A Strategic View
Democrats have a fractured base and credibility problems. They need to do more than just refine their "message" and vote-gathering tactics. In addition to thinking about how they can win, they must think about why they deserve to win. They need an honest explanation of what they think America needs, how they intend to govern, and what they want to accomplish.
Just "fighting for you" is not enough. The explanation must show what America and its role in the world should be and how all levels of government can be repaired to work properly. It must be a realistic, strategic view that will inspire voters. It must be a strong backbone with domestic and international sides that support consistent policies and legislative proposals.
The Domestic Side
In order to truly lead, Democrats must think like new product designers who spot needs before most others do and develop ways to meet them. The domestic side of their view should be based on Abraham Lincoln's call for a "government of the people, by the people, and for the people" about which he had previously said:
"The legitimate object of government is to do for a community of people whatever they need to have done, but cannot do at all, or cannot so well do for themselves, in their separate and individual capacities."
Here are five key issues for the domestic side that Democrats are not discussing.
1. Understanding the US Dollar. Much that needs to be done will require money. But Democrats have been sucked into the myth that the federal government is limited by scarce dollars. On the surface, this makes sense. We know that families, companies, and lower levels of government must balance their budgets. So it seems to follow that the federal government must also take in dollars before it can spend them. But if that were true, where did the dollars that Uncle Sam takes in with taxes come from in the first place?
Before the federal government was formed, there were no US dollars anywhere. The US money supply now has more than 13 trillion of them (M2). Trillions more are in longer term investments and held by other countries. Unlike minerals that humans can't create, dollars are created by the country's money system. If that were not true, dollars wouldn't
just seem scarce, they wouldn't exist. Democrats must show voters how the government can lead by using the money system to create the dollars needed to pay for progress as opposed to staying captivate to the dogma of those who oppose government.
To explain it simply, when the government spends, it pays dollars into the economy. When it taxes, it takes them out. If the government has a balanced budget, the spending and taxes are equal so it does not change the number of dollars in the economy.
When the government runs a deficit, it spends more dollars than it takes out with taxes, and laws require it to sell bonds. But unlike taxing, selling bonds takes no value out of the economy. The buyers just swap their cash for the bonds which are also assets that they can save or sell. Unlike taxpayers, bond buyers give up no wealth.
So when the government runs a deficit, the bond sales don't reduce the total value in the economy, but the spending creates new dollars and feeds them into the economy. The job of creating new dollars is one reason why the federal government is different from states and everyone else. Deficits are not dangers to be avoided, they are the way new dollars have always been created that the economy must have in order to grow.
As a federal bonds mature they can be replaced with a new ones. In total, the bonds will never have to be repaid as long as the country survives. Thus they cannot become burdens on future generations.
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