May 20, 2020 - 3:59 pm
Since March 16, I’ve been at home on the computer sharing educational materials as much as possible with as many folks as possible on social media sites, sending them personal messages and calling them. I’ve done this because, believe it or not, I’ve seen education work wonders.
Because I’ve been on this planet for a good number of years, I’ve learned much and have a good idea of the difference between reality and perception. I’m nowhere near perfect, but I’m pretty good at knowing when someone is talking out of their ear or when a person’s opinion doesn’t pass the common sense test.
The education I’ve been sharing deals with economics, a subject I never delved into, but was introduced to accidentally in early 2019 when I heard about modern monetary theory. Look, I know the word economics isn’t going to have you jumping up and down with excitement, but that’s what happened to me. In the time it took to watch a video presentation, my life changed dramatically.
Today’s economic system works in a manner where solutions to problems everyone repeatedly called complex, could actually be tackled.
The more I learned about modern monetary theory, the more I understood that poverty, the health of the planet, lack of medical care, unemployment and other life and death issues are about political choices. So we have to ask if the 535 members of Congress are making political choices that benefit those who elect them or do those choices benefit only a few.
The COVID-19 pandemic has demonstrated that Congress can spend money for what it chooses and not raise taxes to do so. There is no stash of money tucked away somewhere from which Congress dips into in order to spend. It doesn’t work that way. Congress has the power, given to it by the Constitution, of what is called the public purse.
Congress has the power, the authority to spend on whatever is chooses. The U.S. government honors the payments for those expenditures. If Congress says we’re spending $3 million at this company, the company gets a check for $3 million, or their bank account is credited $3 million. That’s what happens. This is how transactions work every day. If you know another way, please let me know.
Before Congress spends, it doesn’t say: “Oh, wait! We have to go find the money we’re going to spend. We have to borrow it or bring in taxes to pay for it.” Nope, that is not how the system works.
The government books, its balance sheet, record a debit and everything that is nongovernmental records a credit. That credit stays out there in the economy until some of it is taxed back by the government. Debit on one side. Credit on the other.
On March 6, H.R. 6074 became law and provided $8.3 billion in emergency funding for federal agencies to respond to the coronavirus outbreak.
Here is a list of more bills under consideration: https://www.govtrack.us/congress/bills.
As I write this, a $3 trillion coronavirus package was presented by House Democrats. By the time you read this, we could know if the bill passed.
The bills are out there, and it’s not chump change. Taxes haven’t been raised. The federal government didn’t put a few trillion on the American Express card. Spending happens because Congress creates the spending. It’s not about printing currency. Accounts are credited and debited electronically. The U.S. issues the currency. Congress authorizes the spending and recipients get their “money” electronically or by check, which can be turned into cash.
The cash or electronic payments have value because the government accepts it for payment of taxes. Sellers of goods and services accept U.S. dollars, checks or electronic payments and you receive goods and/or services. That’s the system.
Since I have been passing this economic information along, I realize all too well, that some people are accepting, others not. I share to benefit all, not some. Still interested? Call me.
Rose Ann Miele is a journalist and was public information officer for Boulder City for nine years. She is the national outreach director for Real Progressives. She can be reached at firstname.lastname@example.org or at 702-339-9082.