Before he got banned for turning into a troll, Bruce Currie (a Bernie-Bro) used to be part of the ‘Grok commenters. I gave him credit for constantly standing up for his Progressive replies but it was clear that he wasn’t going to go that “last step” and answer one of my principle questions when confronting Progressives on spending and taxation:
Whose money is is FIRST?
I rarely get answers to that because that gives up the game – and Bruce understood that he couldn’t be honest because:
- It means that we are not Free People – that we are subjects rather than Citizens
- Government is now “allocating” our money” and subverting the philosophical underpinning of our country – from the Declaration of Independance: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” That Happiness was originally Property of which our wealth is private property. If Government is now allocating our wealth, then we have no personal property and that EVERYTHING belongs to the State (which Communist Bernie Sanders (don’t believe that “Democratic Socialist” crappola) really wants (for one example).
So in reading Pravda on the Merrimack (Concord Monitor), I spotted a recent Letter to the Editor that referenced “columnist Bruce Currie” so I went looking and found this: Bruce Currie: How can America pay for things the people want? With ease“. I dryly ALSO note that:
- Currie believes that Government is responsible for paying for what people want vs what its Proper Purpose is: protecting our Liberties
- That “With ease” was a signal that Government is in charge of all money – and he proved my supposition further down in his piece.
It’s long – 1,200 words so I’m just going to abstract from it. Please note that it’s from 2019 – and he was still around the ‘Grok but never mentioned this. I do suggest that you read the entire piece. Emphasis mine, reformatted:
A Green New Deal and single-payer health care are finally getting the attention they deserve, thanks in part to the efforts of newly elected members of Congress like Alexandria Ocasio Cortez, who’ve pushed these issues front and center. They want the nation to get serious about global warming – which more accurately should now be called climate catastrophe. But, as with single-payer health care, a rejoinder is often: “How will we pay for it?”
The short, snarky answer for both is: “The same way we’ve paid for our $6 trillion forever wars in Syraqistan, because taxes didn’t pay for them.” So bear with me – a longer answer follows.
Fiat currency
When Dick Cheney famously said that Ronald Reagan proved that “deficits don’t matter,” he was right – though for the wrong reason. Deficits don’t matter because the United States is a sovereign nation with a fiat currency – one not backed by gold or silver but declared as legal tender by “fiat,” and backed by the full faith and credit of the federal government.The federal government does not run like a household. It can never go broke – contrary to the claims of deficit hawks – from whom we hear most often when Democrats are in charge. Congress can authorize spending as much money as it wants or needs – effectively creating money from thin air. Skeptical? As Alan Greenspan told Paul Ryan in a congressional hearing back in 2005: “There’s nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.”
The problem is that countries CAN go broke and it generally happens very slowly – and then all at once. Ask the Weimar Republic and Venezuela for just two examples. Countries can go broke when those buying the debt no longer believe that the “full faith and credit” is no longer a valid supposition. In other words, that FFaC phrase fails to instill any faith at all. After all, with the Federal Reserve now cranking up interest rates, just Interest PAYMENTS on the National Debt will be the third largest item in our national budget – almost more than what we spend on our national defense.
And continuing to just print money is one thing, others accepting is another, but at what real value? We know the answer to that – skyrocketing inflation rates as people actively start to realize that so many dollars being printed aren’t worth as much as they were before the presses started rolling. But he keeps digging and FINALLY ANSWERS MY QUESTION!
But wait, there’s more. A corollary to the fact that all money first comes from the government…
Being a Progressive/Socialist, of COURSE he is pleased as punch to say that Government is the font of EVERYTHING – including the labor that you expend to get your paycheck. Which he just made clear, comes from Government. You aren’t “you” – you simply have already been bought and paid for by Government.
What a dismal way to live one’s life that our Founding Principle, that we are sovereign individuals, has been turned on its head.
is that taxes do not, and cannot, pay for government spending. The spending comes first. Just as a quarterback must first throw the ball before a receiver can catch it, the government must first “spend” money into the economy before taxpayers, like receivers, can throw it back, i.e., pay their taxes.
