by Rodger Malcolm Mitchell, www.nofica.com
Well, the Democrats finally have proved they understand Monetary Sovereignty.
No one is asking, “How much will it cost.”
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How do I know? Read the following excerpts. Amazingly, no one is asking, “Who will pay for it?”
Is it possible that at least one political party gets it?
House Democrats to include $250-300 monthly child payments in stimulus
House Democrats will release legislation Monday to provide millions of U.S. families $3,600 a year for each child under 6 and $3,000 for every child age 6 to 17.
The legislation, spearheaded by House Ways and Means Committee Chairman Richard Neal (D-Mass.), will likely be added to President Biden’s $1.9 trillion COVID-19 stimulus package.
Biden wants his American Rescue Plan to use an expanded child tax credit to cut the child poverty rate in half. Under the plan, the IRS would send $250-300 monthly payments to households for a year, starting in July.
The White House and Senate Democrats have reviewed Neal’s proposal and support it, The Washington Post reports.
After trillions of dollars in stimulus, the Democrats already are on board with an additional $1.9 trillion – and no one is asking, “Who will pay for it?”
Why? Because apparently they must realize that our Monetarily Sovereign federal government pays for everything simply by creating new dollars, ad hoc. Always has, always will.
And then there’s this:
Yellen says those earning up to $60,000 should get full stimulus checks
Treasury Secretary Janet Yellen said Sunday that individuals earning up to $60,000 should receive the $1,400 checks proposed in President Biden’s $1.9 trillion coronavirus relief package.
“The exact details of how it should be targeted are to be determined, but struggling middle class families need help,” Yellen said on CNN’s State of the Union.
The White House has said that Biden won’t budge on sending families another round of stimulus checks, but he is willing to negotiate on where the income cutoff should be to determine who’s eligible.
“He wouldn’t want to see a household making over $300,000 receive these payments,” Yellen said. She added that if Congress approves Biden’s plan the U.S. will return to full employment in 2022.
How much more than $1.9 trillion will those checks cost? No one seems to be asking, because it doesn’t matter. A Monetarily Sovereign government can afford anything.
And no, taxpayers will not pay for it. While state and local taxpayers do pay for state and local government spending, federal taxpayers do not pay for federal government spending.
State and local governments are monetarily non-sovereign, while the federal government is Monetarily Sovereign. There is a vast difference between the two. Those who do not understand that difference, do not understand economics.
“But,” cry the deficit hand-wringers, “this will cause inflation.”
WRONG,
Inflation never is caused by government spending. Inflation is caused by shortages, usually shortages of food and/or energy. In fact, inflations can be cured by additional government spending to obtain and distribute the scarce goods.
“But,” cry the Republicans and Libertarians, “this will cause excessive demand, which will cause inflation.”
WRONG.
Inflation is a general increase in prices, but putting money in the pockets of the middle- and lower-income groups never has caused a general increase in prices.
The cost of certain, specific products could rise temporarily, but there will not be price increases for products and services overall.
The primary effect will be for people to be able to afford life’s basics – food, housing, clothing, education – and additionally pay off debts will being able to save for a “rainy day.”
“But,” cry the rich, who because of Gap Psychology, (the desire to distance oneself from those below and to come closer to those above, on any social scale) do not want the middle- and lower-income groups to narrow the Gap between them and the rich, claim: “The people will simply use the money to pay off loans and add to savings, which will do nothing to stimulate the economy.”
WRONG.
Paying off loans and adding to savings not only will encourage spending on things the impoverishment has forced people to do without, but it will help prevent future recessions. The populace will have the resources to continue spending during otherwise lean times.
“But,” cry the most selfish among us, “if we give people money that will discourage them from working, and where would America be without workers?”
WRONG.
Among certain classes there is the false belief that the poor are inherently lazy, and would rather collect meager welfare checks than exert the effort to improve their lives.
Receiving money begets the desire for more money, which is obtained via labor. The vast majority at any income level would gladly work for more money, if they knew how, where, and what. The primary cause of poverty is circumstance, not laziness.
Actually, on average, the poor labor harder than do the rich, the main difference being the better cards the rich have been dealt.
“But,” cry the uninformed, “all that federal spending is socialism.”
WRONG.
Socialism is not government spending. All governments spend. Socialism is government ownership and control. Sending check to people does not constitute ownership or control. It does not, in any way, constitute socialism.
The primary complaints about the stimulus programs being “excessive” will come from the Republicans, who want the economy to fail under President Biden. These are the people who put politics before patriotism.
They want America to suffer, so they will have election talking points. It’s a traitorous lust for power that has become all too common among the right.
Sadly, we fear the left could fall into the trap. Only recently, left-wing supporters of “Medicare for All,” tried to explain it would be paid for via circuitous, convoluted, complex bookkeeping rather than simply telling the truth: The federal government will pay for it, the way it pays for everything: Via ad hoc money creation.
We only can pray that the past year’s multi-trillion dollar federal deficit, combined with federal tax decreases and a growing economy, will educate the populace about Monetary Sovereignty.
Perhaps then, we can use the federal government’s unlimited resources to eliminate poverty and to fund the many heretofore underfunded strategies that will improve our lives.
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