Mitchell’s laws:
●The more budgets are cut and taxes increased, the weaker an economy becomes.
●Until the 99% understand the need for federal deficits, the upper 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.
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This isn’t news to you. Readers of this blog know the American Association of Retired People (AARP) is a shill for the upper 1% income group.
But I continue to be impressed with the cleverness of their anti-99% message. They pretend to offer a helping hand, while the other hand stabs you in the back. Here’s an example.
According to AARP, Patricia Barry is a “Medicare expert.” Read this direct quote from the AARP website:
medicare expert
PATRICIA BARRYPatricia Barry, senior editor of the AARP Bulletin and its online Ms. Medicare columnist, is a recognized authority on Medicare and Medicare Part D prescription drug coverage. She has written extensively about Medicare and other health care issues for consumers and is author of the book Medicare Prescription Drug Coverage For Dummies (Wiley, 2008).
They even provide a photo of Ms. Barry, a kindly, grandmotherly type.
Really, would this sweet, honest, “Mayberryesque” face ever lie to you?
At What’s in Store for Medicare? gentle Ms. Barry pretends to evaluate several plans meant to “save” Medicare.
She lists the pros and cons of each plan, but these pros and cons are a decoy. They are not the real message. The real message to AARP members is: Medicare will run out of money unless taxes are increased or benefits decreased.
That is the myth with which the upper 1% income group indoctrinates the lower 99%. The purpose: To spread the income gap between the two. The greater the gap, the greater the power the 1% has over the 99%.
In the guise of being helpful, AARP hides the fact that Medicare cannot run out of money unless Congress wants it to run out of money.
Here are a few excerpts from Ms. Barry’s article:
Changing the way Medicare pays for benefits: Under the Ryan plan — known as “premium support” to its proponents and as a “voucher system” to its critics — the government would allow you a certain sum of money to buy coverage from competing private plans or from a revised version of traditional Medicare.
This would put Medicare on a budget to hold down spending and reduce the tax burden on future generations.
Of course, no Medicare plan can “reduce the tax burden on future generations,” simply because there is no relationship between Medicare benefits and Medicare taxes. Medicare taxes could be zero, and Medicare still could continue as always — even increase benefits.
In a Monetarily Sovereign government like ours, federal taxes do not pay for federal spending. The government actually creates dollars by spending.
But the upper 1%, with AARP’s connivance, want you to believe the 99% must sacrifice for the sake of “future generations.” (Never mind that cutting benefits is guaranteed to burden future generations.)
And then there’s this:
Raising Medicare eligibility age to 67: Eligibility for Medicare has always been at age 65, except for younger people with disabilities. This proposal aims to gradually bring Medicare in line with Social Security, where full retirement age is now 66 and set to rise to 67 by 2027.
With more Americans living longer, and health spending on older people rising, we can’t afford Medicare at age 65.
Oh, kindly Ms. Barry, who is the “we” who can’t afford Medicare at age 65? Surely you don’t mean our federal government, which being Monetarily Sovereign, has the unlimited ability to create dollars.
And note the subtle message — “bring Medicare in line with Social Security.” See, it really isn’t a benefit reduction; it just brings Medicare “in line.” Doesn’t everyone want things to be “in line”?
Raising Medicare premiums for higher-income people: Most people pay monthly premiums for Part B, which covers doctors’ services and outpatient care, and for Part D prescription drug coverage. People with incomes over a certain level — those whose tax returns show a modified adjusted gross income of $85,000 for a single person or $170,000 for a married couple — pay higher premiums.
For: The easiest way to bring in more money for Medicare would be to raise the premiums even more for higher income people — so that the wealthiest older people pay the full cost and receive no taxpayer-funded subsidy. Another option is to lower the income level at which the higher premium charge kicks in, so that more people have to pay it.
By pretending the tax hits “wealthiest older people,” angelic Ms. Barry neglected to mention two details: Medicare taxes are paid against salaries, not against other forms of income. But for the 1%, salaries are a minor part of income. Raising the tax rate would affect salaried workers — the middle classes, while leaving the upper 1% largely unscathed.
And Medicare costs are a much larger percentage of the 99%’s income than of the upper 1%’s income. Any tax increase or benefit decrease hurts the 99% while barely being noticed by the 1%.
And, of course, there is no need to “bring in more money for Medicare.”
Changing medigap supplemental insurance: About one in six people with Medicare buys private supplemental insurance, also known as medigap. It covers some of their out-of-pocket expenses under traditional Medicare, such as the 20 percent copayments typically required for Part B services. This option would limit medigap coverage, requiring people to bear more out-of-pocket costs.
People buy medigap to limit their out-of-pocket spending in Medicare. But because they pay less, they tend to use more Medicare services, increasing the burden for taxpayers.
