The science of economics is burdened with many lies and myths, most of which are designed to convince you, the public, you should not ask the federal government for benefits.
The Big Lie of Economics is: Federal taxes fund federal spending. It simply is not true. The truth: Federal taxes fund nothing.
Even if the federal government collected $0 taxes, it could continue spending, forever.
The very rich, who control the political establishment, want to widen the Gap between them and you. So they do everything possible to make you agree to have less than you really should. (It’s called “Gap Psychology,” the desire to distance oneself from those below, in any social/economic measure.)
Because “rich” is a comparative measure, the less the poorer have, the richer the rich are. That is why you are told federal deficits and federal debt are too high, and “unsustainable” — to provide you with a seemingly logical rationale for denying you the things they already have: The availability of:
–Significant income
–Safe and comfortable housing
–Comprehensive health care
–A happy, safe, well-fed, well-clothed lifestyle
–University education for your children
–Pleasant, remunerative working conditions
–A comfortable retirement
They tell you, falsely, that you must pay for federal spending, either viataxing or inflation, and that your federal benefits are the dreaded “socialism,”
Not one word of that is true.
Federal taxing is not necessary for federal spending. Federal spending never causes inflation. And federal spending is not “socialism.”
And that is why the rich publish misleading cartoons like this:
The federal government does not spend your money. Your federal taxes do not fund federal spending.
The truth:
1. The federal government does not spend your money. In fact, your federal taxes are destroyed upon receipt
2. You could have free, comprehensive Medicare covering you and everyone in your family, and not need to pay even one penny in FICA (which, by the way, is the most regressive tax in America.)
3. Your children could be educated, grades 13 and above, without any cost to you
4. You could be provided with sufficient income to afford good food, safe housing, good clothing, and the other benefits of being an American (car, TV, vacations, good working conditions, etc.)
Yes, the rich tell you the economy will falter without your hard labor and deprivation (though they themselves are excluded), and that only the rich are entitled to a good life, and that labor is moral (again, the rich are excepted).
And it is all a lie to keep you down.
Consider, for instance, the battle revolving around the $600 stimulus check vs. a $2,000 stimulus check.
Congress finally settled on $600, though there is not a single, economic reason for that limitation. Not one.
I challenge anyone to provide one good excuse for the lower number other than that the rich, and the party of the rich, don’t want you to have it.
The rich expect you not to understand the differencesbetween our Monetarily Sovereign federal government and our monetarily non-sovereign state and local governments.
So, the politicians falsely claim that state and local governments struggle financially because they are inefficient, incompetent, and crooked.
Indeed, some are, but the real reason for the state/local government financial struggles is that they are monetarily non-sovereign.
They simply cannot afford to provide you with good streets, good water, good sewage systems, good elementary and high schools, good police and fire protection, and all the other benefits the federal government could pay for at the touch of a computer key.
The rich have managed to brainwash you into believing you deserve financial hardship and denial of benefits because you don’t labor hard enough or are not smart enough, and that the rich are the ones who deserve the lifestyles you admire.
This can change. The rich are not superior, more deserving Americans. Fate has just been kind to them.
You deserve to have all the benefits the rich have. But first, you must be willing to accept the truth. You must be willing to accept the fact that you have been lied to.
Yes, it is hard to admit you have been suckered all these years. But swallow your pride, understand the truth, and demand that the federal government, which has unlimited money, should even the score, and pay to give you the kind of life rich Americans enjoy.
Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:
Have you ever read an economics textbook or treatise?
If so, you might have been dazzled, or impressed, by the number of mathematical formulas, the charts, the graphs, the abstruse language. No science offers more dizzying complexity than does economics, “the dismal science.”
And yet . . .
And yet, it all can be boiled down to one simple question, the answer to which opens up the entire subject like a bright ray of sunshine on a foggy morning. That question is:
What is the difference between federal government finances vs. state/local government finances?
