The lawsuit you never heard of could upend your life

The U.S. Supreme Court has a sordid history, with only brief flashes of morality and honesty.

**Following a sad tradition of supporting extremism, bigotry, and personal greed.**

It has legalized slavery, counted blacks and women as less than human, denied the words “well-regulated militia” exist, approved civil asset forfeiture without due process, and approved forced sterilization of the mentally feeble. SCOTUS legalized the internment of Japanese Americans, uninhibited use of eminent domain taking, approved Jim Crow laws, and recently, denied women control over their bodies. SCOTUS ruled that money is speech, so those with the most money were given the constitutional right to the most speech. And then, there was Bush v. Gore, a flat-out contradiction of the Constitution. So yes, far too many crooked, immoral, greedy, and even stupid justices have populated many terrible Supreme Courts. The current one follows that sad tradition. My reading of the current Supreme Court is that it will continue to fail the morality/honesty test and will invent ever more twisted reasons to justify decisions reflecting the following concepts:

If something benefits the rich, the Court’s right-wing likes it.
If something benefits the rich at the expense of the poor, they love it.
If something benefits the rich, punishes the poor, and personally benefits certain members of the Court, they positively adore it.

Call me a pessimist if you will, but Moore vs. the United States will test the Court’s morality and honesty yet again, and I predict the Court will find a way to fail the test. Excerpts:

Moore vs. the United States. The Roosevelt Institute and the ITEP report warned that the Supreme Court’s ruling could even affect social programs and the federal deficit.

The decision can affect social programs only if one wrongly believes federal taxes fund federal spending. While state/local taxes fund spending by these monetarily non-sovereign entities, federal taxes do not fund spending by the Monetarily Sovereign U.S. government. Even if all federal tax collections, including FICA, fell to $0, the federal government could continue its deficit spending forever.

“In Moore, the Roberts Court could decide with the stroke of a pen to simultaneously forgive big business decades of tax dues, increase the federal deficit over the long run, jeopardize future public revenue and essential social programs, escalate these multinational companies’ already sizable after-tax profits, and further enrich their shareholders,” the report authors wrote.

Contrary to popular wisdom, Social Security and Medicare are not funded by federal taxes. They are financed by dollars created ad hoc with the press of computer keys. As for the federal deficit, it is necessary for economic growth. When the deficit fails to grow, we have recessions and depressions. The federal deficit is the private sector’s income. Concerns about the federal deficit are based on ignorance of federal finance. Corporate profits create economic growth, and enriching shareholders is fine if the government also will spend to enrich the poor (via Social Security for All and Medicare for All).

The Supreme Court will hear the upcoming case, scheduled for December. It could potentially have far-reaching implications on the United States tax structure.

The case deals with whether the U.S. Constitution’s 16th Amendment authorizes Congress to tax unrealized sums without apportionment among the states.

Charles and Kathleen Moore are minority shareholders in an Indian farming firm, and they have disputed a provision in the Tax Cuts and Jobs Act passed by Congress in 2017 after the IRS presented them with a $15,000 bill for their investment.

The Moores argue the reparation tax is not on income and violates the 16th Amendment that requires direct federal taxes to be apportioned among the states. After losing a suit in the District Court in Washington state in 2022, the Moores’ dispute will be heard by the Supreme Court.

The Roosevelt Institute and the ITEP explained that before the Tax Cuts and Jobs Act, American individuals and corporations “owning stock in a foreign corporation were allowed to defer payment of U.S. tax on profits generated by the offshore company until those profits were ‘repatriated.'”

Because this is a tax benefit taken mainly by wealthy investors, one might expect the right-wing Supreme Court to rule in favor of the Moores.

If the high court sides with the plaintiffs, almost 400 multinational corporations could collectively receive $271 billion in tax relief.

The U.S. federal government, being Monetarily Sovereign, neither needs nor uses any form of income, including tax income. When this income originates with U.S. taxpayers, it represents a dollar reduction from the private sector and, therefore, is recessive. On the other side of the coin is that most taxpayers will be among the rich, so the tax would help narrow the Gap between the rich and the rest. So, we have a conundrum. Is stimulating economic growth or narrowing the Gap more economically beneficial?

The report noted Chief Justice John Roberts and Associate Justice Samuel Alito are said to own stock in 19 companies that could receive a combined $30 billion if the court strikes down the repatriation tax.

Aha. That would seem to be the closing argument. In the unlikely event that the SCOTUS justices have any remaining morality, Roberts and Alito would recuse. I suspect Roberts still has a modicum of ethics. I doubt Alito has any. If they decide to recuse, it probably will be because Roberts embarrassed Alito into gritting his teeth and going along. If they don’t recuse, Alito and the rest of the right-wing gang will have won the cage match race to the bottom.

The report also argues that depending on the scope of the decision, the Supreme Court could “supplant Congress as a major American tax policymaker, putting at legal jeopardy much of the architecture of laws that prevent corporations and individuals from avoiding taxes, and introducing great uncertainty about our democracy’s ability to tax large corporations and the most affluent.”

Laws that allow the rich to avoid taxes are like roast beef for starving SCOTUS justices. Who will take them on those free junkets if the rich get angry with them? The federal government is not funded with tax dollars. It creates its own funding by pressing computer keys. Taxes control the economy by taxing what the government wishes to encourage and giving tax breaks to what the government wishes to reward. Taxes also create demand for the dollar by requiring tax payments to be in dollars. The actual function of federal taxes is to enrich the rich by widening the Gap between the rich and the rest. “Rich” is just a comparative, not an absolute term. The wider the Gap, the richer are the rich. The rich pay a much smaller percentage of their income and wealth than the poor, so today’s tax law widens the Gap and makes the rich richer. While taxing businesses is anti-growth, taxing the rich (i.e., eliminating tax dodges) would narrow the Gap.

Common Dreams wrote about the report on Moore v. United States and said that while justices could take a narrower view on specific parts of the Moore case, a broader ruling could protect individuals from a wealth tax.

There are many problems with a wealth tax — what constitutes “wealth,” how is it measured, how would a home, a bank account, or company stock be measured for tax purposes. The biggest problem is that, as with current tax laws, the rich would influence (i.e., bribe) Congress to answer those questions in their favor.

The Manhattan Institute, one of eight conservative advocacy groups that filed amicus briefs urging the Supreme Court to hear the Moores’ case, argued in a filing that “the case presents the court with an ideal opportunity to clarify that taxes on unrealized gains, such as wealth taxes, are direct taxes that are unconstitutional if not apportioned among the states.”

