Igniting An American Technological Revolution Without Raising Taxes

By Richard Duncan

In recent years, the United States has experienced widespread economic discontent that has resulted in a bitter partisan divide in politics. At the same time, China has emerged as a geopolitical rival that threatens the United States’ economic, technological and military primacy and, therefore, US national security.

If the US does not act quickly the political divisions at home could tear the country apart, while Chinese hegemony becomes entrenched throughout the greater part of the world.

To address these challenges, there is an urgent need for the United States to carry out a large-scale investment program targeting 21st-century industries and technologies, such as Artificial Intelligence, Quantum Computing, Genetic Engineering, Biotech, Nanotech, Renewable Energy, Neural Sciences, and Robotics.

My book, “The Money Revolution: How to Finance the Next American Century,” details how the US can undertake a government-financed investment program that would turbocharge economic growth, guarantee US national security for generations to come and radically enhance human well-being not only in the United States but all around the world.

Dinner With Ways and Means Democrats

On February 27th, I was invited by Representative John Larson (D-CT) to make a speech before 15 Democratic members of the House Ways and Means Committee in Washington, DC. During my speech, I explained the ideas in my book and conveyed the importance and feasibility of a large-scale government investment program to the decision-makers in our government. This article summarizes the main points from that speech: My Speech Before Members Of Congress – Richard Duncan Economics

The brilliant economist, Joseph Schumpeter, taught that economic growth is driven by waves of innovation, such as the railroad boom of the mid-19th Century, and, later the development of the chemicals industry, electricity, and automobiles.

The breakdown of the Bretton Woods International Monetary System in 1971 set off another similarly transformative innovation, this time an innovation in the way our economic system functions, one that has removed all limits on the amount of credit that can be created, while simultaneously eliminating the labor and industrial capacity bottlenecks that, in the past, had resulted in high rates of inflation when credit expanded rapidly.

With the collapse of Bretton Woods, an international monetary system that had constrained how much credit could be created was suddenly replaced by a system that permits limitless credit creation. At the same time, an international trading system that had been comprised of dozens of relatively closed national economies, each compelled to prevent persistent trade imbalances, was replaced by a new system, Globalization, that encompasses the entire world and in which labor and industrial capacity are excessive, rather than scarce.

New Monetary System

This new monetary system, operating within a new international trading order, has been the most powerful Schumpeterian innovation of our age. It vastly expands the resources at humanity’s disposal. With money no longer backed by gold, there are no longer any limits on how much credit central banks and commercial banks can create. At the same time, the labor and industrial constraints that had caused inflation and held economic growth in check simply no longer exist.

The financial and economic fetters that had long restrained us are no longer binding. We are living in a new, much larger economic environment which presents us with the possibility to accomplish much more than had ever been possible before.

The only impediment left to overcome is insufficient imagination. Policymakers are captive to outdated economic theories that most of them never really understood in the first place. The best of those theories were appropriate for the age when they were developed, but not for our age. This is not the early 20th Century world of Ludwig von Mises when gold reserves limited how much credit could be created. Nor is it Milton Friedman’s 1960s, when the size of the US workforce and the depth of industrial capacity within the United States dictated how much the US government could spend without setting off an inflationary firestorm.

This is the 21st Century. It presents opportunities that did not exist in the past. We must recognize those opportunities, grasp them and extract every last benefit from them as quickly as we can and for as long as we can. If we do, we will greatly improve our lives and our children’s lives. Then, our children’s children will recall hearing of diseases like cancer and Alzheimer’s the way we only remember hearing of diseases like smallpox and cholera; and they will live in a clean and sustainable environment, never knowing the stench of gasoline.

How Do We Do It?

What is the best way to maximize these opportunities? The federal government could organize this program through fully government-controlled investment projects like the NASA “moon shot” project in the 1960s, or by using a venture capital model to set up joint venture companies with promising scientists and entrepreneurs. This dual approach would enable the government to leverage the strengths of both the public and private sectors, fostering a spirit of collaboration and competition that would drive innovation to new heights. Moreover, this approach would mitigate risks associated with large-scale investments and help the government capitalize on the
most promising ideas and technologies.

Financing this investment revolution would not require an increase in taxes for three primary reasons:

1. Accelerated government investment would boost economic growth and tax revenues,
2. resulting in medical breakthroughs would improve public health and reduce government health-related spending, and
3. the government would earn enormous profits from these investments as
   they produce cures for diseases and new sources of very low-cost energy.

A Money Revolution has occurred and rewritten all the rules of finance and economics. It presents the United States the opportunity to invest in new industries and technologies on a scale large enough to open up the possibility of curing all diseases, radically expanding life expectancy, developing limitless clean energy, rehabilitating the environment, and solving many of the other most intractable challenges confronting humanity – not generations from now, but in our own lifetime.

Richard Duncan is an economist and the author of “The Money Revolution: How to Finance The Next American Century”. For more information, see: Richard Duncan Economics. Richard will appear to discuss his work at a future TheDGT.org salon event; keep an eye on the events page.