Ms. Barry suggests another clever way to cut Medicare benefits: Make benefits more expensive. Force people to pay more out of their own savings, a true burden on the 99%, though meaningless for the upper 1%.
Adding copays for some services: Medicare does not charge copays for home health care, the first 20 days in a skilled nursing facility — rehab after surgery, for example — or for laboratory services such as blood work and diagnostic tests. Several proposals would require copays for one or all of these.
Added copays would discourage unnecessary use of these services. Over 10 years, copays could save Medicare up to $40 billion for home health, $21 billion for stays in skilled nursing facilities and $16 billion for lab tests.
Subtle and clever, too — discourage “unnecessary” use. Of course, it would discourage necessary use, too, further burdening the 99%.
At no time has Ms. Barry or any voice of AARP expressed even the slightest skepticism about the need for increasing taxes or cutting benefits. Rather, by various “helpful” means, AARP spreads the myth that the 99% must sacrifice more.
This is what we see happening in Europe, with ever more future austerity being promoted as the solution to . . . well, to current austerity. Europe is the model for America’s 1%, where the middle- and lower-classes are being subjugated by the upper 1% class.
AARP, a private organization run by wealthy people, is a perfect propaganda arm for the upper 1%, in that it masquerades as an ally of the 99%. It’s like having your own grandma steal from your retirement plan, while she tells you how much she loves you.
Anyway, the real solution for Medicare is this: The federal government should eliminate FICA and provide free Medicare to every man, woman and child in America. Period.
Rodger Malcolm Mitchell
Monetary Sovereignty
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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
#MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
Robert G. Romasco
AARP president, 2012-2014
Former senior vice president of customer, distribution and new business development, QVC Inc.; executive vice president and chief marketing officer, CIGNA Inc.; president and chief executive officer, J.C. Penney Direct Marketing Services, including a profitable launch of international business units in the United Kingdom, Korea and Japan; senior vice president, American Century Investments; director of strategic customer development for Corporate Decisions Inc., and chief financial officer of Epsilon, a pioneer in the database marketing industry.
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A treacherous old hag and an overpaid CEO- what a combo.
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Rodger – – –
The AARP is an insurance company simply talking its book. They have no interest in any taxpayer porsitions from any percentile – they simply want to position themselves for greater profitability. Most of the public does not recognize the Trojan Horse business model of AARP.
The author of the piece you reviewed is a public relations spokeperson for an insurance company.
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Yes, and what a brilliant business plan it is. They set up a non-profit to do the marketing, and the insurance business reaps the profit. It would be like Consumer Reports Magazine having a subsidiary called “Consumer Reports Televisions, Inc.”
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Rodgah, Rodgah
First, she was mostly talking about the Ryan budget proposal and later only the Part B premiums, not the general Medicare taxes. How did you miss that?
You’ve been to college, I believe. (FWIW)
Rodger says – in unison with vacuous claims about modern money –
“The government actually creates dollars by spending.”
So, once again, Rodger – loud and clear –
NO, THE GOVERNMENT DOES NOT CREATE MONEY WHEN IT SPENDS.
Neither does the government spend BY creating money.
The government never creates money that pays its bills. NEVER.
The government either spends money already in existence that is taxed into the Treasury General Account for spending purposes, OR
the government issues Notes, Bills or Bonds that secure borrowing already-created, privately-issued money BACK into the Treasury General Account for spending. ALWAYS.
As required by Statute.
That’s how it REALLY happens, Rodger.
Do you have any proof to the contrary?
Please.
Thanks.
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joebhed,
I was talking about AARP’s lack of candor or willingness to inform its members of the truth. Thanks for being a compulsive reader of this blog, despite the ignorance of its author. I hope it has been helpful to you.
Your theory of dollar creation requires that, as you said, dollars already exist. So, how did the first dollar come into existence? (And puleeze don’t tell me you think the government gave banks the power to create dollars, but didn’t give itself the same power to create its own sovereign currency.)
Here is how banks create dollars: They lend dollars. Here is how banks destroy dollars: They accept payment on loans.
Here is how the government creates dollars: It sends instructions to banks to mark up the numbers in creditors’ checking accounts (i.e., spends). Here is how the government destroys dollars: It collects taxes.
As for the government issue of T-securities, this neither creates nor destroys dollars. Assume China wishes to buy $1 million worth of T-bills. Here is the process:
1. China deposits $1 million already-existing dollars into its checking account at the Federal Reserve Bank.
2. China instructs the FRB to debit its checking account and credit its T-bill account also at the FRB. Because a T-bill account essentially is the same as a bank savings account, this transfer is like you telling your bank to transfer money from your checking account to your savings account. It’s a simple asset transfer.
