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•Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
•Any monetarily NON-sovereign government — be it city, county, state or nation — that runs an ongoing trade deficit, eventually will run out of money.
•The more federal budgets are cut and taxes increased, the weaker an economy becomes. .
•Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.
•The single most important problem in economics is the Gap between rich and poor.
•Austerity is the government’s method for widening the Gap between rich and poor.
•Until the 99% understand the need for federal deficits, the upper 1% will rule.
•Everything in economics devolves to motive, and the motive is the Gap between the rich and the rest..
Virtually all politicians are liars, as are some journalists and economists — but the scummiest low-life liars of all are the people who tell you Social Security and Medicare are running short of money and the “solution” is to cut benefits and/or increase taxes.
These people should be skinned alive, boiled and salted, after which painful things should be done to them.
They are paid by, and do the bidding of, the rich and powerful, to hurt the weak and powerless.
“Rich” is a comparative term. The Gap between the rich and the rest, is what makes the rich rich. Without the Gap, no one would be rich, and the wider the Gap, the richer they are.
So, it is a prime goal of the rich to widen the Gap by impoverishing the rest of us. And virtually all politicians, some writers, and some economists are only too happy to oblige the rich.
Who’s Ready for a 10% Cut to Their Social Security Benefits?
By Sean Williams, August 2, 2015
The Social Security program is designed to replace about 40% of a workers’ income.
In reality, though, nearly half of all unmarried elderly beneficiaries get 90% of more of their income from Social Security. The thought of tinkering with benefits is equally worrisome for baby boomers nearing or just entering retirement. Many were clobbered by the Great Recession, and a good chunk could be entering retirement with an inadequate amount of savings.
The Social Security program, however, isn’t in great shape. The Old-Age, Survivors and Disability Insurance Trust, or collectively the OASDI, is slated to burn through its remaining cash reserves by 2033.
If Congress can’t come to a long-term solution that involves raising additional revenue and/or cutting expenses, benefits for eligible beneficiaries will be cut by 23%.
If Social Security were a privately run program or a local government-run program, the above paragraph could be true. The program could “burn through cash reserves,” and the solution would be to”raise additional revenue or cut expenses and benefits.
But Social Security is a federally-run program, and unlike you and me and local governments, the federal government never can run short of dollars.
The author of the article, Sean Williams, is telling a great, big, fat lie, when he says, “If Congress can’t come to a long-term solution that involves raising additional revenue and/or cutting expenses, benefits for eligible beneficiaries will be cut by 23%.
Not that Congress won’t continue cutting benefits, as it already has been. But the point is, Congress doesn’t need to cut benefits.
In fact, even if FICA, the tax that supposedly funds Social Security, were cut to $0, Social Security could continue paying benefits forever — even increase benefits forever.
According to Republican presidential candidate Chris Christie, we need to make some pretty radical reforms to the entitlement program.
Christie’s recommendation to fix Social Security, like many before it, focuses on the coming generations to receive Social Security benefits and not on current retirees.
Thus, if you’re already receiving benefits, you can breathe a bit easier.
Yes, you can breathe easier, if you don’t give a damn about your children and grandchildren. Just sit back, and watch the politicians cut their benefits and increase their taxes.
Christie would like to see the full retirement age moved from age 67 to 69. He also wants to enact a raise to the minimum age at which retirees can claim benefits from age 62 to age 64.
It’s called the “work-until-you-drop (if you even can find a job at that age)” plan.
Christie’s proposal may coerce pre-retirees and Generation X to work longer, which makes sense given that we’re living longer than ever.
Sure it makes sense to the Party of the Rich. You are not rich, therefore you are a lazy good-for-nothing, who needs to be coerced to work and work and work. Heaven forbid you might enjoy a longer retirement.
In the eyes of the rich, only rich people are not lazy, so they deserve the enjoyment of a longer retirement. Not you.
Instead, you middle-class people, having been granted longer lives, are told you should be delighted to search for jobs and to labor those extra years. Strangely, most not-rich people believe it.
But Christie’s proposal also has adverse effects. It turns out that raising the retirement age could be very bad news for the nation’s poorest citizens who rely on Social Security income in their golden years.
But really, who cares about them, so long as the rich (courtesy of the right wing Supreme Court) legally are able to bribe politicians like Christie, to lie about Social Security?
As The Washington Post reports, lifetime Social Security benefits can often reflect a person’s socioeconomic status. The poorest Americans often lack access to adequate nutrition and healthcare, while the richest Americans have ample access to medical care and can make healthier food choices.
So, cutting Social Security benefits and Medicare benefits, while raising taxes, are exactly what the wealthiest nation on earth should be doing to your children and grandchildren. Right?
