Breaking the Debt Chains: Exposing the Myths of Tax, Spend, and Borrow

The debt-based money system and the Great Illusion of Scarcity. Illuminating a path to freedom and prosperity through monetary reform - The first of several articles on this topic.

My husband, former Congressman Dennis Kucinich and I first met twenty years ago over a rather unromantic yet profoundly important topic: monetary reform. The second time we met we were engaged and three months later we were married.

It was 2005, and, at that time, I had spent nearly a decade working with the Forum for Stable Currencies, a group based at the House of Lords in London, dedicated to exploring banking malpractice and the hidden mechanics of money creation and its systemic impact on society.

My journey into this lesser-known field began much earlier, in my teenage years, when a deep concern for the root causes of social and ecological destruction led me to ask a fundamental question: What is the greatest systemic driver of these crises?

Through a series of seemingly serendipitous encounters, I discovered monetary reform—a topic rarely discussed, yet foundational to the structure of our economy and the fate of nations.

I read the Congressional report, A Primer on Money, authored by Texas Congressman Wright Patman, Chairman of the House Banking Committee from 1963 to 1975. In it is explained how the Federal Reserve creates money and how private banks profit from the system. Patman advocated for government-issued money to replace the debt-based system, similar to Lincoln’s Greenbacks, to prevent the U.S. from being perpetually indebted to banks.

Congressman Patman exposed the Federal Reserve’s role in subordinating the U.S. government to private banking interests. In A Primer on Money, he laid bare the mechanics of a system in which the government borrows money that it has the constitutional power to create itself—an arrangement that benefits banks at the expense of taxpayers.

In the moment I read the white paper, not knowing anything about American politics and never having visited the country, I pledged to work to introduce the legislation which Wright Patman would have advanced had it been written.

After nearly ten years of engagement in the topic attempting to uncover the truth of the situation, I finally met a presenter who not only understood the urgency of reform but was also a historian—someone who had meticulously pieced together the grand narrative of monetary history, theory, and the essential reforms needed to transition from a debt-based money system to one of equity and abundance.

His name? Stephen Zarlenga, author of The Lost Science of Money and founder of the American Monetary Institute (AMI). He made the topic of monetary policy exhilarating.

Zarlenga offered not just an analysis, but a vision—a pathway to liberate nations and their people from the stranglehold of debt, while freeing the environment from the relentless plundering demanded by an economic model built on perpetual growth -- Growth not for human or ecological well-being, but to feed an ever-expanding system of interest on money created, as debt, by private banks.

And in that moment, my journey to the very heart of American politics began.

But I’m getting ahead of myself.

Navigating the Political Storm

As I write this, I sit in a café at the CPAC conference, navigating the ideological storm like a dancer gliding through raindrops. I fully endorse that an oversized, overreaching government—one that crushes civil liberties through mass surveillance—should be dismantled.

As Dennis and I explored in our previous articles, The Cost of Freedom: Confronting Military-Industrial Profiteering and Restoring Fiscal Integrity to Preserve Our Republic and Trump Wants to Cut Pentagon Spending in Half. How?, the hemorrhaging of our nation’s wealth on illegal, unnecessary wars and the profiteering of military contractors must be exposed and ended.

I also know, however, that government has a central, essential role: to ensure the well-being of its citizens by upholding the rule of law, protecting individual rights, and providing essential services that individuals cannot effectively manage alone.

As Abraham Lincoln famously stated, "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."

The challenge lies not in rejecting government outright, but in restoring its proper function—one that serves the people rather than special interests, strengthens communities rather than stifles them, and upholds sovereignty rather than selling it to the highest bidder.

A government that safeguards national security without succumbing to authoritarian overreach, that fosters economic opportunity without falling prey to corporate capture, and that defends constitutional freedoms rather than eroding them, is not only necessary but foundational to a thriving republic.

Yet, amidst these discussions—made even more relevant today by the bold actions of President Trump’s Department of Government Efficiency (DOGE)—an enormous elephant looms in the room, one larger in size and consequence than party lines and ideology.

