–AARP’s big lie and why you shouldn’t buy their insurance.

Mitchell’s laws: The more budgets are cut and taxes increased, the weaker an economy becomes. Until the 99% understand the need for deficits, the 1% will rule. To survive long term, a monetarily non-sovereign government must have a positive balance of payments. Austerity = poverty and leads to civil disorder. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.

You’re over 50, so you joined AARP, partly to get discounts on hotel rooms, rental cars and other good stuff, and partly because you believe AARP represents your interests with Congress and the President. Well the discounts are real, but AARP does not, repeat NOT, represent your interests.

Quite the contrary, it represents its own interests in selling you insurance, and it represents the interests of those who wish to take dollars out of your pocket. Here is what AARP said in a recent post titled, The Future of Social Security: 12 Proposals You Should Know About

AARP: With more people living longer, Social Security faces increasing financial challenges. Estimates indicate the program will be able to pay full benefits for the next 20 years, but only 75 percent after that.

That comment is based on the gigantic lie that FICA pays for Social Security. When the U.S. government was monetarily non-sovereign, that was somewhat true. But on August 15, 1971, the U.S. became Monetarily Sovereign. No longer did taxes – any taxes – pay for government spending.

If FICA fell to $0 and Social Security benefits tripled, the federal government still could pay these benefits, not just for 20 years, but forever. That’s right. FICA could be eliminated, and that would not affect the federal governments ability to pay full Social Security benefits, by even one cent.

AARP never tells you that. No, AARP continues promoting the myth that Social Security will run short of dollars. Total nonsense. The federal government, being Monetarily Sovereign, creates dollars at will, merely by increasing the numbers in bank accounts.

So the question is: Are AARP leaders simply ignorant, or are they part of the big money effort to increase the income gap between the upper 1% and the lower 99%? You decide. Ignorance or conspiracy?

Anyway, while you’re deciding, here are the 12 proposed changes in Social Security listed by AARP, all of which will reduce benefits and/or increase taxes. In fairness, AARP does provide pros and cons for each proposal. But all the pros are the same. They save money for the government and take money from you and me. So, I’ll just mention the cons:

Proposed Changes in Social Security

1. Raise the Full Retirement Age ( Raising the full retirement age for everyone simply because well-off Americans are living longer is a stealth benefit cut that is unnecessary and unjust.)

2. Begin Longevity Indexing (Low-earning workers and other disadvantaged groups have seen little or no gains in longevity. Cutting benefits for everyone just because well-off Americans are living longer would be profoundly unjust. Moreover, this change would violate the purpose of Social Security, which is to ensure basic economic security.)

3. Recalculate the COLA (inflation) (The current COLA doesn’t keep up with the inflation that seniors face because they spend more than other Americans for out-of-pocket health care costs and those costs rise faster than average inflation. The chained consumer price index would make matters worse by reducing the COLA.)

4. Increase the Payroll Tax Cap ( This bad idea would cause a hefty tax increase for middle-income taxpayers while not affecting the rich. It would especially hurt the self-employed and certain smaller business owners.)

5. Eliminate the Payroll Tax Cap (If millionaires pay Social Security taxes on all of their salary income, their maximum annual benefit payment could reach over $150,000 a year. Social Security was not intended to provide such large benefits.)

6. Reduce Benefits for Higher Earners (These proposals would actually cut benefits for middle-class workers making as little as $35,000 a year. They are not “high earners.” Benefits are already modest.)

7. Increase the Payroll Tax Rate (Economists have known for decades that if the cost of employees gets too great, employers will start to replace them with machines)

8. Tax All Salary Reduction Plans (This would increase the cost of health care and other employee benefits because the tax savings help to offset the employer’s cost of operating the plans.)

9. Cover All Newly Hired State and Local Government Workers (Making newly hired workers join Social Security would increase revenue now, but eventually the program would have to pay these workers benefits. That would make Social Security’s financial problems even worse.)

10. Benefit Improvements (Although Social Security benefits for some groups are too low, they should only be improved as part of an overall reform. Otherwise, the added costs would only exhaust the trust fund faster.)

11. Increase Number of Years Used to Calculate Initial Benefits (This proposal would reduce benefits the most for people who need them most: women and lower-income, less-educated and minority retirees. It would reduce benefits not only for retired workers, but also for their dependents and survivors.)

12. Begin Means-Testing Social Security Benefits (Means testing would change Social Security from an earned right to welfare. It would penalize you if you saved or earned a pension because that income would reduce your Social Security. And it would cost more to administer. The government would have to routinely check your income and assets in order to adjust your benefit. )

Even some of the cons listed by AARP are based on the big lie, that FICA pays for Social Security benefits, and the federal government cannot afford to pay. The entire article is entwined with the same false idea.

