Government Cost Cutting is Bullshit

I can't take it any more... saving tax dollars is nonsense.

I have a killer piece coming out on Tax Day.

But I seriously cannot take it anymore. I’m going to burst.

I was watching MSNBC before, and there’s Chris Jansing, blathering about how “the taxpayers want to know their money is being spent correctly…” about Elon Musk gutting the government, with her panel of guests. They’re talking about the crazy Cabinet meeting, and his crazy CPAC chainsaw thing, and they had some “GOP Apologist” former whatever, and he’s going on and on about how “Americans want to see real spending reforms.”

It’s all I can do not to throw my iPhone out the window.

So I instead came to the keyboard. Wasn’t going to write anything today, but here I am.

The sooner we can stop with this nonsense, talking about “taxes paying for things,” and people paying “their fair share,” and this whole fiction, the sooner we wake up from this collective stupor of stupidity and ignorance about what taxes are and what they do.

I don’t mean to go all Sam Kinison on this issue, but I can’t take it anymore.

I’ll warn readers right now—this article will be considerably more emotionally charged than I usually am, because I’m just ready to burst. I’m not kidding.

The tax day post will come in its due time. It’s my typical well presented and executed self. But since we’re allegedly going to blow up the federal government in the name of “the taxpayer,” and since we’re suing left right and everywhich way, and since we destroyed America in the name of chicken eggs over this bullshit, okay, let’s talk about where the hell federal revenues come from and the dirtiest of dirty secrets, which is this:

Taxes don’t pay for shit.

I’ll say that again.

Taxes. Don’t. Pay. For. Shit.

Diddly-squat! Zippity-zilch! A big fat goose-egg-a-rooney! Nothin’ but a whole lotta nothin’, neighborino!

Absolutely fucking nothing.

Yeah. I’ll let that sink in for a moment.

That’s the big secret that billionaires would prefer you don’t know, that keeps the poor poorer, the rich richer, and the rest of us lashed to the mother fucking wheel.

Taxes Don’t Pay for Diddly Doodly

See this?

See how under “THE UNITED” it says the following:

My friends, these are the 11 magic words. Those 11 words make the sun shine, the winds blow, and the world go round. Those 11 words are how the government pays for everything.

Not your taxes.

Not your hard work.

Not your savings.

Not a blue fuckin’ thing.

Not a one.

It’s those words:

Amazing, huh?

Now you may be asking how.

Well, the answer is simple: “all debts, public and private,” is the key. Public debts are government debts. And when we say “government,” we’re not talking about your local DMV or city hall. We’re talking about the United States Government—the issuer of the currency.

The Myth of the Tin Cup

People think Uncle Sam is out there with a tin cup, rattling it on the street, collecting money so he can afford to buy things. And what he can’t collect in tax revenues, he borrows from citizens and pays them back over time.

I can’t fault people for thinking that. Hell, we have songs about it. Back in the 1940s, the U.S. sold war bonds to “fund” the war effort. They had a whole campaign around it, convincing people their money was needed to fight the Axis.

Except it wasn’t.

That’s not how it worked then and certainly not how it works now.

But to understand why, we need to go back. We need to talk about the gold standard—the biggest monetary straitjacket the U.S. (and every other country in the world) ever imposed on itself.

The Gold Standard: The Great Money Illusion

Before 1971, the U.S. (and many other countries) operated under a system where money was tied to precious metals, predominantly gold. This was called the gold standard.

Under this system, the government couldn’t just issue money freely—it needed an equivalent amount of gold in reserve. To be clear, this wasn’t about having a mere claim to gold; the government had to physically hold the gold. That’s why Fort Knox exists—it’s one of the U.S. government’s gold reserves. (Though the largest isn’t Fort Knox; it’s actually the Federal Reserve Bank in New York. Let’s hope no one tells Trump—he’d probably try to rob it.) In theory, if you had a dollar, you could redeem it for its value in gold.

That system worked, until it didn’t.

The problem with gold-backed currency is that it artificially limits how much money a government can create. If the government wanted to spend more, it needed to mine or acquire more gold.

But what happens when the economy grows faster than the gold supply? What happens when a country needs to ramp up spending for a war, a recession, or an emergency?

