If we eliminate taxes, how will the government pay its bills
--Phil

The government pays all its bills the same way: By creating money. Recently, Congress passed a bill authorizing $124 billion to pay for the Iraqi war. No taxes were authorized.
Where will the $124 billion come from? The government will create it.
--Rodger Malcolm Mitchell

When the government turns on the presses and prints money, this causes inflation. Remember pre-war Germany.
--Axelrod

This is widely believed, but in fact, federal deficits historically have not been associated with inflation.
Money loses value (inflation) when there is too little demand for it. Demand is related to interest rates. That's why the Fed raises rates to combat inflation.
Germany had hyperinflation, which caused the government to print money, not the other way around. Germany could have prevented inflation by raising interest rates and making its money more valuable.
--Rodger Malcolm Mitchell

Nothing is free. There is a cost for everything. The more money that is created the less it is worth which weakens our international position. What you are teaching is irresponsible.

To the 6/16 author of "Nothing is free." Your comment to the effect that creating money weakens our international position, is non-specific. Today, federal debt is an astounding 800% of what it was in 1980. How much weaker is our "international position" (whatever that is), than it was then?
Today, the value of money is determined primarily by risk and reward, i.e. by interest rates. Raising interest rates always increases the value of money.
Your intuition (I can't say "facts," because you present none), is stated and disproved at http://rodgermitchell.com/extras.html. Check it out.
Do you have any historical facts to show that creating money weakens our economy or our "international position"?
--Rodger Malcolm Mitchell

Correlation doesn't necessarily imply causation. You must realize the Federal Reserve Bank is actively controlling monetary supply to ensure a balance between economic growth and inflation. That is the reason for the correlation you see in the historical data. Growth in the supply of money is necessary for economic expansion, but it need not be spent on government "investments" such as the infamous "bridge to nowhere."

The Fed controls monetary supply by creating money, i.e. creating debt. It has only limited power to do this. Congress and the president have the real power, through taxing and spending policies.
What is the "balance between economic growth and inflation"? What does it mean?
What would you do if economic growth were faster or slower than inflation?
One example: Say growth is 1% and inflation is 10%. Would you add or subtract money?
Sadly, the Fed, and all those concerned about debt, have no solution to what is called "stagflation."
--Rodger Malcolm Mitchell
<mailto:rmmadvertising@yahoo.com>

By the way, the infamous "bridge to nowhere" is an example of so-called federal "waste," which is an economic benefit. It adds money to the economy.
The first use of money is not the final use. The people building such a bridge would earn money, which they would spend on food, clothing and nonsense. Then the retailers selling the food, clothing and nonsense, would pay money to the wholesalers, who would pay the manufacturers, and all would pay salaries.
Some of that "waste" might even wind up in your pocket.
This money erroneously is called "taxpayer" money. There is no taxpayer money. If it were taxpayer money, there would be no deficit.
The government creates all the money it needs.
--Rodger Malcolm Mitchell
<mailto:rmmadvertising@yahoo.com>

No problem! Unfortunately, the solution may be just to gave all baby boomers half of their social security benefits, and ALL retiree of the federal government half as well. I read that this may be proposed in the not to distant future? I'm not overly concerned about future generations, I'm more concerned about the present generation - if it is not already to late to get this under control. Whats this, a separate tax just to fund the war?

The solution is to increase Social Security benefits, increase Medicare and eliminate FICA. The government does not need your tax money. The government continues to create all the money it needs -- without inflation.
--Rodger Malcolm Mitchell
<mailto:phyllisrgarber@yahoo.com>

I think that he and many Americans are whistling in the dark.It will come down us when we either can;t pay the interest on the national debt or it will take so much to pay it that it will result in renegeing on entitelments.Which could cause a revolution.

--Skezx

The federal government never will be unable to pay its debts. Even during the darkest days of the great depression, no federal check ever bounced.
During the Reagan administration, the federal debt grew six-fold. What happened? The start of the longest period of economic growth in American history.
How was this possible? The federal government has the unlimited ability to produce money. That's what it did -- and without inflation.
It is absolutely, positively impossible for the U.S. government ever to be unable to pay its debts.
I welcome any evidence to the contrary.

