Federal Taxes Don't Pay For Anything

How can this be? Well, in 1971 Nixon changed how our bills would be paid.   He abandoned the gold standard and substituted a sovereign fiat currency system.   No one informed America's leaders of the extraordinary implications of those events.   President Nixon was singularly responsible for this paradigm shift in American monetary operations which should have eliminated among many canards, now current, all talk about "America going broke" and "America defaulting on its obligations."

All Federal spending is accounted for on Federal Reserve spreadsheets, now computerized, in reserve checking and savings accounts.   National modern money management has become a series of computerized credits and debits to accounts at the Federal Reserve.

Warren Mosler writes that Scott Pelley asked Bernanke on live, 60 Minutes TV:

"Is that tax money that the Fed is spending?"   Bernanke said: "No, it's not tax money.  The banks have accounts with the Fed, much the same way that you have an account in a commercial bank.   So, to lend to a bank, we simply use the COMPUTER to mark up the size of the account that they have with the Fed."   

That's how we pay all of our debts. Go ahead, fact check with the Fed and CBO.

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