According to The Washington Post, which conducted an informal study last year that allowed online respondents to select which of 12 methods they’d support to fix Social Security (respondents could select all that appealed to them), boosting the earnings cap on the payroll tax proved to be by far the most popular fix.
Cut benefits across the board today (100%)
Raise the full retirement age (20%)
Freeze the purchasing power of benefits (95%)
Freeze benefits on a sliding scale (55%)
Change the cost-of-living adjustment (20%)
Do nothing (but cut benefits when the Trust Fund reserves are gone) (100%)
Increase the payroll tax on everyone today (100%)
Raise the earnings cap (30%)
Use the estate tax to tax health benefits (35%)
Transfer start-up costs to general revenues (100%)
Raise the return on assets by investing in the stock market (20%)
Do nothing (but raise taxes when the Trust Fund reserves are gone) (100%)
Could a survey be any phonier?
It provides 12 so-called “options,” all of which boil down to “cut benefits and/or increase taxes,” while leaving out the one true option: The federal government should pay for Social Security and Medicare. Period.
Here is what Sean Williams and all the politicians who want to cut benefits and increase taxes don’t tell you: FEDERAL TAXES DO NOT FUND FEDERAL SPENDING FICA doesn’t fund Social Security and Medicare.
President Roosevelt, who originated Social Security knew FICA was not necessary. He created FICA only to prevent politicians from eliminating the program, not to pay for the program.
fre are running out of money?
The answer: The rich don’t want the White House the Supreme Court and Congress to run out of money, but the rich do want Social Security to run out of money.
By pressing down on middle classes and the poor people’s income, the rich widen the Gap. They make themselves richer by comparison.
Whenever you hear any politician — Christie, Bush, Obama, Boehner et al — or read any article, saying that the Social Security “Trust Fund” is running short of dollars, know this: The speaker or writer is a stinking liar, who has been paid by the rich to take money from your children and grandchildren.
And pay no attention to phony claims that certain increases in FICA also will take money from the rich. The rich aren’t affected by a few dollars taken from salaries.
Many of the rich don’t even earn a salary (Have you ever wondered why FICA only is applied to salaries and not to capital gains?), A few dollars means nothing to the rich — though it can mean quite a lot to the poor and the middle.
Who is stealing your children’s Social Security and Medicare? The scummy, low-life politicians, journalists and economists — and you, if you believe their stinking lies.
Rodger Malcolm Mitchell
Ten Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Provide an Economic Bonus to every man, woman and child in America, and/or every state a per capita Economic Bonus. (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Tax the very rich (.1%) more, with higher, progressive tax rates on all forms of income. (Click here)
9. Federal ownership of all banks (Click here and here)
10. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
The Ten Steps will add dollars to the economy, stimulate the economy, and narrow the income/wealth/power Gap between the rich and the rest.
10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt
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.
1. A growing economy requires a growing supply of dollars (GDP=Federal Spending + Non-federal Spending + Net Exports)
2. All deficit spending grows the supply of dollars
3. The limit to federal deficit spending is an inflation that cannot be cured with interest rate control.
4. The limit to non-federal deficit spending is the ability to borrow.
THE RECESSION CLOCK
Vertical gray bars mark recessions.
As the federal deficit growth lines drop, we approach recession, which will be cured only when the growth lines rise. Increasing federal deficit growth (aka “stimulus”) is necessary for long-term economic growth.
14 thoughts on “–Which stinking liars are stealing your children’s Social Security and Medicare?”
Rodger, an idea that I have been giving a lot of thought to is the country’ two deficits, the budget deficit and the either the trade deficit or the current account deficit. Today, the budget deficit and the current account deficit are almost the same. According to the sector balances, the budget deficit can’t be reduced without pitching the economy into a recession or depression until the current account deficit is reduced.
People can understand the trade deficit and how it reflects jobs that have been exported. Almost no one sees the linkage between the two. Do you think there is a good way to link them and transfer fears from the budget deficit to the trade deficit? Fears of that would actually do some good.
I’m not sure.
Budget deficits adds dollars to the economy; trade deficits subtract dollars from the economy.
So, on the surface, they would seem to be opposites. But oddly, they both are beneficial in that both provide goods and services to the economy.
I’m not sure how to turn that into a clarifying explanation, but if you have an idea along those lines, give it a shot.
“Yes, I have proven in this book, Monetary Regimes and Inflation, that in my view, all hyperinflations, and there are very many other high inflations, have usually been caused by deficits of the government financed by money creation.
