Correcting the Big Lie

For those who wish to see a classic example of the Big Lie (that federal deficits cause inflation and are a burden on taxpayers) read this article from the Washington Post.

U.S. government spent $660 billion more in March than it collected in revenue, the third-largest monthly deficit on record

Translation: “. . . the third-largest monthly economic gain on record.” (When the government pumps more money into the economy than it takes out in taxes, that is an economic gain for the economy.)

Stimulus plan and $1,400 checks drove spending much higher as the White House and Republicans clash over where to spend money next. By Jeff Stein, April 12, 2021 at 2:00 p.m. EDT The federal government spent $660 billion more than it collected in tax revenue this March, the Department of Treasury said Monday, as the Biden administration’s stimulus package pushed the U.S. monthly deficit near record highs.

Translation: ” . . . pushed the U.S. monthly economic gain near record highs.” (That’s the purpose of a stimulus — adding money grows the economy.)

The U.S. spent $927 billion in March alone — more than double the level from March 2020 — a jump due primarily to the disbursal of tens of millions of $1,400 stimulus payments under the American Rescue Plan. Meanwhile, tax revenues stayed largely flat, with the government only collecting slightly more than last March. The resulting deficit is the third largest ever in American history, Treasury officials said, eclipsed only by April and June of last year — when the U.S. authorized larger levels of emergency spending to head off the economic crisis caused by the pandemic. The monthly deficit had contracted relative to the summer months as federal spending expired and the U.S. economy began to heal.

Translation: “The resulting economic gain is the third highest in American history . . . to head off the economic crisis caused by the pandemic.” (Neither you, nor your children, nor your children’s children will ever pay for the so-called “deficit.” Our Monetarily Sovereign federal government funds its payments by creating new dollars, ad hoc.)

The U.S. budget deficit breached $3.1 trillion in 2020 as the pandemic slammed economy Over the first six months of the current fiscal year, the government’s budget deficit has reached $1.7 trillion, a massive sum. America’s annual deficit hit $3.1 trillion in 2020, an all-time high that far surpassed the previous record of $1.4 trillion, which came in 2009 during the depths of the Great Recession.

Translation: “The U.S. economic gain breached $3.1 trillion as the pandemic slammed the economy.” “. . . the economic gain has reached $1.7 trillion, a massive sum.” “America’s annual economic gain hit $3.1 trillion in 2020, an all-time high . . . ” (And despite all the handwringing by pundits, there is no inflation.)

Democrats and Republicans authorized much of the emergency spending last year as a way to try and stop an economic collapse. They are at odds, though, over spending levels in 2021. The government has to borrow money to cover deficits, and it does this by issuing debt. Interest rates are relatively low, which has made it cheaper to borrow, but the federal debt has grown markedly in the past year.

Translation: “The federal government, being Monetarily Sovereign, does not need to borrow money to fund an economic gain, nor does it issue debt. In an unrelated process, the government accepts deposits into T-security accounts, which are like interest-paying safe-deposit boxes. Unlike “borrowing,” the federal government never touches the dollars in T-security accounts.” ” . . . relatively low, and interest rates have no effect on the federal government’s ability to increase the economic gain.”

Most of the new stimulus payments have already been sent out and are reflected in the March data. Still, budget experts say higher-than-usual deficit totals are likely to continue for the rest of the year. On a call with reporters, Treasury officials noted that all the funding from last year’s Cares Act and the rescue plan had not yet been allocated.

Translation: “Fortunately, budget experts say higher-than-usual economic gain totals are likely to continue for the rest of the year.”

“This is going to be a big deficit year because we were already running substantial deficits and passed a $1.9 trillion bill,” said Marc Goldwein, a budget expert at the Committee for a Responsible Federal Budget, which advocates for lowering the deficit. “This is not higher than expected. It’s what you’d expect with a $1.9 trillion stimulus on top of a structural deficit.”

Translation: “This is going to be a big economic gain year, because the economy already was running substantial gains . . . ” “It’s what you would expect with a $1.9 trillion stimulus on top of a structural gain.”

Jeff Stein is the White House economics reporter for The Washington Post. 

Translation: Jeff Stein is a White House economics reporter who is paid to promulgate the Big Lie that economic gains are a burden on the federal government and on taxpayers. Because the federal government is Monetarily Sovereign, it pays for its spending by creating new dollars, ad hoc. The federal government has the infinite ability to create dollars, so no tax dollars are used for federal spending. (The sole economic purpose of federal taxes is to allow the government to control the economy. It taxes things it wishes to discourage, and it give tax breaks to what it wishes to encourage.) Thus, the whole reason for calling is a a federal “deficit” is to mislead. The purpose of the misrepresentation is to dissuade you, the public, from demanding more benefits from the government. Because those benefits tend to narrow the income/wealth/power Gap between the rich and the rest, the rich pay the politicians, the media, and many economists to promulgate the Big Lie. Shame on Mr. Stein, and shame on the Washington Post, and shame on all the other media, the politicians, and the economists who disseminate the Big Lie. Shame, for doing the dirty work of the very rich. ………………………………………………………………………… Rodger Malcolm Mitchell [ Monetary Sovereignty, Twitter: @rodgermitchell, Search: #monetarysovereignty Facebook: Rodger Malcolm Mitchell ] THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE. The most important problems in economics involve:

• Monetary Sovereignty describes money creation and destruction.
• Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics. Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps: Ten Steps To Prosperity:

1. Eliminate FICA
2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
3. Social Security for all
4. Free education (including post-grad) for everyone
5. Salary for attending school
6. Eliminate federal taxes on business
7. Increase the standard income tax deduction, annually.
8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
9. Federal ownership of all banks
10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

  The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest. MONETARY SOVEREIGNTY