(but he doesn’t know it) 

 During the Commander-in-Chief discussions aboard the USS Intrepid, Donald Trump made a statement that—if he understood economics—he could have attracted a lot of votes his way. He made note that we (the US government) squandered some $3 trillion on Middle East wars since invading Iraq—for which we got nothing in return. He only argued that we should have taken Iraq’s oil. But he did not take that golden opportunity to tell us what we could have done with that money in a more positive way and put it to much better use. All of those alternatives foregone are known to economists as “opportunity costs.” Those uses are staggering in their scope, immense in meeting our critical needs, and super colossal in what our country would look like if implemented.

Here is what we could have done (and can do yet) with $3 trillion. 

Today, a newly printed dollar that is put into circulation gets spent six times in one year as it travels from consumer to seller, then to employee, and then to seller as it goes around and around, again and again.  The number of times it “turns over” in one year in transactions is known as its “velocity.”  With a velocity of six, that means that $3 trillion in circulation creates $18 trillion in new goods and services (GDP).  We might have to inject such a large infusion over 6 or more years in order to avoid creating inflation, but that is a side issue. 

Missed Opportunities.  Here are the annual results of $18 trillion in new GDP:  1)  24 million new high paying jobs;  2)  $15.3 trillion in new personal incomes;  3)  $2.7 to $3 trillion in new federal tax revenuesr;  4)  about $4.2 trillion in new local and state tax revenues;  5)  enough new cash in local, state, and national coffers to pay for all of their budget deficits, plus enough left over to fix all our highways, railways, bridges, air and seaports; and with still enough of offer free higher education to everyone who wants it; health care insurance for everyone; plus enough to shore up the solvency of Social Security and Medicare far into the future; plus new research and development revenues for new renewable energy sources; for medical research; plus 6)  with all the new jobs and new incomes, we could raise the entire nation out of poverty, thus sending new ripples of opportunities throughout the land.  In addition, 7) we could eliminate virtually all our social ills including huge reductions in crime rates, incarceration rates, illiteracy rates, illegal drug usage rates, teen pregnancies, suicides, mental health issues, hunger, increase life expectancies, and boost social mobility rates.  

Of course, the economy could not absorb 145 million new jobs in six years.  We do not have a large enough population.  And so a large chunk of new profits would go into higher wages--perhaps doubling in value across the board.  And into new plant and equipment.  Suffice to say we would be awash in new prosperity.

Your blew it, Donald.  And that is mainly because your brain is deficient in business and economics, and your moral character won’t let you think about anyone other than yourself.  

Attention Hillary:  I am asking all my readers to copy and send this short essay to you, or to your campaign, or to your house, or to your foundation.  When you get it, make the most of it.  If progressives win by a landslide in November, they can write a new history by passing lots of new legislation, and by ordering the Federal Reserve to print $3 trillion in new money, and require that they inject it directly into circulation (M1 only) over 6 years, and watch the magic happen.  If you don’t believe me, then ask Robert Reich, or Paul Krugman, or any economist with an IQ higher than 100.  Just ask them if this identity is true or false:  new M1 times V1 = new GDP.   

No need to thank me.  It’s what I do.

Ed Phillips, Ph.D.