It’s a question that separates the wheat from the chaff, so to speak, the knowledgeable from the pretenders.
Consider the common phrase “taxpayer dollars.” You see it often, usually in the context of some government spending. But which government?
If the author is referring to a state or local government, the phrase may be apt. But it never is appropriate when referring to federal government spending.
The federal government does not spend taxpayer dollars. Never. Not ever.
The answer to the question, the fundamental difference between federal government finances and state/local government finances is:
The federal government is Monetarily Sovereign; state/local governments are monetarily non-sovereign.
Almost everything in economics, every true statement, and every false statement is related to that one basic truth.
What does it mean? It means the federal government is the issuer of the U.S. dollar, while state and local governments (and you and me) are merely users of the U.S. dollar.
As the issuer, the federal government creates dollars at will.It creates at will, all the laws that govern the supply and value of the dollar. The issuer never can run short of dollars and has absolute control over the exchange value of the dollar.
The issuer of the dollar does not need to obtain dollars from any outside source. Having the unlimited ability to create dollars, it does not borrow them nor does it need to levy taxes in order to obtain dollars.
What erroneously is termed “borrowing” when referring to the federal debt, actually is the acceptance of deposits into federal security (T-bill, T-note, T-bond) accounts. The so-called federal “debt” is the total of those deposits, the purposes of which are to:
–Provide a safe, parking place for unused dollars and
–Help the Fed control interest rates.
Thus, the purpose of federal “debt” is to stabilize the dollar
The purpose of federal taxes is to help control the economy by taxing what the government wants to limit and by giving “tax breaks” to what the government wants to encourage.
Neither taxing nor accepting deposits into T-security accounts, provides spending dollars to the federal government, which has the unlimited ability to create spending dollars at the touch of a computer key.
Even if the federal government collected no taxes and accepted no deposits into T-security accounts, it could continue to spend, forever. The same cannot be said of state/local governments, which rely on income in order to spend.
Your federal income tax dollars help to pay for the items on the federal budget. The money the federal government borrows to cover the budget deficit is what creates the national debt.
I love the Tax Receipt Calculator on WhiteHouse.gov. It’s highly informative and not a little shocking to see exactly how my tax dollars are spent.
Why don’t all Americans receive a similar receipt when we file our taxes? If the corner store gives me a receipt with my pack of Slim Jims, shouldn’t the federal government give me a receipt for my generous (if compulsory) contribution to the national piggy bank?
Wouldn’t it be nice to receive a kindly written thank-you note from the IRS attached to a detailed receipt of how every cent of our tax dollars would be spent that year.
According to How Stuff Works.com, “Dave Roos is a freelance journalist who has contributed hundreds of articles to HowStuffWorks since 2007, with a specialty in personal finance, economics, and business.
It is truly sad to have a specialty in something you know so little about, for Roos’s entire article, including the title, demonstrates a profound ignorance of economics. He does not understand the differences between federal finance and state/local government finance.
That’s right. Those precious dollars you work so hard to obtain, and then are forced to send to the federal government, are destroyed as soon as they hit the Treasury. That is why no one can answer the question, “How many dollars does the federal government have.” The best answer is, “Infinite.”
By contrast, state/local taxes are spent. They first are deposited into a bank and later are distributed into the economy, all the while remaining in that money measure called M3.
Sadly, Mr. Roos is not alone in his misunderstanding of Monetary Sovereignty. For instance:
Why Governments Levy Taxes, By: Mark Kennan, Reviewed by: Sari Luciano, BS, Accounting/Business, Updated December 04, 2018
Governments provide a variety of services to the people they serve. In order to pay for these services, the government levies taxes on the citizens and companies who benefit from these services. The government must also make payments on any money borrowed to sustain operations.
And:
Why We Pay Taxes. Since 1950, individual income taxes have been the primary source of revenue for the U.S. federal government.By Sarah Pruitt
Together with payroll taxes (used to fund social programs like Social Security and Medicare), income taxes amount to roughly 80 percent of all federal revenue, and are the essential fuel on which our government runs.