On balance — and there are two strong sides to this — I will agree with the conservatives if they rule in favor of the Moores. While state and local taxes are necessary to fund state and local government spending, federal taxes don’t support anything. In my view, the best federal tax is no tax. SUMMARY Remember the three points at the start of this post: If something benefits the rich, the Court’s right-wing likes it. If something benefits the rich at the expense of the poor, the right wing loves it. If something benefits the rich, punishes the poor, and secretly benefits certain members of the Court, they positively adore it. See whether any justice recuses. Then, see the decision and who votes for what. That will demonstrate much about this SCOTUS. My guesses: The right wing will back Moore and the rich. Their obligations to the rich and powerful are too strong to break. Roberts and Alito won’t recuse, though, for appearances, they might dump their stock shares (and repurchase them later.) Those posh vacations on yachts and private planes may be too much fun to give up. And hey, they have lifetime jobs, so let the peons complain. I’d like to be proven wrong on this. The only solution is term limits and a morals clause similar to what every other judge in America must follow. Rodger Malcolm Mitchell Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

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

MONETARY SOVEREIGNTY

Is the problem cruelty, ignorance, or greed? You decide

We’ll begin with our usual reminders:

1. The U.S. federal government is not like state/local governments. It is uniquely Monetarily Sovereign, meaning it cannot unintentionally run short of its sovereign currency, the U.S. dollar.

Unlike state/local governments, the federal government never spends “taxpayer money.” It creates new dollars ad hoc when it pays any bills. Even if the government collected $0 in taxes, it could continue spending forever.

Because federal taxes do not fund federal spending, what is their purpose? The first purpose of federal taxes is to control the economy by taxing what the government wishes to discourage and giving tax breaks to what the government wishes to reward.

The second purpose is to assure demand for the dollar by requiring taxes to be paid in dollars.

2. Federal deficit spending does not, has not, and will not cause inflation. All inflations in history have been caused by scarcities of key goods and services, most notably oil and food, but more recently, transportation, computer chips, metals, lumber, labor, and other goods.

Today’s inflation was COVID-induced by all of the above scarcities. The scarcities and inflation could be cured by more federal spending to acquire and distribute the scarce goods and services.

Recently, I read an article in THE WEEK Magazine that reflects Congress’s cruelty, ignorance, and or greed, primarily those of the right. Here are excerpts and comments: Child Poverty in Western Cities: learning from global approaches – Child in the City

Child Poverty in Western Cities: learning from global approaches – Child in the City

The child poverty rate in the United States more than doubled between 2021 and 2022, according to new data on poverty, income, and health insurance from the U.S. Census Bureau on Sept. 12.

A year after the rate hit a historic low of 5.2 percent, the percentage of impoverished children jumped to 12.4 percent.

The bureau pointed to the end of the pandemic-era expansion of child tax credits in late 2021 as a critical factor in the dramatic increases.

“This represents a return to child poverty levels before the pandemic,” Liana Fox, assistant division chief at the Census Bureau, said during a news conference, per the Associated Press. “We did see the child tax credit substantially decreased child poverty.”

Why was the program discontinued if the child tax credit was proven to work and no taxpayer dollars were involved? We’ll discuss that later in this post.

The increase was “part of a wider rise in poverty recorded by the Census,” Time noted, “some of which can be attributed to inflation.” However, child advocates said, “the leap was particularly stark for kids — and was avoidable,” the outlet added.

The federal government can cure inflation by using its infinite money-creation power to acquire scarce items and/or reduce business expenses.

How did the rate go from a record low to more than doubling in one year? During the pandemic, Congress expanded the child tax credit as a part of the American Rescue Plan, which helped families stay afloat alongside stimulus checks.

Families received up to $3,600 for kids under 6 and $3,000 for children aged 6 to seventeen.

Officials also made the tax credit refundable, meaning families who did not make enough money to owe income tax could still be eligible for the monthly payments. This allowed millions of low-income families to be qualified and helped drive the child poverty rate to its lowest level in years.

That progress was reversed when the pandemic relief lapsed, and Congress did not vote to extend the expanded child tax credit at the end of 2021. With the program ending, millions of families lost eligibility for the credit.

The child tax credit can sometimes be considered “an upside-down policy,” Sharon Parrott, president of the Center on Budget and Policy Priorities, told NPR. “That’s because the children who need it the most get the least, while higher income children get more.”

That means when the pandemic relief ended, many families no longer reached the income requirement to qualify for the credit.

In contrast, families making six-figure incomes still get the full tax credit, Parrott explained. The child credit is income-based, so the more money you make, the more you earn per child.

Why did Congress favor giving more to the rich and less to the poor? Logically, it should be the other way around. But the rich make bigger campaign contributions. It’s that simple.

The data highlights “that poverty in our country isn’t a personal failing, but rather a policy choice,” said Melissa Boteach, vice president of income security at the National Women’s Law Center, per Time.

Legislators could “lift millions of women and children out of poverty” if they “prioritize families over their wealthy donors,” Boteach added.

The rich have convinced the voting public that the poor are lazy takers whose poverty results from their sloth. “If only they worked harder like I do,” goes the mantra, “they wouldn’t be poor.” It’s all a convenient lie to excuse cruelty and lack of compassion. If anything, the poor work harder than the rich. They are tasked with the most menial, least pleasant, most demeaning, least rewarding, back-breaking jobs our society offers. More than any other fact, luck separates the poor from the rich. “There, but for the grace of God, go I.”

If the expanded tax credit was working, why wasn’t it extended? President Biden blamed congressional Republicans for not extending the expanded child tax credit, arguing that the rise reported by the Census was “no accident.”

But the push to expand the child tax credit reached a stalemate in Congress, with opposition from Democrats and Republicans. “One flash point was an insistence by some lawmakers that it should go only to families with working parents,” wrote The Washington Post editorial board.

That’s the WSJ expression of the “lazy takers” poverty theory. If someone doesn’t have a job, that “proves” they don’t deserve help. It’s a disgusting lie promulgated to support cruelty and indifference. “I am a good person, but I don’t give to charity because (fill in the blank).

Others objected because they felt the money would discourage people from working and fuel inflation, which was already at a record high.

