The federal government requires various goods and services to operate and function as government. It needs tables, chairs, paper, pens, printers, ink, computers, airplanes, tanks, ships, ammunition, concrete, steel, wiring, switches, light bulbs, on and on. The question is, how can the federal government obtain all of these things, now and in the future, to ensure that the federal government will always exist?
By manufacturing its own currency.
First, the federal government taxes and demands its own dollars, that it alone is authorized to create, as payment for those taxes.
This act causes everyone in the nation to need dollars.
Some people then take their tables, chairs, paper, pens, printers, ink, computers, airplanes, tanks, ships, ammunition, concrete, steel, wiring, switches, light bulbs, on and on, and sell them to the federal government. Others sell their labor to the federal government.
The federal government decides how much of its own currency that it is willing to pay for these items, then manufactures the dollars necessary to buy them.
Some people now have dollars in their possession. Those that do not, and do not work for the federal government, seek employment from businesses that have the dollars, because workers also need to pay the tax.
Everyone pays the tax, and then uses what is left to buy things.
Why does everyone use the federal government’s dollars to buy things in the private sector?
Because everyone knows that the federal government will tax again, and can enforce those tax collections. Everyone wants to avoid the punishment for not paying the taxes.
It is a simple matter of conducting business and private economic/financial activities using the federal government’s dollar, because everyone knows that the federal government’s dollar is the only way to settle tax liabilities owed to the federal government.
By having the exclusive right to issue dollars, the federal government ensures that it can buy all of the goods and services that it needs to exist and operate as the peoples’ government, without the danger of going broke.This is why you and businesses can go broke, but not the federal government. You and business merely use the dollar; the federal government issues the dollar.
By having the exclusive right to be the only source of dollars, the federal government ensures that it will exist far into the future.
When you understand this basic, simple reality, you will then understand that it is never a question of balancing the federal government’s budget. The question is always the real resources with which the federal government’s dollar can buy.
When the supply of dollars is short in the economy, real resources are left idle and unemployment is high. When the supply of dollars is plentiful, real resources are not left idle, full employment exists, and there is prosperity for all.
The federal government is the centerpiece in the economy, not the private sector. Errant belief that the private sector is the centerpiece is why we have unemployment and poverty, and why the economy fails.