And:
Why Do We Have Taxes?
Taxes, which are the main source of federal, state and local government revenues, pay for buildings, public education, highways, airplanes, rockets, road signs, and the salaries of millions of government employees.
Without taxes there would be no governments. Taxation is one of the several ways by which governments raise money to pay for the goods and services that they are called on to provide. Governments lack the major sources of revenue available to other sectors of the economy and must therefore rely on taxes to finance the majority of their expenditures.
The list goes on and on. Similar articles can be found everywhere, Yet not one sentence in the above examples is correct.
The federal government does not levy taxes to pay for federal services. It creates new money, ad hoc, to pay for whatever it wishes. Payroll taxes do not fund Medicare and Social Security.
The U.S. government does not borrow money. It has no need to. The federal government (unlike state/local governments) has no need for revenue of any sort.
Not only does the government not borrow, but it should not lend. “Lending” implies repayment, which the government does not need. If, for instance, the government wishes to encourage college attendance, it should not have a student loan program. It should have a student gift program.
President Obama: Washington Has to Live within its Means, 9/19/2011, By Colleen Curtis
Summary: The President’s plan for economic growth and deficit reduction offers a balanced approach to get our fiscal house in order, based on the values of shared responsibility and shared sacrifice
The President’s plan will enable Washington to live within its means, something Americans across the country have been doing for years. And the balanced approach means that no one group has to bear the burden alone. It means that everyone – including millionaires and billionaires – has to pay their fair share.
Obama’s knowledge of economics was abysmal. Deficit reduction guarantees recessions and depressions by taking growth dollars from the economy.
“Fiscal house in order” implies reducing federal debt, which simply stated, is the dreaded austerity, that has claimed the lives of many economies.
Red line: Federal Debt changes. Vertical gray bars: Recessions. Relative debt reduction leads to recessions which are cured by relative debt increases.
And rather than “shared sacrifice,” how about shared prosperity, as a better alternative.
And so far as “live with its means,” Obama confuses federal finance with personal finance. While you and I must live within our means (i.e. spend no more than our incomes), the federal government has no “means” to live within. The federal government’s “means” is infinite.
The COVID-19 relief deal remains in limbo over Christmas after House Republicans rejected President Donald Trump’s demand for $2,000 stimulus checks on Thursday, while the president spent the day golfing in Florida.
I’m not referring to the “Trump Golfs” part. We know why that is. But, why do Republicans block the $2,000 stimulus?
Given that:
–The federal government has an infinite ability to create dollars
–Federal taxpayers do not fund federal spending, and
–The private sector has a desperate need for dollars,
Why the GOP reluctance to spend?
Yes, there are the GOP’s political considerations of not wanting to help the poor, and preferring to help the rich, but additionally, there is the belief (excuse?) that federal finances are no different from personal finances.
The public doesn’t understand the simple difference, and the GOP exploits that ignorance.
Contact your Senator or Representative to demand a $2,000 stimulus check (or better yet, Social Security for All). You will be met with the fake unaffordability issue.
Your Senator or Representative may or may not know the difference between federal financing and state, local and personal financing, but he/she makes the tacit assumption that you are ignorant about it.
That same assumed ignorance applies to arguments about Medicare for All, free college for all, and to every other debated federal expenditure.
Simply keep in mind that:
–The federal government can afford anything. It never can run short of dollars. It is the sovereign of dollars.
–Taxpayers do not pay for federal spending.
–The federal debt is not a burden on anyone. Lack of income is a burden on the populace
—Federal spending does not cause inflation
–Federal finances are nothing like state/local government, and personal finances. The federal government is Monetarily Sovereign; state/local governments are monetarily non-sovereign.
Try to find candidates who understand the differences, and vote for them, or teach the ones you are stuck with.
Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:
Unlike state/local governments, the U.S. government is Monetarily Sovereign. That means it never, NEVER, unintentionally can run short of its own sovereign currency, the U.S. dollar.
Federal taxes do not support federal spending. Even if all federal tax collections ceased, the federal government could continue spending forever.
The federal government has infinite money. It cannot run short of dollars.
The federal debt and deficit are not a burden on anyone — not on you, not on your grandchildren. On the contrary, when federal debt growth slows, we have recessions and depressions, which are cured by increases in federal debt growth.
Inflations never are caused by federal deficit spending. Inflations always are caused by shortages, most often by shortages of food and/or energy. In fact, inflations often are cured by deficit spending to obtain and distribute the scarce goods.
Federal deficit spending itself is not socialism. Socialism is government ownership and control. That said, some forms of socialism are good for the economy. Examples: Virtually all streets and highways, Social Security, public parks and beaches, many museums and zoos, many rivers and lakes, the military and VA hospitals, many libraries, federal lands, federal buildings, federal agencies like NASA, FBI, and CIA.
Government in itself is neither good nor bad. Government is a tool. The function of the tool is to improve and protect the lives of the people. To the degree it fulfills that mission, it is good. Where it fails that mission, it is bad. Mere size is not an issue any more than the size of the pencil in the voter’s booth is an issue.
I. Given Congress’s infinite checkbook, why is there even a discussion of a government shutdown?
II. The Democrats had suggested $1,200 checks. Even Trump wanted $2,000 checks. Why was this reduced to $600, and still is being debated, in face of the private sector’s worst financial crisis in many years?
III. Why exclude assistance to states?
IV. Why has Congress struggled for months to produce a plan for preventing/curing the COVID recession, that has hurt so many people?
V. Pfizer Says Millions of COVID-19 Vaccine Doses Are Sitting Unclaimed in Warehouse Coolers. The federal government has not given the company shipping instructions. Why?
You can contact your Senator or Representative– that person to whom you gave your valuable vote — and ask these questions.
Do you think you will get an informative answer? An honest answer? An intelligent answer?
If not, why did you toss away your vote on an uninformative, dishonest, unintelligent fool?
What should Congress really do? Institute the Ten Steps to Prosperity (below) immediately, especially rush Step #3: Social Security for All.
Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:
Given his narcissism and predilection for lying, it was unseemly but not surprising when Trump, peddling fantastical theories about massive voter fraud, refused to accept defeat, despite a cascade of contrary court decisions.
Fear does strange things to a man
But he isn’t alone in ensuring that the presidency Biden will claim on Jan. 20 is a poisoned chalice.
Top congressional Republicans, including Senate Majority Leader Mitch McConnellof Kentucky and House Minority Leader Kevin McCarthy of California, have acquiesced in Trump’s disinformation campaign, hiding behind pious statements about counting every legal vote.
As Pennsylvania Attorney General Josh Shapiro noted in his devastating response, the Supreme Court “should not abide this seditious abuse of the judicial process, and should send a clear and unmistakable signal that such abuse must never be replicated.”
Here is a list of the Republican Representatives who, on behalf of Donald Trump, attempted a coup. They voted to commit treason. They tried to destroy our democracy by canceling the votes of millions of Americans, to make Donald Trump the dictator.
We fought the Revolutionary War to overthrow a dictator and to install a democracy, and today, after 240 years, the Republican party has become so corrupted by Trump, it is attempting to undo the sacrifices of previous generations.
Russia, China, North Korea et al, would like nothing better than for our democracy to fail. Fortunately, despite the efforts of America’s enemies, our democracy has survived this blatantly right-wing extremist effort.
Not only have dozens of Republican judges rejected all of Trump’s lawsuits, but the Republican-dominated Supreme Court refused even to consider this unconstitutional effort.
There is only one word that aptly describes these lawmakers, and that word is “traitor.”
Keep this list handy for the next election, coming in only two years. It will help you vote for democracy and against treason.
