Thursday, June 22, 2017

The Old "Socialism Card!

We as a country are so screwed up by our misunderstanding of how our economy works. We all use and need money, every day, yet most of us have no clue about where our money comes from or how it gets into our pockets. Well, here's a capsule description. The US government creates every dollar in our economy and inserts those dollars into circulation by spending them into the private sector. Although banks create credit against those dollars, the US government is the sole issuer of our US dollars, not the private sector, despite what many people want to believe. We have a system. It works, although today's fiscally conservative political preference seems geared toward breaking it. Our private sector well-being depends on a functioning federal government doing its part in supporting our economy by providing the private sector with the medium of exchange that it has been constitutionally mandated to do.

There are too many people whose rancor toward government in general has blinded them to the federal obligation and authority to create US dollars. They seem to think that the private sector itself rightly creates US dollars and that by "printing" money the federal government is overstepping its bounds. Ultimately, many of those people believe that federal participation in the economy is nothing short of the dreaded "socialism".

Here is an exchange I had the other day that demonstrates the absurdity of so much of today's conventional thinking about our country:

Jim : What I am describing is the way our economy and monetary system works ... the private sector creates the value and the federal government supplies the money by buying into private production.

Respondent: That's just socialism you describe Jim... The government buying into or supplying the money is nothing more than subsidizing private interest or corporate welfare.

See what I mean? The respondent, in his eagerness to bash the federal government, pulls out and plays the old "socialist" card. By doing so, he basically contends that we, now and in the past, have a socialist form of government. Really? Really?