“Affordability” for the US Government is Never a Question of “Money”

“Affordability” for national governments like the US, UK, Canada, Japan, Australia is always in terms of real resources (iron ore, agricultural capacity, water supply, labor supply, etc.) and never “money”. If you still do not understand this concept, you will soon. Forty years of neoliberalism and nonsensical mainstream economic policy errantly focused on the finances of these governments, which do not possess hard financial constraints, while ignoring their real productive capacities, leaving vast resources idle. Persistent recessions, high unemployment rates, expanding income inequality, high private debt levels and financial instability have been the end results of these policies and so, political unrest is rising as world populaces are no longer willing to tolerate these deplorable conditions. At the root of the problem is the erroneous belief that these governments can run out of “money”. That incorrect viewpoint causes you to miss the reality: US Dollars are infinite. Real resources are finite.

Consider: If you have $1,000, you can only buy so many goods with it. When you’ve completely spent the $1,000, you cannot buy any more goods. Now let’s assume that you can create US Dollars at will anytime you so desire. How many goods can you buy? You can buy anything for sale that is priced in US Dollars, both in the short run and the long run (Shout out to Simon Wren-Lewis). Money is no longer of any concern to you. And that applies to the US government. Money is not a concern to the US government because it alone has the authority to create and spend US Dollars. Its finances are of no concern. Its budget does not need to be balanced. It does not tax to fund its spending. It does not borrow to fund its spending. When it spends, it simply creates a US Dollar and spends it. The only concern of the US government is the real resources available that its US Dollars access. In other words, a US Dollar is just a voucher that we use to obtain goods and services.

Since the US government can issue an infinite amount of US Dollars, getting enough “money” into everyone’s hands so they can access goods isn’t the problem. The problem and the real question is,

“Is the economy capable of producing enough goods and services to meet everyone’s needs?”

The problem with Social Security is not money. The problem is making sure that there are enough goods and services being produced so that beneficiaries can buy them right along with everyone else in the country.

The problem with universal healthcare is not money. The problem is making sure that there are enough doctors, nurses, hospitals, clinics, medicines, surgical devices, ambulances and other things necessary to ensure everyone’s health can be cared for.

So, affordability for you personally might be in terms of US Dollars. That is precisely because you do not issue US Dollars. You use US Dollars. Therefore, you need to quickly come to terms with the fact that your situation does not apply to the US government and when you persistently vote for candidates who propose to “find cuts to pay for” spending or slash the deficit, you are actually voting to cut your own income, to reduce your quality of life and to shorten your lifespan.

Rethink economics.