(We would be remiss if we didn’t add Senator Ted Cruz to the list of traitors, as Cruz hungrily begged to be the lead lawyer prosecuting the suit).
Mike Johnson, Fourth Congressional District, Louisiana
Gary Palmer, Sixth Congressional District, Alabama
Kevin McCarthy, Twenty-Third Congressional District, of California
Steve Scalise First Congressional District, Louisiana
Jim Jordan Fourth Congressional District Ohio
Ralph Abraham, Fifth Congressional District, Louisiana
Robert Aderholt, Fourth Congressional District, Alabama
Rick W. Allen, Twelfth Congressional District, Georgia
Jodey Arrington, Nineteenth Congressional District, Texas
Brian Babin Thirty-Sixth Congressional District Texas
James R. Baird, Fourth Congressional District, Indiana
Jim Banks Third Congressional District Indiana
Jack Bergman, First Congressional District, Michigan
Andy Biggs Fifth Congressional District Arizona
Gus Bilirakis Twelfth Congressional District Florida,
Dan Bishop Ninth Congressional District North Carolina
Mike Bost Twelfth Congressional District Illinois
Kevin Brady Eighth Congressional District Texas
Mo Brooks Fifth Congressional District Alabama
Ken Buck Fourth Congressional District Colorado
Ted Budd Thirteenth Congressional District North, Carolina
Tim Burchett, Second Congressional District, Tennessee
Michael C. Burgess, Twenty-Sixth Congressional District, of Texas
Bradley Byrne, First Congressional District, Alabama
Ken Calvert Forty-Second Congressional District California
Earl L. “Buddy” Carter, First Congressional District, Georgia
Ben Cline Sixth Congressional District Virginia
Michael Cloud, Twenty-Seventh Congressional, District Texas
Doug Collins Ninth Congressional District Georgia
Mike Conaway, Eleventh Congressional District, Texas
Rick Crawford, First Congressional District, Arkansas
Dan Crenshaw, Second Congressional District, Texas
Scott DesJarlais, Fourth Congressional District, Tennessee
Mario Diaz-Balart, Twenty-Fifth Congressional District, of Florida
Jeff Duncan Third Congressional District South Carolina
Neal P. Dunn, M.D., Second Congressional District, Florida
Tom Emmer Sixth Congressional District Minnesota
Ron Estes Fourth Congressional District Kansas
A. Drew Ferguson, IV, Third Congressional District, Georgia
Chuck Fleischmann, Third Congressional District, Tennessee
Bill Flores Seventeenth Congressional District Texas in
Jeff Fortenberry, First Congressional District, Nebraska
Virginia Foxx, Fifth Congressional District North, Carolina
Russ Fulcher First Congressional District Idaho
Matt Gaetz First Congressional District Florida
Greg Gianforte, At Large Congressional District, Montana
Bob Gibbs Seventh Congressional District Ohio
Louie Gohmert, First Congressional District Texas
Lance Gooden, Fifth Congressional District, Texas.
