The entertaining episode has received much media attention. Oliver produced a trailer for an imagined movie blockbuster called Infrastructure, featuring Edward Norton as the lead, in the hopes of making the idea of repairs more interesting to the public.
Although the show was a lot of fun, it is a serious question that Oliver raises. U.S. infrastructure is in abysmal condition. According to the report, serious disasters loom. Where does a much indebted government get funds for necessary projects? President Obama suggests closing tax loopholes for corporations, says Oliver. Speaker Boehner is still looking into the problem. Meanwhile, the trust fund for highway repair, Oliver also reported, is due to go bankrupt very soon. The conventional methods of borrowing and taxing have not been sufficient to fund the upkeep of America’s bridges, roads and dams.
Paul Grignon is a moviemaker whose animated Money as Debt features have educated audiences about the banking system and alternatives worldwide in twenty-four languages. He has proposed, in great detail, alternative forms of money creation. His website describes the current system of banking, and more generally, the problems with money conceived of as a limited supply of anything.
Digital Journal asked Grignon if the Federal Reserve were out of the picture, could the U.S. government spend new money into existence without creating inflation?
If it creates an expansion of economic activity and money exchange, yes. But that stage was post Word War 2. When infrastructure is first built, it is often for the very purpose of creating new opportunities for economic growth that can absorb the added money without inflation. However, repairing existing infrastructure doesn’t create any new economic activity that survives the project, and perpetual growth is impossible, so that idea doesn’t apply.
There’s no free lunch, but there’s also no need to borrow at interest. Any government that can collect taxes can spend new money as tax credits and avoid borrowing and paying interest. But money spent must be taxed back to preserve its value. It’s tax and spend in reverse. However, this way around, there will always be enough money to pay the taxes because the government spent that much into existence. The same principle can be applied to the private sector as well, making money redeemable in goods and services and limited only by the actual production of value.
Grignon enjoyed John Oliver’s show, which he thought was “very funny, especially the movie trailer.” He said he hopes that interest in the problem of funding infrastructure projects might make more money reformers look into his research and consider alternative ways of solving some of our most pressing and expensive problems.