That’s when things get dicey. First it tries to borrow money from the population. This is where “Any Bonds Today?” comes in. By taking money away from consumers (and issuing them script in the form of government debt), it reduces the amount of consumer dollars that can be redeemed, thereby increasing the amount of dollars the government can redeem. This concept will prove important later, so keep it in the back of your mind.

Then, Governments throughout history tried to cheat—adjusting the amount of gold required per dollar, essentially devaluing the currency to make spending easier. This is called devaluation. You reduce the peg to the amount of gold needed, and suddenly, you have more money to spend. The problem with this approach is essentially it’s inflationary. This was why you had a gold standard, to keep inflation artificially in check. Having currency artificially pegged to a gold reserve kept the government from monetizing debts, thereby reducing the ability of the government to cause inflation through spending.

But by 1971, the jig was up. Nixon took the U.S. off the gold standard, officially ending the idea that a dollar must be backed by anything other than trust in the U.S. government. That’s when things got funky.

What Money Is

Money is a promise. It’s a symbol, a shared belief system that lets us buy things without killing each other. It is an agreement that holds value because we all believe it does. Here are some examples of money functioning as a promise throughout history:

1. Gold-Backed Currency (U.S. Gold Standard, pre-1971) – Every dollar was theoretically redeemable for a fixed amount of gold, making it a promise tied to a physical asset.

2. IOUs and Promissory Notes – Before formal banking, merchants and traders often issued handwritten promises to pay a specific amount later, creating private currency.

3. British Tally Sticks (1100s-1800s) – The English monarchy issued notched wooden sticks as official tax receipts, which could be traded as currency. The government’s promise to accept them as payment gave them value.

4. Colonial Script (American Colonies, 1700s) – The colonies issued their own paper money, which was not backed by gold but by the government’s promise to accept it for taxes and trade.

5. Confederate Dollars (U.S. Civil War) – The Confederacy issued its own money based on the promise that it would be redeemable after they won the war—except they lost, making it worthless.

6. Bitcoin and Cryptocurrencies – While not issued by a government, crypto functions as a promise based on decentralized trust in the network and its scarcity model. Unlike fiat, no government enforces its value.

7. Cigarettes in Prison Economies – When traditional money isn’t available, commodities like cigarettes become currency, holding value based on the promise that others will accept them in exchange for goods and services.

8. Central Bank Digital Currencies (CBDCs, future potential) – Governments are exploring digital currencies that function purely on trust in central banks, without a physical equivalent like cash.

9. Post-War Germany (Cigarettes and U.S. Dollars as Currency, 1945-1948) – After WWII, the German mark was so devalued that people started using cigarettes and U.S. dollars instead, treating them as more reliable promises of value.

All money—whether gold-backed, fiat, digital, or barter-based—is only as good as people's trust in the support system.

My favorite example is the island of Yap; money wasn’t just something they physically exchanged—it was a system of ownership claims. The islanders used massive limestone discs, called rai stones, as currency. These stones were too large to move, so transactions didn’t involve physically handing them over. Instead, ownership was transferred through oral agreements, like a ledger system. Everyone in the community knew who owned which stone, which was enough.

The value of rai stones wasn’t just about their size; it was about how difficult they were to obtain. These stones were quarried on the distant island of Palau, over 250 miles away, and transported across the ocean in dangerous journeys. The effort required to bring them back made them scarce and valuable—similar to how gold once backed national currencies.

This system worked because money is ultimately about trust and shared belief, not just physical exchange. The people of Yap didn’t need to move the stones around to function as currency—just as today, digital bank balances represent money without any physical movement of gold or cash.

That’s how money works. It’s not about the material itself—it’s about the promise and agreement behind it.

It’s not about the material. It’s about the promise.

That’s why today, when the U.S. government needs to pay for something, it doesn’t need to tax or borrow first. It simply creates the money.

And up until this moment, we had the best promises in the world. Our word was our bond, and it was stronger than Oak.

My point in all of this is that money is a promise. It’s not magic. It’s not something special. It works because we all believe in it. It really pays for nothing. It’s a symbol of our collective productivity.