3. Then, when the T-bill matures, the FRB debits your T-bill account and credits your checking account — plus interest. The interest is nothing more than an accounting notation, which in itself creates dollars.
The need to issue T-securities is an obsolete quirk in the law, that was instituted when dollars had a physical backing. Back then, dollars were not just the accounting notations they are today,
Interestingly, because of another quirk in the law, the federal government can create trillions of dollars without issuing T-securities.
The Treasury can issue a platinum coin (for some reason, it must be platinum and not any other metal) in any denomination. It could, if it wished, mint a $15 trillion coin, and give that coin to the Federal Reserve Bank, which could use it to pay off all outstanding T-securities, in which case, the U.S “debt” would be $0.
During the most recent debt limit battle, this was suggested as a solution, but the President was afraid it would look like “cheating,” so for political purposes, he didn’t do it. He should have, if for no other reason than to show how meaningless T-securities are.
Finally, by law, you too are allowed to create money out of thin air. Though your money cannot be actual dollars, they must be exchangeable for dollars (for tax purposes).
So, go down to your local printer and have him print up some “joebucks.” If you can get people to accept them in exchange for goods and services, you will have created money.
Randy Wray did this with Roo Bucks.
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Rodger,
Thanks.
The reason I stay tuned despite the author’s unfounded knowledge, same as with ALL MMTers, is y’ alls honest, sincere attempt to use the money system to achieve worthy social objectives.
Everything Warren, Randy, Bill, etc claim to want are the same things I want.
And they all purport to want to use the powers inherent in an honest money system to achieve those goals.
Only, for some reason, they needed to conjure up a money system that does not exist, and yet they claim it is actually founded upon the nuances of FR accounting – which is absurd – apologies to Stephanie.
I hope you WILL share my criticism with the others.
MMT is presumptive and anecdotal, where empiricism should prevail.
Anecdotal, as in – from where do you think the FIRST dollar came?
Golly gee, got me there.
Do you mean pre- free-banking?
I have read Hammond’s “Banking and Politics in America – From the Revolution to the Civil War”.
I thought this was about “modern money”.
Yes, banks today CREATE the nation’s (modern) money by repeatedly, and increasingly, creating (and destroying) debt-based bank credits, which count as the M1 money supply.
THAT is what we use as money.
I again say we will at some point refer to Mann’s “The Legal Aspects of Money” in order to settle these peripheral matters as best we can.
But they are peripheral issues compared to modern political economy.
The rest is about what happens with that M1 money, or about non-money monies (joedollars included).
On to Rodger’s questions.
The answer is that FIRST the government gave itself the power to create the nation’s money (ARTICLE 1, section 8, Clause 5) – then , reading Hammond, gave that power to various political forces, and then ultimately – as to modern money – GAVE IT TO THE private BANKS where it continues to reside – all perfectly OK with MMTers for some reason. Period.
If you don’t mind, please show me where the government has any power today to create the nation’s money, and puhleez do not base the answer on some temporary, double-entry accounting glitches from two MMT self-identified branches of ‘government’.
Rodg – here is a statement that you can readily disprove by your college-and-business-learned knowledge.
The government does NOT have the power to increase the balance in ANYONE’s bank account by computer stroke unless the computer program shows a positive balance (of already existing money) in the government’s Treasury General Account.
There’s the statement that you can just simply disprove to shut me up, Rodg.
I am all in on that one.
They CAN’T do it.
It is illegal to do it.
It would be immoral to do it.
Rodg, just so you know there is no point in repeating it again, I totally understand and totally agree about what happens with China and Treasuries.
THAT is irrelevant to this discussion.
FIRST the banks created the money and lent it into existence and the holders of the bank-credit money purchased goods from a Chinese corporation who is holding those bank-credit dollars in their checking account and they use that money to buy Treasury securities.
Case closed.
No big deal.
Best wishes.
Joe
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An honest and moral government? You’ve got to be effing kidding me. Congress, the judicial and the executive branches skirt the “law” with impunity. What planet are you from? Semantics aside, your argument holds no more water than Rodger’s. I’m waiting for the presumptive part dude.
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bambi,
The relevant point is that a Monetarily Sovereign government has no spending limits. The U.S. federal could decide to eliminate all taxes and all borrowing tomorrow, and still pay all its bills, including full support for Medicare for every man, woman and child in America.
That is the fundamental difference between the U.S. and a monetarily non-sovereign government, like Greece.
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First, start as soon as possible, since funds in a 529 account opened when a grandchild is born or is very young have much longer to grow. But battling myths, these educational establishments have a proven record in sharpening the mind and fine-tuning the body, in a positively nurturing environment. With these all of these challenges facing working students, how can they balance the load.
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Unless, your 529 is run by crooks, as was the case with the Illinois 529, in which most of the funds disappeared.
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