But should be. Must be. In this blog we’ll address some of the most essential, absolutely foundational questions that are never, ever, asked, but are essential for even contemplating, much less implementing, the organizing principles by which we will live. Questions like:
Why Does Government Need to be Funded?
Indeed. The implications of this question are nothing less than staggering. If this question were to be effectively addressed, some of our most foundational assumptions could be radically altered.
Staggering as in, for example, delivering simultaneously to the (intellectually honest) devotees of free-market “capitalism” and redistributionist socialism the heart-felt ends for which they yearn. Chapter 3 of the little book that informs this little blog has the title: The Great Antinomy. The obscure, but uniquely relevant and useful term “antinomy” is clearly explained and defined. It describes the natural tension between the essential concepts of liberty and justice. In this instance, specifically distributive justice. The whole point of this little book is just what to do about this presently insoluble dilemma.
Staggering like virtually eliminating federal income taxes. Taxation would still need to exist, but for the single specialized purpose of controlling the overall total money supply. For this single specialized purpose, taxation could occur only at the most rarefied heights, quite possibly in the form of estate taxes, rather than income taxes. But, most importantly of all, simply doing away with the foundational assumption that government at the national level needs to be funded will allow us to monetize the economy from the bottom up, in the form of equity, rather than from the top down, in the form of debt. Hence, the solution to the presently insoluble dilemma of distributive justice.
This could, WOULD mean the federal government could, WOULD provide additional income to every person below a certain threshold of income, those who most directly do the actual work that makes our economy actually function. These would be in the form of stipend payments in an amount that would increase with every day of productive participation in that market economy, gradually evolving into a retirement income, all the while serving as potential unemployment insurance and vacation pay. These payments would also, crucially, provide a secure position for every person, irrespective of their level of ambition.
There would be a secure place for everyone, of every level of ambition and ability, while simultaneously a positive work ethic would be strongly reinforced. Active participation in the market economy would bring powerful rewards, while strongly addressing the socialist issue of distributive justice, accomplishing this in the market economy of a privately held market-place, not a command economy with top-down control and government ownership of the means of production. The concluding chapter of the little book that informs this little blog, Chapter 8: Implementation: Perfect Money Applied, deals with this matter in considerable, specific detail, how it would be handled in the macro sense of government budgeting, and what it could mean in actual dollars to individuals.
There is an apparent reason to fund government, and if that reason were correct it would indeed be compelling. But in America today it is not correct and relevant. The apparent reason to fund government is to assure the value of the currency. In a modern, vibrant, wealth-producing economy, the quintessence of which is the U.S economy, this reason is obviated. That reason is obviated (rendered unnecessary) because the concepts of money and wealth are two different things. And this statement, not incidentally, leads us naturally to another ultra-basic question, which, also, no one anywhere ever asks:
What is money?
When this second question is answered precisely, which is done in Chapter 2: Money at the Level of Being, it can be seen the answer to the first question is:
In America today, it doesn’t.
In America today there is no need to fund government at the national level. Funding that government from the private sector in some kind of attempt to balance, or even somewhat control a national budget, has no essential function in securing the value of our currency.
It is the real and proper answer to the question: what is money? that makes this new financial dynamic possible. Hint: it (money) is not currency. Anyone can make currency, but currency must have value, and the value of currency cannot be declared–it must be earned.
The value of currency can be secured in one way only: the production of wealth. In America today, our federal government does not need to be funded. Government funding has no function toward ensuring the value of our currency; that value is provided by the wealth that underlies that currency.
Command economies could work, at least somewhat, if the value of currency could just be declared. But it can’t. That value has to be earned. Unless, that is, a currency is backed by specie, but even this is no solution in our modern world. It just won’t do with a modern market economy because the quantity of specie is limited, while the creation of wealth is potentially infinite. A crisis of liquidity would be the inevitable and immediate result.
Tying an economy to specie for the value of its currency is severely limiting, and, in fact, retains elements of barter–when one trade good was exchanged for another trade good. Dynamic economies quickly outgrow any system of barter; ours in America outgrew it long ago.
When the question “what is money?” is thought about in depth, it can be seen that the function of money relies upon value, which is a function of wealth creation. And when this is thought about even just a bit, it can be seen there are two basic kinds of wealth:
- That which is present by virtue of creation, that is, natural resources of all kinds, which include the very most basic things we tend to utterly take for granted, like gravity, and electrostatics, which largely power our civilization, in addition to the more obvious natural wealth like minerals, fossil fuels, etc., and . . .
- That which is generated anew by the forces of human creativity, which rely almost entirely on freedom of action, which is to say, liberty, which allows for, crucially, positive incentives.
As big as this topic is it can be described in considerable detail in a quite small book. That is the project of the 150 (or so) page book with the (approximate) title of this blog: Why Does Government Need to be Funded?