Category Archives: J. D. Alt

A Business Strategy Long Overdue

By J.D. Alt


The Washington Post recently reported that Day Care now costs more—in 31 U.S. states—than a college education. In a fit of logic rarely exhibited in today’s journalism, the article explains that since it takes the average family eighteen years to save enough for a child’s college education, that same child now needs to start saving for his or her own children’s Day Care beginning at age eight. The article didn’t mention—I suppose because they thought it was obvious—that this necessity is against America’s child labor laws. And, of course, Little League Baseball would be devastated.

Continue reading

Rescuing the 1%


lsaverIn an earlier essay I suggested we just forget the 1%. This was an idea not entirely supported by the commentary that followed. On reflection, I’ve decided it isn’t the right approach after all. What we really need to do is rescue the 1%.

They may seem like the last people who need rescuing, but when you consider the facts it becomes clear they really do need to be tossed a life-preserver. The problem is their basic business model is self-annihilating. This is not a new observation in history, but it is worth thinking through again. CEOs and board members are required by fiduciary law to maximize profits for their shareholders. If they fail to aggressively pursue this goal with every business decision, they might actually get sued by an angry shareholder deprived of his maximum return on investment. So maximizing profits is the order-of-the-day—every day. This imperative has been dramatically reinforced (and distorted) over the past three decades—as explained and illustrated by William K. Black—by evolving corporate compensation rules awarding huge bonuses to upper level managers based on the short-term profits their business and “accounting” strategies are able to generate.

Continue reading

The Oppressive Free Lunch

By J.D. Alt

alt-lunchTrying your best to balance the Federal Budget with a limited number of Tax Dollars—and doing so while visibly displaying great compassion for your fellow citizens in the hope they might reelect you—requires some very special thinking skills. These unique skills of rational analysis and gentle compassion were on display recently when Congressman Paul Ryan gave a speech to the Conservative Political Action Conference laying the ground work for his forthcoming efforts to cut the deficit by “reforming” the welfare system.

Continue reading


By J.D. Alt

All this talk about the 99% versus the 1%? I say the easiest—and likely the most useful—thing to do is just forget the 1%. Write them off. Let them have their gated communities, their mega-yachts, their island retreats and off-shore bank accounts. What do we need them for?

For one thing, we DON’T need their money. Even if we could get it—which we can’t because they steadfastly refuse to use it for anything other than casino gambling in their private and secretive financial networks. We wonder why we have a “jobless recovery”? Does it have anything to do with the fact that such a large percentage of our “capital” has, for all practical purposes, been removed from the economy?

Continue reading

Revising Adam Smith

By J.D. Alt

The Ebook DIAGRAMS & DOLLARS (in top 10 best-sellers on Amazon/ category money & monetary policy!) paints an optimistic picture of what “Sovereign Spending” could achieve for our collective benefit. The video made from it (approaching 3,000 views on YouTube—thank you Haiku Charlatan!) ends with cheering calisthenics around the final diagram of our national prosperity. Unfortunately, the “real world” of our Congressional leaders and media spin-machine is painting a very different picture—a dire vision of out-of-control government spending and national insolvency. Understanding why that is, and what we can do about it, is the real challenge we have before us.

Continue reading


By J.D. Alt *

I’m most appreciative of the comments and suggestions that followed my recent post. The comments were so encouraging I decided to expand the essay slightly and turn it into a small eBOOK available on AMAZON. I did my best to incorporate many of the commentary’s suggestions. For example, I tried to minimize the problem of reinforcing the “wrong” ideas in my effort to debunk them—a problem rightfully and forcefully pointed out not once, but twice, by Bob Eisenberg! I did not go so far as I think he would have liked, but I did incorporate a warning, just prior to the “incorrect” diagram, advising the reader not to get too enamored with it because it was INCORRECT, and the purpose of the eBOOK was to explain why.

Continue reading

DIAGRAMS & DOLLARS: modern money illustrated (Part 2)

By J.D. Alt

5. TREASURY BONDS—Are they really what we think they are?

Recall that in the old diagram we started out with—the one Congress seems to be using as a guide for its budgeting process—Treasury Bonds appear to be the mechanism by which the Federal  Government “borrows” Dollars from the PS pot. Since we now understand that a Dollar is actually the Federal Government’s I.O.U. for tax credits, we can also see that it is illogical for the Federal Government to “borrow” these I.O.U.s. Why would it “borrow” its own I.O.U.—something it can instantly create any time it wants by simply saying, “I Owe You”? If that is the case, why does the FG “sell” Treasury Bonds?