The Manufactured Debt Crisis

Every election cycle, the same economic theater plays out. Politicians argue endlessly over taxes, government spending, and deficits, creating the illusion that the United States is on the brink of financial collapse. We are told that without drastic spending cuts, the country will drown in unsustainable debt. Meanwhile, both major parties perpetuate the same dangerous falsehood—that the U.S. government operates like a household or a business and must “balance its books.”

But this is a myth. And it is time to expose it.

This is the theater of tax and spend—a scripted debate that ignores the true source of America’s financial problems: the privatization of the money system.

The real crisis is not public spending but the fact that nearly all U.S. money is created as interest-bearing debt by private banks.

Instead of issuing debt-free money for public investment, the government borrows from financial institutions, ensuring that the nation—and its people—remain permanently indebted.

As the Trump Administration proposes $2 trillion in spending cuts, the stakes couldn’t be higher. These cuts threaten public services, infrastructure, and economic stability, yet they do nothing to address the root cause of our so-called “debt crisis.” The real question is not where to cut, but rather, why does the government borrow at all when it has the constitutional power to issue money directly?

The U.S. Constitution grants Congress the power to issue money in Article I, Section 8, Clause 5, which states:

"The Congress shall have Power [...] To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures."

Additionally, Article I, Section 10, Clause 1 prohibits states from issuing their own money:

"No State shall [...] coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts."

These clauses establish that money creation is a federal power vested in Congress, but over time, this power has largely been transferred to the Federal Reserve and private banking system, which issues money primarily through debt-based mechanisms. (I’ll go into this in a future post)

Government Budgets vs. Household Economics: Understanding the Difference

I was raised in London, England, in a fiscally conservative household during the Thatcher era. My parents were independent business owners, and I grew up watching and experiencing the privatization of Britain—public assets paid for by taxpayers sold off under the name of efficiency. Non-profit government services were turned into profit-making entities, prioritizing shareholder profit over public access.

I believe in balancing budgets, living within one’s means, and paying down personal debt as soon as possible. However, one of the biggest misconceptions in economic policy is the belief that government finances are akin to household or corporate budgets. This is fundamentally incorrect.

• Households and businesses must first earn income before they can spend. Their access to money is limited to wages, sales, or borrowing, requiring careful budgeting.

• Governments, however, operate in a fundamentally different way. The U.S. federal government, unlike a household or business, does not need to “earn” money before spending—it holds the sovereign power to issue currency. This ability allows it to finance the public good without the same constraints faced by the private actor.

Unlike individuals or businesses that must generate income, take on debt, or cut expenditures to balance their budgets, the federal government has a unique constitutionally-based role: to create the nation’s money supply, and through spending, circulate it into the economy.

This means that, within reasonable inflationary limits, it is never constrained by a lack of funds in the way a private entity is. It does not need to collect taxes before it can spend, nor does it have to borrow from private banks to finance public programs—though current policy choices force it to do so.

The notion that the government must tax or borrow before it can spend is a relic of the gold standard era, when paper money had to be backed by a finite reserve of gold. However, since the U.S. fully abandoned the gold standard in 1971, it now operates under a fiat currency system, where the value of money is not tied to any physical commodity but rather to the productive capacity of the nation and the stability of its institutions. Under this system, the federal government has the authority to create money as needed to fund infrastructure, education, healthcare, and other vital services without relying on external lenders or burdening future generations with unnecessary debt.

The key limitation on government spending is not an arbitrary budget constraint but the risk of inflation—too much money creation without corresponding economic productivity can drive up prices. However, when money is spent on productive investments, such as building renewable energy infrastructure, modernizing public transportation, or advancing scientific research, it generates economic growth, stabilizes employment, and enhances national prosperity.

Thus, the real debate should not be about whether the government can afford to invest in its people and infrastructure, but rather how to direct public money in ways that maximize societal well-being while maintaining economic stability.

Let me explain.