David: We have the Japanese now, not only monetizing debt, but taking freshly printed money and putting it directly into the stock market. Can you think of a historical precedent similar to that?
Peter: Japan is a special case. They have increased the money supply very much, indeed, even much more than the United States, which has a record, from all historical perspectives. But Japan, and the government debt is now, I think, 230% of gross domestic product. I don’t see how they can get out of this. And then I was trying again to increase the money supply very much and I cannot believe that there will not be a day of reckoning someday.”
He also talks about Switzerland having no inflation since WWI but i’m not sure what his reasons are for that. I guess his overall view is that money creation should be strictly a private banking activity
“ALL hyperinflations . . . have USUALLY been caused . . . ”
ALL . .. USUALLY”?
Gimme a break.
And then there’s Japan, which is a “special case.” Why is it a “special case”? He has no idea, other than it disproves his thesis.
And is the U.S. also a “special case,” since our debt is enormous and no inflation?
” . . . day of reckoning someday.”
Ah, yes. Good old “someday.” See: “Ticking time bomb.”
It seems he thinks that spending more than what comes in from taxing creates a debt that has to be repaid or financed by spending more?
This is why i don’t think people are lying it’s that they just don’t get MMT:)
“That is the second reason, in fact. I personally have shown that, usually, politicians, and therefore the government, have an inflationary bias, and this is understandable if I speak as a public choice economist, because if you want to deliver good things to people, it is always good to increase, at least in the short term until the next elections, the expenditures more than the tax revenues. This means, of course, that you have a deficit. As long as you can finance the deficit in the financial market, it is okay, but there are certain limits to that. And if these limits are reached, the temptation for governments is great to press the central banks, and often they have the full control of central banks for financing their deficits with the creation of the monetary base.”
Peter Bernholz (Professor Emeritus of Economics in the Center for Economics and Business (WWZ) at the University of Basel, Switzerland)…” has spent his career examining the intertwined worlds of politics and economics with special attention given to money. In his most recent book, Monetary Regimes and Inflation: History, Economic and Political Relationships, Bernholz analyzes the 12 largest episodes of hyperinflations – all of which were caused by financing huge public budget deficits through money creation. His conclusion: the tipping point for hyperinflation occurs when the government’s deficit exceed 40% of its expenditures.”-Hayman Advisors (who?)-Oct. 2009 Newsletter
His conclusion:” the tipping point for hyperinflation occurs when the government’s deficit exceed 40% of its expenditures.”
Let’s examine that theory for a bit:
In 2009, the USA ran a deficit of $1.4 t. , spending was $3.5 t . . My calculation shows we were EXACTLY at Bernholz’s threshold of 40%. Results? Ongoing recession and deflation. I’d be willing to bet the US could have run a deficit of 60% of total spending that year and it would have still been deflationary. Why? There existed an enormous output gap, massively under utilized resources, a recently disposed yet readily available highly educated and adaptable workforce, a strong central government and a newly liquid banking system. As many including Rodger have stressed, when the private sector is toast and a nation is a net importer, the govt. absolutely must step up to the plate and run really large SUFFICIENT deficits.
Betting he can’t understand or fathom the above paragraph, it only leads me to believe Bernholz is simply a bought and paid for hard money clown.
penny, as you know (as you read this blog), hyperinflation is never caused by money printing.
My favorite external source for the causes/workings/responses to hyperinflation here: http://bilbo.economicoutlook.net/blog/?p=3773
When you say gap you mean between gov spending plus private spending and GDP? When that gap closes along with a sustained rise in prices would signal for the Fed to raise rates?
But now it appears they want to cut spending before even closing the gap. I guess this is why the stock market is in retreat 🙂
Gap in my above description means lost productivity, best measured by the glacial paced decrease in the unemployment rate over the past several years. Maybe up to$4 trillion in lost GDP over what is now nearly an unbelievable 8 year window. The scenario remains deflationary.
Therefore, no uptick in wages, even with the falling unemployment. As federal spending goes into surplus it only makes matters worse. No real need to raise rates, however small or incremental. It’s likely just going to be the Fed “testing the waters.”
Roger where is a graph that shows how gov can increase spending while later reducing taxes? thanks
The government can increase spending and the government can reduce taxes. Graph of what?
A graph or article showing that during the last X number of years spending and taxing are at times inversely correlated
Spending and taxing are not correlated, inversely or otherwise.
When spending goes up more than taxing, the deficit increases.
When taxing goes up more than spending, the deficit decreases.
Well they should be:)
When you state the deficit goes up or down in relation to taxes and spending that’s the propaganda, deficit bad surplus good.
Deficit = Taxes – Spending