One way to see that is this: there isn’t even enough money to go around, because capitalism had been such an efficient predatory mechanism, those at the top hoard most of it, while those at the bottom and in the middle hold negative amounts. So how could there be enough healthcare, education, retirement? What the? Does that make any sense at all to a reasonable person? A thinking one? Isn’t so twisted and backwards it beggars belief?
To fully understand this one needs to examine their concept of money and how it relates to the distribution of resources. What the average American is led to believe is almost 180 degrees backward from reality, but it resonates with their limited knowledge of money derived primarily from their own budgeting process or that of any entity that isn’t the federal government.
Article 1: Section 8 of our Constitution gives a monopoly patent on the US dollar to Congress and mandates that it create (coin) it as needed to enable the fulfillment of the guarantees made in the document “for the general welfare”. While the gold standard imposed limitations to this creation for much of our history, restraining America to the will of banks, that ended in ’71 (’34 domestically) when Nixon removed us from the post-war Bretton-Woods agreement that pegged our currency to a fixed exchange rate with gold.
As the monopoly issuer of America’s currency, Congress is not constrained by revenue as other entities are. In fact, Congress must spend/create dollars into the private sector before they are available to pay taxes or “lend” to the government. Only by misstating the order of processes in our monetary system can a general consensus be reached that posits deficit spending as a negative to the private sector, forcing it into “debt” that must be paid via taxation on incomes at some point in the future. The truth is that the red ink of our government is the only net source of black in the private sector (us) has. Every dollar spent by Congress becomes someone’s asset in the private sector without a debt obligation to anyone.
The fact that a balanced budget is a 100% tax, leaving no store of value able to retire private bank debt or be net saved is lost in the propaganda surrounding our economy that is so prevalent that financial institutions have adapted processes to it. The bad fit of those processes to the reality of our monetary system is what gives us periodic failures we call “recessions”, and depressions when the system is not allowed to correct itself with injections of public money from our government. The irony of the major support for this perversion of economic reality coming from those who most object to taxation should not be lost on anyone. They are actively promoting the theft of private sector resources by the government they claim to resent.
A currency-issuing sovereign government cannot “go broke” as long as its debt is solely denominated in the currency it creates on demand (fiat). Such a government can always “afford” whatever is available (or potentially available) in the private sector without incurring inflation. Monetary inflation (when all prices rise with increases in the money supply) is not possible in such an economy until maximum productivity and employment are realized. Any price increases below that point must result from commodity shortages or supply chain problems, not the money supply, and would be incurred at any level of currency in the economy. The “free market” conservatives love so much will always increase output before raising prices when competition is present. Competition for government contracts makes it the price setter in the economy, setting the value of the dollar to whatever it wishes it to be.
It doesn’t require a stable genius to understand these simple truths. However, decades of propaganda from politicians and our media, some intentional and some out of the common prevailing ignorance, have conditioned Americans to resent their government, especially when it spends what they wrongly perceive as “their tax dollars” to benefit anyone, especially those who are seen as “less worthy” by virtue of being less productive in generating profits for employers. This opposition to funding the general welfare as directed by the Constitution most believe supports only capitalism is at the root of almost all of our society’s ills, especially racism.
Americans, deprived of their Constitutional right to access to the nation’s currency by austerity, have had to rely on bank debt to maintain any decent living standard. Banks quit lending from deposits around ’34 when they were no longer required to cover their liabilities with gold reserves. They, like Congress, can create a pseudo-currency from thin air to enable interbank transfers of loan proceeds. However, that currency can never net retire the debt that created it or be net saved as a store of value. Only public money can do either. The wealthy get first crack at any public money creation via totally unnecessary Treasury bonds, that Congress funds for them with deficit spending, so the proles are never able to accumulate even imaginary wealth without inflation of home values.
So, while Americans are railing on about the “national debt” (that is nothing more than an accounting entity) and imposing extreme austerity in the fiscal policy they are taking on much more risky debt that can only remain viable as long as GDP growth is sufficient to “roll over” their obligations into new debt. The capitalism that so many are fervently dedicated to fails and depends upon socialist money creation at every downturn in the business cycle to prevent cascading failure of supply chains. As more Americans find themselves victims of this charade and lose access to credit the middle-class shrinks with every recession for simple lack of funding that isn’t dependent upon bank profiteering.
As they drop into the legions of poor via no real fault of their own they become bitter and give into the human tendency to punch down when threatened, blaming immigrants, welfare recipients previously made poor, and anyone they perceive as not favored by their God, for their condition. I often wonder if the persistence of politicians and their oligarch masters in promoting this grand lie isn’t due to fear of what reaction might be possible should such a massive number of well armed and equally ignorant citizens ever discover the truth. Then I snap out of that delusion and go back to the reality of it’s all about greed and profit above all else, including the very existence of mankind.