Continue reading

DIAGRAMS & DOLLARS: modern money illustrated (Part 1)

By J.D. Alt

1. The “unsolvable” riddle of our National Budget

Being an architect, I’m fascinated by diagrams visualizing things which otherwise are invisible. In designing a building we usually begin with diagrams to explore and understand the functional and spatial relationships—the flows and often unexpected interactions—the architecture needs to accommodate. Getting the diagrams right is important—if they’re wrong or incomplete, the building we design could turn out to be a dysfunctional disappointment for its owners and users.

Continue reading

Democratizing Sovereign Spending

By J.D. Alt

This past month I have been diligently working to complete my entry in a design competition to envision the “Residential Tower of the 21st Century”. At first, I did not intend to enter the competition because I have believed, for many years, that the challenge of future architectural development was horizontal rather than vertical—how to organize and “enable” high density , “piecemeal development” into horizontal communities (using people-mover technologies as a “horizontal elevator” core.) I even named this development model “The Horizontal Skyscraper”.

Continue reading

Talking Points for the 99% (Part 2)

By J.D. Alt


(This is the working draft of a short, targeted eBOOK directed specifically at the millennials—the huge generation of energetic, creative, and cooperatively inclined young people who might, just maybe, rise up and demand a new understanding of the American economy. The eBOOK has three goals: (1) explain the basics of MMT to those who’ve never heard of it (2) unveil, at least partially, the misinformation network of the status-quo, and (3) suggest the scale of very real collective benefits a new understanding actually makes possible. Any suggestions about fine-tuning—or fundamentally altering, if necessary—the basic message of the essay are welcomed. (I’ve divided the draft into two parts to better fit the blogosphere.)

Sovereign Spending, Public Goods, & Private Wealth

It is often said that what is most obvious is the most difficult thing to see, and such is the case with sovereign fiat currencies. The answer to the question just posed is that the sovereign government spends the Dollars it issues. What does it spend the Dollars on? It buys goods and services from the citizens—bridges and jet planes and medical services, for example—and the citizens, we now understand, are happy to provide those goods and services in exchange for the fiat Dollars because (once again):

  1. They are going to need some of those Dollars to pay their taxes with, and
  2. They know that they will be able to use the Dollars to purchase goods and services from other citizens for exactly the same reason.

In other words, sovereign spending happens first and taxes are collected afterwards—and the reason the taxes are collected at all is not so the sovereign can spend further, but to ensure that the citizens will continue to want to sell goods and services in exchange for the fiat currency.

As the sovereign pays the citizens fiat Dollars to make things, and build things, and provide services (like medical research and weather forecasting, for example), the citizens accumulate Dollars in their private accounts, and they use those Dollars as a means of exchange for goods and services amongst themselves. Banks leverage those fiat Dollars with loans that create bank deposits in “bank-dollars”. “Bank dollars” are just as good as real fiat Dollars because, by law, the banks are required to convert the “bank dollars” to fiat Dollars on demand. (The only downside with this arrangement is if the banks take on more risk than they have fiat Dollars to back up—in which case they don’t have enough fiat Dollars to meet the demand to convert. This is when the sovereign government steps in—as it always must do—providing the banks with the fiat Dollars necessary to make their convert-on-demand promise good.)

A Liberating Reality

The simple reality contained in the previous paragraphs, if it can be embraced, is a game-changer for the 99%. In truth, we the citizens are not in a desperate competition with our own government to acquire and spend a finite pool of Dollars. The truth is profoundly the opposite: The 99%—by virtue of the fact that they (by mathematical definition) hold the democratic power of the sovereign government—are in a position to cause that government to issue and spend fiat Dollars, as needed, to purchase—from the citizens themselves—any goods or services the citizens would like to see created. So long as the actual, sustainable resources (labor, energy, materials, technology) are available in exchange for the fiat Dollars, there is no limit to what the citizens can be paid to accomplish. Nor is there any need to collect taxes over and beyond what is necessary to establish the citizen’s willingness to accept fiat Dollars for their goods and services. Finally, there is no need for the sovereign government to borrow fiat Dollars from the citizens. It can, and likely would, continue to issue Treasury bonds, but only for the purpose of managing interest rates in the banking industry and to provide the citizens, themselves—especially retired folks—with a reliable source of interest income.

But what about Inflation?

