If You Can Deliberately Restrain Federal Spending, You Can Deliberately Expand It

Anti-austerity is a word, of which, culturally and socially speaking, perhaps the Spartans wouldn’t have approved of. We can accept that. It was a Laconian thing. We wouldn’t understand anyway. However, it is also a word, economically-speaking, that many orthodox economists and politicians understand but outright refuse to accept. It’s a neoliberal thing. We cannot and must not accept that.

Neoliberalism: (n) 1. An economic and social model that seeks to transfer the control of the economy from the public sector to the private sector. 2. Pure economic nonsense.

Neoliberal: (n) 1. One who seeks to transfer the control of the economy from the public sector to private sector. 2. A peddler of macroeconomic nonsense. “Hillary Clinton, Ronald Reagan, Ted Cruz, Bill Clinton, George W. Bush, George Osborne, Tony Blair, David Cameron, and Theresa May are examples of neoliberals.”

On a daily basis, we are unwittingly inundated with extreme nonsense; outright lies is a better way to put it, regarding federal spending. Politicians, with the help of these so-called “economists” and the media, craft tales of pure fantasy concerning federal deficit spending that are always frightening, dismal and hopeless. The tales are then bound and published in the form of annual budgets. The resulting fiscal policy stance reverberates throughout the economy and society to be permanently ensconced within the collective mind of the public, left and right and those in between, as “common knowledge”. The so-called “common knowledge” is, in fact, common anti-knowledge purposefully constructed and disseminated to restructure both the economy and society for the benefit of the few who, over the last forty years, have been the greatest beneficiaries of federal deficit spending. It’s no conspiracy. It is just business and the wealthy using their influence to make government see things their way, just like you do when you vote. Your vote is influence. The only difference here being that for business and the wealthy, their money is more influential to politicians than your vote.

Interwoven with this anti-knowledge concerning the evils of federal spending, are more tales of absolute nonsense, portraying the private sector as the all-wise, all-knowing, all-efficient manifestation of sovereign perfection. Business and the rich are gods; holy creatures without whom the economy and society would collapse in an instant. They are the job creators and must be appeased. They are our hope; our daily bread; our role models we must look up to and strive to emulate. And they are patriotic too.

Men of the Continental army were decapitated by cannons, ripped to pieces by musket fire, gored by bayonets, suffered small pox and privation to create a nation of freedom and liberty and it is through mindless propaganda that we are purposely made to view an unfettered free market as the embodiment of that freedom and liberty. Could that errant viewpoint be the reason why we wave flags, enjoy parades and “ooh-ahh” fireworks displays every 4th of July, though we do not realise it? An appalling thought, to be sure. We think we are celebrating independence from British tyranny, but realistically, in part, we are celebrating our seemingly infinite ability to tolerate economic oppression. In this context, the American people are a sleeping giant that simply wants to go on sleeping and not have its pleasant dreams of freedom and liberty disturbed. Today, America is simply not unique with regard to freedom and liberty, other than 250 years ago being the instigator of positive change for western nations. Even in the worst of circumstances, today Britain has freedom as defined by the American conception of the word. Canada has this freedom; Denmark has this freedom; Australia has this freedom. Can a UK citizen start a business? Can a Canadian do likewise? Yes. Can an Australian speak out publicly regarding his or her’s government? Of course. In truth, we have gone far beyond the cause of 1776. Britain today is our greatest ally, our brother and yet, are we intending to insult that brother every July 4th ? No. Then with a western world that has followed the American cause of freedom and liberty to fruition, what are we celebrating?

Is July 4th yet another day for supposedly ‘honouring’ veterans? Another day where we pay lip service to veterans, have a cook out and on July 5th go back to lying to them; insisting that their government has an endless stream of US dollars for their active duty brothers and sisters, but is somehow “cash strapped” with regard to veterans and so, they need to quit being lazy, irresponsible, self-pitying con-artists and pull themselves up by their bootstraps? What manner of celebration is that? That is disgraceful; that is vile and what’s more, it is a lie! It is a shining example of the economic nonsense peddled by the politicians you’ve come to adore and worship as “wise councilors”.