Bottom line: Social Security benefits are too low and FICA should be eliminated. Period.

Meanwhile AARP continues to spread the big lie rather than spreading the truth. They tell you the that Social Security (and Medicare, for that matter) will run out of money unless taxes are increased and/or benefits decreased. That Simply Is Not So. It’s the biggest lie in all of economics.

Of course, you might try writing to AARP, and explaining the facts. But if that doesn’t work, go ahead and join AARP for the discounts. But don’t be fooled. They are no friend of yours.

And whatever you do, don’t buy their insurance. Selling you insurance is what they they were formed to do and what they really care about. You don’t want to reward them for helping the government take money out of your pocket.

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. Two key equations in economics:
Federal Deficits – Net Imports = Net Private Savings
Gross Domestic Product = Federal Spending + Private Investment and Consumption + Net exports


18 thoughts on “–AARP’s big lie and why you shouldn’t buy their insurance.

  1. But don’t be fooled. They are no friend of yours.

    Selling you insurance (MONEY) is what they they were formed to do and what they really care about. You don’t want to reward them for helping the government take money out of your pocket (income taxes).

    How this article could also be about banks. The private ones that are for- profit corporations, ****But don’t be fooled……



  2. Roger,
    Excellent job exposing AARP – they have really been irritating me lately by sending out questionaires with very limited choices… basically eat cat food or die!
    Any reason not to send this article along to to each state AARP office? Might open a few minds.


  3. So Rodger, until August 15, 1971, was the government accumulating FICA tax payment collections into the SSTFA and paying benefits out of the SSTFA account?

    And then, because that day we unpegged our national current account balances – nothing to do with this country’s internal financing operations – from a gold exchange settlement, the government ……….. did what with those FICA collections the next day?
    The next week?
    The next month?
    The next year?

    The next 40 years?

    All the AARP did was to repeat some of the forecasts of the CBO and other public and private entities that have examined the Trust Fund balances as presently funded, and have independently come to the conclusions that AARP has explained.

    Of course, social security IS fixable.
    It DOES reflect just another government payment.

    But, until we actually restore TO the Congress the power to create the nation’s money, rather than it being some nuanced reserve accounting fantasy, we will never be able to fund the social security, medicaid or medicare for all Americans.

    Rather ALL monies will continue to be created by private bankers as they are now, and then either taxed or borrowed from private holders of the privately-issued monies by the government who, because of its REAL monetary sovereignty, actually can begin funding the public sector as soon as it has the courage.

    For the Money System Common..


    1. The government never “did” anything with FICA payments. They merely were a credit to several accounts.

      Actually, the government always could have done away with FICA and simply paid for Social Security. However, before 1971, its ability to pay bills was limited by its gold supplies, So if gold supplies were insufficient, something had to give — whether it be Social Security or other functions.

      Congress creates dollars by authorizing payment of bills (via budgeting). The government pays its bills by instructing creditors’ banks to increase the numbers in creditors’ checking accounts.

      Today, the government can send these instructions endlessly. If it chose to, the government could pay a bill of a trillion trillion dollars, tomorrow. It simply would tell creditors’ banks to mark up the numbers in the creditors’ checking account.

      There are two sources of dollars:

      1. Federal bill payments (authorized by Congress)
      2. Bank loans

      Rodger Malcolm Mitchell


      1. I think you’re a little mixed up here, Rodger.
        A couple of things, really.

        First – the FICA tax revenues.
        Earlier you said it was a lie for AARP to say that FICA funds the SS Trust.
        You said it was ‘somewhat’ true before 08/15/71 that FICA tax funded the SS Trust, but on that date – TA DA – we became monetarily sovereign(????), and thus taxes, FICA or otherwise, were no longer needed to pay for government services.

        Lots of people wonder if there was a memo that went around,. Did government or academic economists rush in and say we can eliminate taxes to pay for government services somehow. If not, why not? Like, how do you know Rodger? Is it written clearly anywhere on this site?

        You, and others, say that taxes have somehow become unnecessary, ostensibly because of abandoning the Bretton Woods gold-exchange standard.
        However, the law and the rules of the government say that taxes and bonds MUST fund government services, and that the collection of the taxes and the spending of the balances provided by that tax collection, MUST be audited and certified to and reported to Congress thereon.

        When laws are in effect, they stay in effect until repealed or amended. Did anybody amend or repeal the law that says that taxes and bonds must finance the government’s spending? If not, then how did it become unnecessary – just because we got off the gold exchange standard on 08/15/71 ?

        If anyone is going to accuse an organization like AARP, of which I am a member, of lying about FICA, they need some actual proof of the falsity claimed, and also that it was not just an honest error.

