THE UNIVERSAL ECONOMY UNIT XI: RICH CLASS WAR ON AMERICA – AVOIDING “HOW ARE YOU GOING TO PAY FOR IT” TRAP
We tend not to see the obvious. In Unit X of this series we saw how whenever government spending or increasing the Federal deficit benefits the rich, not a question is asked. Congress approves a blank check, the US Treasury creates, out of nowhere, the requested money, and the US Federal Reserve Bank issues the funds into the economy.
When 16 trillion government created fiat dollars are needed to bail out corrupt Wall Street banks, not a single politician questions, “How are you going to pay for it?” When the wealthy CEO’s from arms corporations want a 100-billion-dollar annual increase in government military spending, not a single politician mentions that it will balloon the Federal deficit. When massive tax cuts for the rich continue to balloon the deficit, not a single politician asks which government programs will be ended to pay for this.
But let average working Americans suggest that our roads, bridges, lead tainted public water systems, public schools and infrastructure in general need repair and the congressional chorus erupts: “How are you going to pay for it!?” Let average working Americans suggest that college tuition for all of our young people should be government funded as it was for veterans for many years under the G.I. Bill and the politicians screech in unison: “How are you going to pay for it?” “Government spending is out of control!” Let average working Americans suggest we need a single payer public healthcare system like every other industrialized nation and the congressional frenzy explodes: “How are you going to pay for it?” “The deficit will bankrupt us!” “Government spending is out of control!”
We tend not to see the obvious. We miss the obvious contradictions. We don’t ask the obvious questions. We walk like sheep into the “How are you going to pay for it?” trap. It is time that we trap the trapper.
The very next time we working Americans ask that our roads be repaired and we hear – “How are you going to pay for it?” – the question must be answered with questions: How did our government pay for 16 trillion dollars to bail out corrupt banks? Why wasn’t the deficit a problem then?
The next time we ask that our lead tainted public water systems be replaced and we hear – “How are you going pay for it?” “Government spending is out of control!” – the question must be answered with questions: When our government spends 716 billion dollars each and every year to make the CEO’s of arms corporations fabulously wealthy, how does our government pay for it then? Why isn’t government spending out of control then? Why doesn’t the government deficit matter then?
The next time we working Americans suggest that college tuition for our children should be publicly funded, that our youth should not be saddled with life-long debt to gain an education, and we hear – “How are you going to pay for it?” “What social programs will be cut to keep the government budget neutral?” “The deficit will bankrupt us!” – the questions must be answered with questions: How did our government pay for huge tax cuts for the rich and corporations? Why wasn’t the ballooning government deficit a problem then? Why wasn’t government spending out of control then?
The examples – and the contradictions – go on and on. Obviously, where government spending for the rich and corporations is concerned, congress plays by a different set of rules than when funding the public good. Government spending for the rich and corporations recognizes that a sovereign nation utilizing a sovereign fiat currency can afford to create any and all money needed to fund any and all requests. But as soon as spending for the public good – for working Americans – is suggested, we are told by congress that our government is like a household budget. It must “take money in before it can spend money out.” All of the expertly crafted sound bites immediately appear. “Spending is out of control.” “The deficit will bankrupt us.” “We are indebting our children.” “How are you going to pay for it.” And each and every one of these sound bites is a lie enshrouding a trap.
If the rich class who now own “our” politicians can deceive the public into believing that the federal government budget is like a household budget, austerity can be imposed. State and local governments can be forced into endless debt to Wall Street banks. Public lands and infrastructure can be auctioned off at fire sale prices to the financial industry. Youth can be forced into lifelong debt to gain an education. Public schools can be defunded and privatized. Social Security can be attacked to “fix the debt.” Working people – and their children – can be driven into lifelong serfdom, and the rich class, the rentier class, will have won their parasitic war.
Historically speaking, none of this is new. Since time immemorial the excesses of the uber wealthy have driven nations and working people into economic ruin. Indeed, it has often been the stuff of revolution. But it doesn’t need to end this way. We can recover our America and it can once again work for all of us.
We must educate ourselves. There is excellent work on Modern Monetary Theory (fiat currency) emanating from the University of Missouri – Kansas City, much of which can be accessed at New Economic Perspectives. But perhaps one of the clearest sources for understanding the functioning of a sovereign fiat currency by laypeople can be found in Warren Moslers short book: The Seven Deadly Innocent Frauds of Economic Policy. Mosler’s website can be found here and his book can be read online for free here.
Unit XII will discuss: Stopping The Rich Class War – Public Banking