Idolatry (noun): 1. The worship of idols. 2. Extreme admiration, love, or reverence for something or someone.

(Synonyms: idolization, fetishization, fetishism, idol worship, adulation, adoration, reverence, veneration, glorification, lionization, hero-worshiping)

If you are idolizing politicians, you need to stop that immature shit post-haste and get with the programme.

Deny it if you will, but today, we view the American Revolution and the lives sacrificed by the men of the Continental army solely from the standpoint of achieving private sector economic freedom and conversely, we are urged by our “dear leaders” to view the federal government that the founding fathers both designed and established as a blackened monolith of pure evil and oppression. Politicians equate our federal government with King George III, and they equate business, Wall Street and those like the Koch brothers and the Walton family with the patriotic cause. I remain convinced that when Washington crossed the Delaware, free markets weren’t on his mind. I am certain beyond all doubt that after the victory at Cowpens, men of the Continental army were not shouting, “Huzzah! Huzzah! Huzzah! We are one step closer to a liberated market that will be allowed to self-optimise!” I can also reasonably assure you that when Cornwallis surrendered his sword, Washington did not think, “Praise almighty God! Laissez Faire at last!” And whilst I’m on the subject, I will state for the record that the one of the purposes of American independence was not to proclaim a land free of taxation:

US Constitution, Article 1, Section 8: “The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises”

One of the purposes was to proclaim a land free of using taxation in a manner inconsistent with the well-being of all citizens. For the federal government to even issue the US dollar, it must first get that dollar accepted. Taxation is the method. By laying a tax payable only in US dollars, the private sector must obtain US dollars to pay the tax. As a result, the private sector sold goods to the US government and then the US government paid for the goods with its own currency – The US Dollar. Today, we are told that the US government funds itself through federal taxation and we can do little unless the rich pay their fair share. Thus, the people conclude that capital is somehow sovereign and the federal government is subject to capital. That is why we spin our wheels going nowhere and a major reason why Americans see bridges collapsing around them; why the bottom income distribution needlessly struggles; why Americans go bankrupt paying medical bills. We are not allowed to progress. We are not allowed to have common decency and we are told, in part by the right-wing, that such a thing is inconsistent with the ‘free-market’ intentions of the founders, and because we do not work hard enough.

So then, what are we celebrating if we refuse to accept the notion that we are celebrating economic oppression? Could it be, then, that we are celebrating an act which would give birth to the founding of our own nation and ultimately change the world? Such a celebration is more palatable and reasonable, until one asks the question: what is a nation?

A nation consists of a national government, people who are legal citizens and all of the land and resources within the boundaries of the authoritative arm of that government. Whether that nation be free in the American sense of the word or not, doesn’t apply here. In the case of the US, at the founding, the federal government codified certain ideas and aims into supreme law and the population gathered around those ideas and aims. In short, a team was formed. A complex team, yes, but a team nonetheless. In the US, all citizens are accorded the benefits of US citizenship, whereas non-citizens cannot derive benefit. What then are the benefits of citizenship?

In a democratic nation of free people, the benefits of citizenship are determined by the people and codified into law by their respective national governments. The purpose then is to state quite unequivocally, that anyone who is a law-abiding citizen must be allowed to partake fully of what that nation has to offer without let or hindrance, because he or she is a member of an exclusive club. Some nations offer great benefits, others very few. Denmark, being one that offers five star benefits, comes to mind. Unlike various clubs found within the private sector, being the member of a nation isn’t exactly a choice one makes the majority of the time. Membership is conferred on the individual at birth and if that nation offers very little, one is then compelled to suffer privation. This then begs the question, is it in the best interests of a wealthy nation purporting to be the hallmark of freedom and liberty, to offer little more than the freedom of movement, sight, hearing, voice, thought and written word as the benefits of citizenship?

