I have never been one to subscribe to conspiracy theories, but I am revising my thinking about them lately. All of America’s. and Britain’s by association, problems can be traced back to a shift in economic thinking and political rhetoric that began just before Reagan was elected with the Powell memo that laid out the path toward creating a “market based” economy.
Americans were never the great thinkers of the world and their perspective surrounding the money and its origin was largely based on their own experience that required them to obtain money to afford the basics of sustaining life. For the vast majority of Americans, even if they dreamed of someday being a capitalist themselves, their livelihood was financed by their labor and their ability to secure a paycheck. To them, money was a finite “thing” that they traded for their labor and then for the things they needed.
About the same time that Reagan was vilifying the “welfare queen” as a thief of the hard-earned money of others, Thatcher was stating “There is no public money, only private money”. Both of these positions denied the economic reality that gave us the New Deal and enabled the defeat of the Third Reich. That reality is simply money is not a “thing”, but simply a unit of measure we use for convenience in commerce, the embodiment of tax law.
Governments impose taxation only payable in the currency they claim a monopoly patent on so that the currency is in demand. They can then provision themselves with that currency simply by creating it, and if they create enough of it beyond what is demanded in taxation that currency will be accepted as the dominant currency of trade and denomination for contracts. The US calls its currency the US dollar and Britain calls its the Pound Sterling. but they function in the same way and are both a product of government, not commerce.
By shifting this perspective among the population to a complete reversal it was possible to sell the concept of “the people” financing their government with “their” money when the reality is that their government finances their economy by creating and managing the money supply. The simplest math, no more complex than adding and subtracting, would prove the “national debt” is no more than the sum total of money created but not yet recalled in taxation to allow spending additional new money without incurring inflation for the government that neither needs nor uses “revenue”.
Basic logic would also prove that one cannot collect or borrow what doesn’t yet exist, so neither can be “funding” operations for the currency-issuing government. Deficit spending is required to maintain a healthy economy if the nation wishes to take advantage of imports or allows the accumulation of wealth, as well as funding economic and population growth. A balanced budget, the holy grail of politicians, is nothing more than a 100% tax rate that leaves nothing in the economy to store value, enable savings, retire private debt, or even to compensate the people for the resources and labor the government consumes.
By way of this manipulation of perspective and positing the investment class as “job creators”, the voters have been deceived into fearing and mistrusting their democratically elected government and cheering for their own financial ruin, willing to work until they die in debt, and attack anyone who is seen as a “taker” of “their money”. They see nothing wrong with one man, Jeff Bezos, accumulating more wealth than is owned by the bottom third of the population and remained convinced that such absurd wealth is entirely possible for them as well if they only work more hours or somehow discover the next great idea or product.
American style capitalism is more than an evil method of distributing resources and wealth. It is a mass hallucination infecting the population that can only be supported by a conspiracy of government, business, and the media.
