Excellent analysis, but it misses one critical factor that Sir Ronnie introduced, or brought into play, in American economics that has shaped its economy around white nationalism. He took advantage of a popular, but incorrect, concept of money and its origin.
Having left the gold standard less than a decade previously, the country hadn’t adjusted to the economic possibilities the change presented and still treated the currency as a finite “thing” that must be “obtained” by their government to enable its spending. It was a natural and predictable reaction considering that it is how the people must relate to the currency as users and how everything they knew about money gave value to thrift.
With Volker’s years of stagflation still on everyone’s mind, it was quite simple to sell the illusion of the people’s tax dollars funding the government and the envy politics Reagan became famous for with his “welfare queen” and the constant refrain of government being the source of the people’s problems. That illusion has been the goto for Republican politicians ever since and the Democrats, whether from economic ignorance or strategy of their new “market capitalism” economic focus, offered no pushback and joined the chorus of denigrating government deficits to justify higher taxation.
The simple truth is exactly the opposite of that, as the federal government’s deficit spending is the only net source of fiscal assets the private sector has. All “net” money is the result of Congress spending more than it taxed, and the much-maligned national debt is nothing more than an accurate record of that deficit spending since the nation’s founding. It is the money supply in the non-government sector represented by a negative tracking entity in the government sector to comply with dual entry spreadsheet accounting used to track money worldwide.
FDR understood this and suspended the convertibility of the currency to gold domestically in ’34 as the only way to combat the depression that left the economy all but depleted of money. He also used the fiat system to allow ramping up to defeat the Nazi threat and Japan. No one asked in any seriousness how he would pay for the spending when no one had any money to collect as taxes or borrow as Treasury debt, just as no one questioned how Eisenhower funded the new interstate highway system that perpetuated the New Deal economic successes.
Whether racism is the motivation for the false scarcity and general economic insecurity such scarcity causes, or simply a byproduct, is arguable, but no less a factor for any demographic that is first fired and last hired historically. By institutionalizing involuntary unemployment via monetary policy as the only control of the economy in the absence of sufficient fiscal stimulus to compensate for trade deficits and wealth accumulation, the population is forced to leverage their own private debt to maintain lifestyles. Even the smallest preferences of the majority will have devastating accumulative effects on any considered “the other” by those in power who are able to use their tribalism to affect policy.
Simple recognition of our economic reality with a sovereign fiat currency not dependent upon revenue or limited by prior spending would go a long way toward mitigating our nation’s racism problem, as well as bringing back an economy that works for everyone. If the people understood that “ANY” misery that can be mitigated with US dollars is entirely a “political decision” and not sound economics they would not stand for the conditions so many Americans are forced to endure, or the people who promote them.
