Rachel Greszler is a research fellow in economics at The Heritage Foundation. David Ditch is a researcher specializing in transportation issues for Heritage’s Hermann Center for the Federal Budget.
Rachel Greszler and David Ditch, The Heritage Foundation on Aug 5, 2021
Most Americans realize the federal government spent a lot of money, including three rounds of so-called “stimulus payments” that most households received.
But those $3,200 worth of individual checks pale in comparison to total spending.
If ordinary Americans had spent like the federal governmentdid in 2020, the median household that earns $68,703 would have spent $131,620 and put $62,917 on the credit card, despite already being $541,287 in debt.
Via ignorance, stupidity, or malice, the writers for the Heritage Foundation prove our point by attempting to confuse federal finances with personal finances.
The two are as completely different as flypaper is from the daily paper.
As of 2021, the U.S. debt comes out to roughly $220,000 per household. That’s enough to buy about eight years’ worth of groceries, gas, clothing, and housing for the typical household.
The above is a completely meaningless and misleading comparison, that is supposed to shock you, but not to inform you. You are not, and never will be liable for the so-called, misnamed federal “debt.”It isn’t a debt, and no one is liable for it.
And even that figure doesn’t include the unfunded liabilities of Social Security and Medicare.
Without a significant reduction in the size of those programs, each household’s total debt is actually over $660,000. That’s equal to the cost of a median family home, a new car, plus over five years’ worth of a typical household’s income.
Utter nonsense. All federal liabilities are “unfunded” until the government funds them by creating dollars, ad hoc.
The real purpose of the article is to groom you for acquiescence to right-wing calls for Social Security and Medicare cuts. But even if the FICA tax were eliminated, the federal government could support Social Security for All and a comprehensive Medicare for All, forever.
Then follow more meaningless comparisons, all designed only to be shocking. Your household will not ever pay a single penny to pay off the so-called federal “debt.”
However, even this massive a debt doesn’t seem all that bad.
Interest rates are low, and the federal government has had little problem seemingly borrowing into oblivion without consequence. (The same could be said of Greece before a financial crisis ensued.)
The fact that interest rates are low is yet more meaningless tripe. The U.S. government sets interest rates at any level it chooses, and it pays interest by creating new dollars, ad hoc, which it has the infinite ability to do.
And by the way, Greszler and Ditch, is it ignorance, stupidity, or traitorousness that causes you to compare the Monetarily Sovereign United States (which has the unlimited ability to create its own sovereign currency, the dollar) with the monetarily non-sovereign Greece (which has no sovereign currency)?
But our currently low interest rate payments—equal to over $2,500 per household in 2021, or the cost of about 6 months’ worth of groceries—are on track to rise to about $6,400 per household in 2031. That’s four months of mortgage payments.
Again, more designed-to-deceive, meaningless, false equivalences between federal finances and personal finances
And that’s the equivalent of an interest-only mortgage. Those costs don’t even begin to reduce the principal amount of debt.
The so-called federal “debt” is not a debt in the usual sense. It is the total of deposits into Treasury Security accounts (similar to safe deposit boxes) which are no burden whatsoever on the government or on future taxpayers.
While ordinary Americans aren’t allowed to take out mortgages or open up new credit cards in their children’s names, the federal government does this every day.
Yet even more ignorant, stupid, or intentionally deceptive false comparisons between federal finances and personal finances. The Heritage fraud goes on and on.
The share of debt for a child born this year was $66,874. And that debt is on track to rise every year, reaching $111,552 by the time they’re 18 and either start working or head off to college. It will then hit $191,768 by the time they’re 30 and potentially raising young children.
The above implies that future children will have to pay for the so-called “debt.” It is a lie of the first order.
No one will pay for the “debt” because it is not debt. It is deposits that will be paid off as they always have been: By simply returning the dollars in those T-security accounts.
Fortunately, it’s not too late to prevent the nation from going broke.
It is impossible for the United States to “go broke.” Being Monetarily Sovereign (unlike Greece), the U.S. has the unlimited ability to create dollars. If needed, it could press one computer key and create a trillion dollars tomorrow.
Congress should cut out wasteful spending such as corporate welfare and excessive compensation for federal bureaucrats.
The Heritage Foundation, being right-wing, now complains about “corporate welfare.” Do they mean the Republicans’ tax cuts for businesses?
And really, how many federal bureaucrats receive “excessive compensation”?
Of course, the whole thing is meaningless, because all federal deficit spending, even so-called “wasteful” spending, benefits everyone by adding stimulus dollars to the economy.
Congress should stop shirking their responsibilities by placing an increasing amount of federal spending on autopilot, and instead seek to reform programs like Social Security and Medicare that are on a path to bankruptcy.
I have no idea what “autopilot” means in this context. I suspect the authors don’t know, either. But none of it matters.
