The Fallacy that America is ‘Broke’   Leave a comment

by Dave Svetlik

We are told that America and Wisconsin are broke – that austerity budgets targeting the middle and lower classes are required to pay for our profligate ways. However, there is a disconnect between wealth and money that is contributing to the problem. Adding simple definition to these concepts may shed light on our predicament.

We could say that wealth is all of the goods and services that improve the physical human condition. It is housing, food, clothing, transportation and communication systems, and countless other commodities and services that contribute to our physical well-being. The late visionary, R. Buckminster Fuller, defined wealth as available physical resources, in the form of matter and energy, multiplied by the scientific and technical capability to most effectively use these resources to man’s advantage (currently accumulated human knowledge). Stating this as an equation, Fuller concluded that:


Based on the laws of physics, wealth is incorruptible and inherently global. Knowledge and resources are worldwide and the greatest multiplication of wealth can only be realized through the synergies of universal cooperation.

Money at its best is a medium of exchange for the fair transfer and trade of wealth. But money is not wealth. It is a legally sanctioned claim to wealth – a system of indebtedness wherein the holder of $100 is owed that amount of wealth in goods or services by his society, until this individual chooses to “spend” the money. Money is based on manmade rules and, unlike wealth, is infinitely corruptible. It is this corruptibility that lies at the heart of our economic woes.

Now, all of this seems uselessly theoretical until we realize that in 2011 there are 18.6 million (1 in 9) empty homes in America and 3.5 million homeless people, and that an estimated one billion people around the world live in near starvation while we produce one and one half times the food needed to feed everyone. Clearly, the laws of physics and Fuller’s wealth equation are telling us that we can afford to do whatever is necessary to care for humanity, while the manmade rules of “money” are telling us we are broke. Further clarification might be of value.

Wealth is that which physically supports the human condition. Money is an exchange mechanism for trading wealth. But money can also be invested to make money. In the case of legitimate interest bearing loans to individuals or businesses, or through the purchase of stocks or bonds in private or public enterprises genuinely improving the human condition, this investment can usefully lead to a tangible increase in true wealth. But let us take using money to make money to an extreme. We will call this methodology, used by the financial industry, something like “exotic financial instruments.”

Exotic financial instruments do not create wealth. They transfer the claim to wealth (increase the indebtedness of society to the holder) by the manipulation of money. Through game playing and deceit, money is moved upward, and society falls farther into debt. To make matters worse, money is power. Through the efforts of well paid lobbyists, the legal system and tax codes are altered to further favor the game players. The money – the claim to the wealth – is methodically removed from average Americans. We are told that infrastructure, public education, social security and Medicare are unaffordable. After all, America is “broke.”

But let us rephrase some questions: Do we have sufficient cement to rebuild our bridges? Yes. Do we have sufficient structural steel? Yes. Do we have the technical knowhow? Yes. Do we have sufficient manpower? Yes – we have high unemployment. Are we capable of growing enough food to feed these people? Yes – excess food is wasted in America. Can we house these workers? Yes – obviously.

“Oh, but wait” say Wall Street and their Washington servants, “You people can’t build these bridges. You forgot – America is broke. You don’t have any money. And besides, you cannot afford enough clean water to mix the cement because, don’t you remember? You had to sell us (privatize) your public water utilities because – – you’re broke. We hedge fund managers and Wall Street bankers and corporate CEO’s have simply been savvy businessmen. It’s nature’s way, and now you Americans – – well, you’re broke.”

So we sit and look at the unused cement, the rusting steel, the wasted food and crumbling homes, our unemployed workers, undereducated children, and poverty stricken elderly, because of course, “we’re broke.” We are being made to suffer in a land of near-endless wealth, because money is infinitely corruptible.

Neither America nor the world is “broke.” However, we continue to operate planet Earth under the now scientifically and technologically disproved Malthusian belief that there is not enough to go around – someone must suffer and go without. This is at the root of the hoarding behavior of Wall Street and the mindless wars over oil resources in the Middle East. The tragedy is that continuing this false, reflexive belief makes it a self-fulfilling prophecy. Our greatest efforts are dedicated to subverting one another, rather than developing the technologies and systems thinking that would enable mutually assured human success.


Posted August 7, 2011 by Middle Wisconsin in Uncategorized

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