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Progressives — That’s Not How Money Works!

There is a NYTimes Guest Essay, What Kind of Country Do You Want? Start With Taxes.. Supposedly a progressive answer to Republican tax cuts for the rich & their corporations nonsense, it actually reinforces conservative arguments about government spending.

The essay amplifies conservative propaganda about the “price tag” of government tax cuts and spending. It uses conservative terminology like “revenue,” “borrowing” and “fiscal crisis.” This wording keeps people trapped in a medieval/conservative “gold standard” thought system about money that limits what governments can do to make people’s lives better.

The US dropped the gold standard some time ago. In a modern economy the government issues currency, period. The US government is not “funded” and certainly doesn’t have to round up or borrow gold before it can do things. It is not “in debt.” Think about what “bankrupt” means to a country that prints its own currency. It certainly doesn’t mean we can’t find enough gold to hand over and have to sell off the Washington Monument or the US Capitol. (Actually Congress has already sold itself but that’s another post.)

Taxes Are Not Revenue

Taxes do not “raise revenue.” Taxes balance income and wealth distribution and bring fairness. They incentivize desired behaviours. But they do not “fund” the federal government. The US government is not a family around a kitchen table scraping together a few dollars to pay for food, it manages a modern economy.

Instead of the current medieval-based system of superstitiously limiting spending “in case” doing so might “trigger” inflation, governments must do actual work to plan spending according to production capacities, available labor, available resources, etc in order to keep inflation at bay.

Free Your Minds

Understanding how modern money and budgeting works frees progressives to be able to get things done to make people’s lives better. Why can’t government guarantee a well-paying job with benefits to people who want to help solve society’s problems. For example teacher’s aides, elder or child care, insulating homes, etc? Why can’t government do what is needed to fight the climate crisis and transform to a green economy? Once you understand how money works the possibilities reveal themselves.

However

However, the public is not caught up with an understanding of modern budgeting, and these concepts could scare people and leave them vulnerable to conservative fear-mongering about “government spending” and “debt.” Wall Street and conservatives do everything they can to scare the public into thinking progressives will “bankrupt” the country. For now please just stop reinforcing old fashioned terms that limit what we can do while we wait for people to catch up with understanding how money really works. Do not use terms like “funding” and “revenue” and “borrowing” and “deficits” and “debt” in your discussions of budgets and taxes. We can say the same things without reinforcing those harmful concepts.

Defunding Public Services Is A Privatization Strategy

In the UK people are getting more and more upset as the NHS is increasingly defunded, and the resulting problems get worse and worse.

Survey shows high levels of abuse of UK doctors by patients,

Long delays for care and staff shortages are cited as the main triggers for what NHS leaders say is an increased readiness by the public to be aggressive towards frontline staff.

The UK conservative strategy is to defund the health system to make people hate it, so they can privatize it.

It is a STRATEGY. Recognize it.

Democratic government is about making regular people’s lives better. But you have to fight to keep it.

Government “Spending” Is The JOB Of Democracy

People think that government spending is like a “household budget” (it isn’t.)

So try this out. If a household INVESTS by putting solar panels on the roof (with a battery for storage) and converts appliances to electric it no longer pays for energy. Never again. After the investment is paid off (from the savings) energy is free.

“Spending” thereby SAVES. “Borrowing” thereby lowers spending.

If a household INVESTS in preventative healthcare it lowers spending on overall healthcare.

If a household INVESTS in making sure everyone has enough to eat, then the household members are more able to prosper.

The list goes on.

Democracy is the idea that government’s JOB is to spend (allocate resources) to make our lives better. Cutting “government spending” is cutting democracy.

And cutting democracy is the point behind efforts to convince people that “government spending” is somehow a bad thing.

The idea behind America was that finally regular people would have a government that works to make regular people’s lives better – and protects regular people from the things the rich and powerful do to enrich themselves at the expense of regular people.

Think about who benefits from convincing people to hold back on doing things to make regular people’s lives better, and from protecting regular people from harms and scams that enrich the wealthy and powerful at the expense of regular people.

Neoliberalism vs Democracy

Neoliberalism (conservative economics) is the idea that “markets” should decide things for society. It literally means One-Dollar-One-Vote.

Democracy is the idea that decisions should be made by and for We the People. It means One-Person-One-Vote.

PS Neoliberalism is heavily promoted by the wealthy because they have more dollars. Examples: “Business does everything better than government.” “Government is wasteful and inefficient.” “Make government smaller.” “Get government out of the way of businesses.” Deregulate to unleash businesses.”

The “Private Sector” Is Government “Contracting Out” Its Functions

We live in a society, and getting things done for society is what government is for. Government is society’s way to make decisions about society’s resources, economy and future. Period. Anyone who tells you you don’t need government, or that government shouldn’t do this or that, is actually just trying to BE the government, for their own benefit.

EVERY decision about society’s resources, economy and future is made by government, one way or another. Period. Every. Single. One. Socialism, capitalism, communism, dictatorship, aristocracy, oligarchy, democracy, etc are just descriptions of how that decision-making is divided up. It’s about who makes the decisions and who gets the benefits. All the “ideological” battles are really just all about keeping the public from understanding that.