--Rodger Malcolm Mitchell

true federal taxes are emept. It does nothing to pay down the deficiet. FHLBB is privately owned. Contrary to U.S. Constitution. "Green Backs". Gold backed dollars has been a continual sqeeze. FDR recalled the Gold ...Woodrow wilson signed legislation 1913 for the Federal Reserve. Regan used the housing market to suck equity and put paper money in the pipeline. Cheap Labor in foreign countries drew out manufacturing jobs. GAINT sucking sound 1992. Property taxes (an extention of income taxes) rose. There is no dirtier business than a business who makes money. With large imports with no tarriffs provides an open door to even less production. The solution is waiting by those to created the problem. NAFTA It wont work...they can't even manage the small economy of the US. My prediction. One world economy, One world power. Much to the demise of the 80 billion people they Govern. Local economies will be left to fend for their selves. Services will be cut. Our Leaders for the past 60 years are the problem. NAFTA SSP To that they said we couldnt be insolationist. While CHina and India are raking in the doe. Interesting how we go to them now with hat in hand, much like the FEDS did during the days of the MAFIA. Isnt that how the PLO started in the 70s? Ordinary street thugs working their way through the legal system to later become policitial forces. Maciavillian Politics. Next prediction...ordinary citizens will be as trained dogs. Told when and where. Its happening now. Money and Power has created the above the law elite. Secret societies have perpetuated it. History repeats itself. Eras pass and no one remembers. How about the Spainards and the Meyans? Corrupt the top the rest will follow. Oh I guess the general population doesnt have the intellenct to govern themselves, the Old Testiment shows that. So where are we the "power" that fuels the machine. The everyday worker that drives the economy and politics. We are useful idiots. And I do mean idiots. I for one am not going to run for the local dog catcher with hopes of being the Vice President. No and most people wont. The good guys are very much like the bad guys. Most people would prefer to stay out of the cross hairs....but that brings me back to the trained dog. Its a hopeless cycle. You wont see me in the VFW or the American Legion forming golf tournaments. No You wont even see me in the local NIMBY protests. No not even the local bar and grill. Nope...just like most folks get up go to work eat my ration of shit and pay my taxes. Like someone told me years ago...Life is a shit sandwich. The more bread you have, the less shit you have to eat. My Prediction...grab a fiddle and watch the city burn
--Lowell L Morse
<mailto:alum4226@mypacks.net>

Next predition. Dont be suprised if Yen Ling sends a notice that you will be paying Yen Ling LLC your next mortgage. Yup all those years of paying interest and upkeep. After all who do you think is buying the U.S. Fannie Mae...yup and your FREDDIE Mac. I will take investments for three trillion Alex....."and thats the way it is" in the words of the most trusted man in America the late and bought and paid for Walter Crock kite.
--Lowell L Morse
<mailto:dared9922@mypacks.net>

kenezin economics + grauduated income tax = killing the american growth (personal wealth) and economics. Keep em in debt...yum
--Lowell L Morse
<mailto:samba4656@mypack.net>

One of the Neo-Con objectives was to eliminate government social programs by bankrupting the federal treasury. Back then I didn't think think was a real goal or was doable. GW Bush is showing us that is indeed a serious goal of the ultra-right and how to do it. If Fannie Mae and Freddie Mac are put on the budget as the administration is proposing it will increase the national debt by about $5.2T going from $9.8T to a nice round $15T!!

When Bush took office the debt was at about $5.8T so he will have increased it by a factor of about 2.6. That's compared to Bill "Big Spending Democrat" Clinton who increased the debt from $4.25T to $5.8T, a factor of 1.35. Reagan, contrary to his image, tripled the debt from about $1T to $3T.
--Concerned Baby Boomer

You seem to working on the assumption that money is wealth. It is not. To create wealth you need real resources, like machinery, structures, labor. Money creates nothing, it only facilitates trade. The only 'real' thing thing you can do with money is burn it.

Printing money does not create resources or wealth or anything else than increase prices if you create more that transactions in the economy increases.

There are plenty of self-taught 'gurus' who claim the world can be saved by printing money. They are all wrong. Printing money will not create crops. It does not make factories.
--Get A. Grip