This is no place

Who's Gonna Pay for It?

In reading about the demonstrations last month in which homeowners demanded the federal government extract money from their fellow citizens in order to pay down or renegotiate their mortgages, I came across a list of demands of Brenda Stokely on the Marxist "Workers World" website. My interest was piqued, and decided to ask Ms Stokely, just who she was making demands of. The letter, in its entiretry, is below:

Ms Stokely,

I recently read an article on Workers World in which you were quoted as saying the following:

"We will not accept a rejection of our demands for single-payer health care; a moratorium on evictions and foreclosures; jobs with a living wage; free education from cradle to grave; an end to all wars and the immediate return of our troops; a national civic works project to rebuild our infrastructures and absolutely no bailout for the rich criminals.”

I was curious to whom you are making these demands. It would seem at first that you are making these demands of the federal government, but logically, that simply cannot be the case. The US Government is bankrupt and has no money to meet the demands you request. The US Debt has now reached 11 Trillion Dollars, with a large percentage of the taxes collected from hard working Americans going to service the interest on that debt. If current spending and deficit trends continue, before long, 100% of all taxes extracted by the US Government will go to service the debt of the US government, and all additional spending will have to be financed by borrowing or inflation. At that point, the government will have two options: repudiate its debt, or create enough dolla rs to pay down the debt, and effectively destroy the dollar completely. Repudiation of the debt would at first seem the better of options, but in truth, it is no more an option than destroying the dollar. By repudiating the debt, much of which is held by foreign investors, we would first anger the holders of our debt, but also would create a dollar crisis, as holders of our debt would seek to dump their dollar reserves. This would create a much higher supply of dollars than their would be demand for which would have nearly the same effect as inflating our way out of debt. This is not to mention the disaster that repudation of the debt would have on the retirement funds of millions of Americans which hold government bonds (debt). Many retirement funds would be virtually wiped out.

The US government is not a wealth generator. It is a dollar creator and redistributor. Every dollar that the US government pays out is either printed or extorted from hard working Americans through the income tax.

Since it is obvious that you cannot be making demands for single payer health care and free education from the Federal Government, my question is who you are making these demands of. Free education from the US Government is impossible. As I mentioned above, since the US government is not a wealth generator, any education spending by the US Government has to be financed by the American citizens. Education isn't free if all tax paying Americans are paying for it. This is a simple contradiction in terms. If you are talking only about free education for citizens who don't pay taxes, well I suppose that education would be free to those individuals, but it would hardly be free to the individuals whose hard earned payrolls are taken by force, that is: threat of jail for failure to file and pay taxes, in order to pay for the education of those who are not robbed by the US government.

Likewise, I don't see how the federal government could fund the civic works project you've called for. A so-called single-payer health care system is a similary dichotomy. The phrase "single payer health care" implies that the federal government would pay for the health care of all Americans. Once again, since the Federal Government does not produce anything to make a profit, it only prints money, it would not actually be the US Government paying, it would be every tax paying American paying for health care. Hardly a single payer system, rather, a millions-of-payers-system would be required.

Given the infamous inefficiency of the federal government, and the tendency of money in Washington DC to fall prey to corporate interests, the costs of such a millions-of-payers-system would soon spiral out of control. I know that some people claim thta a single payer system would increase efficiency and reduce costs, but that idea has been pretty thoroughly debunked by the American Medical Association. I highly encourage you to read their findings and proposals at VoiceForTheUninsured.org. Granted, we've already established that the US Government is bankrupt and could not fund such a system anyway, but the system would likely rapidly consume the entire GDP of the US Economy.

Finally, you also stated your group's demand for a "living wage". Obviously you are not demanding this of the federal government either, as there is no way the federal government could provide jobs to all Americans. Some Americans have to work in the private sector, and not work for government agencies. If we all worked for the government, there would be no one from whom to collect taxes (through threat of force). The government would have to print money to pay it's employees and then collect that money again to pay for all these projects that people think the US Government should pay for.

I suppose you could be demanding that the US Government enact new minimum wage laws, but my 10 year old can read the Constitution with enough understanding to see that their is no authority in that document for the federal government to tell businesses how much to pay their employees.

Never the less, a living wage is something I can get behind. Let's go back to that idea I mentioned earlier, "inflation". When the government spends more than it steals (taxes), it has to make up the difference somewhere else. A lot of this deficit is financed through borrowing, but a large portion of it is financed by creating new money. The treasury borrows money and then monetizes the debt through the federal reserve. This creates a constant stream of new money to finance government largesse. If you know the first rule of economics, as the supply of something increases relative to its demand, its value decreases. This is what has been happening to the dollar. It is called inflation. This is why the loaf of bread you could buy for a dollar in 1960 would cost you a dollar or more today. Interestingly enough, the silver that was in a dime in 1960 is still worth enough to buy a loaf of bread today. (Too bad we don't use silver for money anymore.) Money does not just lose value through magic, it loses value through government extravagance, and it is calculated and planned for by the government and its financiers.

So, this final demand could actually be met by the US government. If the government stopped spending so much money, and changed to a sound monetary policy that did not destroy our savings accounts by devaluing our dollars, we would all likely have a living wage. The only reason we need cost of living increases in our salaries is because of inflation. If we dumped the criminal Federal Reserve System (designed in a secret meeting of bankers and bureaucrats in 1912) which benefits large banking institutions, our money could retain its value, and we'd be able to save money that would be worth as much when we crack open our piggy banks as the day we dropped it in. Instead of the price of everything going up constantly because the value of the dollar is going down, prices would not only stabilize, but they would decrease. You may notice that the price of many things has decreased as they have become more common place. Look at computers. 20 years ago, a computer that would run a word processor and not much else would cost you $2000. Today, I can buy a computer with a much better word processor that will play movies, life like games, connect me to billions of people around the globe through the internet, and perform a mulitude of other functions. That computer today I can buy for $400 or less. This is the beauty of an economy in which producers are allowed to compete freely with each other. Products get better and cheaper. If we had a sound money system not only would our money retain its value, but we would actually be able to buy more with it. Imagine how much that $400 dollar computer would cost if our dollars were as valuable today as they were in 1988!

On ending wars, I'm right there with you, and this is certainly something the federal government could do. Well, at least it could end the wars that we start and engage in, and bring all of our troops home. I'd go so far as to suggest we listen to Thomas Jefferson and dissolve the Department of Defense, and have no standing army, but rather a Navy to protect our coasts, and state run militias for defense, and Congress only use its power to raise armies for two years when they are needed, ie: if and when we are attacked.

So, this was a long walk for a short drink, but I wanted to explain why I was confused about your demands. Anyway, my question is this, outside of a living wage (which we can get through fiscal responsibility and sound money), and bringing our military home and cease engagement in immoral wars, I simply would like to know of whom you are making your demands. It sounds like you have some ideas that would make life easier for people, if only we can figure out who is going to pay for them.

Sincerely,
Canute