The concept of “pay for” at the federal level is a fairly recent shift in perspective and has produced new levels of poverty/wealth in America that threatens the democratic process. The idea that the monopoly issuer of the nation’s currency must “find” money to enable it to spend is patently ridiculous and dangerous. It completely nullifies the ability of the federal government to act as a net benefactor in the economy and sets up the mistaken view of taxation and borrowing as “revenue” for the federal government.
Republicans, since before they were called Republicans, have worked to undermine the ability of the federal government to live up to its promise to provide the rights enumerated in our Constitution and their main weapon in this effort has been perverting the public’s view of its own currency. It wasn’t that hard because it resonates with voters who must earn their money prior to spending or borrow from someone who has money to lend.
The articles of the Constitution you cited clearly give the power to create the currency to Congress, but also mandates that it do so “for the general welfare” with no qualification for a gold standard or balanced budgets. Even just applying simple logic would tell us that it is not possible to collect or borrow that which doesn’t yet exist and that spending the currency into existence must precede both.
The government doesn’t tax because it needs our money. It taxes to establish a condition where we “need” its money to avoid penalty. This enables Congress to organize the society and economy around its currency by making it the only legal denomination for use in paying federal tax obligations or fines, as well as the denomination for all federal contracts. Once the currency is established as the currency of trade by Congress spending more than it collects, taxes can also serve to curb inflation and prevent extreme inequality, but should never be considered as “revenue” for federal spending.
Balancing the budget at the expense of the economy is the absolute worst thing any leader at the federal level could advocate. It leaves nothing in the economy as a store of value for commerce or to net retire private debt. At the very least, deficits should reflect wealth accumulation, the desire to save, and trade deficits just to keep the economy even, and that is before we consider how to fund economic and population growth. The budget should be the tool Congress uses to balance the economy, but that will require a higher order of intellect than we have been prone to electing recently.
I know that both Bernie and Warren fully understand this, as I know their econ advisors, but are naturally reluctant to turn their campaigns into econ lessons that counter all popular rhetoric surrounding federal spending. Note that both target people for taxation that should be taxed simply because they have levels of wealth that are dangerous to our democratic process.
Neither, if elected, will allow their agendas to be killed by the “pay for” question that now accompanies any spending initiative beyond the military, even among many Dems now in Congress. Bernie’s agenda is bolder with an emphasis on creating jobs by mitigating climate change, while Warren takes a more measured approach that is kinder and gentler in letting down the oligarchs and Wall St.