Think about it. Some 0f the financially fortunate in Congress felt that people receiving $3,600 to support a child for a year would not look for work. Only the clueless would believe such nonsense. Others falsely claimed that increasing the federal deficit would exacerbate inflation. (They had no objections to the gigantic tax loopholes enjoyed by the rich, which further increased the deficit.) When Donald Trump paid only $500 in total annual taxes for income that otherwise would have resulted in many millions of tax dollars, he alone increased the deficit by more than several thousand poor people receiving child tax credits.

Sen. Joe Manchin (D-W.Va.) reportedly suggested that parents would use the extra money on drugs, per Intelligencer, and he later opposed his party’s Build Back Better budget proposal, which included an extension to the child tax credit program.

Manchin’s disturbing suggestions were:. If you give anything to the poor, they’ll blow it on booze, cigarettes, and drugs rather than feeding their children. If you’re one of the (mostly) right-wingers who like to make that claim, I genuinely feel sorry for the terrible job your parents did on you. They made you into a small, mean-spirited excuse for a person.

On a smaller scale, it’s “encouraging that 13 states have a version of the tax credit in place,” the Post editorial board reported. Most are blue states, but “there are also programs in conservative states such as Idaho and Oklahoma, where lawmakers understand how effectively it works,” the board noted.

The irony is that when states spend money, their taxpayers fund the dollars, unlike federal taxpayers, who fund nothing. And here’s a cute switch by the increasingly right-wing extremist Wall Street Journal:

The temporary infusion of cash provided by the child tax credits and other pandemic stimulus programs contributed to “an inflation surge that gutted real incomes.”

Manchin was right to oppose a program that would have cost $1.2 trillion over the next decade.

The U.S. doesn’t need more inflationary spending that disproportionately “punishes lower-income Americans.”

Get it? The Wall Street Journal tells its gullible readers that helping the poor is bad for the economy and even bad for the poor! (As though that right-wing paper gives a fig about the well-being of the poor.) In the lying words of the hate-mongers, giving to the poor encourages unemployment, drugs, inflation, and amazingly, even makes the poor and their children poorer. (Never mind that the child poverty rate more than doubled when the child tax credit ended.) Perhaps the death of the WSJ’s owner, Rupert Murdoch, will help this paper come to some semblance of accuracy, though it has not yet improved the equally extremist Fox News. SUMMARY Giving money to the poor makes them less poor, doesn’t cause inflation, doesn’t increase illegal drug use, doesn’t increase unemployment, doesn’t threaten America’s solvency, and doesn’t cost taxpayers a thing. In answer to the title question, “Is the problem cruelty, ignorance, or greed”? The answer, of course, is: All three. And it applies to Washington and the voting public. Rodger Malcolm Mitchell Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

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

MONETARY SOVEREIGNTY

Fairy tales about money.

We have three main political groups in America:

The Republicans who support rich, white, Christian, NRA men born in America, but claim too much money is given to everyone else.
The semi-Republicans (aka “Libertarians) who also claim the government spends too much helping the poor and middle-income people but support tax breaks for the rich.
The Dems who claim to love ordinary people but still yield to fairy tales about excessive federal deficits and debt.
There’s a fourth category: All those groups that claim to support a specific issue but, in reality, are designed to take votes from one of the major parties.

Veronique de Rugy | Washington Examiner — **Veronique de Rugy**

Here are some excerpts from an article that demonstrates the fairy tales they all promulgate. It was written by a semi-Republican (Libertarian).

‘Bidenomics’ Is Failing Everyday Americans The big spending has fueled higher inflation, resulted in larger-than-projected deficits, and contributed to a record level of debt.

By Veronique de Rugy, 9/21/2023

We’ve shown you data (here, here, here, here, and elsewhere) that demonstrate why even massive federal spending does not cause inflation. All inflations are caused by shortages of critical goods and services. When anything is in short supply, its price rises. When critical goods like oil and food are in short supply, prices generally increase. This general increase is called inflation. These shortages can be cured by federal spending to obtain and disseminate the scarce goods and services. The U.S. government spent massively for many years, and we experienced meager inflation. Only when COVID, the Russian/Ukraine war, immigration restrictions, and Saudi greed caused shortages of oil, food, computer chips, lumber, metals, labor, and other Gross Domestic Product necessities did we have the general increase in prices known as “inflation.” GRAPH I.

**There is no historical relationship between highs and lows of federal spending (green) and inflation (red).**

GRAPH II.

**Also, there is no historical relationship between highs and lows of federal DEFICIT spending (blue) and inflation (red).**

GRAPH III.

**There is a strong correlation between the highs and lows of oil supplies (gray) and inflation (red).**

Ordinary Americans aren’t feeling the so-called success of “Bidenomics.”

Superficially, the economy looks solid. Real gross domestic product (GDP) increased at an annual rate of 2.1 percent in the second quarter of 2023.

While August’s unemployment rate rose to 3.8 percent, that’s still considered full employment by economists.

Wages are rising, and we are often told we’re in a manufacturing boom.

But these numbers need perspective. Employment growth was inevitable because we lost millions of jobs during the pandemic.

De Rugy forgets she admitted we’re at full employment. This has nothing to do with employment growth. “Full” means “full.” She makes the strange claim that because we lost jobs during COVID, today’s full employment was a natural result. Sorry, but that right-wing naysaying won’t fly. Federal spending helped create those jobs. We have a labor shortage, partly because right-wingers falsely claim that undocumented immigrants bring crime and drugs to America.

Comparing Crime Rates Between Undocumented Immigrants, Legal Immigrants, and Native-born US Citizens in Texas

This study used uniquely comprehensive arrest data from the Texas Department of Public Safety to compare the criminality of undocumented immigrants to legal immigrants and native-born U.S. citizens between 2012 and 2018.

The study found that undocumented immigrants had substantially lower crime rates than native-born citizens and legal immigrants across a range of felony offenses. Relative to undocumented immigrants, U.S.-born citizens are over 2 times more likely to be arrested for violent crimes, 2.5 times more likely to be arrested for drug crimes, and over 4 times more likely to be arrested for property crimes.

Drugs come in via legal entry ports, not via immigrant families desperate to escape gangs and poverty.)

Cocaine seizures on U.S. borders, for instance, regularly measure in tons, making it impractical to have individual migrants ferry it across. Instead, dealers prefer to smuggle drugs into the country via legal ports of entry, which allow them to bring in high-value substances that are more easily hidden.

“The majority of the illegal drugs that enter the United States through the U.S.-Mexico border cross through formal Points of Entry,” said Joel Martinez, a Mexico research associate for the Center for American Progress

“The drugs that cross in between are very minimal and non-expensive products like marijuana. All the cocaine, fentanyl and methamphetamine — they cross through formal ports because they’re easier to hide […in] freight comp and assorted vehicles.”

