The Monumental Global Economic Fraud Called Government Budget Deficit and National Debt (Part II)

We the people of the United States, you and I, are destroying the American Economy and Ourselves, through sheer ignorance. We point fingers at Congress, the White House, Wall Street, Lobbyists, China and everyone else except ourselves. There is a proverb that states the following: “When you point your index finger at someone, the other four fingers point at you”. The other four fingers are now pointing at us, you and I, for our ignorance of the Government Budget Deficit.

Almost every American has been shouting and telling the White House, the Congress and anyone who would listen, that the Government is too big and profligate. That it is spending too much and will go bankrupt. We want the Federal Government to spend much less, but how much less, we do not know. We want the Federal Budget reduced, but by how much, we do not know. Some of us even want the Federal Budget balanced.

The following recent excerpt from MSNBC simply attests to these facts:

“America is looking for a populist. According to the poll, a whopping 76% agree with the statement that the current economic structure of the country is out of balance and favors a small proportion of the rich over the rest of the country. However, another 53% of respondents agree with the statement that the national debt must be cut significantly by reducing spending and the size of government. By the way, nearly 40% of all those surveyed agree with BOTH statements about the unfairness of the economic system and the size of government issue.”

http://firstread.msnbc.msn.com/_news/2011/11/08/8698369-first-thoughts-four-storylines-you-shouldnt-miss

We have also developed a habit of comparing the family budget to the Government budget, and emphatically state that if families can balance their accounts, the Government can do the same. In other words, the Government must rein in spending so that the economy will grow, and more people employed. What a warped thinking. How can the Government reduce spending and we expect the economy to grow and hire more people? How can the Government reduce spending and we expect to rebuild our broken and dilapidated bridges, roads, sewer systems, educational systems and even our varnishing manufacturing businesses? How? State Governments are already cutting spending to balance their budgets, as mandated by law, and we are seeing the massive layoffs of police, fire fighters, teachers and other civil servants, and the devastating effect on our schools, neighborhoods and industries.

We the American public have convinced ourselves, the White House and Congress, and especially the Republican Congress, that our priority is to reduce the Government Budget Deficit or even balance the Budget and National Debt. And this is exactly what the White House and Congress are doing — reducing the Budget Deficit to meet our demands, as sovereign citizens of the United States. We gave authority to the White House and Congress to do as we wish, and they are doing just that. Helping us destroy the American Economy and hence, our future and the future of Americans unborn because of mere numbers called government budget deficit and national debt. Phantoms!

For thousands of years it was Phlebotomy or Bloodletting, the cure-all for all types of sicknesses and diseases. Human blood was drained for even mere headache, and as a result, hundreds of millions of human beings died from this stupid idea, including the first President of the United States, George Washington.

For the past several hundred years till date, another monumentally stupid idea is destroying the economy of every Nation on Earth including that of the United States. Europe lead by Germany and France is asphyxiating itself through senseless and stupid austerity measures because of the so-called Government Budget Deficit and National Debt —- two fallaciously monumental frauds that are extremely deadly.

There is nothing like National Budget Deficit and there is no National Debt originating from the cumulative annual Budget Deficits over the years. It is time we humans, especially Americans wake up from our ignorance of these two extremely dangerous fallacies or we will destroy the whole global economy.

Yes, there is a gap between what the Government decides to collect in the form of Tax Receipts and what it decides to spend, Expenditure. When Expenditure is greater than Tax Receipts, we claim to have a Government Budget Deficit. The irony of this folly is this. The Government (the Congress in the case of the US) decides the tax rates of every American Citizen and Business. Thus, it controls how much Tax Receipts it wants. The Government or more precisely the US Congress also controls how much it intends to spend. As such, the US Congress can create a Government Budget Surplus or Deficit at its discretion or even whim.

Now, the Government is not the Nation. The Government is a component of the Nation.

A Nation includes Government, Households and Businesses. Just as a Government has a Budget, Households and Businesses also have Budgets.

Thus, we can make the following mathematical representations:

Nation = Households + Businesses + Government

Nation’s Budget = Households’ Budgets + Businesses’ Budgets + Government Budget

Nation’s Budget Deficit = Households’ Budget Deficits + Businesses’ Budget Deficits + Government Budget Deficit

Subsequently, the Government Budget is not the Nation’s Budget, and the Government Budget Deficit is not the Nation’s Budget Deficit. This also means, the Government Debt is not the Nation’s Debt.