Sam Graves Sixth Congressional District Missouri
Mark Green Seventh Congressional District Tennessee
H. Morgan Griffith, Ninth Congressional District, Virginia
Michael Guest, Third Congressional District, Mississippi
Jim Hagedorn, First Congressional District, Minnesota
Andy Harris, M.D., First Congressional District, Maryland
Vicky Hartzler, Fourth Congressional District, Missouri
Kevin Hern First Congressional District Oklahoma
Jody Hice Tenth Congressional District Georgia
Clay Higgins Third Congressional District Louisiana
Trey Hollingsworth, Ninth Congressional District, Indiana
Richard Hudson, Eighth Congressional District, North Carolina
Bill Huizenga, Second Congressional District, Michigan
Bill Johnson Sixth Congressional District Ohio
John Joyce Thirteenth Congressional District, Pennsylvania
Fred Keller Twelfth Congressional District Pennsylvania
Mike Kelly Sixteenth Congressional District Pennsylvania
Trent Kelly First Congressional District Mississippi
Steve King Fourth Congressional District Iowa
David Kustoff, Eighth Congressional District, Tennessee
Darin LaHood, Eighteenth Congressional District, Illinois
Doug LaMalfa, First Congressional District, California
Doug Lamborn, Fifth Congressional District, Colorado
Robert E. Latta, Fifth Congressional District Ohio
Debbie Lesko, Eighth Congressional District, Arizona
Billy Long Seventh Congressional District Missouri in
Barry Loudermilk, Eleventh Congressional District, Georgia
Blaine Luetkemeyer, Third Congressional District, Missouri
Kenny Marchant, Twenty-Fourth Congressional, District Texas
Roger Marshall, M.D., First Congressional District, Kansas
Tom McClintock, Fourth Congressional District, California
Cathy McMorris, Rodgers Fifth Congressional District, of Washington
Dan Meuser Ninth Congressional District Pennsylvania
Carol D. Miller, Third Congressional District West, Virginia
John Moolenaar, Fourth Congressional District, Michigan
Alex X. Mooney, Second Congressional District West, Virginia
Markwayne Mullin, Second Congressional District, Oklahoma
Gregory Murphy, M.D., Third Congressional District North, Carolina
Dan Newhouse, Fourth Congressional District, Washington
Ralph Norman, Fifth Congressional District South, Carolina
Steven Palazzo, Fourth Congressional District, Mississippi
Greg Pence Sixth Congressional District, Indiana
Scott Perry Tenth Congressional District Pennsylvania
Bill Posey Eighth Congressional District, Florida
Guy Reschenthaler, Fourteenth Congressional District, Pennsylvania
Tom Rice, Seventh Congressional District South Carolina
Mike Rogers Third Congressional District, Alabama
John Rose Sixth Congressional District, Tennessee
David Rouzer, Seventh Congressional District, North Carolina
John Rutherford, Fourth Congressional District, Florida
Austin Scott Eighth Congressional District, Georgia
Mike Simpson, Second Congressional District, Idaho
Adrian Smith, Third Congressional District, Nebraska
Jason Smith Eighth Congressional District, Missouri
Ross Spano Fifteenth Congressional District, Florida
Pete Stauber Eighth Congressional District Minnesota in
Elise Stefanik, Twenty-First Congressional District, New York
W. Gregory Steube, Seventeenth Congressional District, New Jersey
Glenn “GT” Thompson, Fifteenth Congressional District, Pennsylvania
Tom Tiffany Seventh Congressional District, Wisconsin
William Timmons, Fourth Congressional District, South Carolina
Jeff Van Drew, Second Congressional District, South Carolina
Ann Wagner Second Congressional District Missouri
Tim Walberg Seventh Congressional District Michigan
Mark Walker, Sixth Congressional District North, Carolina
Jackie Walorski, Second Congressional District, Indiana
Michael Waltz, Sixth Congressional District, Florida
Randy Weber, Fourteenth Congressional District, Texas
Daniel Webster, Eleventh Congressional District, Florida
Brad Wenstrup, Second Congressional District, Ohio
Bruce Westerman, Fourth Congressional District, Arkansas
Roger Williams, Twenty-Fifth Congressional District, of Texas
Joe Wilson Second Congressional District South Carolina
Rob Wittman, First Congressional District, Virginia
Ron Wright Sixth Congressional District, Texas
Ted S. Yoho Third Congressional District, Florida
Lee Zeldin First Congressional District, New York
And soon will come the riots by enemies of America (posing as patriots) who haven’t the slightest notion about what a democracy is. They don’t believe the voters. They don’t believe the judges. They don’t believe the media.
They believe only Donald Trump, he of the 22,000+ lies, and his sycophants.
There is a penalty for their ignorance. Sadly, America’s democracy will have to get through this, somehow.
Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:
#Monetary Sovereignty - Mitchell 