Mitchell’s laws: Reduced money growth never stimulates economic growth. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity breeds austerity and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
Here is my (dumb?) question about Social Security and Medicare:
The “experts” tell us: More and more people will receive benefits from Social Security and Medicare. Current FICA payments are inadequate to cover these increased benefits. So, either FICA must be increased and/or benefits must be decreased. Otherwise, Social Security and Medicare will go bankrupt.
In short, Social Security and Medicare are self-funding entities. They even lend money to the government. They are separate from the rest of the U.S. government finances, which is why they can go bankrupt.
But . . .
Mr. President, you and Congress tell us the federal deficit is too high, and the federal government must “live within its means,” and one way to accomplish this is to cut Social Security and Medicare benefits.
Now wait a minute. You can’t have it both ways. If Social Security and Medicare finances are separate from the U.S. government, and these agencies could go bankrupt separately from the U.S. government, that means the federal government isn’t supporting them.
So my dumb question is: If the government isn’t supporting Social Security and Medicare, how can cuts in benefits help the government live within its means? And if the government is supporting them, how can they go bankrupt?
I look at it this way: My working adult child receives no financial aid from me. Her job doesn’t pay enough, so she either must cut her expenses or go bankrupt. How does her cutting her expenses help me live within my means?
It’s all so terribly confusing, Mr. President. Can you clarify this for me, before I award myself a dunce cap?
Rodger Malcolm Mitchell
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia. The key equation in economics: Federal Deficits – Net Imports = Net Private Savings