How then did we humans come to equate the Government Budget Deficit as the Nation’s Budget Deficit. Why are we using the Government Budget Deficit as the gauge for the economic health of a Nation? Who invented such a monumental fraud called Government Budget Deficit as an indicator of the economic well-being of a Nation? Why are we not using the Household Budget Deficit or Business Budget Deficit as the gauge for the Economic Health of the Nation? Why only the Government Budget Deficit? The Budget Deficit Hawks have no answers to these questions.

As described above, if the Government is not the Nation, then the Government Debt is also not the Nation’s Debt. Plain and simple. We must stop our fatally useless attempts of balancing the phony Government Budget Deficit and illusory National Debt or we will all self-destruct..

The only economic balancing principle that matters to every Nation is this. The money in circulation in the hands of Real Consumers must always match the Real Wealth of goods and services we have already produced, or

Money in Circulation in the hands of Consumers = Real Wealth of goods and services

When the money in circulation in the hands of Real consumers is less than the Real Wealth of goods and services we have already produced, there is a Real Nation’s Deficit. This was the wasted $6 million worth of Bananas in the case of Vanuatu Republic because there wasn’t sufficient money in circulation in the Real Vanuatu Economy. This shortfall in the Real Money Supply compared to the goods and services we have already produced, is the Real Nation’s Deficit, and this is what matters to every Nation on Earth and not the phony Government Budget Deficit, a useless number. This Real Deficit is what we Americans and every human being need to focus on.

It is time for us Americans to wake up from our confusion and ignorance, and ask the following questions to all the budget deficit hawks — the economic gurus, the television pundits, your friends, your uncle, your neighbor, your legislators and all those who believe in reducing the government budget deficit and balancing the national debt.

Who invented the Government Budget Deficit and why? How have you been hurt receiving money from the Government? ow have you been hurt by the Government reducing your taxes?
How have you been hurt by the Government spending money to repair our bridges, roads, and sewer systems, build new infrastructure, boost our education system and increase funding for research and development?
How have you or anyone you know been hurt by the Government Budget Deficit? How is the Government Budget Deficit the most serious problem in the US today?
If the Government is not the Nation, why is the Government Budget Deficit the Nation’s Budget Deficit?
Since the United States Congress sets the tax rates for all Americans and also decides how much money the Government can spend, why does the Congress not raise taxes high enough to match its expenditure? After all, Congress totally controls both component parameters of the Budget Deficit —- Revenues and Expenditures.
Finally, what exactly is money and why do we make it scarce compared to our real wealth, being wasted in the form of foreclosed homes, unsold cars, empty offices, shuttered factories and unemployed professionals like engineers and lawyers? Why do we make money more important than life, when millions of Americans are homeless in the midst of hundreds of thousands or even a few million foreclosed and empty homes?

There will only be silence or nonsensical responses that have nothing to do with the so-called Government Budget Deficit or the real economy of production and services, to meet our human needs.

Finally, the following headlines from the New York Times of December 14, 2011 is a firm warning to us all Americans to wake up from our ignorance before our dysfunctional, totally confused and clueless United States Congress lead us down a catastrophic economic cliff of no return.

“Congress takes up partisan spending battle, again

For the third time in a year, lawmakers are locked into a fight over fiscal measures”

And the following excerpt follows this headline:

“Shutting down the government. Again”.

“For the third time in a year, the divided 112th Congress is dancing on the edge of catastrophe, locked in a bitter partisan battle over fiscal measures, with unrelated policy debates clinging to the side.”

http://www.msnbc.msn.com/id/45678188/ns/politics-the_new_york_times/#.TumG0FbQvps

Not satisfied with the recent childish food fight over raising the debt limit that had nothing to do with the phony Government Budget Deficit, and which nearly brought the Nation to its knees, the US Congress is back with another stupid food fight over nothing. In the interim, unemployed, homeless, hopeless, helpless, hapless and penniless Americans are trapped in one of the worst Recessions in memory and still looking for a way out of their economic misery.

America, Wake Up! We are Destroying the American Economy and Ourselves from our ignorance of the phony Government Budget Deficit and illusory National Debt. They are mere phantoms. Ignorance is not bliss — and in this case, extremely deadly.

Bright Harry is the author of America, Wake Up!, We are Destroying the American Economy and Ourselves”, where he debunks the National Budget Deficit and National Debt as mere illusions, albeit extremely deadly ones, with facts, logic and history. His follow-up book called “The deadliest Formula in the world”, further expands on this phony Government Budget Deficit and Phantom National Debt.


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