However, the federal government is the only one that issues it. That makes them very special.

States work the way you think it work. They do have to collect coins, borrow for real, have actual bank accounts, and write checks. Your state functions like you do, just on a massive scale. States can (and have) gone effectively “bankrupt.” It’s not called that, but they can default on their debts. States technically cannot go “bankrupt,” because the federal bankruptcy code doesn’t allow for them to bankrupt themselves. However, states have defaulted on their debts to their citizens. For example:

1. The State Defaults of the 1840s

• During the early 19th century, several states took on massive infrastructure debts, particularly for canals and railroads.

• By the Panic of 1837, these states were drowning in debt and could no longer make payments.

• Arkansas, Illinois, Indiana, Louisiana, Maryland, Michigan, Mississippi, Pennsylvania, and Florida (then a territory) defaulted on their debts in the early 1840s.

• Some states, like Pennsylvania, eventually repaid their debts, while others, like Mississippi, outright repudiated them and never paid back creditors.

2. Arkansas in the Great Depression (1933)

• Arkansas defaulted on its bonds in 1933 during the Great Depression.

• The state had borrowed heavily for road construction but couldn’t keep up with payments.

• It ultimately restructured its debt but never declared bankruptcy.

3. New York City’s Near-Bankruptcy (1975)

• While not a state, New York City was on the verge of bankruptcy in 1975.

• The state of New York was also under financial strain but did not default.

• The federal government intervened with a loan to prevent a complete economic collapse. That said, NYC would have (and could have) defaulted. Nobody wanted that (because of institutional reputation consequences.)

4. California’s Fiscal Crisis (2008-2010)

• California didn’t go bankrupt, but in 2009, it issued IOUs instead of paying bills because it ran out of cash.

• It struggled with a massive budget shortfall but ultimately balanced its books through spending cuts, borrowing, and tax increases.

5. Puerto Rico (2017) – A Unique Case

• Puerto Rico, a territory in the U.S., went bankrupt in 2017 with $72 billion in debt.

• Since territories cannot declare bankruptcy under federal law, Congress created PROMESA. This financial oversight mechanism allowed Puerto Rico to restructure its debts in a bankruptcy-like process.

So states have to play by the game we all do. They cannot generate money out of thin air like the federal government. The federal government can never go bankrupt. The federal government can never involuntarily default on its debt (this is why the debt ceiling discussion is so ridiculous, but that’s a post for another time.)

States work the way you think they work. But the federal government?

No. They’ve never been constrained by taxation.

So if taxes don’t pay for anything, I imagine by now you’re asking: “Well then why the fuck am I paying taxes?”

Well, before you decide not to, I’d caution you to understand that, in many circumstances, intentionally and willfully stopping paying taxes is a felony. Second, there’s another reason to pay taxes: it limits consumption so that the government can provide goods and services for us all.

The Dirty Secret of Taxation

So if taxes don’t “fund” the government, why do we pay them?

Three reasons:

1. To create demand for the currency. You have to pay taxes in dollars, which forces people to use dollars.

2. To control inflation. Too much money in circulation? Tax it back.

3. To redistribute wealth and manage economic inequality. Taxes aren’t about funding—they’re about shaping the economy.

The government doesn’t need your money to pay for things.

It needs you to believe that it does.

The Power of Sovereign Currency

One of the most overlooked yet fundamental aspects of government control over an economy is its ability to denominate and enforce debts in its own currency. In the U.S., all debts, public and private, must be paid in U.S. dollars—a policy that cements the dollar’s dominance and reinforces its value.

This isn’t a natural law; it’s a deliberate choice. The government enforces this rule through legal tender laws, which mandate that the U.S. dollar must be accepted for all debts. Even if someone wanted to pay in gold, crypto, or foreign currency, creditors—especially those dealing with taxes, fines, and legal obligations—are required to accept dollars. This creates continuous demand for the currency, ensuring that people need to earn or acquire dollars to meet their financial obligations.

Governments leverage this power in several key ways:

1. Taxation Creates Demand for Dollars – Since taxes must be paid in U.S. dollars, people and businesses must earn dollars to settle their tax liabilities. This maintains the dollar’s status as the primary medium of exchange and prevents other forms of money (like Bitcoin or gold) from replacing it.

