Disasters and wars have a way of breaking through the established norms that cloud our vision of how our government creates its own money. On the heels of the terrible hurricane disasters that struck the islands and coasts of the U.S. this year, the U.S. House of Representatives hurriedly met and passed an initial disaster relief bill, allocating billions to FEMA to help in its efforts. Sadly, the bill is paltry in terms of what is needed, but that’s for another day.
My point is that Congress just created money out of thin air to serve public purpose.
Under a modern monetary system such as that which operates in the U.S., money is created simply by authority of Congress. Congress didn’t collect taxes to “get” this money. It doesn’t spend from a vault of cash. It didn’t call up China to see if they had any extra U.S. dollars they might lend to the relief effort.
No, they just did their job (albeit inadequately so far) and authorized the creation of currency to meet a public need.
As I’ve attempted to explain before, our nation’s currency is a boundless public utility that can and should be used to serve the needs of the people of this great country. Taxes serve an entirely different purpose for our federal government. They are useless as a source of funds since 100% of government spending is done via the creation of new currency via the Treasury & Federal Reserve operations.
Congress doesn’t need to get money from anywhere before it can authorize the appropriately-sized, long-term funding for the relief, recovery, and rebuilding of Houston, Puerto Rico, and the U.S. Virgin Islands. There is no excuse for waiting – this can, and should, be the number one priority.
Yet, this Congress is working night and day on promoting a massive tax cut that would benefit the wealthiest Americans, even though such a tax cut serves no public purpose. In fact, it seeks to exacerbate an already extreme level of power and wealth inequality that every day further undermines the fabric of our democracy and the social cohesion of our states, cities, and communities.
To all my fellow American entrepreneurs, businesses owners, and investors who have been blessed to be in the upper end of the income and wealth spectrum: America needs a lot of things before we need another tax cut.
Lend your voice, influence, and funds to help this Congress understand our nation’s priorities. My message is quite simple:
You can cut my taxes when…
- The hurricane-ravaged cities, towns, and islands have been fully restored;
- Our nation’s infrastructure is upgraded to the quality needed for the world’s most dynamic economy;
- The judicial and criminal justice system is adequately staffed and funded so that it can provide equal protection to all, especially to the disadvantaged and low income;
- All our towns and cities have the highest quality water and sewage treatment systems;
- All major metro areas have the kind of world-class public transit they need to meet the needs of all residents (especially those without vehicles), workers, and businesses;
- Our interstate highway system is complemented with an inter-city electric high-speed rail system rivaling that of Europe and Asia;
- Our education system is adequate and accessible to train every resident in the skills and knowledge they need;
- Every veteran and every resident can obtain the local health care they need from high-quality medical facilities and professionals;
- Every scientist and every research center working on important medical, energy, agricultural, technological, and other scientific research that could enhance life and living standards is funded and equipped;
- Every veteran, resident, and refugee who is ready, willing, and able to work has a job with a dignifying wage and benefit package;
- Our industries, from agriculture to chemicals to finance, are all operating in ways that are regenerative to the vital ecosystems that support us all.
When we have achieved all these things; when our nation is sustainably prospering at every level of society; only then, if the public acting through Congress still deem that it is in their highest interest to lower taxes on the wealthy, then you can cut my taxes.
For now, our nation has higher priorities. Congress, you have a big job to do, we’re all here to help you do it!