How Will We Pay For It?

As outlined in Article 1 Section 8 of the Constitution, the United States is a currency issuer.

Alan Greenspan, a former Republican chair of the Federal Reserve, emphasized that the government has the power to create money as needed, as long as the necessary resources are present for purchase. So, the size of the national debt and the debt to GDP ratio are irrelevant for fiscal sustainability. The government cannot go broke unless it voluntarily defaults on its debts.

The deficit is the difference between government spending and tax payments collected. Their red ink is essentially our black ink. If you reduce the deficit, you reduce the non-government sector’s ability to spend and save. So even if these policies increase the deficit, it doesn’t really matter at the end of the day, as all that it means is that jobs are being created and there are more dollars to be saved and spent. There is no reason to worry about the deficit, as again it is an accounting record of the difference between money spent by the government, and the money put into the non government sector. Repaying the deficit is not a concern, as the United States Government is a currency issuer.

Our primary focus needs to be be on resource availability and potential inflation concerns, not on fiscal sustainability. Once elected, a qualified economist will be on staff to assist in drafting these policies into bills, taking into account the most advanced inflation models. Contrary to popular belief, implementing these policies will not necessitate increased tax payments, since tax revenue does not directly fund federal spending.

This was evident during the COVID-19 pandemic when two bills totaling 2.2 trillion dollars were passed without any tax increases. The government simply enacted the necessary measures without raising tax rates.

Concerns about borrowing money from China or any other country are unwarranted, since the United States does not borrow money in foreign currencies, and any debts to China to be repaid in Dollars can always be repaid by our currency issuing Government. The ability to create money ensures that our financial obligations can always be met.

It is important to stress that the government does not raise the question of “how will we pay for it” when it comes to military spending. It understands that we always pay for things the same way. The Treasury sends checks out, or has the Federal Reserve mark up private accounts to pay for the goods and services it buys from the private sector.

Adopting a similar approach for social programs, we should pass bills and implement policies that benefit our citizens, rather than fixating on issues such as the level of the national debt. Let us divert our attention towards critical matters, such as healthcare, climate action, and education.