The U.S. Debt & Modern Monetary Theory

The data for this graphic was sourced from the U.S. Department of the Treasury by the Peter G. Peterson Foundation, as of year-end for 2023. 

The U.S. national debt increases when the federal government spends more than it collects through taxes and other revenue streams. When government spending exceeds tax revenue, a budget deficit occurs. To cover the shortfall, the U.S. Treasury issues Treasury bills, notes, and bonds. The national debt is the cumulative total of the federal government’s budget deficits, adjusted for any surpluses.

U.S. gross debt increased from $34.4 trillion at the end of 2023 to $36.1 trillion as of December 2024, with some experts calling it unsustainable. Of the $34.4 trillion in gross debt in 2023, over $27 trillion (79-80%) was public debt borrowed from domestic and foreign investors, while $7 trillion (20%) was intragovernmental debt, reflecting internal government transactions.

As this 2nd chart above shows, the Federal Reserve System was the largest single domestic holder of U.S. public debt, with holdings of $5.2 trillion.  But note, there is over $5.7 trillion held in U.S. Savings Bonds, making that group of owners/investors the the largest holder of public debt.

The debt held by the public represents the amount borrowed by the U.S. Treasury from external lenders via financial markets to fund government operations. It is considered a critical measure of debt because it directly impacts the government’s ability to manage economic crises and can influence economic stability. As of December 2023, debt held by the public equaled 97% of the U.S. GDP.

Elon Musk and former presidential candidate Vivek Ramaswamy will head the newly established Department of Government Efficiency (D.O.G.E.). The department aims to identify and eliminate wasteful spending, with Musk claiming it could cut $2 trillion in government “waste,” potentially reducing the national debt or curbing expenditures.

Let’s now discuss MMT – Modern Monetary Theory – I call it magic money theory.

MMT asserts that monetary sovereign countries such as the U.S., U.K., Japan, and Canada all of which spend, tax, and borrow in fiat currency that they fully control and print, are not operationally constrained by revenues when it comes to federal government spending.

I am going to show you exactly how MMT = Equity Stripping.

MMT is the opposite of how a government is supposed to interact with the economy, the nature of money, and use of taxes and budget deficits. The idiots believe, “don’t worry, we will print our way out of this”.

MMT = Printing = Inflation = Devaluation of Currency = Tax

If A = B and B = C then A = C

MMT = Tax

MMT is used in policy debates to argue for such legislation as universal healthcare, large government bodies such as the Federal Reserve, FEMA, Department of Homeland Security, and many other agencies all of which can be found at https://www.usa.gov/agency-index, and all of which add to significant budget deficits as they claim not to have enough money to fund them.

I went down through the list of government entities on Wikipedia and created a column that shows what entities could or should be eliminated based on the following:

1. Extra Employees = Extra Leaks
2. Does the governmental office effect Citizens’ lives on a daily basis?
3. Under the Biden Administration, did the governmental office prove its uselessness? 
4. Can the amount of personnel be consolidated between the entities to achieve the same goal but in a quantifiable manner with a proper cost-benefit analysis?
5. Can the layer upon layer of department heads and supervisors be trimmed so that there is truly One Head of the Department/Organization?  Fewer layers or departments = more transparency. Redefine the responsibilities and hire the best people to achieve the goal.
6. Removal of any duplicative service between the various departments and consolidate.
7. No loans or moving of funds, such as inter-government loans between departments. Each department stands alone with full accounting.
8. Why do separate internal government entities and government personnel exist within the government to enforce rules on government employees. Laws exist for people outside the government. Government employees should be held to account to the same rules of law, just as non-government employees are. This supposed internal policing is inefficient and ineffectual and has allowed “employment in perpetuity” Furthermore, a legal system within the government itself, outside the purview of the public, leads to abuse of power.
9. Elimination of any DEI requirements and personnel promoting it from government.

Given the above considerations, the result would be 78% fewer entities and or government employees:

1406 Entities - Total Number of Entities

1102 Entities - 78% could be removed

304 Entities - 22% would remain

Although this study is not conclusive and there is, and should be, a cost-benefit analysis completed, it is one method to show what can be massively improved to help balance budgets.

It is reasonable to think that the Federal government can run on 50 to 70% less employees and do a much better job for its citizens by eliminating the complexity which was created to transfer and or “equity strip” the assets of Mom and Pop.