So, right-wing bigotry against foreigners, especially those of color, make it almost impossible for those people to gain citizenship.

Unemployment is low, but only because the economy is drunk on spending, simultaneously closing many people out of the labor force.

De Rugy, desperate to minimize Biden’s success, unknowingly admits that federal spending reduces unemployment. Then, strangely, she declares that in some unknown way, federal spending “closes people out of the labor force.” It is not unusual for people to take both sides of an issue when they have no facts.

Moreover, inflation-adjusted median household income has declined—from $76,330 in 2021 to $74,580 in 2022. Labor tensions and strikes are also intensifying.

This problem is not caused by federal spending but rather by the greed of the rich. Plenty of profits reward shareholders via stock price growth and stock by-backs. Companies have plenty of money to reward executives with excessive pay increases, many multiples higher than average workers’. Now, we see the inevitable result: Strikes.

With all this in mind, is the average American becoming better off?

No, the average worker is not making more inflation-measured dollars, which is why Biden (but not the Libertarians and the GOP) favors the strikers. They are striking to narrow the income/wealth/power Gap between the rich and the rest. This is anathema to the Republicans and the faux Republicans (Libertarians), who always favor cutting benefits to the not-rich (while cutting taxes on the rich.)

These troubles are partly caused by inflation, which continues to take its toll. Per the Consumer Price Index (CPI), year-over-year inflation rose to 3.7 percent in August, nudging back up after peaking at 9.1 percent not long ago.

“Core” CPI (excluding food and energy) is down slightly to 4.3 percent. Although these numbers are an improvement after we experienced their highest levels since 1982, they remain disturbingly high.

Excluding food and energy from the measure of inflation and calling the balance “core inflation” makes no sense. It’s like excluding all home runs, triples, and doubles from a baseball player’s statistics and calling singles his “core” batting average. Scarities of energy and/or food are the most common and most important reasons for inflation. The Fed is so focused on money it has lost sight of reality. The reason: The Fed is tasked with curing inflation, and its only tool is interest rates. So, the Fed ignores the scarcity of energy and food and proclaims these products are not “core,” when that is precisely what they are. (“Move on, folks. Nothing to see here.”)

This is bad news for Americans whose standard of living has fallen since early 2021.

The Bureau of Labor Statistics (BLS) reported real average hourly earnings declining in 2021 and 2022, meaning Americans can afford less with their hard-earned dollars.

More than three-quarters of people’s income is devoted to living expenses like housing, transportation, and food—all of which have become more expensive.

The federal government can make all of the above less expensive to Americans. Consumers could receive federal benefits for housing, transportation, and food. FICA could be eliminated; being a federal tax, it pays for nothing. (The federal government pays for everything by creating new dollars ad hoc. Federal tax dollars are destroyed upon receipt.) The right-wing opposes all these solutions to the fallen standard of living.

Food prices, for instance, rose by 19.3 percent. Shelter rose by 16.5 percent since 2021. Gasoline prices are up, too.

Inflation is a tax on every American’s standard of living. It’s also a regressive tax. Low-income workers tend to experience higher-than-average levels of household inflation.

Inflation would not take its toll on Americans if the federal government increased spending to:

Provide free healthcare insurance to every man, woman, and child in America, regardless of wealth and income.
Provide Social Security benefits to every man, woman, and child in America, regardless of wealth and income.
Reduce energy prices by supporting renewable energy and oil drilling/refining.

De Rugy cries crocodile tears for the “Average American’s troubles” but refuses to consider any cure for those troubles. Instead, she worries about the non-existent “troubles” of the federal government, the one entity in America with limitless funds, and never needs to worry about bankruptcy.

Making matters worse, high-interest rates resulting from the Federal Reserve’s fight against inflation also hit lower-income Americans the hardest.

These tend to consume a higher proportion of such incomes and take money from the pockets of people who hold assets in cash or low-yielding bank deposits.

In other words, inflation creates the opposite of an equitable economy.

Both inflation and high-interest rates take money from the pockets of average Americans. But both inflation and high-interest rates are unnecessary and totally within the control of the government. High rates do not “result” from anything. They are the Fed’s primary inflation-fighting tool. Inflation can be cured by federal spending to cure the shortages that cause inflation. And interest rates are determined by the Fed. Raising interest rates not only does nothing to cure inflation but also exacerbates inflation by increasing the price of nearly everything: Real estate, cars and trucks, food, clothing, all imported goods, construction materials. The Fed feeds the patient salt tables to cure high blood pressure. Why does the Fed do it? Because the Fed focuses on money, raising interest rates increases the demand for the dollar. The Fed ignores the obvious fact that adding interest payments to the price of everything increases the purchase price of everything.

Simple example: You buy a $50,000 car and finance the purchase with a 5-year, 3% loan. The total of your 60 monthly payments is $53,852.13.

Alternatively, say you finance that $50,000 car with a 5-year 6% loan. Now, the total of your monthly payments is $57,776.95

That $50,000 car cost you an additional $3,924.82, courtesy of the Federal Reserve. That is the very definition of inflation.

By now, it’s well-known that Bidenomics’ big spending has fueled higher inflation, resulted in larger-than-projected deficits, and contributed to a record level of government debt.

It may be “well-known” that federal spending causes inflation, but what’s “well-known” often contradicts the facts. It once was “well-known” that the earth was the center of the universe, emotional stress was the primary cause of stomach ulcers, and drinking water during exercise causes cramps (Yes, really. When I was young, that was common knowledge.) As GRAPH I and GRAPH II (above) demonstrate, there is no relationship between federal spending and inflation. Nor is there a relationship between federal deficit spending and inflation. There is, however, a robust relationship between oil price increases (which are strongly related to oil scarcity) and inflation. As for de Rugy’s concern about federal debt and deficits, she displays widespread ignorance about Monetarily Sovereign governments. The U.S. federal government’s finances are nothing like those of monetarily non-sovereign governments such as state, county, city, and the euro governments. Monetarily, Sovereign government cannot run short of their own sovereign currency.

Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”

“Federal debt” is not a debt of the federal government. It is deposited into T-security accounts that are owned not by the government but by the depositor. The government never touches those deposits other than to add interest money, and upon maturity, the money in those accounts is returned to the depository. The two purposes of T-accounts (T-bills, T-notes, T-bonds) are to:

Provide the public with a safe storage place for unused dollars.
To assist the Fed in setting interest rates.