        Second, Rodger, regarding the magic of abandoning the gold exchange.
        I have some bad news.
        You say here:
        “However, before 1971, its ability to pay bills was limited by its gold supplies, So if gold supplies were insufficient, something had to give — whether it be Social Security or other functions.”

        Jeezum, Rodg, we got off THAT gold standard on June 5, 1933. Then we adopted the gold exchange standard with Bretton Woods in ’44, that which we got off on 08/15/71.

        The Bretton Woods standard merely applied a gold-standard payment for international exchanges, primarily the settling of current accounts among signatory nations. It had NOTHING to do with internal(national) government spending at all.
        Never did. Never will.

        June 5, 1933.
        A serious day for monetary reformers, because we restored our national autonomy in money.


        1. Confusing. The first half of your comment seems to say the federal government does not have the unlimited ability to create dollars, but instead must rely on taxes and borrowing.

          The second half seems to say since 1933 the government always has had the unlimited ability to create dollars.

          Which do you believe?


  4. I agree emphatically with everything Roger says in the post above. One other thing: AARP works behind the scenes to make sure America never has single payer health insurance. AARP does this because AARP wants to sell its own private health insurance. To hell with those liars.


  5. This is to Rodger at 7:42 am

    Seems like a self-inflicted confusion.
    Thanks for mentioning June 5, 1933.
    My Dad was a monetary reformer before 1971. Getting off the gold-exchange standard did nothing for monetary operations.
    MMTers ought to pay attention to reality here.

    The first half is correct. Due to the laws of the land in effect since SS came into being, the federal government does not have “ the unlimited ability to create dollars.”.
    It’s a legal thing having nothing to do with sovereignty.
    Because of sovereignty, we could change that tomorrow.
    By adopting the Kucinich Bill.

    What has happened since June 5, 1933 is that the internal monetary operations of the national government are not constrained by its unit of currency being tied to a supply of physical gold of certain fineness. THAT’s how FDR did his thing.
    That is just one among the many errors of MMT proponents.
    When are they going to correct the date?



  6. Roger asks, “What, in your opinion, is the difference between Monetary Sovereignty and monetary non-sovereignty, and which do you believe, is the U.S.?”

    Monetary sovereignty means the State controls the issue and supply of currency, and chooses what currency is legal for public exchange, and for payment of taxes.

    Monetary non-sovereignty means the State does not have these powers.

    Does the USA have monetary sovereignty? NO, because the State does not have these powers. The power (and thus the sovereignty) lies with the Fed cartel, which consists of private Fed member banks, plus private too-big-to-fail banks. They control all, and they coordinate their activities to serve their own interests, which may or may not coincide with the State interest.

    For the American State to have monetary sovereignty, its currency and central bank would have to be fully under public control.

    The American colonists had monetary sovereignty, and they fought a war with the British Empire to keep it. British imperialists like the author Adam Smith were outraged that the colonists had their own monetary sovereignty, with their own currency (colonial scrip). Therefore, private British bankers bribed the British parliament to pass the Currency Acts of 1751 and 1764, which outlawed the use of colonial scrip as legal tender. After the colonists won their war for monetary sovereignty, they surrendered that sovereignty to private bankers, many of them foreigners.

    Since that time, the private bankers that have monetary sovereignty “have used the bank’s funds to speculate in the breadstuffs of the country. When they win, they divide the profits among them; and when they loose, they charge it to the bank,” that is, to the people. That was Andrew Jackson condemning the Second Bank of the United States.

    The United States has briefly recovered monetary sovereignty from time to time, e.g. in 1861-62, when Abraham Lincoln authorized the Treasury Dept. to issue debt-free “greenbacks” to help finance the Civil War. These dollars were debt-free because they were not lent by private bankers. On 4 June 1963 President Kennedy issued Executive Order 11110, authorizing the Treasury Dept. to issue debt-free silver certificates. Four months later, Kennedy was eliminated, and the private bakers retook control. Once more the USA surrendered its monetary sovereignty.

    Roger thinks the USA attained full monetary sovereignty when the USA went off the gold standard on 15 Aug 1971. I disagree. I say that no State has monetary sovereignty as long as the State is controlled by private bankers.

    We’ll just have to “agree to disagree.”


  7. I agree with EVERYTHING that Richard Wilson has written here, EXCEPT his definition of monetary sovereignty. Just the fact that the government has the POWER to issue the currency makes is monetarily sovereign, no matter what hellacious construct the bankers can advance.

    My objection is that the nation became monetarily sovereign, and we have never given up our sovereignty. Were we to pass a Constitutional Amendment repealing 1.5.8 , THEN we would NOT be monetarily sovereign.

    Until then, we remain monetarily sovereign BECAUSE we have the power to return those Federal Reserve bankers to the business of banking, rather than empowering them to issue the nation’s currency.

