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Which is worse: Your lack of money or the federal government’s lack of money?
Answer: The federal government, being Monetarily Sovereign, cannot lack its own sovereign currency, the dollar.
It is absolutely, positively, 100% impossible for the U.S. federal government to run short of dollars, unless Congress and the President wish it.
Even if federal taxes fell to $0, even if federal spending tripled, no matter how large the federal deficits, it is impossible for the federal government to lack dollars.
And that is why the FICA (Federal Insurance Contributions Act) tax is unnecessary and harmful, and Medicare is unnecessarily inadequate.
Because the federal government never can run short of dollars, no purpose is served by your making “insurance contributions” to FICA. You might as well make a water contribution to the Pacific ocean.
In the same vein, Medicare is unnecessarily inadequate because it doesn’t cover some of the most common health problems facing America: Dental, hearing, vision, and long-term care.
Scientific American Magazine: Why won’t Medicare cover dental, hearing or vision expenses?
Phil Moeller: The failure of Medicare to cover most dental, hearing, and vision expenses is perhaps its greatest failing.
Other critics might point to the fact that it does not cover long-term care expenses either.
And my favorite personal rant is reserved for its failure to cover nearly all medical expenses incurred outside the United States.
Huge and growing numbers of seniors face substantial dental, hearing and vision expenses. Failure to receive adequate care in any of these areas will have a big impact on overall health care and thus on health claims that Medicare does cover.
Unfortunately, nearly all of the talk in Washington these days is about how to restrain Medicare expenses, not add to them.
Why restrain Medicare expenses? After all, the federal government cannot run short of money. So why restrain medical care for Americans?
Because the rich don’t need Medicare. They can pay for all of the best medical care.
By keeping medical care from the middle and the lower-income groups, the rich widen the Gap between them and the rest — and widening the Gap is the primary goal of the rich.
The Gap makes them rich. Without the Gap, no one would be rich (We all would be the same) and the wider the Gap the richer they are. The rich widen the Gap by increasing their income or by reducing yours. Either will do.
Medicare pays for doctors and hospital care. Is dental care all that important?
Scientific American: Oral Health Goes Modern
We are amidst a global oral disease epidemic, and the statistics are startling: nearly 100 percent of adults have had cavities.
About one-fifth of middle-aged adults have gum disease so severe that they could lose their teeth—and about a third of the world’s elderly citizens no longer have any of their original teeth.
Periodontitis—the swelling, bleeding, receding gums caused by some species of bacteria in our mouths—may raise the risk of a number of serious health conditions.
That list includes stroke, respiratory illness, and cardiovascular disease, adult-onset (type 2) diabetes, and premature birth.
Mouth pain from cavities is among the leading reasons that children are absent from school. Bacterial invaders in gum tissue can slip into the bloodstream, settling into the arteries around the heart, or may be inhaled into the lungs, causing pneumonia.
In answer to the question, “Is dental care all that important?” we only can ask, “Are stroke, respiratory illness, heart disease, diabetes, pneumonia, pain, and school absences all that important?”
Scientific American Magazine: The Case for Oral Health
Former Surgeon General David Satcher: “Children who live in poverty in this country and around the world don’t get good oral health care.
“80 percent of oral health problems affect about 20 percent of the population—the poor and minorities in this country.
“We still have the only health system [among developed countries] that doesn’t provide universal access to care.
“I’m supportive of the Affordable Care Act but critical of the fact that while…it improves oral health care access for children, it does not for adults.
“Our health system has to incorporate easy access to oral health care.”
Think of it. The great United States of America has the only health system [among developed countries] that doesn’t provide universal access to care.
In effect, you have been made a second-class citizen of a second-class country.
Why? Because you have been told the government can’t afford comprehensive Medicare, an outright lie, promulgated by the rich.
And it’s not just young people who receive inadequate dental health care:
Scientific American Magazine: Attention on Prevention
In the U.S., about 10,000 baby boomers turn 65 each day—and many who have dental insurance lose it when they retire.
One-fifth of people over 75 haven’t seen a dentist in five years.
The nonprofit Center for Oral Health is currently assessing dental problems among California’s elderly. Preliminary results show that 38 percent of people in the state’s long-term care facilities have lost all of their original teeth; nearly half have at least one untreated cavity; and about one in seven need urgent care.
In the U.S. alone, nearly 30 percent of 15,000 adults surveyed said life is “very often” or “occasionally” less satisfying because of the condition of their mouth or teeth.
