply and keeps prices elevated. Builders facing higher financing costs may simply raise prices.

And higher rates force the government to add more growth dollars to the economy.

The Fed controls interest rates, but it does not control the physical economy. That power belongs to Congress and the President through its spending and, and regulations.

The true constraints on federal spending are not financial. Nothing is “unaffordable” or financially “unsustainable.” Those words are wrongly used as excuses not to fund efforts that aid the people.

The only spending constraints are available labor, technology, energy, raw materials, productive capacity, transportation, and political will. America cannot run out of dollars. It can run out of doctors, housing, energy and competent governance, and those scarcities only can be cured by deficit spending.

We already possess the productive ability to provide every American with healthcare, food, housing, transportation, education, retirement security, and access to information beyond anything imagined by previous generations. The limiting factor is no longer financial. It is philosophical.

What is the purpose of an economy? Modern economists rarely ask that question directly. Instead, they speak endlessly about: GDP, productivity, labor markets, deficits, interest rates, inflation targets, and “full employment.”

But these are measurements, not purposes. The purpose of an economy should be simple. The same as the purpose of a government: To protect and improve the lives of the people.

That phrase — improve the lives — changes everything.

If the purpose of economics is human well-being, then labor is not automatically sacred. Labor is a tool. Human suffering is not an economic virtue. Artificial scarcity is not moral discipline. Exhaustion is not a measure of worth.

For centuries, human beings spent much of their lives performing backbreaking labor merely to survive: Chopping wood, hauling water, washing clothes by hand, growing food with primitive tools, traveling by foot or horse, dying young from disease.

Technology liberated humanity from much of that misery.

The washing machine did not destroy civilization. It destroyed washboards. The tractor did not destroy civilization. It destroyed endless hours behind plows. The car did not destroy travel. It facilitated local travel and opened the door to airflight.

Yet every technological advance has been accompanied by fear: “If machines do all the work, what will people do?”

The answer is obvious: If machines do all the work that people don’t want to do, people will live the lives they want to live.

They will raise children, study, create art, build relationships, explore ideas, travel, invent, teach, learn, play games, care for one another, and pursue whatever gives their lives meaning. Some will still work hard because they enjoy challenge and accomplishment. Others will work less because survival no longer requires endless labor.

This is not decadence. It is progress. The tragedy is that modern economies often treat labor itself as the goal rather than the means. Thus we have as one of the Fed’s mandates: “Full employment”

It has become a sacred phrase even as automation steadily reduces the need for human labor. Entire industries now operate with a fraction of the workers once required. Artificial intelligence may soon reduce the need for millions more.

Yet instead of asking: “How can technology improve human life?” economists ask: “How can we force people to remain economically necessary?”

That is backwards. The purpose of humanity is not to provide jobs for humans. The purpose of technology is not to preserve labor. The purpose of an economy is not to maximize toil. The purpose of an economy is to maximize meaningful human flourishing within the physical limits of reality.

This does not mean resources are infinite. They are not. Energy matters. Materials matter. Environmental limits matter.
Human skills matter.

But dollars are not the scarce resource.

The United States can mobilize enormous productive capacity whenever it chooses. It proved this during wars, financial crises, pandemics, and technological races. The obstacle is not money. The obstacle is political will and public understanding.

Wars demonstrate this brutally. Whenever nations decide destruction is necessary, suddenly the “unaffordable” becomes affordable: Factories appear, research accelerates, labor mobilizes, deficits explode, and governments somehow “find the money.”

Yet when the subject is healthcare, housing, education, or poverty reduction, society suddenly becomes obsessed with “fiscal responsibility.”

This is not economics. It is priority. The deeper danger is not inflation or deficits. The deeper danger is allowing obsolete myths to prevent civilization from using its productive powers to improve human life.

A society capable of artificial intelligence, robotics, instant communication, advanced medicine, and planetary-scale production should not fear abundance.

It should fear the inability to imagine what abundance is for. We have the money. We have the machines to help us. We even have the intellect. All we need is to understand what our goal really is.

I have not had a paying job in 18 years. My main concerns revolve around mortality. I’m 91. Still physically active. Still interested. Still involved. If machines waited on me hand and foot, and I lived another 18 or 91 years, I would be happy.

But if you were to listen to economists, I should worry about having nothing to do, so I should want full employment so there would be meaning in my life. And I should worry about the federal government running out of money. And I should worry about the Medicare and Social Security trust funds receiving enough money from FICA. And I should worry about the federal debt, and the Debt/GDP ratio.

You have one life. On average you will live about 31,000 days, and be awake for about 2/3 of that time, about half a million waking hours.

How will you spend those relatively few that you have left? How many of those scarce hours will you waste doing things you hate or find boring? How many will you spend working vs. having enjoyment? How many will you spend ill, without proper healthcare? How many will you spend in bad housing in a bad neighborhood?

What is your purpose in life? The economists measure the government’s ability to pay for things (unlimited), but do they measure the pleasure or sadness you will have from your limited years? The economists measure dollars, but not lives.

President Kennedy famously (and wrongly) said, ““Ask not what your country can do for you — ask what you can do for your country.”

But the nation and the economy exist for human flourishing, Humans don’t live for the economy and the country.

We have arrived at the point where we can have it all:

  • Free healthcare for every man, woman, and child
  • The end of poverty and the narrowing of the gap between rich and poor.
  • As much free education as each individual wants.
  • Government funding of research and development for new beneficial products and services
  • Fairer allocation of power and wealth

The only, ONLY thing standing in our way is ignorance about a few facts:

  1. The purpose of government and the economy is to improve and protect the lives of the people, and not the other way around
  2. Our Monetarily Sovereign government is not financially constrained. It can pay for anything, and do it without using tax dollars.
  3. Federal debts and deficits are not burdens on the federal government, on taxpayers, or on the economy.
  4. Inflations are caused by shortages of goods and services. To prevent/cure inflations, prevent/cure shortages with federal spending.

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