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Compound Interest Is Devouring the Federal Budget
Albert Einstein is often quoted as saying that compound interest is “the most powerful force in the universe.” The quote is probably apocryphal, but it reflects a mathematical truth. Interest on earlier interest grows exponentially, outrunning the linear growth of revenue and eventually consuming everything. That is where the United States now stands. The government […]
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Why Does the Government Borrow When It Can Print?
In the first seven months of Fiscal Year (FY) 2024, net interest (payments minus income) on the federal debt reached $514 billion, exceeding spending on both national defense ($498 billion) and Medicare ($465 billion). The interest tab also exceeded all the money spent on veterans, education, and transportation combined. Spending on interest is now the second […]
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Three Presidents Who Made Thanksgiving a National Holiday And What They Were Thankful For
Three U.S. presidents were instrumental in establishing Thanksgiving as a regular national event. On October 3, 1789, George Washington declared the first federal Thanksgiving holiday. In 1863, Abraham Lincoln made it an annual federal holiday. And in 1941, Franklin Roosevelt signed a bill setting the date at the fourth Thursday of every November. All three presidents […]
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The Contradictions of Ronald Reagan’s America
As the memory of President Ronald Reagan’s administration recedes, estimation of his deeds grows, and for good reason. A cursory look at his end-of-office stats impresses the casual observer — 67% increase in GDP, from $3 trillion in 1981 to $5 trillion in 1988, net job addition of about 18 million, reduction in the unemployment […]
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Government Debt is Not the Problem
Polarization of the American public reflects the polarization of its political Parties, both of whom strive for ascendancy by demeaning, contradicting, and formulating proposals to wrong the other; each Party wrongs itself and the American public. The recent and periodic arguments concerning the proposed federal budget, an entrance for initiating threats to “close the government,” […]
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Beware of Economic Textbooks
Protests by British university economic students against neo-classical economics highlight the notion that economic education is dominated by theories that defy practical applications and applications that cannot predict, prevent, and ameliorate periodic crises. Students learn economics from unverified and outdated theories, many contradicting one another, which leads to a confused understanding of the discipline and […]
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The True Meaning of Debt
In debating the validity of raising the debt limit, the United States Congress has not carefully analyzed the reasons for government debt and the meaning of all debt. The true meaning of debt has the modern capitalist system as a debt-driven system. All new money supply is debt and the money supply is the energy […]
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