I wish there were some way to
make my formerly rational-seeming friends see that their growing angst over the
federal government’s deficit spending and the growing federal debt, currently
at about $18+ trillion, is misplaced and a needless waste of their time and
energy. I know, because until a couple of years ago I was of that same mindset.
It made me furious to think
that my tax dollars, dollars that I could have better used for my own
well-being, were being taken from me and handed over to a myriad array of
government spending schemes, notably welfare. When guys like Ron Paul demanded
that we cut federal spending, lower the debt to save interest, and balance the
budget it made sense to me. Why? Because in my pea-sized mind I associated
federal spending with federal taxes. It seemed only logical that reduced
federal spending would result in lower taxes which meant that I could hang on
to more of my own money. Besides, I thought it unfair and virtually unconstitutional
for the federal government to take my money from me and spend it on someone
else, especially when that someone else could be using my money to buy cell
phones, beer, cigarettes, drugs, and flat screen TVs. And, I was afraid that
the US could actually go broke as Obama and Bill O’Reilly warned.
Then, in 2012, I had an
epiphany. When, in one the Presidential debates, Ron Paul said he would reduce
the tax rate to zero I did a double take. Curiosity started me digging into
money, the nature of money, and how the federal government gets and uses money.
What I discovered makes guys
like Paul Ryan, Ron Paul and Rand Paul, Ted Cruz, Scott Walker, Lindsey Graham,
and other guys like Barack Obama, Bill Clinton, Alan Simpson, and Erskine
Bowles, and ladies like Nancy Pelosi and Hilary Clinton look like imbeciles or villainous
liars. They all want to either cut federal spending to get our fiscal house in
order or to increase federal taxes to finance national initiatives. What they
all really want is to cut us, the private sector, off at the knees. What I
learned is this: federal spending creates all the dollars that we in the
private sector get to keep and use for all our financial activities, and
federal taxes destroy those same dollars making them unusable by us.
And there it is – Bam! Federal
taxes do not fund federal spending. Let me repeat – the federal government does
not spend tax dollars! The federal government creates money. It does not need
our taxes to have money. It does not even need to borrow money to have money. Because
it creates money by spending, the federal government can always pay any bill,
no matter the size, as long as it is denominated in US dollars. If all federal income,
payroll, inheritance, and other taxes were suspended tonight, the federal
government could continue to pay for everything it pays for now, including
Social Security and Medicare. My taxes and your taxes don’t go to anybody else’s
cell phone or F-35 fighter jet. The federal government always creates new money
to pay for those things.
Further, the dollars the
federal government spends and does not tax back are the dollars that you and I
and everyone else gets to spend, save, and invest. Lower federal spending and higher taxes both equate to less money for the private sector. A balanced budget simply
means that the federal government taxes back every dollar it spends – that is –
no more federal deficit spending. A balanced budget boils down to two results:
1) an end to the money supply for the private sector and 2) the federal
government pays for nothing – just like a socialist government it would
basically own the factors of production. It does not hurt the federal
government to spend more than it collects.
So there you have it. Any
candidate whose platform includes cutting spending, or raising taxes, or more
specifically promoting a balanced budget amendment, is serving someone other than the private
sector of the United States. They may be serving the government, or the
oligarchy, or the lords of idiocy or socialism, but they are not acting in the
best interest of the American republic. That’s why I can’t get excited over
Rand Paul, Ted Cruz, Scott Walker, or any of the other potential Republican,
Tea, and Libertarian Party hoo-hahs of their ilk. It’s also why I can’t get
excited about Hilary either. I want someone who exposes a balanced budget for
the lie that it is. I want someone who will either cut federal taxes, or increase
federal spending, someone who will strengthen the economic well-being of the
private sector and not try to appeal to our misguided idea that the federal
government should mimic a household.
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