2. Debt Denomination Protects Monetary Policy – If debts were widely denominated in foreign currencies or alternative assets, the U.S. would have far less control over its own monetary system. By requiring debts to be paid in dollars, the government ensures it can regulate inflation, interest rates, and money supply without interference from competing currencies.

3. Global Dollar Hegemony – The U.S. enforces dollar-denominated trade domestically and internationally. Many global commodities—like oil (petrodollar system), metals, and international debts—are priced in U.S. dollars. This forces foreign governments and businesses to hold reserves of U.S. dollars, reinforcing America’s economic influence.

4. Debt Repayment as a Form of Economic Control – Countries that owe debts in dollars must acquire dollars to make payments, often requiring them to export goods to the U.S. or comply with U.S. financial policies. This gives the U.S. leverage over international economic affairs.

Because the U.S. government can issue the currency where all debts are denominated, it can never run out of money. This is why concerns about the government “going bankrupt” are misplaced—it prints the money it needs. The only real constraint is inflation, which is managed through taxation, interest rates, and spending controls.

Forcing debts to be paid in dollars is a subtle but powerful mechanism that keeps the economy functioning under government control. It ensures that people must use U.S. currency, prevents competing monetary systems from emerging, and secures America’s financial dominance at home and abroad.

Taxation and the Creation of Monetary Space

In a fiat currency system like the U.S., taxation isn’t about “funding” government spending in the way most people think. The government, which issues the currency, doesn’t need tax dollars before it can spend—it can create money as needed. But that doesn’t mean taxation is meaningless. Taxes are crucial: they remove money from the economy, creating the monetary space necessary for government spending without causing inflation. If taxation and borrowing didn’t happen, inflation would spiral out of control, and money would become worthless, because the “promise,” of the future value of our money would collapse.

Think of it this way: if the government pumped money into the economy without ever pulling any out, too much money would chase too few goods, driving prices up. Taxes take money out of circulation, preventing overheating while making room for government spending on public services like infrastructure, education, and healthcare.

Taxation and Social Services

Historically, the U.S. used high taxation to fund expansive social programs that benefited most Americans. In the mid-20th century—especially during and after World War II—the top marginal tax rate on the wealthiest Americans exceeded 90%. This wasn’t about punishing success; it was about ensuring that national prosperity was reinvested into the public good. These high tax rates helped finance projects like the GI Bill, the construction of the Interstate Highway System, public universities, and Social Security expansion—all of which created economic mobility and a strong middle class.

Even when corporate tax rates were significantly higher than today, businesses thrived because public infrastructure, education, and research investment fueled economic growth. The government’s ability to provide these services wasn’t because it “collected” enough taxes first—it was because taxation allowed it to spend money in the economy to maximize public benefit while keeping inflation under control.

Over time, tax cuts—especially from the Reagan era onward—shifted this balance. The argument for lower taxes was that it would spur private investment. Still, it concentrated wealth at the top while reducing the government’s ability to fund services that benefited the majority. The result? A crumbling social safety net, deteriorating infrastructure, and a shrinking middle class.

In short, taxation isn’t just about revenue—it’s about structuring the economy to allow the government to provide public goods without triggering runaway inflation. When used effectively, it ensures that the government can spend on what society needs while maintaining economic stability.

Taxation, Income Inequality, and the Preservation of the Middle Class

Taxation has always been one of the most effective tools for shaping income distribution. When structured properly, it is a counterweight to wealth's natural tendency to accumulate at the top. Without progressive taxation, wealth concentrates in fewer and fewer hands, eroding the middle class and creating the kind of extreme inequality that leads to economic and political instability.

During the mid-20th century, the U.S. had one of the most progressive tax structures in its history. From the 1940s through the 1970s, top marginal tax rates on the wealthiest Americans ranged from 70% to 94%. Corporate tax rates were also significantly higher. These policies weren’t about "punishing the rich"—they were about ensuring that economic growth translated into widespread prosperity rather than being hoarded by a small elite.

