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.”
Alan Greenspan: “Central banks can issue currency, a non-interest-bearing claim on the government, effectively without limit. A government cannot become insolvent with respect to obligations in its own currency.”
St. Louis Federal Reserve: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e.,unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.
To understand liars you must listen to (or read) liars, which is why I read Breitbart, the ultimate in prevarication and exaggeration. In Breitbart, you sometimes can uncover a tiny nugget of truth from the vast supplies of bovine excrement, or at least acquire a better understanding of fool’s thinking.
Here is a Breitbart story which I found both fascinating and disturbing, because amazingly, it contained what appears to be the abovementioned nugget:
Democratic National Committee (DNC) chief executive officer Seema Nanda admitted on Tuesday she does not know how to pay for the socialized medicine scheme known as Medicare for All, estimates of which are somewhere between $32 and $38 trillion.
Nanda, during Yahoo Finance’s “All Markets Summit: America’s Financial Future” event in Washington, DC, on Tuesday, the interviewer asked:
It would be very expensive, so, if this is going to be a winning issue for Democrats in 2020, how do you answer the question of how are you going to pay for this? Because there have been studies, credible studies that say it would cost three trillion dollars a year, you would have to double everybody’s taxes or maybe triple everybody’s taxes.
How do you answer the cost question?
“So, you know, your answer is I don’t know how we’re going to get there, but these are all big conversations that we need to be engaged in,” Nanda added.
Perhaps Nanda does know but doesn’t wish to give away the Democrat’s plans just yet. Or, more likely, she is as clueless as Sen. Bernie Sanders was when he first proposed Medicare for All.
Virtually everyone, left and right, believes that having medical insurance is important. Today’s medicine simply is so expensive that only the richest among us could risk not having a backup plan to pay.
So, the question becomes a simple one: Who should pay for medical insurance, the public or the federal government?
“The public,” which consists of people, businesses and local governments, is financially constrained. It does not have unlimited funds. The public can, and often does, run short of dollars. It is what is known as monetarily non-sovereign.
By contrast, the federal government is not financially constrained. It has the unlimited ability to create its own sovereign currency, the U.S. dollar. It is Monetarily Sovereign.
The U.S. government never can run short of dollars. Even if all federal taxing totaled $0, the federal government could continue spending, forever.
In fact, the federal government’s method for creating dollars and adding them to the economy, is to pay creditors.
So, before we continue with the Breitbart article, think about the answer to this basic question:
Who should pay for healthcare, the public which does not have unlimited money or the federal government which does have unlimited money?
Paying for Medicare for All remains a daunting task for Democrats. Multiple studies have estimated that the plan would cost between $32 and $38 trillion over the next ten years, contrary to Sen. Bernie Sanders’ (I-VT) claim that the plan would save America money.
In the unlikely event that the $38 trillion over ten years turns out to be correct, what does the seemingly simple term “save America money” mean?
If the federal government were to fund for Medicare for All, that indeed would save the American people money.
And the federal government has no need to save money, because it has the unlimited ability to create dollars.
So yes, Medicare for All would save America money.
The Associated Press (AP) even noted that the socialized medicine proposal would require “historic” tax increases to pay for the single-payer healthcare proposal.
Note the pejorative and incorrect term “socialized medicine.” In socialized medicine, the government would own all the medical facilities and employ all the medical workers.
I know of no one who suggests that. It’s a fake objection by Breitbart, the home of fake objections to anything that benefits the middle classes and the poor.
In Medicare for All, as with today’s Medicare, the federal government merely takes the place of private insurance carriers.
It does not own the hospital and clinics and pharmaceutical companies.e It does not employ the doctors, nurses and other personnel. It merely writes checks, which it can do endlessly.
Sen. Bill Cassidy (R-LA) said that Medicare will soon become bankrupt and that adding half of the country to the government health care program will not improve anyone’s health care.
Because the U.S. federal government has the unlimited ability to create U.S. dollars, it cannot unintentionally go bankrupt.
And because the federal government cannot go bankrupt, no agency of the federal government unintentionally can go bankrupt.
Even if all FICA taxes disappeared, the federal government could support Medicare for All forever, and I suspect Cassidy knows this.
“My point is Medicare for All is Medicare for none,” Cassidy told Breitbart News in October.
“Medicare is actually going bankrupt in eight years, and now Bernie Sanders wants to put 150 million more people into a system going bankrupt in eight years?”
No, Medicare will not go bankrupt in eight years or in eighty years, unless Congress wishes it.
Many in Congress do not understand the differences between federal financing and personal financing. They think federal debt is like personal debt, and is a burden on the government or on taxpayers.
It is neither.
Many others in Congress are well aware that the federal government has the unlimited ability to fund Medicare for All, and in fact, adding trillions of dollars would provide a dramatic stimulus to the overall economy.
These members of Congress do not want you to know this for fear you will make “unreasonable” demands on the government.
What is an “unreasonable” demand? Anything that narrows the Gap between the rich and the rest. (See: Gap Psychology)
In summary: Every person in America should be able to afford health care, and not to be financially devastated by illness. But someone has to pay for such insurance.
The public’s funds are limited, but the federal government’s funds are unlimited. The only logical solution is for the federal government to pay for Medicare for every man, woman, and child in America — which the federal government easily can do.
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
3. Provide a monthly economic bonus to every man, woman and child in America (similar to social security for all)
The Ten Steps will grow the economy, and narrow the income/wealth/power Gap between the rich and you.