T-securities do not provide the federal government with spending money. To pay its bills, the federal government creates new dollars ad hoc. Federal deficits are not a burden on the federal government or on taxpayers. The government has the infinite ability to pay any obligations. Unlike state and local governments, the federal government does not need or use tax dollars to pay its bills. It always uses newly created dollars for that purpose. Ms. de Rugy’s concerns about federal “debt” and deficits are unwarranted. Federal deficits add dollars to the economy. When federal deficits are too small, the economy ceases to grow (“recessions”) or shrinks (“depressions). Graph II shows this effect. As deficit spending shrinks, the economy goes into a recession, cured by increased deficit spending. Deficit spending grows the economy and does not cause inflation or require taxes. Even if no federal taxes were collected, the federal government could continue spending forever.

The most recent estimate of the full-year deficit for 2023 is $1.5 trillion, up from $946 billion last year. Total federal debt is more than $33 trillion, an increase from $28.5 trillion in 2021. Budget tensions led the credit agency Fitch Ratings to downgrade Treasury debt based on prospects of further fiscal deterioration.

Fitch Ratings did not downgrade Treasury debt because of the size of the debt or deficits. It downgraded the debt because of the uncertainty regarding one of the most ignorance-based laws in American history: The debt ceiling. This harmful law is based on the false premise that federal debt and deficits burden the government and taxpayers. The law threatens to force the federal government to renege on its promise to return the money in T-security accounts to depositors or to fail to pay past obligations to creditors.

This is not great; federal borrowing is projected to be $120 trillion in the next 30 years.

The federal government never borrows dollars. It creates all the dollars it needs and uses ad hoc.

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.”

The prospect of gigantic, never-ending deficits during good times makes investors nervous.

Knowledgeable investors are aware that the size of federal deficits does not, in any way, affect the federal government’s ability to pay its bills.

Borrowing costs like mortgage and car loan rates are rising, as are yields on benchmark 10-year treasury notes. They’re above 4.3 percent, their highest level since 2007—weighty burdens on lower-income Americans.

Here, Ms. de Rugy mixes two errors.

Mortgage rates are whatever the Fed wishes them to be. Sadly, the Fed believes raising rates is the way to fight inflation, while it causes more inflation.

Finally, while America may be experiencing a hike in real construction spending, that’s a far cry from a manufacturing boom.

According to the Institute for Supply Management Report on Business, economic activity in the manufacturing sector in August contracted for the tenth consecutive month following 28 months of growth.

Moreover, manufacturing only accounts for 11 percent of GDP. Even if this sector grew, the benefits wouldn’t be widely shared.

**After the COVID recession, GDP grew faster than at any time since WWII.**

Manufacturing will continue to contract as we transition to a computer-based society. One day, we all will have 3-D printers that allow us to create what we want without buying manufactured goods. Ms. de Rugy is stretching to find fault with economic growth. She is a member of the “semi-GOP” Libertarians whose sole contribution to the economic discussion is to criticize Democrats.

Nor will Bidenomics’ manufacturing subsidies help workers with college degrees. These handouts, often extensive and rich, benefit companies for projects they would have likely taken on anyway.

It’s not clear why Ms. de Rugy believes manufacturing subsidies won’t help workers with college degrees. And as for projects that “likely” would be taken on without benefits, one wonders where she came up with that bit of fakery.

Take the Inflation Reduction Act, for example. About half of all projects included in the Act were announced before it was passed.

Meaning that half were announced after it was passed. That’s an excellent result.

The private green market was booming even before the subsidies. The remainder of those subsidies overwhelmingly benefit affluent consumers of electric cars and other Biden-favored products.

Ms. de Rugy’s complaint seems ever more desperate. The private green market may or may not have been “booming,” but is that a reason not to invest in green? She objects to government aid for anti-global warming electric vehicles because rich people own them (though average workers build them).

Taken together, these facts can help explain the president’s low approval ratings and the American people’s overall pessimism about the economy’s direction.

With so many working people feeling pinched, who can blame them?

The president’s low approval rates are not related to reality but more to the relentless naysaying from extreme right-wingers like Ms. de Rugy. When you keep pounding people with the message that things are awful, they tend to believe it.

JUST SOME OF BIDEN’S ACCOMPLISHMENTS DESPITE THE EFFORTS OF THE GOP

1) $1.2 trillion infrastructure package 2) $1.9 trillion COVID relief deal 3) Highest appointment of federal judges since Reagan 4) Halt on federal executions 5) Rejoined the international Paris Climate Accord 6) Mandated converting the federal fleet to zero-emission vehicles. 7) Support for transgender service members. 8) Reduced unemployment. 9) Strengthened QUAD alliance with the U.S., India, Australia, and Japan. 10) Student loan debt relief 11) Used the Russia/Ukraine war to strengthen NATO, which Trump tried to weaken. 12) Imposed crippling sanctions on Russia 13) Fought Saudi’s oil price increases by releasing 180 million barrels of oil from the country’s Strategic Oil Reserves. 14) Pardoned people convicted of a federal marijuana charge 15) Respect for Marriage Act 16) Prevented the rail strike and gave workers a significant raise. 17) Passed Government Funding Bill 18) Got us out of Afghanistan, ending years of American deaths. 19) Expanded healthcare. 20) Defended Obamacare 21) Negotiated lifting the debt limit to prevent an economic disaster 22) Rejoined UNESCO 23) Lowest unemployment in years 24) Massive job creation 25) COVID-caused inflation dropping

Considering that unemployment is at historic lows and GDP is at historic highs, consumers’ biggest problem is the COVID-caused shortages causing in inflation. Without the obstinacy of the right-wing, Biden could have passed even more consumer benefit programs to “unpinch” working people. And yes, that would have increased federal spending, a good thing. It would have grown GDP further.

Federal Spending + Nonfederal Spending + Net Exports = GDP

Unfortunately, Republicans and faux Republicans are not the only parties guilty of misstating federal finances. Here are excerpts from a Senator Dick Dubin (D-IL) letter I recently received:

September 22, 2023, Dear Mr. Mitchell,

Thank you for contacting me about the Fiscal Responsibility Act (P.L. 118-5). I appreciate hearing from you.
The debt limit is a statutory limit on the amount of debt the federal government may incur. When government expenditures outpace revenues, the Treasury may issue debt to cover the shortfall.