So then, it can be clearly understood that when we celebrate the 4th of July, what we are celebrating is our nation’s existence and the benefits of citizenship. We are celebrating being members of an exclusive, wealthy and powerful club called the United States that sadly offers little more in the way of benefits for most of its citizens than intentionally sustained long-term involuntary unemployment, poverty, an inefficient for-profit healthcare system, crumbling infrastructure, a choice between student loan debt or no secondary education at all, ignored veterans, homelessness, wage suppression and other needless and mindless nonsensical offenses, all wrapped up in a tidy package of so-called “patriotism” that we are told means “freedom” and “liberty”. Quietly, behind the scenes, whilst we are struggling to find the money to pay for food to grill on the 4th, the opulent rich and corporate America possess the freedom and liberty to ensure that federal spending continues to flow into their pockets alone as it has done now for forty years whilst we go without and the public purpose crumbles around us. Given this glaring fact, we then are also celebrating our seemingly infinite patience with economic oppression. And we deign to call this dysfunctional team a nation?

A nation does not unite around the military or the Olympic games. It unites around a set of ideals, codified into law by its government and prospers through economic activity. A nation, therefore, is more or less a prison for much of the citizenry unless every single citizen derives good benefit from the economy. For nations such as the US, UK, Canada, Japan, Australia, et al., involuntary unemployment and poverty is voluntary choice and so is the resulting disunity amongst the citizenry. In short, we simply choose to maintain poverty. It is easy to make such a useless and vulgar choice when your elected officials, orthodox “economists”, your “truthful” media and the wealthy few who control your government persistently lie to you about the “evils” of federal spending, taxation and the national debt whilst promoting the private sector as the true sovereign to which the federal government is subject. In reality, the federal government is a sovereign, yet neutral entity and requires politicians to act before it can act. Understanding this reality gives us clear insight: The US government can be made to either operate justly for the benefit of all citizens, or be made to behave as a rabid dog and turn on its citizens. Both Reagan and Clinton are wrong; big government and the federal government itself are not the problems. Politicians and the wealthy few who control the federal government are the problems.

So, let me tell you something and I wish to be clear: If you can love your country and hate your government, you can also love your country and easily despise the 1% for what they have done to your government. If you can deliberately restrain federal spending, you can deliberately expand it for the well-being of every US citizen. It is when they deliberately restrain federal spending that politicians perform their little magic trick and the public is so focused on the trick itself that it never bothers to look at the sleight of hand that makes the illusion seem real.

When it comes to nations, the government manages and the population plays the game. What kind of team do you have if the players reject the manager and go off on their own? You don’t have a team; you have chaos. You have failure. You have a losing strategy. As it relates to the American experience, the people hate their government, which means, that they hate their nation and themselves. They hate their fellow citizens for their skin colour, or for their wealth or lack theorof, or for the way they dress, or for their religion or lack thereof, or for their intellect or lack thereof. But they hate their fellow countrymen and women, because most of them were made to do so, not by their “evil” government, but by those who control their government for political and economic gain; those with great wealth who ironically achieved that great wealth, not through freedom and liberty, but by being the greatest beneficiaries of federal spending through fiscal policy aimed at that purpose. Surely, if federal spending is bad for the average guy in a lawn chair eating a brat on the 4th of July as we are told, then it is just as bad for the Walton family and Wall Street. But the Walton family and Wall Street would disagree with such a notion. They know something that you, the patriotic average American Joe and Jane do not know: All US dollars come from the US government, the supply of US dollars available to the US government is always equal to infinity and the only way the US economy can obtain more of these infinitely available US dollars is through federal deficit spending.

US Constitution, Article 1, Section 8: “The Congress shall have Power to coin Money,”

“The Congress shall have Power to provide for the Punishment of counterfeiting the Securities and current Coin of the United States”

