Perpetuated Economic Lies Born of Ignorance


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https://youtu.be/ba8XdDqZ-Jg

Modern Money & Public Purpose 2: Governments Are Not Households

Warren Mosler, an American billionaire trader reveals the truth that is well know to operational banks such as Goldman Sachs, Morgan Stanley but generally not known to political parties or individual MPs, congressman, and important law making fraternities or think-tanks.

1. The government must raise funds through taxation or borrowing in order to spend. In other words,
government
spending is limited by its ability to tax or borrow.

Fact: Federal government spending or any sovereign country that spends in to the economy using its own currency is in no case operationally constrained by revenues, meaning that there is no “solvency risk.” In other words, the government can always make any and all payments in its own currency, no matter how large the deficit is, or how few taxes it collects. Inflation levels caused by price rises are the only thing that counts.

 

2. With government deficits, we are leaving our debt
burden to our children.
Fact: Collectively, in real terms, there is no such burden possible. Debt or no debt, our children get to consume whatever they can produce.. This deadly innocent fraud is often the first answer most people give to what they perceive to be the main problem associated with government deficit spending. Borrowing now means paying for today’s spending later. Or, as commonly seen and heard in the media: “Higher deficits today mean higher taxes tomorrow.”

 

3. Government budget deficits take away savings.

Fact:    Federal & Sovereign Government budget deficits ADD to  savings.

 

4. Social Security & Services costs need to come down because they cannot be afforded

Fact    Federal & Sovereign Governments issue payments that cannot bounce.When it comes time to make Social Security payments,all the government has to do is change numbers up in the beneficiary’s accounts, and then change numbers down in the trust fund accounts to keep track of what it did. If the trust fund number goes negative, so be it. That just reflects the numbers that are changed up as payments to beneficiaries are made. The only thing that matters is Prices

 

5: The trade deficit is an unsustainable imbalance
that takes away jobs and output.

Fact Imports are real benefits and exports are real costs. Trade deficits directly improve our standard of living. Jobs are lost because taxes are too high for a given level of government spending, not because of imports. The mainstream has it all backwards, including the trade issue. To get on track with the trade issue, always remember this: In economics, it’s better to receive than to give. Therefore, as taught in 1st year economics classes: Imports are real benefits. Exports are real costs.

 

6: We need savings to provide the funds for investment.

Fact: Investment adds to savings. this belief undermines our entire economy, as it diverts real resources away from other sectors to the financial sector which results in real investment being diverted in a manner totally divorced from public purpose. It is Warren Moslers guess that over 20% is being drained annually with tragic consequences leading to the type of financial crisis we’ve recently and still are going through.

 

https://youtu.be/0zEbo8PIPSc

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