In the US, supposedly a democracy where the decisions are ultimately made by “We the People,” we hear about the “public sector” and the “private sector” of our economy. What we call “the private sector” is really just the government “contracting out” the functions of managing society. Corporations are those contracts. From the recent post about corporations, Understanding What a Corporation Actually Is Can Help Restore Democracy,

We the People want to have factories to build cars or toasters. We the People could do this – build the factory, hire the managers, organize supply chains, provide insurance. etc. – ourselves but instead we have come up with corporations as a way to “contract it out” to private investors to accomplish these jobs for us.

Corporations are the contracts government makes when it “contracts out” its functions. Period. Government charters corporations to do things government doesn’t want to do itself. Those charters come with conditions and rules.

Except our currently captured government doesn’t enforce the agreements.

A Currently ‘Hot’ Example

Government contracts out money creation. We charter banking corporations to do that function of government for us. The Post Office could do that as well, but we, for various reasons, choose to let a few “capital” holders – wealthy people – do that and reap the returns.

A Game As Old As Wealth

Over at sister-site Government Cheese, a discussion of capitalism, propaganda and how a few wealthy people keep things under control

Capitalism literally means that the people with wealth make the investment decisions for society & get the return on investment, and the broad public don’t.

All the rest is just propaganda. Capitalism has nothing to do with “markets” or “freedom” or any of the rest.

It’s really so simple. It’s how a few people maintain control of society for their own benefit and it’s been this way for thousands of year, under different labels. It’s what a monarchy is. The King and his buddies control the wealth. “WE should have this and you should not and here’s why.”

It’s why the United States was such a breakthrough. WE THE PEOPLE will decide what’s best for us, not you. Government of, by and for THE PEOPLE. Not the elites, the wealthy, the aristocrats, the priesthood, the monarchy, the warlord, whatever label put on the ruling wealthy. A country run for the benefit of the people in the country. Whatever label we put on that – democracy, socialism, whatever.

That’s all. All the rest is just propaganda.

Read Lincoln’s Gettysburg Address in the context of the monarchies of Europe just salivating waiting for “the Union” – the experiment in democracy – fail so they can get the world back where they want it.

Understanding What a Corporation Actually Is Can Help Restore Democracy

“Some corporations do bad things.” “Corporations bribe politicians.” “Good corporations don’t harm people.” “Corporations are greedy.”

Almost everything we read and hear about corporations destructively misstates what corporations are and why we have them. Understanding what a corporation really is has enormous implications for our democracy.

Corporations Don’t “Do” Things

Here’s the thing: A corporation is a contract. It is a legal agreement enabled by our (“We the People”) government. That’s it.

Corporations are not sentient entities. Contracts don’t “think” or “want” or “need” or say” or “care” or “do” anything. Neither does a will, nor a lease, nor a confidentiality agreement. Corporations also can’t be “greedy” or “criminal” or “good” or “altruistic.” But people can.

When we say these things about corporations we are reinforcing misunderstanding of what a corporation is. This helps the executives running corporations get away with all kind of bad acts.
Continue reading “Understanding What a Corporation Actually Is Can Help Restore Democracy”

“Big Government” is Good

When you hear “conservatives” talk about how bad “government” is, remember that in a democracy “the government” is us. When they run down “government” substitute the words “democracy is decision-making by We the People.”

Big “decision-making by We the People” is obviously good.

Decision-making by We the People is better than by business.

When Decision-making by We the People intervenes in the economy it is bad for profits at the expense of the people and the planet.

Government (decision-making by We the People) is good because its job is protecting us and making our lives better. Government spending is by definition spending that we want because it makes our lives better.

The Radical Left

How far have fallen down the rabbit-hole of collapse? How many of the things we take for granted as ‘givens” in our society have gone away?

Imagine if the idea of libraries or public parks or, God forbid, Social Security or the Post Office were proposed today. Imagine if ANY of the “public goods” we take for granted were proposed today. Even police departments or courts.

Picture the national discourse around such “radical left” proposals.

It would be unimaginable today that our country would allow such radical leftist ideas to come to be. The government paying to have places where people can go borrow books … for FREE? Parks that don’t charge a fee?

We all know this is how it would be.

We CAN Have Nice Things

People worry a lot about “inflation.” This is when the price of goods and services money buys increases, either because the quantity of available goods and services declines or the money circulating in the economy increases faster than the goods and services increase.

People used to think by limiting the money in circulation, prices would stay where they are. So they would “base” the money on something scarce. They thought inflation came from a “debased currency” – meaning the “base” wasn’t scarce enough anymore.

The gold standard was an example of “basing” the economy on scarcity. Governments had to round up (or borrow) gold and trade the gold for the things a government wants to do (forge weaponry, hire mercenaries…) To keep track of this kings and such had to use budgeting methods that made sure they didn’t run “deficits” that drained them of their gold until they couldn’t pay off their “debts.”
Continue reading “We CAN Have Nice Things”