Can the Koch brothers issue US dollars? Can the Walton family? Can Wall Street? Can you? No. Only the US government has the authority to issue US dollars. It is where all US dollars come from. You must find a way to earn them. From the moment that the market sold goods to the federal government to obtain US dollars to pay the tax, the US government became the price setter and the market operated using the US dollar subject to the currency-issuing and regulatory authority of the US government. The private sector is not the sovereign; the currency-issuing US government is the sovereign to which the private sector is subject. Full stop. The gold standard and Bretton-Woods are long gone. When President Nixon ended Bretton-Woods, the US dollar entered into a flexible currency arrangement. It floated on an exchange and became inconvertible to anything but US dollars. The result left the US government the ability to afford whatever was for sale in US dollars. Because there is no need to defend gold reserves or maintain an exchange parity, the federal government is free to unleash its infinite spending capacity to abolish involuntary unemployment and poverty and to ensure the public purpose, spending up to the point of the real ability of the economy to respond with output. When the federal government deficit spends, it merely spends new dollars into existence and then leaves some in the private sector. All federal spending is direct dollar creation. Taxation today destroys US dollars. It limits the spending power of the private sector. The federal government is not penniless by design. It was not the intent of the founders to construct a national government that would be forced to go out looking for ‘money’ to spend. It was created to be a currency-issuing government and because of that, it simply cannot go broke. Its debt is not an actual debt like a household experiences, because it is denominated in its own currency which it issues at will called the US dollar. There is no national credit card. So, when the federal government deficit spends, that spending is the private sector’s income. We can now understand exactly why the household analogy does not apply to the federal budget. Wall Street and the Walton family know that and something else about federal spending that you do not know: he who controls federal spending, controls the economy and society. Buying politicians guarantees control over legislation, fiscal policy and an unearned income stream for the wealthy.

Again:

Neoliberalism: (n) 1. An economic and social model that seeks to transfer the control of the economy from the public sector to the private sector. 2. Pure economic nonsense.

Those persons who have usurped your government are free to restructure society and the economy for their own personal benefit. They use your government as their personal, exclusive ATM whilst ensuring that you have no access to it. In truth, they enjoy the benefits of US citizenship and you go without. They are the actual US citizens; you are a US citizen in name only. They want you to grill that brat, wave that flag, “ooh-ahh” at the pretty fireworks and learn your place.

Neoliberalism, the big lie of the late 20th Century and early 21st, survives by insisting that long defunct monetary systems apply to flexible currency arrangements. It tells you that the US government can go broke, that its national debt is a real debt, that the proceeds from federal tax collections and bond issuance are spent by the federal government, that Social Security will become insolvent. In this manner, it convinces you that austerity; restraining deficit spending for the public purpose, is desirable. It tells you that fiscal policy is the proper way to fund war, but monetary policy (bank lending) is the only stable way to manage an economy. It insists that we cannot do, cannot have, cannot afford that which benefits the entire nation: public expenditure on universal healthcare, free education and a Job Guarantee. It encourages the public to view welfare and food stamps as “mooching” and “taking”, thus hiding the fact that welfare and food stamps are the economy’s automatic stabilizers, without which, an economic downturn would grow worse. Benefits must be slashed, forcing people to search for good paying, full-time jobs that aren’t there and to accept wholly insufficient and degrading low-wage part-time jobs whilst they conduct that search in vain, because federal spending has been so restrained that job growth doesn’t exist. Wages must be suppressed, driving GDP to capital. You are told that involuntary unemployment must be maintained to avoid accelerating inflation which is a flagrant lie. In truth, the purpose of involuntary unemployment is nothing more than an economic whip that capital can crack on the back of labour, threatening workers with unemployment lines if they refuse to accept low wages and other indignities. It claims that an unfettered market can self-regulate, when the market is but a user of the federal government’s infinite supply of currency. Neoliberalism is pure madness and lies. And using these lies, it has turned wealthy nations into sweatshops for the benefit of the few.

Today, neoliberalism infests governments around the world. Insane policies of austerity have resulted in deflation and high unemployment, misery and suicide. Its policies of wage suppression, privatisation and pressing high levels of private debt onto populations have created extreme wealth for a few and poverty for the rest. It has condemned some nations like Greece to desolation and left currency-issuing nations like the US and UK with crumbling infrastructures, social collapse and output that is lost forever. All of this is accomplished with an illusion that, unlike good magic tricks, is plain as day if only you think. And how we will think about it is by using the “common knowledge” notion that a surplus is good and allows government to save up for a rainy day. We will also use the term “private sector” for the sake of familiarity for laypersons.

