Debt Ceiling Scam

By William McNaughton, 3 January 1996

> Quoting Eskinews!shadow.net!odin to All
> It's a scam, but please, progressives, don't swallow this
> nonsense about the government spending too much and
> borrowing too much, without pointing out that it's the
> priorities that are wrong, not the spending.

Finally! I've been waiting for someone to point out this scam that is being pulled on both Americans and Canadians. We are being told that our big problem is the continuing government deficit, producing a steadily rising debt. This only makes sense to those who don't understand how our economy works:

There is a basic economic equation that must be in balance for any economy to be healthy. On one side is the value of the goods produced (valued at their selling price to the consumer), and on the other side is the cost of the goods produced (as paid to the workers who do the productive work).

In a capitalist society, these amounts are unequal by an amount equal to the profits the capitalist owners receive which is not spent on purchasing produced goods. In monetary terms, the money paid to the workers to produce the goods is insufficient for those workers to buy all of the goods produced.

For the economy to be healthy, there must be an additional source of money to allow the goods to be purchased.

So far in capitalist societies only two solutions to this problem have had even short-term success. One of these (the poorer in my estimation) has been to have a war in which large masses of goods are destroyed before they can be purchased.

The second (and better) solution is for the government to provide the extra money, and in the capitalist economies this has been done by the government running a deficit each year of an amount comparable to the value of profits removed from the economy by the capitalist owners.

The only problem with this is that they pretend that this money is a debt (to the banking system to which the government licensed the right to create money) and as a debt it obviously can never be repaid.

When is a government going to apply the simple and obvious solution -- use their right to create money themselves to cover the amount of the required deficit?

... Lack of money is the root of all evil.
G.B.Shaw