The authors urged policymakers to re-evaluate the separation of the mouth from the rest of the body in healthcare policy—and to consider the growing data linking oral health to physical, social and economic well-being.
Bottom line: We lead worse lives because of a lie: The Big Lie that very simply says federal taxes are needed to fund federal spending, so the federal government is running short of dollars.
The big truth: The federal government never can run short of dollars, with or without taxes. The government can pay for anything, including comprehensive Medicare for every man, woman, and child in America.
The rich want you to believe otherwise, because they want to widen the Gap between them and the rest.
Don’t fall for the con-job. Contact your Senator or Representative. Tell them you know the secret, and will not be fooled. Demand a fully paid, comprehensive Medicare for all.
Who needs money more: The federal government or you?
Contact your Senator or Representative. Tell them you know the secret, and no longer will be fooled. Demand a fully paid, comprehensive Medicare for all.
Demand fully paid, comprehensive Medicare for all. America deserves nothing less. You deserve nothing less.
Rodger Malcolm Mitchell
The single most important problems in economics involve the excessive income/wealth/power Gaps between the rich and the rest.
Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics.
Implementation of The Ten Steps To Prosperity can narrow the Gaps:
Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
This article addresses the questions:
*Does the economy benefit when the rich afford better health care than the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ANNUAL ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:
Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012
Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefiting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
5. SALARY FOR ATTENDING SCHOOL
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
6. ELIMINATE CORPORATE TAXES
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.
The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.
9 thoughts on “Which is worse: You lack money or the federal government lacks money?”
Mr. Mitchell, do you think illegal immigrants should get their medical expenses covered by the gov?
Yes. It’s the only humanitarian thing to do.
The federal government cannot run short of dollars, so why should anyone in America not receive medical care?
Shall we allow people to sicken and die, when it costs nothing to save them?
Off subject: Funniest comment of the day:
Good job of not creating a misleading impression, Jimmy.
Hi Mr. Mitchell. I have enjoyed your blog and your comman sense answers to pressing issues. I have a better understanding of MMT but have one question. At the present time Federal Deficits add dollars to the economy, but doesn’t the selling of Treasury notes remove those dollars from the money supply? I understand that the selling of the Treasury’s is a tool to control interest rates. Doesn’t the law require Treasury Notes to be sold to “cover” the
“Money supply” is measured in many different ways — M1, M2, M3, L — all related not exactly to the supply, but more accurately, to liquidity.
While depositing dollars into a T-security account doesn’t affect the supply of dollars (they still exist) it affects the liquidity of dollars.
Moving dollars from a checking account to a savings account does the same thing.
T-bills, having the shortest lifespan, are the most liquid of the T-securities, and all T-securities (even T-bonds) are quite liquid during their last days of existence.
The answer to your last question is, “Yes.”
….correct me if I am wrong, then a Federal deficit adds dollars to the economy as soon as the suppliers or sellers receive them from the Treasury for goods and services to the U.S. Government, and the law requires the Federal Reserve to issue or sell the same amount of T-Bills or Bonds as the deficit. A increase in the money supply is short lived as the two actions balance, other then the movement of the dollars supplied(payments by the Treasury to suppliers of goods and services) to those who purchase the T-bills from the Federal Reserve (removing those dollars from the money supply by the purchase of the T-Bill). Hope I am not confusing in terminology.
Compare depositing your dollars into your T-security account at the Federal Reserve Bank vs. giving the government your dollars as a gift.
When you deposit your dollars into your bank account you do not lose dollars. They continue to exist.
When you give dollars to the government (as in a tax payment) you lose dollars. They no longer exist.
Get the difference?
Yes I understand. My lack of understanding on this point is, it appears that Federal deficit spending adds dollars, or credit that does not have to be payed back by taxes or federal revenue, to the money supply or movement, encouraging growth. Those new dollars eventually move to investors who remove them from the moving supply of dollars, those dollars are not destroyed but are invested in Treasury’s in effect savings and out of supply of dollars available for growth. A Congressional Law changing the required selling of Treasury’s in the amount of the Federal deficit would allow those deficit dollars to remain in the liquid dollar, increasing growth. Perhsps I am not fluent enough to understand. My question would be, what would happen if the required selling of Treasury’s in the amount of the Federal deficit was no longer required by law?
People would search for the next safest investments — perhaps Canada Savings Bonds or UK Gilts?