If a government is running a surplus, then clearly there is no deficit. A government achieves a surplus when tax collections are greater than what it is spending. After all, you claim that taxation is a revenue source for the federal government, right? It is you who claim that the government has no money of its own and so, must tax in order to get ahold of US dollars, yes? Then to deliberately run a surplus, you patently admit that government must spend less and therefore, it will be taxing more than it spends to get ahold of US dollars and save them. It must have more coming in than going out to have a surplus. So, who then is government taxing? You. And when you are taxed, you have less to spend, don’t you? Isn’t that why the rich do not want to be taxed? Yes. They, like you, want to keep their money. But with a surplus, the government is taking money from you and from everyone else. Therefore, if the federal government taxes the private sector $1 trillion dollars and only spends $200 billion, then it clearly removes $800 billion dollars from the private sector. And even if we go with the mainstream claim that the federal government holds on to those dollars “for a rainy day” which is operationally impossible, still, how can withdrawing $800 billion dollars from the private sector and locking it away possibly leave more US dollars for the private sector to spend?

The mainstream notion is patently absurd.

Again, if the federal government takes $800 billion from every citizen and business in the US, then every citizen and business in the US has $800 billion less. And clearly, if the government is supposedly saving this $800 billion (which it cannot do), it isn’t spending it back into the economy, so nobody is getting the dollars back any time soon. Admit it – even using the orthodox economic narrative, the private sector is short $800 billion and what it could have purchased with $800 billion, it cannot purchase now. So then, I wonder what will happen to all of those employed people when consumers cut back on spending for goods and services? They will become unemployed people and because they are unemployed they themselves will no longer be able to buy goods and services like they used to. They’ve got to cut back as well. When they cut back on spending, business loses more income and so, cuts payroll even more, slashing even more jobs. Every hear of a recession? It’s what I am describing presently. In the end, when the deliberate surplus causes a recession, the surplus will automatically become a deficit again.

Derp. Massive amounts of derp.

When politicians achieve a deliberate surplus and a recession occurs, only the wealthy remain unscathed, because they were the only ones to benefit from prior deficit spending and have more than enough “money” to weather the storm. Each recession allows for further reductions to wages and greater reliance on underemployment justified by the beautiful excuse that wages are solely a cost to business; a potentially crippling cost at that during a recovery, and they serve no demand function. An outright lie. To assume that wages are only a cost to business is to assume that workers never spend their paychecks. Literally, that is the line you are sold by politicians to justify their acts of violence on the citizenry. Each recession lowers the standards. Hence, employment today and wages are not what they were in 1960 and neither are corporate profits and what constitutes “wealthy”.

The madness that is neoliberalism must stop. The people must forego their patience and reclaim their governments. They must redirect their government’s spending towards the public purpose and away from the demands of those like Wall Street and the Walton family.

There are those of a more conservative mindset who might claim that by turning the US government against the Walton family and Wall Street, we are punishing success. My answer to that is clear: when a US citizen finally understands that all US dollars come from the US government, that the US government does not spend the proceeds from federal tax collections, that the US government has an infinite supply of US dollars and that Wall Street and those like the Walton family control that infinite supply, then turning the US government’s fiscal policy towards the public well-being and against the demands of Wall Street and the Walton family is not punishing success; it is patriotism.

When opulence is attained via control of a government’s fiscal policy to the detriment of society, wealthy becomes indecency. If the opulent can use their wealth to buy the government for their own gain, turning that government on its own people like a rabid dog and leaving in its wake privation, misery and social collapse, then let the people speak again of American-style freedom and liberty. Let them shout remembrances of 1776 until it reverberates throughout the western world once more. I speak to all people suffering under the iron fist of neoliberalism, but especially to the people of the US, UK and Australia who must lead the way forward. Infinite patience with your oppressors is not in keeping with the notion of a free people. Throw off not the institutions that are your governments, but rather, at the ballot box cast out and condemn those politicians who control your governments and have stolen what is rightfully yours. Rise up. Seize control of your government’s spending and deliberately expand it towards the well-being of the people. It is your civic duty.