A Deadly Ignorant Fraud of Economic Policy - The Federal Government must raise funds through taxation or borrowing in order to spend
The belief that the federal government must raise funds through taxation or borrowing in order to spend is one of the most pervasive—and damaging—myths in modern economics. This misconception has crippled governments’ ability to address critical issues like poverty, unemployment, and inequality. The truth, as revealed by Warren Mosler of Modern Monetary Theory (MMT) , is simple yet transformative: "The federal government can always make any and all payments in its own currency, no matter how large the deficit is, or how few taxes it collects." This revelation, which emerged in the early 1990s, emancipated fiscal policy from artificial constraints. It shifted power back to elected governments, freeing them from the dominance of central bankers. Unfortunately, this shift has gone largely unrecognized, even by policymakers. Why? Because central bankers, reluctant to surrender their prestige and influence, have failed to communicate this paradigm shift to the public. The resul...