The Money Multiplier: How Banks Operate In The Land of Make Believe

M = 1/RR

A simple little equation. It says that the money multiplier (M) equals one divided by the reserve requirement (RR). For those of you mathematically inclined, it says that the money multiplier is the inverse of the reserve requirement. This cute little equation and the concept that it describes is taught to economics students. You will find a description of the concept in most Economics 101 textbooks and much like the Energizer Bunny, the teaching and reinforcement of money multiplier in the minds of students goes on and on and on throughout their undergraduate career. By the time they enter graduate school, they are “firm believers” in the holy word of the Church of Economic Nonsense.

Federal Taxes: They Aren’t Funding Federal Spending

Since it is tax season, I want to again discuss how federal taxes work. But this time, a little bit more in depth. I wish to demonstrate the concept of federal taxation by pretending that I am the federal government and that there are three people in the non-government sector, Bob, Patty and Jane. Afterwards, we will discuss where your tax dollars actually go and why you pay federal taxes.

Negative Numbers: Understanding Federal Spending

In pre-algebra, students use a number line to help them learn to add and subtract negative numbers. Starting out, the concept may seem difficult for some, but really, it isn't. For instance, consider the following statement:

-1 + -2 = -3

Pretty straight forward. Just add and don't forget to leave the (-) sign in place. Zero, (0) being the absence of value, is the balancing point between two infinities: Positive numbers and negative numbers.

Debunking The US National Debt Hysteria

That thing out there that's at $18 trillion and rising; that thing that will be a future burden on our grandchildren; that thing that will bring the US government to financial collapse; that thing we are told to fear by the media, politicians and Occupy Democrats memes; that thing that liberals and conservatives accuse each others’ presidents of increasing; that thing, much like the monster hiding under your bed at night, doesn't exist. I am going to state the following for the umpteenth time:

The US National Debt is not a real debt and so, it does not exist.

The SNAP Dilemma: “Moochers” or Valid Macroeconomic Policy?

I wish to address the federal government’s food stamp program, SNAP. Generally, in all political debates, SNAP falls under one of two categories, depending on which “team” you support: “It helps the poor” or “lazy moochers”. Factually, both sides miss the point. The debates only result in vicious attacks and the mention of useless “statistics” that prove nothing and do nothing to protect SNAP, such as, “red states are the moochers”. Yes, SNAP does help lower income people buy groceries and yes, there most likely is a tiny fraction of recipients wishing to “milk” the system. But the function of the program is far more than just providing a means to buy food. In fact, without SNAP, some of you who aren’t on the program might not have jobs today. The “lazy” vs “hard working” political thinking is the result of a culture steeped in Calvinistic thinking, too much TV “news”, a steady diet of political nonsense and not enough education.