In episode one, we looked at “debt money” and how it is impossible to pay off
our national debt unless we start having our U.S. government issue our money. In
episode two, we saw the Republicans jack up our national debt like crazy. I know
many of you didn’t believe what you were reading and had to look it up for
Good. Believe nothing. Confirm everything.
Today we’ll see why the Republicans exploded our national debt. But, first a
question: How does our government get its money? Taxes, yes, but there is
another way, too. When our government needs more money than it raises with
taxes, it “borrows” money from the Federal Reserve, increasing our national
debt. I put “borrows” in quotes because the Fed doesn’t have any money; it just
prints up Federal Reserve banknotes and trades them for U.S. Treasury Bonds.
These Treasury Bonds, created to raise money, are our national debt.
Republicans continually vote to increase our national debt because they
represent the wealthy and printing more money benefits the rich. You may be poor
or a worker and yet vote Republican. Many do. Typically, you were splintered
away from the Democratic Party using divisive, wedge issues that don’t involve
money such as abortion, gays and guns — you know: “family values.” But the
actual Republican base is wealthy and by borrowing $1 trillion, that money
doesn’t have to be raised by taxes — which they, being rich, would have to
When this new money enters our economy, we have inflation; and inflation is
an insidious, hidden tax affecting the poor and middle classes — and the poorer
you are, the more it hurts. If you are truly wealthy, what do you care if your
driver fills your limo with gas at $3 a gallon or $10? You’ll probably just
write it off as a business expense anyway, reducing your true cost to about
half. Higher interest rates cause more money to flow into your accounts from all
the poor saps who owe you. And you own your home, so inflationary rent increases
aren’t your problem; it’s a problem for all your working-class tenants.
In fact, the rich actually benefit from inflation with an increase in the
value of, and income from, their properties, raw materials and manufactured
goods, while their personal asset managers reposition them out of cash and bonds
and into real estate, stocks and commodities. If you are poor, work for a living
or are retired on a fixed income, you suffer as the world around you costs more
and more and more. In your world, your “assets” on the couch in front of the
TV and the only adjustment you can make is to your belt.
To determine which side you are on, ask yourself: Is inflation beneficial or
detrimental to me?
Progressives, on the other hand, favor a progressive income tax —
incrementally affecting the rich, richer and richest — those benefitting most
from our economy and most able to pay — instead of an inflationary tax,
targeting the workers, retired and the poor — those least able to pay.
As your congressional representatives ponder yet another tax cut for the
rich, you should remind them that we average Americans have already paid $14
trillion in taxes for the wealthy during the last 30 years and it’s about time
they stepped up and paid their fair share.
But wait, there’s more. There is another, much more sinister reason why the
Republicans want to keep raising the national debt, but that explanation will
have to wait until next time.
First published in the Daily Republic on August 8, 2011