Pay our taxes? Or rebating it back? He has no idea what real wealth creation is all about, does he? But again, he never would acknowledge that capitalism is where true wealth is created – not allocated.
…The tax equation
Federal taxes have two main functions: 1) they serve to maintain the currency’s value, since taxes can only be paid in dollars and, 2) taxes (and tax cuts) can be used to control the money supply, or to redistribute money within the economy.
No, taxes do not “control” the money supply. Yes, the Federal Government as a role by the money it spends (authorized by politicians that generally have NO idea what basic economics hold). It is the Federal Reserve’s job to “manage” the money supply – something that even with all their “expertise” still give us cycles of recession, depression, and booms.
We’ve had over four decades of tax cuts that effectively redistributed income upward to the 1 percent, and we know how that has worked out for most Americans. A proposal to implement higher marginal taxes on the rich now has broad support.
And he’s ignorant of our Progressive tax schedule. Right now, the bottom half pays about 2.5% of all income taxes – the top 1% pays about 45%. That’s redistributing?
<snip>
The Founders did not think entrenched, hereditary wealth and a growing rentier class of landed gentry was a good thing. Our own history shows that the republic survived and thrived with far more progressive tax rates in the 1950s and ’60s, when the top marginal rate was over 90 percent.
<snip>
Which no one paid. However, he never did like it when I said “Sure – just give us the same sized and intrusive Fed Government at the same time in the 50s and 60s.
Modern Monetary Theory
The understanding outlined above of how a sovereign nation with a fiat currency works isn’t too good to be true. Instead, it’s how money works in the real world and is the gist of Modern Monetary Theory, or MMT. While MMT is currently “hot” and has a growing number of adherents from within the economics profession, it’s not really new. MMT’s understanding of money, credit and debt can be traced back at least to Alexander Hamilton’s 1791 “Report on Manufactures” and to the writings of John Stuart Mill. Today, one of MMT’s best known proponents is Stephanie Kelton, who served as economic adviser to the Bernie Sanders campaign in 2016.Higher taxes on the rich by themselves won’t “pay for” single-payer health care, or a Green New Deal, or cover the $6 trillion we’ve spent so far on wars in the Middle East since 9/11. But it isn’t necessary to “pay for” this spending. We can debate the wisdom of having spent $6 trillion on permanent war. Just as we can (and should) debate the need for a single-payer health care system or the need to address global warming with a Green New Deal.
With a sovereign currency, what this nation chooses to spend money on should be removed from any discussion of how a program should be paid for. Congress can authorize such spending at any time. Inflation is never a concern, so long as sufficient goods and services are available to purchase with the money spent into the economy.
Translation: spend like drunken sailors all the time because there will NEVER be any bad outcomes to bad politics, bad policies, and bad legislation that “their” money really isn’t there and that others “get a financial vote” on this behavior later all. That is Currie’s always undiscussed philosophy of Progressivism – that actual outcomes are irrelevant both in achieving the purpose/outcome for legislation and that those putting them into action are to be held blameless.
In other words, there can never be any responsibility or accountability. And we are expected to believe this 2+2=5 nonsense as it refutes reality and human nature.
In fact, government spending that invests in new infrastructure, more efficient buildings and transportation, and in better health care for all, has a multiplier effect that spending on war does not. The benefits of such spending are concrete and tangible to all of us, because they ripple through the economy in ways that spending on wars cannot.
Much of this spending is on things that the private sector will not or cannot do, because it’s on things that aren’t profitable – like roads and mass transit, or retrofitting buildings for greater energy efficiency. The return on investment may be too risky, or too many years away.
And thanks to “shareholder value theory” popularized by Milton Friedman, U.S. corporations have become risk-averse – more interested in stock market manipulations than in long-term investment.
But finally, after years of knowing but with no proof, we have the answer: “the fact that all money first comes from the government…”
Gosh, what did we EVAH do before the Federal Government existed?