    Unfortunately, Rodger and the MMTers actually BELIEVE that the government issues new money when it spends, but it destroys old money when it taxes and borrows. It’s like MAGIC !

    Have a read of Stephanie Bell’s paper here for a fuller explanation.
    Chapters 5 and 6 are all that is relevant.

    It is BECAUSE of this belief system that a claim is made that right now, TODAY, the US government is the monopoly issuer of our currency, and therefrom the statement that we are today monetarily sovereign – by their definition.


  8. [1] Roger writes, “According to your hypothesis, Congress and the President do not have the power to determine how much to spend.”

    Congress and the President have some influence over fiscal policy (where money is spent) but little or no influence over monetary policy (where money comes from). Congress and the President are on the payroll of the private bankers and bond traders, who ultimately control everything. It is the latter (not the US government) who collectively have monetary sovereignty. Private bankers and bond traders can expand the money supply or contract it, causing a depression. They can allow funding for wars, or social programs, or deny funding. The Fed cartel is immune from audit or oversight. It is a private, secretive, impenetrable black box. It and the bond market are in control. They make the major decisions. You seem to think that Congress and the President make the major decisions. I wish that were true, because then the USA would indeed have monetary sovereignty.

    [2] Roger writes, “According to your hypothesis, the U.S. and Greece both are monetarily non-sovereign.”

    Yes, both nations gave up their monetary sovereignty to private bankers. Greece gave it to the Troika. The USA gave it to bankers inside the USA and abroad (e.g. Chinese interests). The structure is different, but the result is the same. The bankers rule all, and they enslave us via debt, and by controlling the money supply.

    Even when Greece still had the drachma (before Greece adopted the euro) Greece did not have monetary sovereignty, since Greece’s central bank was privately owned and controlled.

    The bankers fear any nation that has a public central bank, and thus has true monetary sovereignty. Such nations threaten their tyranny.

    They destroyed Libya, they are destroying Syria, and Iran will be next. Reason: All three nations had public central banks, and true monetary sovereignty. Thus they have free education, free health care, and subsidies to the poor. In Syria, Iran, and Libya (before the destruction) working women are entitled to 90 days of maternity leave at two-thirds pay, with the right to return to their previous jobs. This is intolerable to elitist bankers.

    The entire nuclear issue is a smokescreen. For the bankers, no nation can be industrially or financially self-sufficient, such that it is free from the global banker-grid. (Iran makes its own cars, textiles, leather products, pharmaceuticals, agricultural products, processed food, beverage products, military equipment, home and electric appliances, steel, copper, rubber products, telecommunications equipment, cement, and industrial machinery. Iran has the largest operational stock of industrial robots in West Asia. And so on.)

    Iran is a “threat” because Iran has true monetary sovereignty. That means Iran is not controlled by the same private bankers, speculators, bond markets, and corporations that control the West. All such “rogue states” must be annihilated so the globalist machine may reign.

    In order to stop being a “terrorist state,” Iran must give up its monetary sovereignty. That means Iran must end free education and free health care, and eliminate all social programs, plus all food and fuel subsidies for the poor. Iran must eliminate its middle class. Iran must be deregulated. Iran must privatize everything, beginning with its central bank. Iran must move all its factories overseas. Iran must eliminate all aspects of self-sufficiency. Iran must become a major polluter. Iran must allow McDonald’s and Wal Mart to come in. Iran must have the same rates of cancer, diabetes, and heart disease as occurs in the West. Iran must be crippled by debt to private bankers and to bond markets.

    Again, the nuclear issue is irrelevant. It is merely a smokescreen.

    The campaign against Iran and Syria is part of the worldwide banker war on monetary sovereignty and national sovereignty. The bankers alone will have monetary sovereignty.

    This is the real world. People who do not want to face the real world attack me. They spout an abstract formal definition of “monetary sovereignty,” and say I do not understand it. So be it.

    To my attackers I ask, “If the USA has monetary sovereignty, then why do politicians constantly claim we are “broke,’ and must “shrink the deficit”? Why is there no money for social programs? In short, why can we not have what any monetary sovereign nation should have?

    The answer, of course, is that we do not have monetary sovereignty. The private bankers do.


    1. @ R.Wilson

      “”The answer, of course, is that we do not have monetary sovereignty. The private bankers do.””

      “Permit me to issue and control the money, and I care not who makes the nation’s laws,” – Baron de Rothschild.

      Again, RW, apologies but the privilege that private bankers have to create the nation’s circulating media, and to thereby completely control the national economy, is ensconced in law, not sovereignty.

      But, you busy yourself with trivial matters, merely self-imposed constraints.
      Please be quiet.

      The smartest kids (of all ages) in the room have figured out the functioning of the national balance sheet. It’s really all about accounting here.
      Not political-economics.



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