You may not like the US Government, but the one thing that you do like is the sole product that the US Government manufactures – the US dollar. You want it, you demand it, you cannot get enough of it.
The US Government has a monopoly over the US dollar. No other entity, foreign or domestic, can issue the US dollar but the US Government. Every last US dollar in the US private sector was put there by the US Government through deficit spending. Through trade, some of those dollars flowed from the hands of US citizens and into the hands of the rest of the world.
So why do you want US dollars? Why do you demand them? Why is it that you cannot get enough of them? Two reasons, really. The main reason why you are simply unaware of, and the second reason is a micro level related reason that you are fully aware of.
As to the latter, the US dollar is the one thing that can purchase all things priced in US dollars. Since we live within a modern monetary economy, you need US dollars to buy food, clothes, toothpaste, DVDs – anything you can think of. But, this is a secondary reason to why you actually demand US dollars.
To understand the main reason why you demand US dollars, you have to move up to the macro level. The reason is to avoid having your property seized and/or yourself being sent to prison. I am talking about federal taxation. You simply cannot pay your federal taxes with gold, silver, soiled diapers, hairspray, grapes, feta cheese, or coffee. You can only pay your federal taxes with US dollars. If you do not have US dollars, then you cannot pay your federal taxes. Therefore, you have a pressing need to obtain US dollars for this reason.
First, the US Government imposes a tax, imposes a punishment for not paying the tax, and then declares that tax to be payable only in US dollars. Now then, I wish to be clear here, so I will state the reality and you will simply have to find a way to come to terms with it:
The US Government is over 200 years old. You were not there at the founding of the nation. You were born long after that. You’ve arrived in the middle of game long after US dollars have been in existence. That is one major reason why you think that US dollars come from the private sector. In your experience, US dollars have always been in private hands, so that must be where they originate from. But, if you look back in time and ask yourself, “were US dollars in existence in the year 1498?” The answer, quite obviously, is no they were not. So, where did they come from?
The US Government.
The US Constitution, Article 1 Section 8 gives the US Government the exclusive authority to issue US dollars and to levy taxes. Anyone else who attempts to issue US dollars is counterfeiting, and the US Constitution Article 1 Section 8 also gives the US Government exclusive authority to punish counterfeiting.
So, as I said, first, the US Government imposes a tax, imposes a punishment for not paying the tax, and then declares that tax to be payable only in US dollars. Now the private sector must find a way to obtain US dollars so it can pay the tax. How does it do that? By selling goods and services to the US government in exchange for the US government’s US dollars. The US government determines the price that it is willing to pay for the goods and services. It then manufactures some US dollars and pays for the goods and services at the price that the US Government alone has determined to be acceptable. Now the private sector can pay the tax and keep what is left over. From this point, US dollars begin to circulate throughout the private sector, until we arrive in the year 2016.
You’ve arrived in the middle of the movie. US dollars haven’t always been in private hands. US dollars were put in and then left in private hands every single time that the US government ran a deficit. If the US Government runs a budget deficit, it is first manufacturing US dollars, then spending them into the economy, taxing away less than it spent, leaving the remainder in private hands.
Furthermore, do not listen to these conspiracy theorists and horribly confused individuals that tell you all US dollars today come from a private bank called the Federal Reserve, and the Federal Reserve is not the US Government. “The Federal Reserve is a private bank” statement is what happens when people believe that macroeconomics and monetary theory are a political free-for-all, where everyone’s opinion is always valid. It’s what happens when people believe that conspiracy documentary watching experience trumps educational, professional research and work experience. It’s what happens when central bank independence mythology is considered reality.
I will state for the record that the Federal Reserve’s Board of Governors is an agency of the US Government – Full stop. There is no way around this reality. It is the nation’s central bank. It is not a private entity. It is not a commercial bank. The US Government created the Federal Reserve, firstly, for its own use, and secondly, to manage the nation’s banking system. This is not the first time in history that the US Government has created and used a central bank. The US Government, today, maintains its own bank to handle its transactions and all things monetary.
The US Treasury is not a giant vault. It is not a heavy-duty chamber filled to the hilt with gold doubloons, and paper cash taken from the private sector through taxes. Armored trucks are not driving from the IRS to the US Treasury to deposit your tax dollars. The year is not 100 AD and this is not the Roman empire. The IRS is a giant accounting agency with guns, and the US Treasury is a giant office complex, filled to the hilt, not with taxpayer cash dollars, but with computers and telephones. And those phones are constantly ringing and those computers are constantly in use. Know why?
Because the Federal Reserve is in constant communication with the US Treasury and both work in cooperation to conduct monetary and fiscal policy.
The Federal Reserve is not a private bank. The US Treasury is not a giant vault. Together, they comprise the Consolidated Federal Government of the United States of America.
Through the US Treasury and the Federal Reserve’s efforts, the US Government spends US dollars into the economy and taxes US dollars out of the economy. That is the reality and there is simply no way around that reality.
So, you may not like the US Government, but the one thing that you do like is the sole product that the US Government manufactures – the US dollar. And if you want a better economy, you simply have to come to terms with reality, then find politicians who are willing to allow the US Government to do its job as a currency-issuer: To spend for full employment and the public purpose. Any other federal spending is mismanagement of the US economy on behalf of politicians serving in the US Government. Directing deficit spending and fiscal policy towards the demands of business, Wall Street, and the rich exclusively is why the economy malfunctions.
Each and every US citizen, together, equals a nation.
The US Government is a public institution, installed by the people of the United States that sits in authority over that nation.
The US Government is the exclusive issuer of US dollars.
The US dollar is free-floating, inconvertible fiat. The US government does not tax or borrow to fund spending, because there is nothing pegged to the dollar today that would necessitate taxation or borrowing to defend the peg.
The national debt is merely a bunch of savings accounts that pay interest.
US dollars are 100% public funds.
Because US dollars are exclusively public funds, they are intended to be created and spent for the provisioning of the US Government with goods and services, enabling it to operate on behalf of the public, and to be created and spent for the public purpose alone. This means that fiscal policy must, at all times, be directed at full employment and the public’s well-being or the economy will malfunction.
This means that the market is not in charge here.
This means that the rich are irrelevant to prosperity.
This means that every US citizen counts.
This means that federal spending must always be directed towards the benefit of all citizens.
This means that all must derive good benefit from our economy.
If only a few benefit from federal spending, while the majority are needlessly made to struggle and flounder, then only those who benefit are actual US citizens and the rest are nothing more than humans born into imprisonment.
Delusion occurs when people cannot distinguish between politicians in the US Government and the public institution that is the US Government. This means direct your anger, not at the US Government, but at those politicians you elect who’ve turned your government into a den of thieves that operates exclusively in the interests of business, Wall Street and the rich.
When the people are made to hate the public institution that is the US Government, then poverty is guaranteed.