–Latest idiot proposal by the Democratic Party

The debt hawks are to economics as the creationists are to biology. Those, who do not understand Monetary Sovereignty, do not understand economics. If you understand the following, simple statement, you are ahead of most economists, politicians and media writers in America: Our government, being Monetarily Sovereign, has the unlimited ability to create the dollars to pay its bills.

In the event you think the Democrats are the common sense party of the middle/lower classes, read excerpts from an article in the Washington Post.

Controversial health board braces for continued battles over Medicare
By Bara Vaida, Published: May 8, 2011

The Independent Payment Advisory Board (IPAB) was created by the 2010 health care law. Last month, in releasing his deficit-reduction plan, President Obama called for increasing the panel’s authority, saying it was critical to controlling the costs of the program, estimated at $524 billion in fiscal 2010. Republicans and some Democrats have denounced the IPAB, saying it will be made up of unelected bureaucrats who will wind up rationing care to Medicare beneficiaries. As the spotlight turns back to the deficit, debates about IPAB are moving front and center. Here’s a look at the issues:

Q: What will IPAB do?

A: Beginning with fiscal 2015, if Medicare is projected to grow too quickly, the IPAB will make binding recommendations to reduce spending. Those recommendations will be sent to Capitol Hill at the beginning of each year, and if Congress doesn’t like them, it must pass alternative cuts — of the same size — by August. A supermajority of the Senate can also vote to amend the IPAB recommendations. If Congress fails to act, the secretary of Health and Human Services is required to implement the cuts by default

Any reduction in Medicare spending will mean doctors, nurses, and/or hospitals will receive less. Is this what we want? Do we really want our best doctors going to boutique status, where those patients who have money pay the annual fee out of their own pockets, while those patients who don’t have money are left either with the less-qualified doctors or will wait in long lines for service?

Do we really want fewer doctors available to the middle class and the poor, while the rich continue to receive unlimited medical care? Do we really want fewer doctors, fewer nurses and fewer hospitals? Do we really want fewer advances in medicine, like CT scans, MRIs and other costly procedures.

(“I’m sorry, Mrs. Jones. You’ll have to pay for this MRI out of your own pocket. We have exceeded our IPAB ration. You don’t have the money? Well, I guess you’ll just have to die.”)

(“I’m sorry, Mr. Smith. Development was halted on a machine that safely would have excised your brain tumor, because funding has been cut. We’ll use an older method, though it may leave you a paraplegic.”)

That is exactly what we will get if Medicare costs are “controlled.” And why? It’s all because of the false belief that the federal debt is a problem.

People like John Mauldin tell Americans, “Government spending is either money collected from the private sector in the form of taxes or borrowed money that future generations must repay.” This fundamental lie is so pernicious, so harmful, that anything Osama bin Laden did pales in comparison. The Americans he killed numbers in the thousands. Limiting health care spending will kill millions, today, tomorrow and for decades.

No, Mr. Mauldin. No, Mr. Obama. Government spending is NOT money collected from the private sector. And no, future generations will NOT pay for federal spending. No one pays for federal spending. Being Monetarily Sovereign, the federal government creates money. This is the federal government’s method for adding money to the economy. It’s necessary for a growing economy.

What does take money from the private sector and from future generations? Limitations on health care. This is the penalty of ignorance.

Rodger Malcolm Mitchell

No nation can tax itself into prosperity, nor grow without money growth. It’s been 40 years since the U.S. became Monetarily Sovereign, and neither Congress, nor the President, nor the Fed, nor the vast majority of economists and economics bloggers, nor the preponderance of the media, nor the most famous educational institutions, nor the Nobel committee, nor the International Monetary Fund have yet acquired even the slightest notion of what that means.

Remember that the next time you’re tempted to ask a dopey teenager, “What were you thinking?” He’s liable to respond, “Pretty much what your generation was thinking when it screwed up the economy.”


10 thoughts on “–Latest idiot proposal by the Democratic Party

  1. “Do we really want fewer doctors available to the middle class and the poor, while the rich continue to receive unlimited medical care?” So how did those patients get to that state? In the words of every socialist :Each to his needs, each to his wants” no matter earned of not. If that isn’t a problem, then you are right keep funding poor health practices by everyone. BTW: Ted Kennedy pushed health care most of his political life. He was a drunk that killed a person and in the end, his money got him a free trip to Hades.


  2. Dare to cut the military by $500 billion and you got the funding “covered”. I do understand that technically there is enough “money” to cover everything.


    500 billion is chump change to the US Armed Forces. Just reallocate the “funds”. Game over. The military will be just fine, they won’t starve. We still have PLENTY of ammo and bombs to go around. Maybe they will have to make do with $100 toilet seats on a few aircraft carriers instead of the $400 models?

