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The Basics of Modern Money - YouTube
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excellent schools support for our
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veterans medical research upgrade an
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infrastructure imagine if we could
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afford all these things well we actually
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can but somewhere along the way we
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forgot the true power of our currency we
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invented the US dollar so we could
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unleash the full potential of our nation
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of our people of our land and of our
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economy to achieve our greatest
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aspirations you see the United States is
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a currency issuer currency issuers are
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completely different than currency users
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this distinction is a really big deal
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cities businesses and households like
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yours and mine are all currency users
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our federal government is not currency
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issuers are unique they should not
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behave like currency users if you can
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grasp that you're already further along
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than most of our politicians currency is
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their government's money only the US
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government can create our nation's
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currency many countries work this way
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but not those like Greece which gave up
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their national currency not all money is
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created by the government banks credit
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card companies and other institutions
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also create money each time they issue
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credit or loan we call bank money credit
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to distinguish it from currency most of
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the money in our economy is bank credit
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the credit is not the same as currency
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currency plays a unique and important
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role in our economy as a nation we dream
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big about how to make life better for
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our citizens and communities unlike you
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and I who have to earn or borrow money
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to spend it we gave our government the
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exclusive power to issue the national
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currency every time our government
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spends it creates currency usually just
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by adding numbers to bank accounts on a
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computer and when it taxes it removes
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some of its currency by subtracting
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those numbers it's a bit like keeping
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score adding and subtracting currency to
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various accounts is like adding and
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deleting points in a computer game so
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our government can't run out of its
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currency any more than a computer can
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run out of numbers to add and it never
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needs to get points before it can add
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more now you may be wondering if the
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government can just issue currency with
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computer why would anyone accept that
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his payment for anything why would it
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have any value at all well this is where
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we discover why we have taxes federal
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taxes can only be paid with the
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government's currency in order to pay
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out taxes and stay in Uncle Sam's good
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graces we have to first get its currency
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by requiring that we return that
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currency to pay out taxes the government
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creates continual demand for the
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currency it alone issues now because
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some people including many of our
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politicians don't understand the
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difference between currency issuers in
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currency users they think Uncle Sam
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needs our tax money to pay for spending
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but it's actually the other way around
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the government spending gives us the
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currency we need to pay our taxes so
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those taxes simply removed from the
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economy some of the currency which was
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already issued by the federal government
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this helps our economy stay in a healthy
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balance one of the biggest
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responsibilities of the currency issuer
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is to make sure it isn't causing
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unemployment or inflation by taxing or
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spending too much or too little the
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really powerful part about all this is
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that not only concurrency issuers like
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the u.s. never go broke but they can
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also always afford whatever they're
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authorized to do but if the government
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doesn't need money from external sources
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to fund that spending what's with all
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this fear about the national debt though
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we owed China kajillion dollars or
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something are we worried they'll stop
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buying out government bonds well not
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really think about it how can we borrow
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US dollars from China when all US
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dollars are made in the USA you see
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China gets their US currency through
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trade they send us stuff and we pay them
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with currency which they along with many
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other countries like to save we like to
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save currency to US government bonds are
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actually just big savings accounts a
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really safe way to hold currency that's
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already been spent into existence so
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that big scary sounding number that's
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commonly called the national debt is
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actually just a record of all the
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savings of US dollars since our country
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began
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all the currency that's been spent into
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the economy and not yet text back
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that's nothing to fear you probably
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notice that our government is almost
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always adding more currency into our
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economy that it takes out in Texas we
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call this a government deficit but it's
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actually a completely normal and
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necessary response to people saving its
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currency you see how capitalist economy
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is dependent on sales growth money
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that's being stashed away or spent
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overseas isn't being spent on the goods
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we produce here at home when US sales
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fall our employers have less income and
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they're eventually forced to cut
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production and jobs as the sole issuer
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of that currency the government plays a
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vital role in helping our economy keep
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growing we decide what we want our
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government paying for and that sets the
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amount of currency of creates via
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spending the government should then
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adjust the amount it removes via
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taxation to just enough so our economy
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stays at full employment and avoids
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inflation in other words Congress is
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supposed to manage the currency to
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balance the economy freeing our
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government from senseless limitations
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like debt ceilings and balancing the
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budget enables it to use its sovereign
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currency powers to accomplish the real
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and serious tasks for which it was
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formed in the first place
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tasks like putting available resources
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to work on our infrastructure investing
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in the health and education of our
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people
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ensuring us safety and well-being ending
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unemployment and keeping our economy
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growing taking care of our retired how
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sick how hungry are poor our huddled
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masses sound familiar
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as we rediscover the power of our
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sovereign currency let's hold our
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government accountable to use it wisely
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for our nation's prosperity and for the
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well-being of all its citizens
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you
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