I was under the assumption that when the government printed money it was accounted as a deficit. If all that is wrong, there are a great many people who do not understand.
All spending above the amount of taxes collected "IS" the deficit. That is the portion of new money creation that we, those in the private sector, are allowed to keep as payment for real resources and labor the government demands of us. It is our net savings from that commerce, not a debt we owe.
In this context, deficit is not a bad thing. It is only a deficit as an accounting entity on the government's sector and it balances, almost exactly, with the national debt in aggregate. For each entry in dual entry accounting, the method used to track money world wide, there must be balancing (opposing) entries in other sectors. Debt is the opposite of asset, so the debt is accounted for in Treasury's balance sheet and the Fed accounts show it as the "net" money supply.
Why do they make a pageant out of the debt ceiling every year? Why do they even worry about how much they spend? They are always ready to cut poor folks off at the knees. Why if there is an unlimited supply of money?
Those are all good questions. I think it is mostly because it serves the investment class (who have no such delusions about money) to have a subservient and slightly hungry working class. Banks also do very well when the people have to finance their own economy with as little public money input as possible from their government.
None of that would be possible if the people understood that "their" tax money didn't really fund programs and benefits and that "ANY" suffering that could be mitigated with federal spending was entirely a political choice, not economics.
It seems all of the government is in on this budget charade. I can picture all the revenue vs spending pie charts on the net. Maybe QAnon is real but the focus is economic.
Even many economists are taken in by the outdated teaching of gold standard econ when the process made much more sense. Others know how it works but it is too simple to justify their pay, so they take the easy road and tell people what they believe to be true already. Cons focus on reducing public purpose spending and Liberals focus on extracting more from the wealthy. Neither position plays very well against a "deficits are good" reality and it goes directly against what voters believe from their own experience with the money as "users", not issuers.
Bernie falls into this camp, (His econ advisor was the one who showed me the light.) believing he can do more good by not upsetting the whole apple cart given that the wealthy need to be taxed higher in any event.
I suppose you take issue with the recent Rand Report and the Pew Research finding of the huge shift in national income from the middle class to the upper class. It seems real enough to me.
On the contrary. I don't put much stock in research groups since most of them are funded by right wing oligarchs, but these seem, if anything, to understate the problem. I never stated I didn't believe in taxing the wealthy. I simply said that it is better to understand that their wealth is irrelevant to "any" spending by Congress and that they would find much higher taxation policy if the voters knew that.
Just because their money doesn't actually pay for anything at the federal level doesn't mean we shouldn't tax them just because they make too damn much money and use it to subvert the democratic process by corrupting our representatives.
However, finding a consensus for doing so is much harder when they are viewed as a primary "source" of our money, which is complete BS. Making them irrelevant in the minds of voters is the surest path to getting their taxes raised to the bejesus level. Pretending they are critical to the government's spending means making sure they stay wealthy so they can continue to pay what little tax they do.
Little did in know the money was not used for anything, that the government makes money out of thin are to pay for everything, If that’s the case let's cancel income tax if it’s not needed.
Taxation serves other purposes besides funding spending. It controls the amount of currency in circulation to prevent inflation and it "can" provide for more equity in our society if properly applied.
However, some taxes are extremely regressive and should be eliminated as they serve the opposite purpose they should. Social Security and Medicare are the two main offenders. Note that both have been said to require stopping payments if the debt ceiling issue isn't resolved, but both are claimed to be funded by Treasury bonds. Why would programs supposedly funded by "savings" accounts have to suspend payment because of the debt ceiling?
The truth is that all of your payments to the federal government go to reducing the debt and your benefit payments are "funded" by spending new money into your bank account, all done with keyboards, not printing. When your benefits hit the bank the money supply is increased by the same amount at the Fed to cover it.
The only difference between collecting or not collecting your taxes is the mostly irrelevant deficit and debt numbers. That's a lot of middle class spending power to go toward an outright fabrication when the federal government really has no use for the money and can always afford benefit payments, even without revenue.
