Here’s what Progressives should support: Elimination of the Debt Ceiling.

The Debt Ceiling is a significant constraint on public purpose-deficit spending for policies and programs designed to reduce unemployment, insure the medically uninsured, educate for modern skills, develop effective renewable energy technologies, and pay down the national debt.

This self imposed constraint on a fiat currency monetary system is an acknowledgement that our elected officials are substantially misinformed about how America’s monetary system operates to fund its expenditures.  They do not comprehend that because the Fed is the sole issuer of our currency this nation cannot go broke nor can any of its programs become operationally insovent.  And, because of that, the Federal Government is not operationally, constrained by revenue to fund government expenditures.

Tax and interest rate policy are the tools to employ to manage aggregate demand, (inflation/deflation) not to raise revenue.  Therefore, the Federal Reserve does not need revenue to spend, as mentioned above,  the Fed  is the monopoly issuer of our currency and can issue all it wants as long as it also controls inflation.

What the Budget Plans from Ryan and the CPC don’t include, however,  is an explanation that when the government spends it has to spend in the government AND non-government  sectors. Doing so means that deficit spending is equal, to the penny, to savings in the non-government side of the ledger.  Deficits equal surpluses and the surpluses show up in the non-government sector. Accounting 101.

As for debt, Progressives need to understand that a high rate of national unemployment is the singular most important indicator that neither the private nor the public sector has invested enough to reduce the UE rate to publicly acceptable levels. Higher rates of deficit spending, when the Fed inflation target has been  reached, means there is no threat of inflation, and that deficit spending is mandatory to spur aggregate demand.

Since Ryan’s Budget is so far off the scale of familiar conservative policy objectives, Progressive may want to offer an amendment to their budget which supports debt free currency, a la Lincoln’s Greenbacks, under the authority of Article I, Section 8, of the Constitution.

Alternatively, the President could issue an Executive Order instructing the Treasury to have a $100 trillon coin minted and deposited in the Treasury’s General Fund upon which the Treasury would then write checks for Federal, State, and local government authorized expenditures including debt service.  This would of course eliminate all future debt for the Federal Government and all other political jurisdictions. Again, tax and interest rate policy would constrain inflation.  Taxation would not need to be on income but rather on consumption.

What the Budget Plans from Ryan and the CPC don’t include is an explanation that when the government spends it has to spendin the government AND non-government  sectors. Doing so means that deficit spending is equal, to the penny, to net financial savings in the non-government side of the ledger.

If we had elected officials who were independent of their sources of campaign funding we might be able to obtain a budget that really serves public purpose, but that is not likely in the era of Citizens United and a timid Progressive Movement.





Love Barbara, passionate about monetary reform, environmental and energy policies that move us to a safer world, can't do without golf, good, blues and country...Cristina's calamari...Barbara's cooking...and a good laugh everyday.

Primary occupation: Economist
Dream occupation: President of US
Hometown: Saratoga Springs
Schools attended: St. Peter's Academy, Lemoyne College, U. Dayton, GWU
I like: Root Beer Floats, Merle Haggard, Ray Charles, Bonny Raitt, Gladys Knight, The Temptations, The Ojays, Luther, Prysock, Earl Bostic, Nancy Wilson, Tina, Dolly Parton
Favorite writers: Ravi Batra, Doris Kearns Goodwin, Thom Hartman, Paul Krugman, Mike Beschloss
Favorite books: Greenspan's Fraud,Team of Rivals, Screwed, Return of Depression Economics, The Conquerors, Fateful Choices, Ian Kershaw; In The Ruins of Empire, Ron Spector
Favorite newspapers: Christian Science Monitor
Favorite magazines: The Economist, The Nation
Favorite music: Country, Blues, Kansas City Blues, Piano Solo Classics
Favorite movies: Citizen Kane, The Godfather Series, One Flew Over the Cuckoo Clock, To Kill A Mockingbird
Favorite TV shows: PBS News, BBC News, 24, The Wire, National Geographic, Discovery Channel, CSI:Miami
Favorite teams: Tiger Woods
Favorite quote: In the absence of freedom there is no creativity, in the absence of creativity, there is no progress. R. Bostick 1956
Gender: Male
Age: 70
Religion: NA
Political affiliations:Independent

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