President Biden is proposing to exceed the THIRTY TRILLION dollar debt level. What he suggests is not only partisan and disingenuous, but includes multiple effects that restrict and undercut capitalism. If he ever understood the relationship between debt, productive surplus and growth, he has forgotten it… along with Constitutional provisions and any semblance of American exceptionalism: down the memory hole.
Under his and other socialists’ direction, American will be exceptional again: among all industrialized nations we will lead the world in our concerted, legislated efforts to destroy our hard-won success and relinquish our sovereignty. Biden wants to “go big” – biggest fool, perhaps.
The only system that can both destroy debt and increase freedom, is free-enterprise capitalism. That is, NOT monopoly capitalism OR globalism, both of which concentrate money and power OUT of the hands of free citizens and OUT of the hands of their elected representatives – although not out of their pockets in many cases. Those must be stopped before it’s too late. Some serious trust-busting is essential to restoring America.
Practically, a clear course-correction would be to limit the level of corporate net-worths or levels of gross revenues that may donate ANY money to candidates or PAC’s – ANY money. Perhaps companies with $50 millions in assets or $25 millions in revenue or LESS, may donate, not larger. Also, companies that have government or military contracts may not donate. Then trust-busting could proceed.
Already we’ve experienced reduction in job and business growth – returning to pre-Covid levels – because excessive, socialist, “rescue” or “stimulous” payments are keeping people from returning to work! Work… where guided labor produces things, including taxes. We know where idiots… umm, ignore that… “progressives” think economic growth comes from: unemployment checks. Nancy Pelosi said so. Only as employment increases will freedom, independence and tax revenues increase.
People earning their own livings strengthen both responsibility and financial freedom. Having more taxpayers increases political freedom. 2020 has shown that weakening election laws weakens political freedom, and it disenfranchises citizens from our most fundamental and hard-won civil rights. Adding greater responsibility to the exercise of the franchise will clarify honesty in elections – a fundament of the American promise.
Back to what Biden has forgotten… if he ever knew it. Debt is a superb tool for growth, but not for maintenance – period.
Imagine a factory producing, say, refrigerators. Its lines are operating, workers are working and every unit that comes off the line is sold within days. In fact, there is a shortage of refrigerators; people are forced to devise meals for their families without foods that need refrigeration. People are denied good nutrition for lack of a high-enough rate of refrigerator production. Even if the government passed a law requiring more refrigerators to be made, only so many can be.
To upgrade the factory and machinery to produce a third more – a 33% increase – will cost $100 Million. Because the refrigerator company has made a profit over the past 15 years, of $30 Million after all expenses, cost of goods sold and payroll… and taxes, it is able to borrow, or gain a debt of $70 Million. They’ll be able to make a productive surplus of not $3 million, but $4 million per year at 133% of current production, since all costs won’t increase proportionately. Each refrigerator will cost a little less to produce with the new machinery and facility improvements. The $70 Million loan, combined with investment out of increased operating profits, will be paid back with interest to the lender, in less than 20 years.
The earning of profits – creation of productive surplus – enables “Refrigerators, Inc.” to become more productive and efficient, able to modernize, hire trainees who can become highly paid refrigerator builders, and pay taxes to support our civic institutions and even donate money to charitable causes. Productive surplus also enables the company to destroy debt – make it disappear – while increasing production, the only purpose of investment. That’s it. It’s NOT an investment to provide living expenses for people who do not work enough to support themselves or their families; it’s an emergency… it’s charity, not a way of life.
Meanwhile, everyone who wants a refrigerator can buy one – or, contrary to socialist dogma – go to work to earn enough to buy one.
Capitalism is the only process that can destroy debt or, in fact, make investments at all. All other bills incurred by a society that is complex, are paid, or financed, by the productive surplus of profitable, capitalist enterprises. All of government: schools, police fire departments, hospitals, military, public works… everything, is paid for from tax revenues that derive only from productive surplus in a profit-making economy.
The growing tragedy – growing weakness – is our habit of borrowing for current expenses from generations into the future, now to the tune of $28 Trillion. About one-third of our annual federal “budget” is borrowed, not paid from current revenues. This part of economics Joe Biden has not forgotten, even embraced: the lie of modern politics.
For a long time the U. S. borrowed real money… from banks, individuals and even other countries. The Treasury sold bonds: saving bonds, Treasury notes (“Treasuries”) of different maturities and yields. Investors used real money to “invest” in U. S. debt – one step removed from investing in future productive surplus, itself. This was bad enough; we lived beyond our means but we could afford the interest on those debts, not so much affording repayment of the loan principals.
Unfortunately we have worn out our welcome among real investors. Now we “borrow” from the Federal Reserve.
(See: http://www.prudenceleadbetter.com/2020/09/27/knife-edge-election/)
The “FED” is a private bank consortium that can legally “lend” us money they do not have – $Trillions of it. So, they lend us “air” and we pretend it’s money and pay interest on it. Oddly, the Federal Reserve is also granted power to set interest rates, which for a long time have been near 1%, God bless their charitable hearts. What will we do when they decide the rate should be 3%? On $10 Trillion? That’s $300 Billion in real money. That’s a lot of Meals on Wheels.
Wait a minute… wait a minute. Did I say, “$10 Trillion?” I meant $30 Trillion, if we fulfill Biden’s plans. Why, that would be $900 Billion… a YEAR… close to a $Trillion, itself – just interest! That’s a lot of everything, including our own defense. We literally cannot afford more multi-$Trillion spending plans; they are actually taxing plans.
Many in government believe these “air-debts” never have to be paid back! “We owe them to ourselves,” they think. Ooookaaaay… aren’t the UFO people going to usher in a new era of no worries? Oh, absolutely. And, Joe Biden is going to unite the country, end racism and borrow us into prosperity. And equity.