The dangerous myth of balancing budgets leads to unnecessary austerity. It forces governments to cut spending on healthcare, education, and infrastructure when, in reality, they could fund these services debt-free—if only they reclaimed their constitutional money power, rather than relying on private bank-issued credit.

Critics argue that increased government spending without borrowing could lead to inflation or runaway deficits. However, inflation is not simply a result of money creation—it depends on whether the economy has the productive capacity to absorb new spending.

When money is directed toward real goods, services, and infrastructure, it enhances economic output and offsets inflationary pressures. The true cause of destabilizing inflation is not government spending itself, but misallocation of resources, supply chain failures, and artificial scarcity; more specifically, the financialization of the economy, defense spending vs. productive investment, corporate subsidies and monopolies.

If spending were targeted toward productive investments—rather than speculative bubbles, wasteful military expenditures, and corporate subsidies—the economy could sustain prosperity without inflationary crises.

Instead of exercising its sovereign money power for public benefit, the government has entangled itself in a system of excessive taxation and debt-based issuance, making life in America increasingly unaffordable. In the theater of tax and spend, taxation itself becomes the great competitor to human flourishing.

The Creation of the Federal Reserve and the Privatization of Money

To understand our current predicament, we must look back to 1913, when Congress ceded control of money creation to private banks through the Federal Reserve Act. Under the Federal Reserve system, money creation was outsourced to private banking interests. Instead of issuing money directly, the government now borrows it at interest, enriching Wall Street while burdening taxpayers.

This system ensures a permanent cycle of debt and instability:

1. Banks create money by issuing loans, expanding the money supply.

2. When too much money is created, inflation or asset bubbles occur (boom phase).

3. Banks then restrict lending, causing recessions and job losses (bust phase).

4. The government, instead of issuing money to stabilize the economy, borrows from the same banks that caused the crisis.

The result? An economy designed to crash every few decades, keeping ordinary citizens in debt while banks profit from every cycle.

The Role of the Department of Government Efficiency (DOGE) and the Budgetary Illusion

The Trump administration’s Department of Government Efficiency (DOGE) has proposed $2 trillion in spending cuts, with Elon Musk emerging as a high-profile advocate for budgetary savings. But cutting government spending without addressing the structural flaw in our monetary system does not solve the problem—it exacerbates it.

Under the current system, government debt is what the money supply is built on.

Cutting spending reduces the money supply, leading to recession and economic contraction, a reality that neither Musk nor many fiscal conservatives fully understand.

This is the fundamental flaw in mainstream budget-cutting logic: it does not address the privatized money system that creates debt by design.

The Path Forward: Reclaiming Monetary Sovereignty

Congressman Dennis Kucinich introduced the National Emergency Employment Defense (NEED) Act of 2011, arguably the most important piece of monetary reform legislation ever proposed in Congress. The NEED Act would reclaim the power of money creation for the public, eliminating fractional reserve banking and ensuring that government funds infrastructure, healthcare, and education debt-free.

Under a sovereign money system:

Money serves the people, created to facilitate trade and stability, rather than to generate profits for banks.

• The Treasury, rather than private banks, would issue currency directly.

• Public investment would be financed without increasing national debt.

• A Monetary Authority would regulate the money supply to prevent inflation.

It is time to exit the staged roles and dramatics of the tax and spend theater by reclaiming our national sovereignty and reinstating the Constitutional money power.

The debate over tax and spending is a distraction from the real issue—who controls the power to create money? Until we address this, we will see:

• Permanent government debt, manufactured by a rigged financial system.

• Endless austerity, forcing cuts to public services while enriching banks.

• A boom-and-bust economy, where ordinary Americans suffer while Wall Street profits.

Dennis Kucinich, Stephen Zarlenga and I worked with Congressional legislative counsel for 5 years to craft the NEED Act. It is a blueprint to real transformative change, to prosperity, to a debt-free, fully-funded nation.

By reclaiming sovereign monetary power, we break the chains of debt and claim the essence of what it means to be truly free.