    The war industry trumps the peace industry every time. This is the way in America.

    We would rather see your family members die sooner than make a defense contractor downsize his bomb or airplane factory.



  3. KK,

    Cut any federal program and “they won’t starve.” Perhaps not, but program cuts tend to cut the programs’ benefits, even when “they don’t starve.”

    Also, cutting the military by $500 billion reduces the amount of money in the economy by $500 billion, which is anti-stimulus.

    I’m not sure what you mean by “the peace industry.” And why is there an alternative between making my family die sooner vs. downsizing a bomb factory? Please explain.

    Rodger Malcolm Mitchell


  4. What I meant was..take 500 billion from the military..and invest that in other federal programs. Like giving the states the cash instead so they can run Medicare like you suggest.

    The military would not be allowed the “money”. Full stop. If that means they can’t run a base in Germany or Iraq or wherever, they deal with it. Prioritize.

    The “peace” industry is pretty much anything outside the military. Medical schools, doctors, hospitals. Innovations in agriculture so people don’t get sick in the first place. etc.

    When this “printed up” money is reallocated, one of the private bomb factories finds it no longer has government support. They can’t sell bombs to the military. They lay off workers and close the doors. There are still bomb factories, just way fewer.

    The money went instead to the states and was used in building that new wing of the medical school. The money also paid for retraining the former bomb factory workers for their new healthcare or high tech agricultural jobs.

    It’s all priorities. Other monetarily sovereign countries do not spend the “computer key” money on an overkill of military weaponry. Hell, the US even spends this money on EXTRA weapons, then sells them to it’s “friends” making big profits. That’s all short term gain though. The true cost is never given any thought. How much does a world perpetually at war cost anyway?

    I’m not a pacifist entirely. To use a phrase, “Some people need killin’…..some people actually DESERVE it.”

    I think we can do more with less in this regard. Wage economic war on em’ instead.


  5. KK,

    Whether or not the U.S. spends $500 billion on the military, has zero affect on the federal government’s ability to spend money on Medicare. That is the concept of Monetary Sovereignty.

    Cutting the military (or any) budget by $500 billion would remove $500 billion from the economy. However, if the government spent $500 billion on the military, and spent $500 billion on Medicare, that would stimulate the economy. Remember, the U.S. government creates dollars. What need has it for “profits”?

    Finally, any “profits” the U.S. government makes immediately are destroyed, and do not reach the economy.

    You will enjoy reading: https://rodgermmitchell.wordpress.com/2010/08/13/monetarily-sovereign-the-key-to-understanding-economics/

    Rodger Malcolm Mitchell


    1. Yes, I get all this.

      How about $250 billion spent on the military, and $750 billion on Medicare then? I know this is all imaginary but let’s put some dollar amounts on it.

      How about making sure the military gets a much smaller percentage of the total amount we “spend/create” in any given year. By law.

      All other industries and programs get priority.

      Right now according to 2010 budget figures it’s supposedly 50/50 Medicare-Medicaid and Dept. Of Defense (not counting the $52 billion for Veterans). I’m sure there is “creative accounting” and “black budget” in that figure.

      So let’s go 80/20 in favor of Medicare. Why not?

      Assuming we won’t just fund it all in our perfect blog world. The reality is it’s 50/50 ratio currently.
      My whole point is to counter the crying “We don’t have any money for healthcare, it’s SOOO expensive” doomsayer crowd. Yes we do. It just takes political will.


  6. Here is an interesting one:


    Click to resort by percentage of GDP.

    The majority of countries on Earth spend only 1% of their GDP on military.

    Russia, US, Israel, and Saudi Arabia are tops.
    Hmmm. Saudi Arabia spends a lot more than we do. On weapons they aren’t using? I don’t see them at war right now. Maybe they are shipping free guns to all their (secret)friends under the table? Nice.

    Iceland spends 0.8%. The bottom. I guess they have no enemies or are instead spending it on beer.


  7. Rodger, what I think KK is suggesting is there is an opportunity cost in the US directing so many of it’s real resources towards the military rather than civilian programs.

    Yes, at the moment you could increase spending on both, but wouldn’t it be more beneficial to American society if all that extra spending went into the civilian side, as the military is already exeptionally well funded, arguably to excess. There is a real cost if most of your best and brightest are off developing bombs instead of renewable energy, or any number of other worthy ventures.


    1. The military does far more than develop bombs. A great amount of research is done under military contracts, and that research has led to much of what we now consider “civilian.”

      I don’t know the proper amount to allocate to the military vs other federal initiatives, nor do you, but let’s not be simplistic and claim we are discussing war vs peace. There is massive overlap between the two.

      Rodger Malcolm Mitchell


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