The critter from nonsense island

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The Big Lie is that the US government depends on loans and tax revenue, and is therefore “broke,” and has a “debt crisis.” Therefore we must privatize social programs that help average people (i.e. we must give all such programs to the thieves on Wall Street).

There are various sources of this lie, one of them being the book above. Originally published in 1994, it has been a best-seller for years, and it is now in its fifth edition.

Let me pause and reiterate that there are three ways that money is created, or that money enters into any economy.

[1] Bank lending

[2] Government spending

[3] A foreign trade surplus, if applicable (also known as a “positive current account”). In this case the money coming into an economy is usually foreign currency. This does not apply to the USA, since the USA has a huge trade deficit.

The book above says that only #1 exists. That is, the book’s author claims that bank lending is the only way that money is created. Thus the U.S. government borrows all its money from bankers. Therefore all of us (including YOU) owe the bankers.  The dollar bill you found in the gutter is a loan from the bankers that you must pay back to them with interest. This is why we have taxes (according to the book above).

Who are the bankers? According to the book above, they are a mysterious cartel that is more evil and more powerful that anything ever faced by the fictitious James Bond.

spectre 01spectre 02spectre 03invaders

No one can identify the members of this mysterious cartel, but (according to the book above) they decide monetary policy, fiscal policy, environmental policy…everything. They are omnipotent. Transcendental. Beyond.

bankernator

All tax revenues ultimately go to “the bankers.” And since they create all money out of thin air, our monetary system is a “Ponzi scheme.”

(What does money creation have to do with Ponzi schemes? Nothing, but many people love to call everything a “Ponzi scheme.”)

PONZI SCHEME

The supposed “Ponzi scheme” is (according to the book above) is what causes the business cycle.

(In reality what causes the business cycle is a buildup of private debt to the point that the debt becomes crippling, which leads to recessions. This is not a Ponzi scheme. Instead, it is like living on credit cards until the debt becomes so large that you can no longer make even the minimum payments – at which point you must drastically tighten your belt.)

For the above author, the “Ponzi scheme” would end– and with it the contractions and the bubbles and the business cycle — if money was “backed by” gold or some other precious metal. (Of course there were bubbles and crashes and business cycles even when we had a “gold standard,” but you’re not supposed to remember that.)

Astronaut 01Astronaut 02Astronaut 03

There are so many things wrong with the above nonsense that all I can do is look out the window of my little shack and sigh.

my_shack

The thing is, millions of people have read the book above, and they swear by it. For people like Ellen Brown it is Gospel. For ex-Congressman and Presidential candidate Ron Paul it is scripture.

On 25 March 2011, Glenn Beck devoted his entire Fox News show to the book. The YouTube video of that show has 1.65 million views. And since Fox News decided to cancel Glenn Beck’s show, people like to think Beck was terminated for praising this book and thereby “exposing the truth” (even though Beck’s show did not end until over three months later on 30 June 2011).

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I’m serious. Millions of people believe this silliness. There are a few debunkers and detractors, but even they get it wrong. They tend to focus on the minutiae of bank operations, while they ignore the book’s claim that all money is borrowed from bankers (including the U.S. government’s money).

All these people are as block-headed as is our own expert analyst…

Chunch

If the average person tells you that the U.S. government is “broke,” and that it has a “debt crisis,” and you respond that the U.S. government can create infinite dollars, then the average person will report to “Plan B,” which is to claim that the dollar is about to “collapse.” If you debunk this silliness, he will shrug his shoulders, say, “Whatever,” and go silent. He switches off, realizing that he does not know what he is taking about.

By contrast, the people who claim that all money is created by bankers as loans are utterly unmovable.

stubborn[1]BELIEFS

They are as closed-minded as are the MMT people with their “jobs guarantee” and their mantra that “taxes drive money.”

MMT cafe

So much obtuseness. And we wonder why we have always had poor people.

And finally, what would this blog be without a parting jewel of wisdom from the vault? (Below in the reader comments section.)

VAULT

 

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3 Responses to The critter from nonsense island

  1. Chunch says:

    Wow, you are something else. Actually no, you are a lyre and have proven so yerself.

    I’ve repeatedly said that the govermint can print to infinitee, IF IT CHOSE TO. But it hasnt cho0se to do so.

    I’ve also told the tissue is not whether the govermint could printe or not, the issue is that the printing is the same as couterfeiting.

    you and Rojer are the only ones on planit earth pushing the nonsinse about the government destroying taxx monie, but every single tyme you ignor mye quEstion. If the goverment collects money worth a x amount of food, what difference does it make if the goverment still gets to “give” the food away. Isnt that what taxeS are? A transfor of capital to the goverment.

    I get the drift that you dont like the fact tHat im destroying your arguments – try refuting mynes for a chaynge – cowArd..

    Liked by 2 people

  2. cool slim says:

    “If the government collects money worth a x amount of food, what difference does it make if the government still gets to “give” the food away.”

    The government has no use for tax dollars, any money it receives is simply removed from the money supply.

    The rest of your post is confused. How is printing money counterfeiting, do you realise that money has to come from somewhere?

    Like

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