The results were undeniable: the post-war era saw the rise of the strongest middle class in U.S. history. High wages, strong unions, and government investments in education, infrastructure, and social programs created unprecedented upward mobility. A working-class family could afford a home, a car, healthcare, and higher education for their children—all on a single income. The economy thrived because consumer demand was broad-based, meaning businesses had a large, stable customer base.

However, starting in the 1980s, tax policy took a sharp turn. The Reagan administration slashed the top marginal tax rate from 70% to 28%, arguing that cutting taxes on the wealthy would lead to more investment and economic growth that would "trickle down" to everyone else. Instead, it triggered a slow-motion economic shift: wealth began concentrating at the top, wages stagnated, and the cost of essential goods and services—like housing, education, and healthcare—skyrocketed.

The result? The middle class shrank. Today, wealth inequality in the U.S. is at its highest level since the Gilded Age, with the wealthiest 1% holding more wealth than the bottom 90% combined. Meanwhile, the tax burden has shifted away from the ultra-wealthy and onto the middle and working class through regressive taxes, fees, and payroll deductions.

Historically, progressive taxation has been a key mechanism for preserving a broad, stable middle class. By ensuring that the ultra-wealthy contribute their fair share, it prevents wealth hoarding and reinvests resources into public goods that benefit everyone—education, healthcare, infrastructure, and economic opportunities. Without these policies, the middle class continues to erode, and economic power consolidates in the hands of a few, undermining both democracy and long-term economic growth.

The Cost-Cutting Lie: Austerity is Just Class Warfare in Disguise

If taxes don’t pay for anything, what are we talking about when politicians push for “cost-cutting”? What exactly are we “cutting”?

Here’s the dirty truth: cost-cutting is not about making the government more efficient or balancing the budget. It’s about protecting the wealthiest Americans from taxation while shifting the burden of economic sacrifice onto working-class and poor Americans.

Let’s be clear—when the federal government spends money, it does so by issuing currency. It is not drawing from some mythical vault of taxpayer dollars. It is not scraping pennies together to make ends meet. The U.S. government is the currency issuer. It can fund anything it wants, whenever it wants.

So when politicians claim that we need to “cut spending” to be “fiscally responsible,” what they’re really saying is we refuse to tax the richest people in this country, so instead, we’ll take from everyone else.

That’s why budget cuts never come for the billionaires. We never hear about a funding crisis for corporate tax breaks, oil subsidies, or military contracts. Nobody in Washington is talking about “tightening our belts” when it comes to giving Elon Musk another sweetheart deal or handing Raytheon a few billion for the latest war machine. But suddenly, when it’s time to talk about healthcare, education, or social security, we’re broke?

Bullshit.

This is austerity politics, and it’s a scam.

Austerity isn’t about necessity—it’s about priorities. And the priority, for decades now, has been to ensure that the richest of the rich never have to pay into the system that made them rich in the first place.

When you hear that we “can’t afford” universal healthcare, that we “must reform” Social Security, or that public services need to be gutted to “reduce the deficit,” remember: there is no financial constraint on federal spending. The only constraint is political will.

We could fully fund universal healthcare, tuition-free college, and child care tomorrow—if we chose to.

The reason we don’t? Because the people in charge decided that maintaining extreme wealth inequality is more important than ensuring basic economic dignity for most Americans.

The cost-cutting lie isn’t about fiscal responsibility. It’s about ensuring the wealthiest Americans stay untouched while the rest are lashed to the wheel.

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Quick aside—some of you are already clutching your pearls: "But what about the debt? What about the deficit? What about—" Yeah, what about them?

Again, this is The Long Memo—not "Everything I Know About Everything" or "The Tome." (Grin.)

For the debt hawks still lingering: The deficit and the debt aren’t about accounting—they’re about trust. They’re about whether the world believes America can keep its promises and generate future wealth. Credit and debt are just symbols of future productivity brought into the 'now.' The more we invest in the present, the stronger the case we make that we’ll be even more productive in the future.

Historically, this wasn’t even a challenge for us. But in the last 20 years? It’s getting harder.

