Balanced Federal Budget, Federal Deficit Solution Federal Deficit Problem Balanced Federal Budget Federal Government Budget
The measure of an economy is money. A large economy needs a larger supply of money than does a small economy. Therefore, a growing economy needs a growing supply of money. All money is a form of debt. Therefore, a growing economy requires a growing supply of debt.
The Solution to
Federal Debt and Taxes

Please click the cover to see excerpts from FREE MONEY.
Questions? Ask the author, Rodger Malcolm Mitchell at:

            FREE MONEY demonstrates why the federal government has the unlimited ability to produce money by borrowing. Does the federal government also have the unlimited ability to produce money without borrowing? How can America cut the federal debt and federal deficit to $0 while we eliminate federal taxes and pay for Social Security, universal medical care, the infrastructure, the military, education, research and law enforcement? Is this possible?
The Solution to Federal Taxes
            FREE MONEY contains a full description and rationale, but for brevity purposes, please visualize this: The federal government will create a checking account called "Money Created.” In the same way Congress arbitrarily now creates the debt ceiling, Congress arbitrarily will determine the credit balance of the Money Created account.
            Each time the federal government wishes to spend money on goods and services, it will issue a paper or electronic check from this account. The recipient of the check will deposit it in a bank, and the bank will be credited for the amount of the check – exactly as happens now.
           With each check issued, the amount of money in the economy grows, and the economy prospers. All of this is accomplished without federal borrowing.
           Why eliminate federal borrowing? Because federal borrowing gives the false impression our government and taxpayers are “in debt.” Those frightening words, as misleading as they are, have caused endless mischief. When we end federal borrowing, the whole concept of federal debt, potential bankruptcy, grandchildren paying the debt and fiscal imprudence disappears. The government can take positive steps to grow our economy and to improve our society.
           But isn’t federal debt a tool against inflation? The Fed raises interest rates to cure or prevent inflation, and these rates are reflected in what federal securities pay.
           The Fed adjusts interest rates paid by banks, and these rates are reflected in all debt, personal corporate and state and local governmental. Even without federal debt, there is plenty of debt for the Fed to manipulate in its fight against inflation and deflation.
           Because federal debt is unnecessary and harmful, the creation, sale, purchase and servicing of federal debt is a waste of economic resources. The thousands of people occupied with this useless activity could benefit the economy in more productive pursuits.
The Recommendation:
           In summary, I recommend this three-step formula for prosperity:
1) Eliminate federal taxes. Sending money to the government is “sending coals to Newcastle.” The government is a producer of money -- a producer that has no limits. When you send your tax money to the government, the government simply uses it to pay down debt. Since federal debt is money, paying down debt destroys money in the economy. In short, taxes destroy money.
           Further, the entire federal tax system is a monumental waste of resources. The millions of hours and billions of dollars spent in compliance could be better spent in productive pursuits. Visualize millions of people shoveling dirt into a hole, while millions more shovel it out. That is our tax system.
            The first taxes that should disappear: All Social Security and Medicare taxes. This will be politically popular, as these regressive taxes directly impact businesses and low-to-middle income people. The politician who ends FICA will be a hero.
           The federal government can and will create the money to support retirement and health care.

2) Eliminate federal borrowing. As a producer of money, a sovereign government never needs to borrow money. This is an inefficient, actually harmful, exercise that provides no economic benefit. Federal borrowing provides the semantic impression the government is “in debt,” a concept people find repugnant.
           No borrowing; no debt; no wrong-headed hand-wringing about how we citizens owe the debt.

3) Establish a national, money-supply goal. Include in it all the things currently called “debt.” Congress will create a checking account called “Money Created.” It will add money to this account whenever needed. It will write checks and make transfers from the Money Created account to pay for all goods and services.
           That will be the system for federal money creation in our economy. Congress will determine how much money should be added to the Money Created account, thus giving Congress control over money creation. The Fed will continue to control interest rates and inflation.
           Congress will spend what it deems necessary on retirement, health care, the military, the infrastructure, education, crime prevention and other national needs.
           We will have freed ourselves from the tyranny of semantics and the irrational fear of federal debt. We will prosper as no nation has before us.

              Please click the cover to see excerpts from FREE MONEY.
Questions? Ask the author, Rodger Malcolm Mitchell at:

For more information and discussion, please follow these links: Pseudoeconomics   | Solution to Inflation    | Economic Solutions    | Recession    | Federal Debt of the U.S.    | Federal Budget Deficit    | Stagflation | National Debt Letters | Federal Deficit Solution | Balanced Federal Budget | Federal Deficit Problem | Federal Government Budget | US National Debt | National Debt Solution | A Child In Arms | Glossary of Economic Terms Debt, Money, Deficit, Spend, Owe | US National Debt Clock | Inflation and Stagflation | Fair Taxes | Money supply and the weather | The solution to Federal Taxes | The Relationship Between Gold and Money | Social Security Reform | Does Federal Debt Cause Inflation? | The 5 Myths That Damage Our Economy | 10 Reasons to Eliminate FICA | Rodger M. Mitchell -- Ideas |