Monday, January 22, 2018
Fwd: This is how MONEY works when we understand it
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From: John H
Jim Kavanagh (The Polemicist) regularly produces some of the best postings of anyone out on the Internet. Today's article is certainly no exception. Here he tackles what for most Americans is little more than an enigma wrapped in a mystery, the function of money in a sovereign issuer of its own currency. Americans have been, since at least 1971, seduced into believing that federal government money is a scarce resource and that our over-spending is certain to lead us into a catastrophic collapse due to a crushing national debt. This is one of the great myths of our time and is, unfortunately, politically debilitating once citizens have been propagandized into believing it. The problem is that it seems so normal to equate the federal budget and spending policies with each of our household budgets and spending priorities. They are, however, nothing alike.
As Jim explains quite clearly, the federal government is a currency creator of its own sovereign money. Your and my households are users of government created money. We, unlike the federal government, cannot create our own dollars – that is called counterfeiting. This means that we are resource constrained when it comes to money. We can only spend what we can accumulate by working, borrowing and, perhaps, inheriting. The federal government is no so constrained, nor is it constrained by debt (at least insofar as its debt is denominated in Dollars). To be clear, there is no limit on the amount of Dollar debt the federal government can pay, without creating rampant inflation. And, there can be no adverse consequence for our children or their children as a result of this debt.
Here is the kicker, virtually all of the constraints we face in terms of obtaining meaningful social safety-net benefits, infrastructure, and, yes, even military expenditures are artificially created by Congress (including the existence of the national debt itself) and maintained because this false belief system operates to the great benefit of the plutocracy. Neoliberalism, the political philosophy which has overtaken our world in recent years, depends upon this myth persisting in order to maintain control and impose austerity everywhere possible – not just in the U.S.
As many of you know, this has long been an issue close to my heart. If somehow we can get people to overcome their unawareness of how money should work, it will open many minds to the realization of just how messed up this system has become; and, perhaps, give them cause to stand up and say enough is enough.
Do read Jim's piece. It is somewhat long, but well worth the effort.