Dear Main Stream Media, Academia, The Administration and Congress
You're all guilty of spreading the most cancerous and damaging lies ever. And, 99.9% of you, whether Progressives, Democrats, Liberals, Moderates, Libertarians, Republicans of all stripes, believe in your heart of hearts and repeat without a moments thought lies such as:
"The Federal government needs income to pay its bills..."
"Every American should pay their fair share to fund Federal expenditures which serve public purposes."
These, now abandoned imperatives, are egregiously misleading and cynically subversive constituting the major constraint to eliminating social and economic dysfunction in America.
On August 15, 1971, when Nixon closed the gold window, (defaulted on convertibility) the Federal Government became Monetarily Sovereign (MS) issuing its own non-convertible, fiat currency with a floating exchange rate and all of its debt in its own currency.
Given these indisputable facts there are no valid economic or political reasons to reject the following Axioms as the basis for the modern, post gold standard, fiscal policy management of our economy? They are the operational reality which flows directly from the policy decision made by Nixon in 1971.
Axiom #1 -- As the sole issuer of its own currency the U.S. can
never, involuntarily, face insolvency in its own currency, nor can
any of its Federal Programs.
Axiom #2-- The U.S. is not constrained by revenue per se to
Axiom #3 -- A sole currency issuer does not tax and sell
Treasury securities to raise revenue, it taxes to manage
aggregate demand. (It also taxes to force acceptance of its
paper currency, manage income distribution and domestic and
foreign markets incentives). It borrows to manage the term
structure of interest rates.
Axiom #4 -- Until the Federal government/Federal Reserve
spends currency into the economy there is no currency to tax or
These Axioms are, by definition, indisputable. As such, they beg the question why this administration, like all of its predecessors, back to the Nixon Administration, perpetuates the fraud that tax receipts pay for government expenditures in a monetarily sovereign government?
Any other set of principles, as we have seen since then, produces endemic and permanent poverty, unconscionably high unemployment, and the deprivation of needed public services.
Why would the sole issuer of a nation's currency need to raise revenue to spend? The Federal Reserve can issue as much or as little currency as it chooses.
The 1% and their acolytes, falsely and cynically, declare that our tax dollars fund, dollar-for-dollar, Federal expenditures. This misinformed view is intended to comfort us. Make us believe that we're doing our share to build America. Many, if not all, elected officials have no clue. It's just the guys with the really big bucks who know what actually happens with our tax payments because they get to keep a great deal more of their income than we do of ours … they can afford to buy tax code changes.
However, when you ask the professionals in the Federal Reserve's Operations Division if taxes are used to finance the TARP or anything else, they tell you what Ben Bernanke told Scott Pelley during a Dec. 2010, "60 Minutes" interview.
Scott Pelley asked, "Is it tax money the Fed is spending," Bernanke said, "It's not tax money. The banks have accounts with the Fed, much the same way that you have an account in a commercial bank. So, to lend to a bank, we simply use the computer to mark up the size of the account that they have with the Fed. It's much more akin to printing money than it is to borrowing." "You've been printing money?" Pelley asked. "Well, effectively," Bernanke said.
The Federal Reserve did not run out and collect tax revenue to finance the $29 trillion bank bailout.
It didn't need tax revenue, it just marked up accounts, Smokey Robinson & The Miracles same thing it does for all of the Treasury Department's expenditure accounts. Treasury checks don't bounce when there are no revenues because Treasury does not need revenue from any source to pay its (our national bills.)
All Treasury needs to complete the act of spending is an appropriation.
However, Congress, ignorantly or cynically, still functioning under the pre-1971 gold standard rubrics, impose spending (budget) ceiling and other constraints on Treasury which exacerbate national economic woes.
As expected the Congress, Administration and MSM do not herald these Axioms or the implications of the U.S. being Monetarily Sovereign, since doing so would change everything.
ACA could be repealed in favor of Single Payer which would have no real cost to government or citizens. Only the Insurance and Finance Sectors would suffer loss of premiums.
A national infrastructure Program would also be costless in terms of citizen burden. Our government could spend its fiat dollars until the economy was fully employed where everyone who was able and willing to work for living wages with benefits could do so. (Mosler, Wray, Kelton)
***Progressives fail their own goals and ideals by ignoring the social and economic benefits derived from this nation being monetarily sovereign.
There can be no substantive reform in America until Monetary Sovereignty becomes the premise for fiscal policy planning and legislation.***
In the absence of freedom there is no creativity, in the absence of creativity there is no progress.