Earlier it was noted that the last thing the 1% would ever abide is the government “printing” money in order to pay for its spending. “Printing” money obviously increases the amount of Dollars in circulation, and if new goods and services are not available for that money to buy, then prices will go up—which is the same thing as the value of money going down. Fiat Dollars do not change this fundamental relationship, and the possibility of inflation is something the sovereign government must carefully manage and guard against.

What safeguards does the sovereign government have against inflation? First, the taxes it collects on a continuing basis (creating the demand for, and “value” of, its fiat currency) continuously drain excess fiat Dollars out of the economy. Collecting taxes “extinguishes” fiat Dollars—the exact mirror image of “issuing” them by fiat. Thus, the continuous act of tax collection reduces the number of Dollars chasing goods and services in the economy, reducing, in turn, inflationary pressure on the currency.

Second, sovereign spending which pays the citizens to create real goods and services is not the same as “printing” money in the sense of the alarm-bell description proclaimed by the 1%. As long as unused labor and unused resources are actually available, issuing fiat Dollars to marshal that labor and those resources to achieve collective goods will not create inflation but, instead, will expand the overall economy. 

Talking Points to Counter-Narrative

The outline for a 99% counter-narrative should now be growing visible:


  1. Sovereign spending which pays the citizens to produce goods and services which benefit the citizens collectively is not welfare—it is the opposite of welfare. The citizens are not dependent upon the sovereign government to provide them with anything—they are only reliant upon the sovereign to issue and spend the fiat currency which will pay them to provide things for themselves. They are also reliant upon the sovereign to establish and enforce a system of taxes, ensuring that every citizen continues to be willing to provide goods and services in exchange for the fiat currency.
  2. Sovereign spending is not limited to and, in fact, has no direct relationship to the amount of Dollars the sovereign collects in taxes. The only limits on sovereign spending are the real, sustainable resources—labor, energy, materials, and technology—which are actually available in exchange for the fiat currency the sovereign issues. So long as those real resources are available within the territorial boundaries of the nation, there is no limit to the amount of fiat Dollars the sovereign can spend to marshal those resources. The amount of taxes the sovereign must collect is related only to the inflationary pressures on the currency.
  3. The sovereign “deficit” is not a debt which the citizens have to repay with future taxes. Instead, the sovereign “deficit” is simply the balance sheet accounting of the fiat Dollars the sovereign has issued and paid to the citizens. What is written as a “deficit” on the sovereign side of the balance sheet is a financial “asset”—Dollars earned—on the citizen’s side. The citizens then use those Dollar assets to pay for goods and services amongst themselves.
  4. Issuing and spending sovereign fiat currency to pay citizens to create goods and services for their collective benefit is different than “printing” money. This process does not create inflationary pressure on the currency so long as the fiat Dollars are used to employ unused labor and marshal unused resources—and as long as the sovereign effectively manages its parallel process of continuously collecting the taxes which drain excess fiat Dollars out of the economy.

Putting the Counter-Narrative to work

Let’s briefly consider three contentious issues of our current public debate—Health Care, College Debt, and Civil Infrastructure—and see how the 99% might use these talking points and the emerging counter-narrative to demand that public policy—in light of the realities of modern fiat money—be framed anew.

Health Care

Why would we, as a collective society, not want each citizen to be as healthy, productive, useful, and happy in their lives as possible? Certainly each of us would benefit if every citizen had universal access to good health care. We are all exposed to the same pathogens, diseases, and possibilities of accidental harm—if one of us gets sick, there is a good chance another will be sickened as well. Common sense says it is in our collective interest to keep everyone as healthy as humanly possible. The 1% narrative, however, tells us the sovereign government simply does not have enough money to achieve such a goal: It is impossible for the sovereign government to collect enough taxes to pay for every citizen’s health maintenance costs, and it would be fiscally irresponsible for the government to even consider borrowing the necessary Dollars. End of story.

But now the 99% can make a compelling, and truthful, counter-argument: If the real resources are available to provide the health care—doctors, nurses, hospital beds, MRI machines, pharmaceuticals, etc.—the sovereign government can, in fact, issue and spend as many fiat Dollars as necessary to pay those doctors and nurses, rent those hospital beds, lease those MRI machines, and purchase those drug treatments, such that every citizen receives the health-care they need. So long as the sovereign spends those fiat Dollars on real medical-care goods and services, this spending will not inflate the value of the currency but, instead, will expand the quantity and quality of health services available to the citizens.

