What’s the big deal about the government shutdown? Why the debate over funding Ukraine and not having the money to do so?
After all, Rep. Alexandria Ocasio-Cortez believes such programs such as the Green New Deal can be funded using Modern Monetary Theory, which holds that a country with its own currency can spend almost unlimited sums of money. While government spending is normally financed by either taxes or borrowing, MMT suggests that governments can also do this by simply creating money.
If this is the case, there should be no monetary problem for anyone at any time. All you have to do should you get into a financial difficulty is create more money.
I can hear you now, accusing me of counterfeiting. But wait…
I don’t have the money to purchase the new Alfa Romeo Guilia I want. So I go to my bank, tell them I want some money to purchase a new Alfa Romeo. My bankers draw up some papers, I sign them and I have a new Alfa a few days later.
Do I intend on paying back the bank? Not on your life – after all, if the United States government can borrow money with no intention or plan of how to pay it back, and until recently, our government had a AAA+ rating internationally, I don’t see how I am any different.
Should I continue to borrow money from the bank for another car, a house, a motorcycle, a much needed vacation and so on, the bank may tell me at some point I reached my credit limit.
My response is – “Please explain this to me.” So my banker sits down with me and says “You’ve maxed out your credit as you cannot afford to make additional payments on things than you are currently, so you cannot borrow anymore.”
To which I reply, “Show me how I am doing anything differently than our government is doing.” After hemming and hawing for a while, my banker confessed “You aren’t selling any bonds to create the cashflow to pay your loans.” So I print up some pieces of paper, call them bonds and start selling them.
Amazingly, the bank says well done and loans me additional money. Now the bonds have no value before I said they did, but as long as I am willing to pay the interest on the bonds when they mature, how is that different?
It’s no different. You see, the government has no money in the bank, so it borrows from the Federal Reserve. Now where did the money come from at the Federal Reserve? It was created the moment the government requested the Fed to create more.
Now the government plans on paying back the Fed with interest by selling Treasury bonds. Unfortunately, the only entity buying Treasury bonds for the past several years is the Federal Reserve.
So the entity that creates the money to loan to the government is buying the government debt. Thus they are getting interest from the original loan which created the money and also through the interest on the Treasury bonds.
I guess AOC was right. We can print up as much money as we need.
Tyranny is defined as an unjust or oppressive governmental power. Taking something of no value, putting green ink on it and telling everyone you can exchange it for any good or service you desire is unjust as there is no intrinsic value behind the green somethings. In short, you are living in a tyrannical society.
And therefore, you need to understand how to prosper in such a society. You can easily by going to https://TedLeithart.com/prospering-in-a-socialist-society/ and downloading my book.