The real purpose is to make you believe Social Security and Medicare should be cut. That is the goal of The Party of the Rich, the Republicans.
The rich, who support Heritage Foundation, always want to widen the Gapbetween the rich and the rest. The wider the Gap, the richer are the rich. It’s known as Gap Psychology — the desire to widen the income/wealth/power Gap below, and to narrow the Gap above.
So they repeatedly warn that Social Security and Medicare soon will run short of money, despite their being a federal agency that has available to them, infinite dollars.
Neither the federal government, nor any agency of the federal government, can go bankrupt unless Congress and the President want them to.
Congress should focus on core federal responsibilities and clear away countless programs that benefit narrow interest groupsat the expense of the public good.
The elderly and the poor — are they what Heritage considers to be “narrow interest groups”?? Or aren’t the rich — Heritage’s buddies — who really comprise the narrow interest groups?
Congress should recognize our looming debt disaster and step away from shortsighted spending plans.
Big problems like the unsustainable national debt won’t be solved quickly or easily. However, Congress must begin to take fiscal responsibility seriously as soon as possible.
The “unsustainable” national debt has been growing massively, and sustaining, since 1940, while organizations like Heritage have been crying “Wolf” again, and again, and again.
Otherwise, a Greece-like fate may await us.
And the article ends appropriately, with one, final, false comparison of monetarily non-sovereign Greece vs. Monetarily Sovereign America. The Big Lie is alive and well at Heritage.
Even, an organization as devoted to advancing the interests of the rich vs. the rest, should be embarrassed by the above article.
It is so wrongheaded and misleading as to be written by fools and approved by traitors. They do more to hurt America than do the most devoted Russian, Iranian, and Chinese spies.
Perhaps The Heritage Foundation should be renamed The Benedict Arnold Foundation.
Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”
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 Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:
3 thoughts on “Heritage Foundation: Ignorant, stupid, or traitors? You choose.”
With respect to Social Security and Medicare cuts, while I agree the intent is to widen the gap, it isn’t just about cutting benefits to poor people, because that doesn’t make more money for rich people. If poor people have less money in benefits, then that is less money spent into the economy that will ultimately flow into the pockets of rich people. While it does widen the gap, it is a lose-lose proposition.
I believe the real intent is to create an artificial, self-induced fiscal crisis, and associated economic pain, to promote privatization and financialization of those programs such that government payments flow directly to Wall Street banks and investors.
Republicans tried real hard under Bush II to privatize social security, but then the GFC hit and the huge risks associated with relying on private investment were laid bare. It would seem to me that the GFC is far enough away in the rear view mirror such that what we are really witnessing now are the foundations being set for another go at privatization.
That said, widening the Gap does make the rich richer. Think of it this way:
1) If you own $10 million, are you rich? Answer: No, if everyone else owns $100 million.
2) If you own $100, are you rich? Yes, if everyone else owns $1.
In short, “rich” is not an absolute term; it is a comparative term. To become richer you need only widen the Gap, either by acquiring more for yourself or by making those below you have less.
I agree “rich” is a comparative term, but the rich are driven by greed and ego and want to widen the gap by accumulating more in absolute (i.e. acquiring more for themselves), not just relative, terms. Simply cutting benefits to the poor may make them relatively richer, but privatization of public services and benefits will make them absolutely richer by transferring more public money to the investor class.
#Monetary Sovereignty - Mitchell 
With respect to Social Security and Medicare cuts, while I agree the intent is to widen the gap, it isn’t just about cutting benefits to poor people, because that doesn’t make more money for rich people. If poor people have less money in benefits, then that is less money spent into the economy that will ultimately flow into the pockets of rich people. While it does widen the gap, it is a lose-lose proposition.
I believe the real intent is to create an artificial, self-induced fiscal crisis, and associated economic pain, to promote privatization and financialization of those programs such that government payments flow directly to Wall Street banks and investors.
Republicans tried real hard under Bush II to privatize social security, but then the GFC hit and the huge risks associated with relying on private investment were laid bare. It would seem to me that the GFC is far enough away in the rear view mirror such that what we are really witnessing now are the foundations being set for another go at privatization.
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I agree with you regarding privatization.
That said, widening the Gap does make the rich richer. Think of it this way:
1) If you own $10 million, are you rich? Answer: No, if everyone else owns $100 million.
2) If you own $100, are you rich? Yes, if everyone else owns $1.
In short, “rich” is not an absolute term; it is a comparative term. To become richer you need only widen the Gap, either by acquiring more for yourself or by making those below you have less.
That is the essence of Gap Psychology.
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I agree “rich” is a comparative term, but the rich are driven by greed and ego and want to widen the gap by accumulating more in absolute (i.e. acquiring more for themselves), not just relative, terms. Simply cutting benefits to the poor may make them relatively richer, but privatization of public services and benefits will make them absolutely richer by transferring more public money to the investor class.
LikeLiked by 1 person