Can we, just for the moment, put away all of the econ formulas and assumptions to allow us to look at the government’s budget policy from simple logic?

Money spent by currency creation doesn’t simply disappear into the thin air it was created from. It appears in the private sector as someone’s assets.

As money is created in the private sector (the only place money can exist) standard dual entry spreadsheet accounting requires a balancing entry in another sector. This requirement is satisfied by the “debt” entry in the government sector.

This is simply an informative accounting function that signifies that the government “owes” tax credit for every dollar it creates. The only way to “pay off” this entry (balance to zero) is to recover all dollars spent via taxation, leaving no money to denominate commerce/contracts or retire private debt.

Every dollar that enters the government sector as revenue is zeroed as a first order accounting function as it encounters the debt entry that created it. This means that taxation/borrowing can never be “revenue” to be recycled into spending. It cannot survive the cancelation of debt, which also cancels the dollar, to go on to be spent by Congress.

Revenue is not needed for a sovereign currency-issuing government and spending must precede tax collection/borrowing or there is nothing to collect or borrow. Both functions only serve to reduce the currency in the private sector as inflation control.

Without a gold reserve to establish the value for currency in the private sector, every dollar spent above taxes collected in the same accounting period is considered a “deficit” and the year to year accumulation of deficits equal the national debt by definition. Simple logic tells one that the debt is nothing more than a fairly accurate record of “net” currency in the private sector that hasn’t yet been canceled by use to pay a federal tax obligation.

None of the above is conjecture or opinion. It is simply how our monetary system functions and has since ‘1913 with a slight revision in ’71 when we left the gold standard. You may disagree with how much the government spends or what it spends on, but you can’t disagree with simple logic and hard evidence. It’s math, not ideology. The only net source of black ink for the private sector is the red ink (deficit spending) of the government issuing the currency.

Is $22 Trillion too much currency to allow in the private sector? If not, what is the proper amount, remembering that zero isn’t a realistic option? One must also consider that the currency representing the debt is the only store of value/savings, and the only thing that can net retire private bank debt. It is entirely possible to create huge amounts of currency that neither benefit the economy or cause inflation beyond rent-seeking. One only has to systematically funnel that currency into wealth accumulation and trade deficits, which we have spent the four decades proving.

Any validity trickle down had in our economic reality went out the window when we exported most manufacturing jobs. Disconnecting labor from productivity meant that workers could no longer threaten employers with economic harm by simply withholding their labor. People have to eat but none of the management class will miss any meals if domestic workers don’t produce their goods. They simply shift investment to the financial sector and wait for labor to get hungry. This works for business, until it doesn’t, When no one shows up at their stores or websites with cash in hand and the people have maxed their credit abilities the whole thing comes down, as it did in ’08.

It won’t be our debt that brings down America, but rather the distribution of that debt that will always favor the investment class and too big to fail banks that prey on workers. America, with a sovereign fiat currency that is a no-cost commodity Congress is mandated by the constitution to create for the public welfare, can “afford” anything that exists, or potentially exists, even without revenue. This included the excess labor the private sector doesn’t use, and at a livable wage and benefits to set the floor for private sector employment that allows everyone to participate in the promise of America.