Americans are the victims of a massive misinformation campaign that has been underway since the mid-seventies and it has turned their view of democracy and government on its head. While social issues are important to everyone, economics will dominate political discussion as long as the people feel insecure in their ability to provide for themselves and their families.
It has been the purpose of a very well organized and funded effort to keep us at the edge of insecurity so we are less inclined to use the power of our vote in our own best interest. The status quo is always the default position of the fearful. At the center of that campaign is the role of our government in affecting our prosperity as a society.
By positing the government as a “cost” to taxpayers and business as the “source” of money in the economy it was quite easy to sell the prospect of limited government intrusion in the economy as it resonated with voters who received their paychecks from business and pay taxes to the government. However, it isn’t an accurate view of the process of funding the economy, regardless of how well it fits into our perceptions from our perspective as “users” of the government’s currency.
A currency-issuing government never “needs” its own money back to provision itself. It does need us to need it so we will trade resources and labor to get it, and it often needs us to have less of it to protect its value in the economy. Taxation accomplishes both of those needs. By imposing a tax on the population the government creates a condition of unemployment that didn’t exist in a barter economy.
By spending more than it taxes back the government can use that unemployment to drive its currency as the standard denomination for trade and commerce. Such deficit spending allows for a store of value that isn’t possible with barter and the general economy can be manipulated by the government to offer the benefit of organizing the society around the government’s currency to prevent revolt.
Logic would inform us that a tax obligation, as long as it is enforced, may drive the need for the government’s currency, but spending must occur prior to actually collecting the tax or there is no currency to collect, so taxation is never a “funding” mechanism for the issuing government. Government’s spending “funds” tax payments, not the other way around, making the government’s currency “self-funding” and the government the “price setter” for the resources and labor it demands.
Government services take on an entirely different perspective when viewed as a “cost” to taxpayers instead of the only “net source” of our currency in the economy. I fear that if the voters were to ever have a mass epiphany of economics and how our monetary system functions the backlash may be a lot worse than just the election of a democratic socialist President and a few left-leaning representatives.
Business leadership should be boosting Bernie Sanders in this election and working to enable his policies to avoid the most often used tool of revolutions, the guillotine. He fully understands that wealth and poverty are both entirely political choices, not economics.