Those T-securities don’t cover anything. The government never touches the dollars that purchase T-bills, T-notes, and T-bonds. Though Sen. Durbin has been in Congress for over 26 years, he still does not comprehend the difference between federal and personal finance.

Government spending and revenues vary by month, and even if the government has a surplus for the year, it may need to borrow money to cover a shortfall at some point during the year.

Why would an entity having the infinite ability to create dollars ever “need to borrow money?” It doesn’t.

On May 26, 2023, Treasury Secretary Janet Yellen projected that without action from Congress, the federal government would be unable to meet its obligations and subsequently default on June 5, 2023.

Default would have crashed the economy and impeded the government’s ability to make payments to Social Security and Medicare recipients, military personnel, veterans, federal employees, defense contractors, state governments, and our bondholders.

The federal government never needs to default. Only foolish actions by Congress and the President can force the government to default.

On May 27, 2023, President Biden and Speaker Kevin McCarthy reached an agreement. The Fiscal Responsibility Act avoids default by raising the debt limit through January 1, 2025.

Notice that Congress can raise the meaningless debt limit merely by deciding to do so.

Alan Greenspan: “There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.”

This agreement was a good-faith compromise between President Biden and Speaker McCarthy, and it included some provisions that alter several important federal programs, which includes clawing back unspent pandemic relief funding and expanding work requirements for some beneficiaries of the Supplemental Nutrition Assistance Program (SNAP). On June 5, 2023, President Biden signed the Bipartisan Budget Agreement into law.

There is no reason for the U.S. government to “claw back” anything or to expand work requirements. The government has infinite money. There is no reason, but there is a purpose: To make the rich richer by widening the income/wealth/power Gap between the rich and the rich. The wider the Gap, the richer and more powerful are the rich.

This agreement did not include everything I wanted. I am incredibly disappointed in any reallocation of funding to medical research or the National Institutes of Health. However, this agreement is what was required to avoid default.

And, of course, there was no economic reason for the reallocation.

I also have joined Representative Brendan Boyle of Pennsylvania to introduce the Debt Ceiling Reform Act (S. 1882), which would take the threat of default off of the table in the future. This bill would permanently end the weaponization of the debt ceiling by giving the Treasury Department the authority to continue paying the nation’s bills unless Congress submits a resolution of disapproval, which would need to be signed by the president.

The full faith and credit of the United States is not a bargaining chip, and it should not be used to enact any party’s extreme agenda. The Debt Ceiling Reform Act has been referred to the Senate Committee on Finance.

The whole thing is an exercise in stupidity. If, for some strange reason, Congress and the President wished to reduce spending (a reduction that mathematically would force a recession or depression), Congress and the President merely could stop spending. Period.

Now that we have avoided the default crisis, we must look to passing our twelve regular spending bills through regular order. I will be sure to keep your views in mind as we develop these spending priorities, and I will continue working to protect and enhance the federal programs on which American families rely.

If he wants to “protect and enhance federal programs, he should learn Monetary Sovereignty. After 26 years, it’s about time he learned at least this fundamental truth: The federal government cannot unintentionally run short of U.S. dollars. It has infinite dollars.

Thank you again for contacting me. Please feel free to stay in touch.

That didn’t work for Stephanie Kelton; I wonder whether it would work for me. Rodger Malcolm Mitchell Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

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

MONETARY SOVEREIGNTY

The fundamental lie of Libertarianism

“Libertarianism” says Robert W. Poole (Reason Magazine’s early editor) is “about more than just economics and politics, it really is. It’s about human flourishing and what are the conditions for human beings to have satisfying, flourishing [lives].” Money is power.

Hoover Institution Acquires the Archives of Reason Magazine Co-founder Robert W. Poole Jr. | Hoover Institution — **Robert Poole, the voice of Libertarianism**

The fundamental philosophy of Libertarians is that power should be with the people, not with the government. Yet Libertarians espouse exactly the opposite when they opt for tax increases and/or benefit decreases to reduce federal deficits. Keep that in mind as you read the following excerpts from an article written by a leading Libertarian. See whether you believe he believes the money and power should be with the people:

Endlessly expanded federal borrowing and spending is not a realistic long-term transportation future

By Robert Poole, Director of Transportation Policy, September 12, 2023

(Robert Poole is one of the founders of the Reason Foundation [which publishes Reason Magazine] and served as its president and CEO from 1978 to 2000.He is currently director of transportation policy at the Reason Foundation and frequently writes about issues related to privatization.)

The national debt will affect the future of transportation funding, and the public-private partnership community needs to understand why and what the implications for P3s may be.

The most recent parts of the story began on Aug. 1, when Fitch Ratings downgraded the federal government’s bond rating from AAA to AA+. For a company, that might not be a big deal, but for the government of the world’s largest economy, the downgrade was a shot across the bow.

This was the second time a rating agency took such an action with the federal government’s bond rating, with S&P doing so in 2011.

Headlines in the financial press, such as The Wall Street Journal’s “America’s Fiscal Time Bomb Ticks Louder” and “U.S. Downgrade Flashes Warning Sign.” indicate how seriously the downgrade should be taken.

The downgrades had nothing to do with the federal government’s ability to pay. They reflected the government’s willingness to pay, as evidenced by the ridiculous debt ceiling laws. Being Monetarily Sovereign, the federal government has the infinite ability to pay for anything. Mr. Poole confuses “ability”with “willingness.” We have written many times about the so-called fiscal “time bomb.” The first mention we noted was in 1940;

September 1940, the federal budget was a “ticking time-bomb which can eventually destroy the American system,” said Robert M. Hanes, president of the American Bankers Association.

Subsequently, references to the federal “debt” as a ticking time bomb appeared regularly in all media, from scholarly journals to daily newspapers. The 1940 mention came when the total federal “debt” was approximately $48 Billion. Today, that debt is roughly $26 Trillion, an astounding 54,000% increase.

Despite that increase, the “ticking time bomb” still has yet to explode, but the doomsday preachers, having learned nothing from the many years of experience, continue to fret. Eighty-three consecutive years of wrong predictions, and people still believe? What word comes to mind?
As the Journal’s Greg Ip wrote: One reason for Fitch’s downgrade was the absence of any political will to deal with the main drivers of the deficit: spending programs for older Americans, including Social Security and Medicare, and repeated cuts to tax rates for most households.

