Over My Shoulder A Backward Glance
In June of 1965, the U.S. Senate debated raising the national debt ceiling. The Vietnam War and Medicare drove it to $319,907,087,795.48 — 319 billion dollars.
The national debt at the time of this post is greater than $28 trillion, 87 times the national debt in 1966.
If he were living today, Sen. Dirksen (R-Illinois) would be questioning the sanity of the entire congressional legislative body.
Modern Monetary Theory (MMT)
Back in the 1980s when I opened my business, a vendor, a fellow small business owner, invited me to lunch. Before leaving his office he looked inside his checkbook. Turning to me, he said, “I must have money because I still have checks.” (Yes, he said this in jest.)
MMT (Modern Monetary Theory) posits the federal government can pay its debts by simply printing more money. This monetary theory is the choice of the democratic socialists who want to lavishly fund social programs like ‘Medicare for all’ and the ‘Green New Deal’.
FDR’s New Deal printed the money, hired unemployed Americans, and we survive today. Economic thinkers whom I respect believe FDR’s monetary theory actually extended the Great Depression by several years.
“We are spending more than we have ever spent before and it does not work. . . . I say after eight years of this Administration we have just as much unemployment as when we started. . . . And an enormous debt to boot!”
Henry Morgenthau, Roosevelt’s treasury secretary, May 6, 1939
The Thing About Deferred Payment Of Loans
What is the value of a one-dollar ‘greenback’? The U.S. dollar is not based on precious metals like gold and silver. Its value is based on the repayment of loans. The Federal Reserve system is based on fractional banking.
At the time of my first automobile, a 1947 Ford Super Deluxe coup, regular gasoline sold for 25₵/gallon — 1/4th of a dollar. 58 years later, gasoline at the Costco pumps is $2.33/gallon.
The value of gasoline has not gone down; the value of the US dollar has declined due to inflation. My mom could fill a grocery cart for $5. Yesterday, my wife only partially filled a grocery cart for $60.
Inflation affects different groups of people differently. The people at the front who get goods, services and investments early in the cycle do well; those at the tail get higher prices and lower value for goods, services and investments.
Boosting the federally-mandated minimum wage puts minimum-wage employees on top until the employers reduce the workforce to control operating costs. The entry-level worker is the ultimate loser.
“It is utterly embarrassing that ‘pay people enough to live’ is a stance that’s even up for debate,” Rep. Alexandria Ocasio-Cortez recently tweeted. “Override the parliamentarian and raise the wage. [McDonald’s] workers in Denmark are paid $22/hr + 6 wks paid vacation. $15/hr is a deep compromise—a big one, considering the phase in.”
The most obvious problem with the New York Democrat’s contention is that Denmark, like other Scandinavian nations, doesn’t have a statutory minimum wage.
Industries and workers engage in sector-by-sector salary negotiations, which might well undermine intra-industry competition, but which is a much better idea than the flat national-wage floor being peddled by Democrats.
Ocasio-Cortez’s Terrible Minimum Wage Argument | The Daily Signal, 5 Mar 2021
Disclaimer
I am neither a prophet nor the son of a prophet. Neither am I a trained economist. However, my command of the English language serves me well to understand the difference between theoretical and empirical economics.
Summary
My wife and I elected to live a debt-free life several years ago. We discovered we can buy more with cash than with credit. This is to say, we can buy and keep more with cash than with credit. Do we use credit cards? Yes, and we pay them off each month.
My parents lived through the great depression. Looking ahead, I think I see a repeat of history as the democratic socialists — a new label for communism — who have taken control of the Democratic Party, the majority party in both houses of Congress and the White House, pursue a socialist agenda fueled by unbridled, irrational spending. (You do know how $1 trillion of the $1.9 trillion in the COVID relief bill funds pork-barrel projects. Right?)
Elections have consequences.
My God have mercy on the United States of America.
John White
Rockwall, Texas
John N. White 