Most people are only capable of binary thinking until they make up their minds and lose even that flexibility.
Firstly, we need to reject the use of “socialism” to describe government spending for public purpose. It is not socialism, and the intended beneficiaries aren’t even the people who collect benefits, as they are just the pass-through vehicle that provides public money creation to the supply chains capitalism depends upon. As we saw in the great depression, those supply chains are fragile and collapse in a domino-like fashion with very little economic downturn. Once the supply chains begin to crumble and people are laid off it is a difficult momentum to stop and every recession holds the potential for depression.
The second lesson from the depression was that money isn’t a “thing” and its creation and destruction (taxation) are both given to the authority of Congress. Creating the “illusion” that the federal government depends upon any revenue is a ploy of the oligarchs and causes people to act as watchdogs over the use of what they perceive as “their” money. The simple fact that money must exist before it can be collected or borrowed should inform even the most ignorant that spending must precede either. However, if a misconception is broadly accepted institutions will form themselves around them, making them appear as reality. It is far more accurate to state that federal spending “funds” both taxes and Treasury bonds than is the reverse.
Our constitution gave Congress the monopoly patent on the US dollar and mandated that it create it “for the common welfare”. (Article 1: Section 8) One of the major responsibilities of any government is organizing the production and distribution of resources around its currency. It does this by imposing taxation that can only be paid in the denomination the government can create at will, effectively making everyone unemployed until they can satisfy the tax man. This is how governments assure that they can provision themselves at will, not constrained by “revenue”.
To gain acceptance of the currency in the general economy to transact commerce and denominate contracts the issuing government “MUST” spend more than it taxes back, otherwise the people quickly figure out that their resources are being “stolen” not purchased. A “balanced” budget is another way of saying 100% tax rate, leaving nothing in the economy to store value or retire private bank debt. The current clamor for a balanced budget amendment to our Constitution, although unconstitutional itself, displays how poorly our Congress is populated with any economic savvy individuals.
I believe that Alexandria Occasio Cortez may be the only one with an in-depth understanding of our monetary system currently. She is an economist herself and collaborates with several other economists that are promoting Modern Monetary Theory, which is nothing more than an accurate description of our money and its flow from creation (spending) to its demise when used to pay a federal tax obligation. Our monetary system was built around defending a gold reserve and dual entry spreadsheet accounting.
When that gold reserve no longer played a role in our economy the national debt became nothing more than an accurate record of all dollars spent into existence by Congress not yet used to pay a federal tax obligation and borrowing became a totally unnecessary function except to provide a floor for investor returns. The government provides the money to invest when it spends and then pays interest on it when it is swapped for Treasury bonds. If bonds create so much propaganda potential and threaten our economy by setting politicians hair on fire and enabling cruel and unnecessary austerity we should probably not issue them.
What we can’t “afford” is a continuation of the degradation of our society that gains acceptance via misinformation and purposeful manipulation of opinion to force us into increased private bank debt, which is many times more dangerous to our economy than any government spending. Given that only dollars created by Congress can net retire private debt or fund growth, especially for a net importer, the capitalists may be, again, shooting themselves in the foot. I guess that now that they know they can depend upon Congress to bail them out they have little motivation not to run with high-risk scissors.
