It takes only two things to keep people in chains:
The ignorance of the oppressed
And the treachery of their leaders
You endlessly have been told that Medicare and Social Security Trust funds will, in the near future, run short of money unless benefits are decreased or taxes are increased.
In the post, “Fake federal trust funds and fake concerns“ we debunk this false idea. Today, I’ll suggest what you can do to help protect your Medicare and Social Security.
First, as a quick refresher, here are excerpts from a very short article in THE WEEK Magazine, June 22, 2018:t
Nolan Finley: The annual report from the trustees of Social Security and Medicare shows that both programs “have accelerated their race toward the brick wall of insolvency.”
Social Security will spend more money this year than it takes in for the first time since 1983.
Finley and the trustees are wrong.
Social Security and Medicare are departments of the U.S. federal government. As such, they cannot become insolvent unless the U.S. becomes insolvent and/or Congress and the President want them to become insolvent.
The U.S., being Monetarily Sovereign, has the unlimited ability to create its own sovereign currency, the U.S. dollar.
It can pay any debt denominated in dollars. Because the federal government’s financial obligations are denominated in U.S. dollars, the U.S. government always can pay them. It even can pay any obligation denominated in a foreign currency, simply by exchanging dollars for that currency.
Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”
Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”
In short, the United States government cannot become insolvent.
The notion that a department of the U.S. government can become insolvent is like saying the mail room of a large, infinitely wealthy corporation can become insolvent — an obvious impossibility unless the corporation were arbitrarily to decide not to pay the mail room’s expenses.
Further, Social Security does not “take in” money. Those FICA dollars extracted from your paycheck do not pay for Social Security. Upon receipt by the Treasury, they disappear from any measure of the U.S. money supply — M0, M1, M2, M3, L — or any other code.
Your tax dollars effectively are destroyed upon receipt.
If you ask, “How much money does the federal government have,” you will not find the answer. What the federal government does have is the unlimited ability to create dollars. It “has” infinite dollars.
(If your business owned an infinite dollar-creating machine, how many dollars would your business have? And would any department of your business be in danger of insolvency?)
Nolan Finley continues: “Without drastic changes, the Social Security Trust Fund is now expected to be depleted within 16 years, going bust by 2034.
Things are even grimmer when it comes to Medicare’s Hospital Insurance Trust Fund — Medicare Part A — which is projected to run out of money by 2016.
At 63, I’ll probably still collect my benefits but, ‘I feel for the generations behind me. There seems no chance they’ll ever collect anything.'”
These latter three paragraphs voice ideas promulgated by the rich to make the rest of us accept unnecessary reductions in our benefits.
You’ll notice that Finley did not mention Medicare Part B (mostly doctors) and Part D (prescriptions). Why? Because these two benefits are run through the bookkeeping ledgers of the Supplementary Medical Insurance (SMI) Trust Funds.
These mythical “trust funds” receive their bookkeeping credits from the federal government’s General Fund which never unintentionally can run short of its sovereign currency.
That is why no one ever talks about Medicare Part B and Part D becoming insolvent. They have access to an infinite number of dollars.
So, you might ask, why not fund Medicare Part A and Social Security the same way Parts B and D are funded — from the limitless General Fund?
The answer: The politicians, the media, and the economists are paid by the rich to keep you ignorant of the fact that Social Security and Medicare, Parts B & D have infinite access to money.
If you knew this, you might ask for increases in benefits, thereby narrowing the financial Gap between you and the rich — the very last thing the rich want.
In fact, there is a very good chance you didn’t know it until this very moment, and now you are sitting there thinking, “Is this really possible? They’ve been telling me Medicare can ‘go bust,’ but they only are talking about Part A, and they are lying about that, too.”
Yes, that is exactly what is happening. You are being lied to. And the cure for lies is the fresh air of truth.
I suggest you contact your Senators and your Representative, and rather than go through the entire argument about Monetary Sovereignty, simply say this:
“We repeatedly are told that Medicare will become insolvent unless there is a decrease in benefits or a tax increase.
“Were you aware that this applies only to Medicare Part A? Medicare Part B and Part D are paid out of the federal General Fund, which means they cannot become insolvent.
“So the question is: Why doesn’t Congress merely specify that Medicare Part A benefits be paid the same way as Medicare Part B and Part D?
“That would completely eliminate all the concerns about insolvency.
“(The same would be true for Social Security. It too should be paid from the General Fund.)”
A letter would be good. A phone call would be better. A letter + a phone call would be better yet. Repeated phone calls and letters would be the best.
If enough people do this, maybe, just maybe . . .
Anything is possible if enough people want it.
Rodger Malcolm Mitchell
Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
The single most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.
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 can afford better health care than can 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 A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Guaranteed Income)) 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 EVERYONE Five 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 benefitting 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 FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce 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 business 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.