Note the 99% counter-narrative is not asking that the government provide the citizens with health-care; instead, they are simply demanding that the sovereign government issue and spend the fiat Dollars necessary for the citizens to provide themselves with the quality and quantity of care they collectively agree upon. So long as the real medical resources are sustainably available within the nation’s borders, the sovereign government has the exclusive power to enable its citizens to provide themselves the medical services they need. And while the sovereign’s spending will appear as a very large “deficit” on the sovereign’s side of the balance sheet, this “deficit” does not represent future taxes the citizens will have to pay, but rather it represents instead the “assets” that will have been entered on the citizen’s side of the balance sheet—the fiat Dollars deposited in the accounts of all the doctors, nurses, hospital staff, and pharmaceutical lab assistants who provided health care to the citizens.

In a nation that issues and rationally manages its own sovereign fiat currency, then, universal health care is always “affordable” at a level commensurate with the real health-care resources available within the nation’s borders.

College Debt

The average American college student today graduates and begins looking for their first job with a debt of $27,000.  This is not an accident, but is the result of a set of public policies firmly based upon the 1% narrative which, necessarily, goes something like this: There are three reasons why it is impossible to imagine the sovereign government paying for universal education at the college level:

First, it is simply not possible for the government to collect enough tax Dollars to pay for every citizen to attain a college degree—or a comparable certificate of special training—and it would be fiscal insanity for the government to borrow Dollars for that purpose. Second, why should taxpayers pay for someone else to go to college? They have enough burdens as it is, saving Dollars so their own children can attend a collegiate curriculum. Third, while a basic K-12 education may be considered a “right” that should be available to every citizen, college courses are a private-market commodity that citizens should pay for with their own Dollars, just like they pay for everything else. Some might even argue that borrowing Dollars to pay for college courses is a valuable learning experience in itself—teaching the virtues of investment and on-time loan payments.

But the 99% can now offer the following compelling and truthful counter-argument: If the real resources are available to provide every citizen with a college-level education—teachers, classrooms, computers, laboratories, studio-shops, etc.—the sovereign government can issue and spend the fiat Dollars necessary to enable the citizens to educate themselves. It is not necessary to collect tax Dollars in order to do this; nor is it necessary to borrow Dollars.

If the real educational resources are available, why would we choose not to marshal them? What is the collective benefit to us, as a society, when our early-age workforce is either (a) under-trained, or (b) so deeply in debt they cannot easily meet basic living expenses with their starting salaries? Would it not be a great collective benefit to our private economy if our early-age workforce was not only well-trained, but starting out their careers debt-free? How much sooner will a young family be formed, a house and car purchased, if there isn’t a $27,000 college debt to work off? Aren’t there other ways to learn the virtues of investment and on-time debt payments? And if the purpose of education is to prepare for a life’s work, why should we declare that only the first part of that preparation is a “right”?

As long as the sovereign fiat Dollars issued and spent are used to pay for real educational goods and services that did not previously exist, they will not put inflationary pressure on the currency. And while the “deficit” on the sovereign’s side of the balance sheet will be considerable, it does not represent future taxes the citizens will have to pay, but instead represents the “assets” that will have appeared on the citizen’s side of the balance sheet—the wages and salaries paid to teachers, research assistants and educational administrators and staff who provided the educational services.

Every nation that issues and rationally manages its own sovereign fiat currency, then, can afford to pay for universal college-level education for its citizens, commensurate with the real teaching resources that are available in exchange for the fiat currency it issues and spends.

Civil Infrastructure

In April, 2013, the American Society of Civil Engineers issued a comprehensive report laying out the work and repairs that will be required over the next seven years to keep America’s existing civil infrastructure safe and operational. The projected cost: $1.6 trillion. In the same month, the U.S. Congress—caving to the pressure and demands of the 1%—allowed the “sequestration” of sovereign spending to become de facto law: a blind $1.1 trillion reduction in sovereign spending intended to reduce the “out-of-control deficit” of “big government.”

Every citizen who has the need to drive across a bridge, flush a toilet, turn on an electric light, drink tap water, ride a commuter train, fly in an airplane, listen to a weather report, or lives downstream from a damn, should be concerned. If the sovereign government doesn’t cough-up $1.6 trillion over the next seven years, each of those taken-for-granted amenities of our daily lives will begin, one by one, to fail. On 25 May, 2013 a U.S. Interstate 5 highway bridge over the Skagit River in Washington State suddenly collapsed, sending three cars into the water. We are now told there are actually 66,749 structurally deficient—and 84,748 functionally obsolete—bridges in the U.S. highway system, most of them “fracture-critical” structures, (which means they were designed and built, like the bridge over the Skagit River, on the cheap to begin with: if just one bolt or rusted strut gets clipped by a truck, the entire bridge comes down.)

