The post below was originally posted in a fit of sarcasm when I simply could not understand the profligate spending of the Bush administration. It seemed like we were trying to spend our way to prosperity. So, I took it as a topic and posted to that effect. Oddly, some time later, I am beginning to wonder if any of this is plausable. Please read with a smile on your face. Joe's Economics Class 101 I have never studied economics. No macro and no micro. That is just as good, because the theory is all screwed up in the text books of America's colleges. Forget everything that you knew about money from back when the Dollar was tied to the Price of Gold. That stuff no longer applies to the American Dollar. Forget about balancing the Federal budget. That is foolishness based upon old school theory about money in circulation and the value of the dollar as opposed to a commodity such as Gold or Oil. Commodity prices should be allowed to fluctuate and their impact can be absorbed by the overall economy. In Joe's Economics Class 101, you will find that this is a Brave New World. The spending of money is not related to money in circulation. You have to separate the two. That is the first stumbling block that the American educated mind has trouble understanding. We can spend money that has not been printed. Just spend it. Issue it as increased tax returns, or just drop it into people's bank accounts via direct deposit. Nearly half of our Federal Debt is unfunded. In the past all we had to do was have the Treasury (Not Congress) print the money to be spent. In reality, the money did not need to be printed. Now, it is all handled by Electronic Fund Transfers. Your company EFT's your hard earned money to your checking account. You use your credit card to buy stuff you need and the bill is presented to your credit card company for payment. They EFT the funds to the stores account. You pay off your credit card with an EFT from your checking account. Now, was one dollar in circulation impacted? Did one dollar bill touch one person's fingertips? The answer, of course, is NO! Money in circulation does not relate to money being transferred in this country. The same thing applies to the Federal government books. Remember the government does not need to print money to spend it. Printed money in circulation does not equate in any way to money spent. I have been telling people about this for years, but none of the College educated junior economists understand. By freeing the American Dollar from any tie in with a commodity such as Gold, we have created an unlimited free money supply for Federal (but not necessarily state) needs. It does not hurt the US to spend money as long as we do not overly fund it with bonds or notes. Bonds or notes are a tie back to the old way of thinking but have now become effective instruments of foreign policy for the US. That and nothing more. The bonds or notes that we have printed are overseas to deliberately foist the dollar on foolish foreign governments (like China or Japan). We have been very successful in this effort. We have become the greatest foisters in world history. By doing so, we put the requirement to keep the dollar up in value against their currency in THEIR HANDS! Remember the balance of trade deficit. That is the reason why we sell bond and notes overseas. The idiotic overseas countries have dollars and they want to put them into something "concrete," so the foolish governments buy more highly decorated large sheet paper with their billfold sized green paper. Boy are they dumb! The logical alternative is for them to buy into the business of America and support our industrial might. We are still the leading industrial country in the world, greater than the other three industrial countries combined. I keep on pointing this out and college educated economists consistently ignore it. When the dollar starts to slip against the Japanese Yen, THE Japanese Central Bank comes in and props up the dollar. It is in their interests to support the dollar, or it hurts their economy. It is an Amazing system that we have here. School trained economists don't understand it, but I do. IF they don't prop up the dollar as opposed to the Yen, their exports go up in in price and they lose sales in the American Market. Not only that, but the Billions in bonds and notes that they have in their banks is devalued, so they hurt themselves if they do not artificially prop up the dollar. Call that the Double Whammy effect. If you want me to teach you more, I will. Check out the funding of our present national debt, and you will find out the truth. I have told people to do this for years, but they are too lazy. Most of the recent Trillions of dollars spent by the Bush administration is presently unfunded. Remember he has nearly doubled the national debt in the past seven years. Have you seen a doubling of the bonds and notes sold by the Federal government? Wake up America! It is a Brave New World.