No, the reason for the downgrade was the uncertainty caused by the useless debt limit laws. The word “useless” is appropriate. There is no use for a law that limits the federal government’s ability to pay for what it already has purchased. And should anyone believe the law has any purpose whatsoever, they should explain why, since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit – 49 times under Republican presidents and 29 times under Democratic presidents. If the law had any value, why is it so easily and often increased without exploding as a “time bomb”? Money is power, so ironically, if one truly believed the power belongs with the people and not with the government, he would favor money flowing to the people and from the government. Yet the exact opposite is stated by the Libertarian writer.

Fitch noted how much worse U.S. fiscal metrics are than its peer countries. For example, The U.S. is on track to spend 10% of federal revenue on interest by 2025, compared with just 1% for the average triple-A-rated country and 4.8% for double-A-rated.

Why, then, isn’t the U.S. rating even lower?

Mr. Poole doesn’t give examples of those “triple-A” and “double-A” rated countries, probably because they aren’t comparable to the U.S. government. Perhaps, they don’t have a foolish, useless debt-ceiling law. Or perhaps, they are not Monetarily Sovereign nations that can issue their national currency in unlimited amounts, as the U.S. can. It would have been helpful for Mr. Poole to list the nations he refers to, but of course, he never will because that would destroy his argument.

Because the reserve status of the dollar and the size and safety of Treasury debt gives the U.S. unprecedented borrowing ability.

First, the U.S. government does not borrow U.S. dollars. It pays for goods and services by creating dollars ad hoc, which it has the unlimited ability to do. The U.S. government never unintentionally can run short of dollars.

“Not dependent on credit markets” means they don’t borrow dollars. Second, “reserve status” merely means that banks keep dollars on reserve to facilitate international trade. Not only does the U.S. dollar have reserve status, but so do numerous other currencies, depending on geography. Though the U.S. dollar is the most common reserve currency, other reserve currencies include: the euro, the Japanese yen, the Mexican peso, the British pound, the Canadian dollar, the Australian dollar, the Indian rupee, the Swiss franc, the Swedish krona, and many other currencies now being held in reserve by banks, worldwide. Being a reserve currency does not bestow special safety on a currency. It does not indicate a nation’s ability to pay its bills. Third, Mr. Poole mentions the size and safety of Treasury debt in the same article about its being a “ticking time bomb.” I suggest he has just exploded his own warning, as well as he should.

Indeed, it was hard to get presidents or Congress to worry about the deficit when interest rates were low. Today, a bond market signaling that the world is no longer safe for debts may be the first step to tackling them.

Interest rates have no meaning for a Monetarily Sovereign nation like the U.S., which has the infinite ability to create its own currency. Whether interest is 1% or 50%, or anything between, the U.S. federal government simply presses computer keys to pay. Further, the U.S. Federal Reserve pays whatever interest rate it wishes. It sets the rate by fiat. Unlike private borrowers, the Fed does not need to set a rate that is attractive to lenders because:

a. The government does not borrow. The purpose of T-bills, T-notes, and T-bonds is not to provide the government with spending money. The goal is to provide a safe storage place for unused dollars. The federal government never touches the dollars in T-security accounts.

b. If the Treasury wanted to issue T-securities that no one wanted to buy, the Federal Reserve could purchase them.

The long-term consequences of the growing debt were estimated in the latest Congressional Budget Office’s (CBO) 2023 Long-Term Budget Outlook.

Its baseline 30-year projection, which assumes no changes in existing laws and programs, is that by 2053, the national debt will constitute 181% of the U.S. Gross Domestic Product—compared with 98% today.

The debt/GDP ratio is the most misunderstood fraction in all economics. Contrary to widespread ignorance, that ratio has absolutely nothing to do with the ability of the U.S. to pay its bills. The federal government has the infinite ability to create dollars, which it does by pressing computer keys.

Alan Greenspan: “There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.”

The so-called “debt” is the total of T-security deposits accepted by the federal government. These are dollars in accounts owned by depositors, never touched by the federal government, and paid off simply by returning the dollars in the accounts. The misnamed “debt” consists of net deposits made between yesterday and ten or more years ago. By contrast, GDP (Gross Domestic Product) is a one-year spending measure. So, the debt/GDP fraction compares a multi-year total with a one-year total — mathematically senseless. Imagine your house mortgage being $300,000 and you earning $150,000 a year. That would be a 200% ratio that millions of people support all the time. The debt/GDP is even more senseless than that, because GDP doesn’t pay debt. Of course, you aren’t Monetarily Sovereign — you can’t create dollars at will — and the federal debt isn’t real debt. So, the whole thing is foolish, though no more foolish than current worries about Debt/GDP ratios. If you want to waste time evaluating the world’s most useless ratio, go here. It shows the percentages for dozens of countries. I challenge you to use those ratios to determine the world’s best and worst credit risks.

And paying interest on that debt will increase from taking 15% of federal revenue today to 35% of federal revenue in 2053 (more than any national budget item except Social Security and Medicare). And that’s just CBO’s baseline estimate.

Given that the federal government has the infinite ability to create dollars, why does Mr. Poole stress about paying interest? Ignorance or intent to deceive?

The Committee for a Responsible Federal Budget estimates that, given likely extensions of tax cuts and expansions of federal programs, the 2053 national debt will likely rise to 222% of GDP.

Whether the debt is 22%, 222%, or 2222% of GDP has zero effect on the federal government’s ability to pay its bills.

Where does transportation fit in the discussion about the national debt?

Well, in July, the House Appropriations Committee, in response to conservative members saying they’re concerned about out-of-control federal borrowing while a Democrat is in the White House—as opposed to mainly supporting massive deficit spending during the Trump administration—proposed trimming Fiscal Year 2024 Department of Transportation (DOT) discretionary grant spending by $5 billion.

Here is where we get to Congress’s misunderstanding (intentional or otherwise) of the federal government’s ability to pay for things.

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.”

Even if the federal government collected zero taxes, it could continue spending forever. There is no reason to cut spending for budgetary reasons. The government has infinite money.

This relatively minor cut would affect only a few programs in six modal agency discretionary grant programs totaling $22.5 billion last year. Yet a headline in Eno Transportation Weekly read, “FY24 House Funding Bill Has Massive Cuts to DOT Grant Programs.”

This proposal raised similar cries of alarm from highway, transit, and rail organizations, such as the headline “Transportation Funding Under Threat in House of Representatives” by United for Infrastructure, which advocates for more infrastructure investment.

Suppose we make the possibly innocent assumption that the Department of Transportation (DOT) had good reasons for its discretionary grant spending. In that case, we now will be forced to do without that spending. The people will be deprived of important transportation improvements, all because of economic ignorance.