The 1% narrative makes it abundantly clear that it is impossible for the sovereign government to collect enough tax Dollars to even begin keeping up with the problem of our failing infrastructure. Highway taxes collected at the gas-pump, for example (which are supposed to pay for highway repairs) are declining— even as the numbers of vehicles increase—due to better fuel efficiencies. Forget about the smart electric grid and civil infrastructure of the future: we cannot, as a collective society, even afford to keep the decades-old, cracking and crumbling structures we already have safe and operational.

The interesting thing about this apparent dilemma is that the 1% has to use the same infrastructure as everyone else—so (unlike Health-Care and Education) they have come up with a proactive solution: sell the bridges and interstate highways to the 1%! They can afford to repair and upgrade these essential items of our everyday lives and commerce, and they’re more than happy to do just that—in exchange for a toll. So now the 99% will pay a toll to the 1% every time they drive across the repaired and upgraded bridges—and the 1% will slowly, piece by piece, take over ownership of the public realm. The French Revolution succeeded in reclaiming “ownership” of the world from an aristocratic elite—now the elite of the 1% are seeking, inexorably, to reinstate that ownership with the drumming beat of their mind-numbing narrative.

But now the 99% can have its own drum-beat: If they’re actually available for hire, let’s begin immediately retaining civil engineers to design fixes for every “fracture-critical” bridge in the U.S.—and hire the needed contractors (assuming they’re actually available as well) to build the fixes. And that would just be for starters: Forget the old 1% excuse of “shovel-ready”—(if an infrastructure project isn’t ready to immediately begin pouring concrete, it isn’t possible to allocate fiat Dollars to it)—and begin immediately hiring architectural, planning and engineering firms to envision, propose and design the sustainable urban infrastructures—the “smart” electrical grids, zero-carbon energy systems, driverless freeways, downtown people-movers, affordable and energy efficient residential communities, water-management and storm mitigation systems—we’re going to require in the future. Not a single taxpayer Dollar has to be collected; not a single, fiat Dollar has to be borrowed from anybody.

So long as the sovereign spending pays to employ unused labor and sustainable resources—and as long as the sovereign continues to regularly drain “excess” Dollars from the economy by collecting taxes—the new fiat Dollars spent for civil infrastructure will not put upward pressure on prices. And, even though the “deficit” on the sovereign’s side of the balance sheet might grow quite astronomical indeed, this “deficit” does not represent future taxes that must be paid by the citizens—it represents instead the “assets” that will have been entered on the citizen’s side of the balance sheet: the fiat Dollars that have been deposited in the accounts of architects, engineers, steel fabricators, concrete finishers and construction laborers.

These are just three examples of how an understanding of modern fiat money can empower the 99% to alter the national policy debate. The possibilities for cooperative ventures, benefiting tens of millions of citizens across a broad spectrum of issues and endeavors—food, energy, housing, transit, early childhood learning, and even local democratic processes themselves—are limited only by the creative imaginations of real people and the availability of real resources.

Culture of Dependence versus Culture of Empowerment

The most deceptive argument put forward by the 1% narrative is that the kind of sovereign spending demanded by the 99% will result in a “culture of dependence.” We briefly touched on this earlier, but it is such a powerful volley, it seems appropriate to conclude by countering it in some detail.

“Culture of dependence” infers a vast constituency of citizens who will do nothing with their lives except collect welfare checks, food stamps, and housing vouchers. They have no motivation to seek work or employment—or to educate themselves with the goal of acquiring job skills—because all their basic daily needs are provided for by sovereign spending.

This is a bleak picture indeed. But it clearly has nothing to do with the 99% counter-narrative we are outlining here. The sovereign spending we are proposing pays citizens to do things—quite a lot of things, in fact. As we’ve already outlined, it proposes to pay citizens to immediately begin repairing each one of our dangerously deficient bridges; it proposes to pay them to design and build the sustainable, energy-efficient infrastructure we’re going to wish we had in the future; it proposes to pay citizens to provide health-care and health-maintenance services across our entire society; it proposes to pay them to teach our children and young adults all the various skills, knowledge and technological know-how our culture has to offer.

The 99% counter-narrative—based on the real possibilities of modern fiat currency and sovereign spending—does NOT conjure up an image of lazy, indolent, unmotivated masses! Quite the contrary: it challenges every citizen—young and old alike—to imagine a better world, and then cooperatively organize themselves to make it happen. All that is necessary is for the 99% to grasp the real, democratic power that modern fiat currency makes possible.