The problem isn’t that we borrow. It’s what we spend our debt on. We’re running a reverse Ponzi scheme, stealing from the poor to feed the rich, making it harder and harder to convince bondholders that America’s future productivity will keep growing. That’s why debt service is eating a bigger chunk of GDP and why we’re way more sensitive to interest rates.

This doesn’t mean we need to cut spending. It means we need to tax the fucking super wealthy.

Historically, when we’ve hit high-debt periods (wars, recessions), we’ve solved it the same way: tax the rich and reinvest in long-term productivity—innovation, education, infrastructure. That’s how we “grew our way” out of debt every time before.

But this time? We spent it all on dope, hookers, and Elon Musk.

So, yeah. Here we are.

Debt matters—but not in the way you think it does.

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Elon Musk Can Screw Himself

So standing there with his “chainsaw,” you now understand—it’s grotesque. This charade of bullshit.

You should be pissed.

Are you?

Because you should be.

The Republicans just passed a four trillion dollar tax bill—one that guts social services, healthcare, veterans’ benefits, and every safety net that keeps working Americans afloat. And you know who’s left completely untouched?

The 813 billionaires in this country. 9,730 people in America have over $100 million. They're not just prosperous—they’re centi-millionaires. And they’re untouched.

Does that make you happy?

I’m not saying they all need to be dragged out and shot or something. I’m not saying that at all. They’re fully entitled to what they’ve earned. But they’re not going to lose a thing in this new budget. They’re not going to feel a single pinch.

We talk about people paying their “fair share,” and that nonsense. Their 'fair share,' according to Congress? Zero. Think that’s fair?

Let’s have a real conversation about what they’ve earned—and what they haven’t.

Because here’s what they didn’t earn:

• They didn’t build the roads their businesses rely on.

• They didn’t educate the workforce they exploit.

• They didn’t fund the research that led to their technological breakthroughs.

• They sure as hell didn’t “pay their fair share” (by the standards they want to impose upon everyone else) into the system that lets them hoard unimaginable wealth while the rest of the country drowns in medical debt and economic precarity.

They benefit from the infrastructure, the legal protections, the patent system, the labor laws, the military security, and the monetary stability we all pay into—but when it’s time for them to contribute? Suddenly, there’s no money left to tax.

So let’s make this simple:

You pay more in taxes than billionaires.
You work harder than billionaires.
You carry the burden of their bullshit while they pillage, hoard, and sneer.

And now they want to cut your healthcare. Your social security. Your veterans’ benefits. Your child’s education.

So that Elon Musk can go around fornicating with every woman he meets, producing a small army of trust fund kids while making another $100 billion—and firing millions of federal workers in the process.

Ask your Congressman if they think that’s fair.

Ask them why you have to pay the price so that Musk, Bezos, and the rest of these plutocratic parasites can keep playing with their rocket ships while your family struggles to afford insulin.

Ask them why you should have less—so that the richest men in the world can have even more.

I’d love to hear their answer.

I’m tired of hearing about savings, paying for things, paying your “fair share,” nonsense about “having skin in the game,” and the rest.

Taxes are about denying people the right to spend. Full stop.

So who should be denied that right? You? Or Elon Musk?

It’s that fucking simple.

We could have universal healthcare.
We could have tuition-free college.
We could have functioning infrastructure.
We could do anything.

It’s not a lack of money. We have all the money in the world.

We lack the will to stop letting the top 10% hoard nearly three-quarters of all wealth, while half the country owns nothing.

To stop the 0.1% from hoarding so much wealth that they now control more than 15% of everything in this country—an amount larger than the entire GDP of most nations.

To stop pretending it’s normal for the bottom half of America—165 million people—to hold just 1.5% of all wealth, while a few hundred billionaires control 4% on their own.

We could fix it. We choose not to.

Stop talking about taxes paying for anything.

They don’t.

We’re talking about who’s going to be denied, not who’s going to pay.

And right now, chances are that’s you.

And if they have their way, it always will be.

P.S.: Only a complete asshole wears a baseball cap inside the White House. Every man—Marine guards included—removes his hat upon entering. But not Elon. Because of course he doesn’t. He’s an asshole.
Elon governs while Trump slept, I suppose. Damn it feels good to be a gangsta.

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