Let’s think ahead a few years to when massive federal funding in the Infrastructure Investment and Jobs Act, often referred to as the bipartisan infrastructure law, and the Inflation Reduction Act’s budget has been expended.

At that point, state transportation budgets would be expected to revert to their pre-stimulus spending levels.

This is an important point. Though the federal government, being Monetarily Sovereign, can create infinite dollars, the states, counties, and cities are monetarily non-sovereign. They can and often do run short of dollars.

Why then are states asked to fund what the federal government could easily fund without collecting a penny in taxes? Economic ignorance.

But what can we expect transportation organizations and state DOTs to call for?

Based on history, it’s almost certain states will propose the most recent year of those expanded funding levels as their new budget baselines and ask Congress for federal funding.

And if Congress goes along with the calls for that level of infrastructure spending, there will be another massive amount of federal borrowing.

Reminder: The federal government does not borrow. It creates dollars at will.

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

Since CBO’s dire debt forecasts don’t include this level of increased federal transportation spending, this increase would make all CBO’s 30-year projections seriously underestimating.

Many years ago, a chairman of the Council of Economic Advisers, Herb Stein, propounded what became known as Stein’s Law. “If something cannot go on forever, it will stop.”

But the longer that rude awakening takes to happen, the worse the consequences will be.

Someone, please tell Herb Stein that because the U.S. federal government is Monetarily Sovereign, it can continue to deficit spend forever. It never needs to stop.

America’s transportation leaders should think hard about lobbying for this unsustainable spending to continue.

Sorry, Mr. Poole, but federal spending has proved to be infinitely sustainable. There is no reason for it ever to stop.

The largest contribution to the out-of-control national debt is the impending bankruptcy of Medicare and Social Security.

Because the U.S. government is Monetarily Sovereign, it cannot go bankrupt. For the same reason, no federal government agencies- i.e., Medicare and Social Security- can go bankrupt unless Congress and the President want them to. The federal government could and should eliminate the FICA tax and fund Medicare and Social Security the same way it funds Congress and the White House: By creating dollars. Federal spending is not “out-of-control.” Congress and the President control it. It is exactly what Congress and the President want it to be.

If, or when, Congress finally gets around to grappling with the costs of those programs, it’s likely that most or all federal discretionary programs, including infrastructure programs, will be in for severe and long-term spending cuts.

Transportation leaders should start planning for that significant change now.

Does “severe, long-term spending cuts” in transportation sound like “human flourishing,” the Libertarian excuse for the existence of Libertarianism?

One ray of hope for the highway and bridge sector is the opportunity that comes with the urgent need to phase out per-gallon fuel taxes and replace them with per-mile road user charges, also called mileage-based user fees.

Unnecessary taxes. All federal tax dollars are destroyed upon receipt by the Treasury. Taxes are paid with dollars from the M1 money supply measure. When they reach the Treasury, they cease to be part of any money supply measure. Thus, federal taxes effectively are destroyed upon receipt.

If done right, that transition could fully restore the users-pay/users-benefit principles on which the gas tax was based a hundred years ago.

It could even mean converting state highway systems into revenue-financed highway utilities analogous to electric, gas, and water utilities.

Public utilities, which can be government-owned or investor-owned, charge customers based on how much of the service they use. They also issue long-term revenue bonds backed by the projected income from their user charges to fund the costs of maintaining and improving the infrastructure.

This is the usual Libertarian “soak the private sector” (as opposed to “human flourishing,”), though the federal government has infinite money. Ironically, while Libertarians supposedly favor the private sector, they ask the private sector to give the federal government more money. Do these folks even know what they want?

Long-time traffic and revenue consultant Ed Regan has suggested that metro areas could add a transit tax to charges in the road user charge (RUC) future.

This would mean only residents of an urban area would pay for its transit subsidies—not rural taxpayers or federal taxpayers in general.

This isn’t ideal, but it would be more equitable than today’s system of diverting nationwide highway user tax revenue to transit in a few hundred metro areas.

It would be even more equitable for the federal government to stop pretending it spends tax dollars. The purpose of federal taxes is not to provide spending dollars to a government that has infinite dollars. The fundamental purposes of federal tax dollars are:

Primarily, to control the economy by taxing what the government wishes to discourage and giving tax breaks to what the government hopes to encourage.
Secondarily, to create demand for the U.S. dollar by requiring taxes to be paid in dollars.
In reality, to widen the income/wealth/power Gap between the rich and the rest by claiming that benefits to the poor and middle are “unaffordable” and “unsustainable.”

That is why you are falsely told that Social Security and Medicare benefits must be cut.

In the near term, as advocates of more spending point out, thousands of bridges still need refurbishment or replacement across the country.

But there is no way that federal taxpayers, via expanded federal spending, can address that total problem without massive tax increases.

That is a lie. Federal taxes do not fund federal spending. Period.

State and local transportation officials should start planning for a self-help transportation future that requires users to pay for the infrastructure they use and utilizes public-private partnerships to fund and operate significant projects.

Rather than taking from the private sector, the federal government should fund infrastructure the same way it funds everything else: By simply creating dollars.

A version of this column first appeared in Public Works Financing.

SUMMARY Unlike state and local governments, the U.S. federal government is Monetarily Sovereign. Two hundred and sixty years ago, the government created laws from thin air, and some of those laws created dollars from thin air. They created as many laws and dollars as they wished and gave those dollars the value they wished. It all was arbitrary. Today, the federal government retains the infinite right to create as many dollars as it wishes and to give those dollars whatever value it wishes. Thus the U.S. government never can run short of dollars and has absolute control over inflation. It can pay for anything instantly without collecting a penny in taxes. Unlike state/local taxes, federal taxes are destroyed upon receipt by the Treasury. Similarly, no federal government agency runs short of dollars unless Congress and the President want them to. This includes such federal agencies as the Supreme Court, the White House, Congress, all the branches of the military, Social Security, Medicare, Medicaid, and every federal Department. Libertarians claim to believe the federal government has too much power. Yet, to cure federal deficits, they want to cut benefits and increase taxes. Libertarians want to take dollars from the private sector and give them to the federal government — exactly the opposite of the Libertarian stated philosophy. They claim to wish for “human flourishing” and for “freedom,” but it is a freedom to be impoverished and without medical care and transportation, ultimately ending in anarchy. Libertarianism is a fraud that claims to want something noble, but in practice opts for something evil. Rodger Malcolm Mitchell Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

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

MONETARY SOVEREIGNTY

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