Letter writer misunderstands the economy

The economy stands on people spending money, not businesses paying taxes.

Ted Devol, as most Republicans, has a fundamental misunderstanding of money, government and the economy. This is why the last three Republican administrations have blown-up the national deficit while Democratic administrations have decreased the deficit.

The Constitution states in Article 1, Section 8 that the Government (Congress) has the power to coin money and to regulate the value of this money. No State in the Union can create money, only the federal government. This ability to create money has been delegated to the U.S. Treasury which actually prints money or just creates it electronically. This money is then distributed and managed by the Central Bank/Federal Reserve.

Money isn’t “created” by private business or individuals. When a business makes a profit or an individual receives money for labor, a portion of that money is required to be returned (taxes) to the government that created the money. This is done to maintain economic stability and economic growth. This is how all modern economies operate. If this system were to fail or cease operating, our lives would be similar to those living in the Middle Ages.

So, when you hear Republicans spouting how terrible government is, remember, the U.S government creates your money. Just like the sun, without it nothing grows.

Chris Quiles


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