I wrote to Sen. Marco Rubio, reminding him that the U.S. federal government, being Monetarily Sovereign, cannot unintentionally run short of dollars.
Thus, no federal government agency can run short of dollars unless that is what Congress and the President want.
Here is the response I received.
It indicates MAGA Marco either is ignorant about federal finance or is lying. I vote for both.
Dear Mr. Mitchell:
Thank you for taking the time to express your thoughts regarding the future of Social Security and Medicare.
Understanding your views helps me better to represent Florida in the United States Senate, and I appreciate the opportunity to respond.
Except, he doesn’t understand my views and/or doesn’t care about representing Florida or the United States. He is a weak and willing (and usually absent) tool of the extremist GOP.
Social Security and Medicare are critical pieces of the retirement security safety net for seniors. In 2023, more than 66.2 million Americans currently receive Social Security benefits of some form.
As currently structured, however, these programs are going bankrupt, and Congress must work to protect and reform them so that they can fulfill their promises to future retirees.
Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”
Alan Greenspan: “There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.”
Alan Greenspan: “The United States can pay any debt it has because we can always print the money to do that.”
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.”
Quote from former Fed Chairman Ben Bernanke when he was on 60 Minutes:
Scott Pelley: Is that tax money that the Fed is spending?
Ben Bernanke: It’s not tax money… We simply use the computer to mark up the size of the account.
The federal government can and should fund Social Security just as it funds the military, the Senate, the House, SCOTUS, the White House and almost every other federal agency — by simply paying their bills.
Social Security began in 1935 as a social insurance program primarily for widows, orphans, and those living past the current average life expectancy. These benefits are funded by taxes on the wages of all American workers, called payroll taxes, which are automatically withheld each payday.
No, the benefits are not funded by taxes. The federal government destroys all tax dollars it receives. It pays its bills by creating new dollars ad hoc.
In 1950, 16.5 workers were paying in for every beneficiary receiving payments. Today, that ratio has fallen to 2.8 workers for every beneficiary and will continue to decline for the foreseeable future.
Wrong. Those FICA taxes are destroyed upon receipt. Workers do not pay for benefits.
According to the non-partisan Congressional Budget Office (CBO), the Social Security program is now running permanent deficits due to this declining ratio and a growing number of disabled individuals.
According to the Social Security Administration, benefits will only be fully payable until 2033. At that point, the Social Security Trust Fund will only be able to meet 77 percent of scheduled benefits.
The government can pay benefits forever. These scare tactics are solely for the rich who wish to widen the Gap between themselves and those below them on the income/wealth/power scale.
Medicare, created in 1965, is currently running deficits as well. Its solvency must be addressed to protect current and future generations of Americans.
Medicare, an agency of the Monetarily Sovereign federal government, cannot become insolvent unless Congress and the President want it to.
According to the CBO, total Medicare spending was $747 billion in 2022. By 2033, Medicare spending will be $1.6 trillion.
Though Congress has known about these problems for years, it has chosen not to address them straightforwardly with the American people.
Congress can “address the problem” simply by paying Medicare’s bills.
I will continue to highlight the need to reform this critical program in a responsible manner to ensure future generations have Medicare and Social Security in old age.
Marco’s idea of “reform” is to cut benefits and/or increase taxes. The “solutions” the rich want, so the income/wealth/power Gap will be widened.
Social Security should also be reformed to reflect the different kinds of economic insecurity Americans face in the 21st century.
For example, my New Parents Act of 2023 (S.35), which I reintroduced on January 24, 2023, would offer paid parental leave to new parents by allowing the option to use a portion of their Social Security benefits after the birth or adoption of a child.
This is a tacit benefits-cutting measure. The federal government should pay, not Social Security benefits.
They then would have the option to delay retirement by the benefit taken or receive a proportionate reduction in monthly retirement benefits for the first five years of retirement.
The rich always look for ways to reduce retirement benefits, so the poor will be forced to work forever.
At a time when working families are being left behind, and childbirth rates are falling, it is essential to realign our economic policies in support of American families. S.35 would not raise taxes or expand bureaucracy and would not change the long-run balance of the Social Security Trust Fund.
The so-called “Trust Fund” is a bookkeeping fiction. No dollars are stored in any federal “trust fund.” The so-called trust funds simply are records of contributions that have nothing to do with the ability to pay for benefits.
It is an honor and a privilege to serve you in the United States Senate. As your United States Senator, I will keep your thoughts in mind as I consider these issues and continue working to ensure America remains a safe and prosperous nation.
Yeah, right. Blah, blah, blah. I’m sure he has us in his thoughts and prayers and is working day and night for us. Does anyone want to buy a bridge from this guy?
Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
……………………………………………………………………..
The Sole Purpose of Government Is to Improve and Protect the Lives of the People.
MONETARY SOVEREIGNTY
#Monetary Sovereignty - Mitchell 
Sadly, you’d probably get a similar response from Bernie.
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Sadly, you’re right.
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I would like to know what you think of Thom Hartman’s article here:
https://open.substack.com/pub/thomhartmann/p/how-the-gop-suckered-america-on-tax-b1a?utm_source=share&utm_medium=android&r=4q2jp
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Thank you for calling my attention to Hartman’s interesting — but substantially wrong — article. I’ll comment on a few of his claims.
He wrote, “Because tax cuts on the rich are paid for by increasing the national debt, they’re a drag on the economy. They make rich people richer but make the nation poorer.
This is false. The so-called, misnamed “national debt” merely is the total of deposits into T-security accounts by investors and the Fed. This does zero to “make the nation poorer. Apparently, Hartman is ignorant of Monetary Sovereignty. Real tax cuts for the rich leave more money in the private sector, which makes the nation richer.
I emphasize “real” because the real tax cuts for the rich include loopholes, not the stated percentages. That’s how Donald Trump was able to pay far less taxes than you paid in the past 10 years.
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He wrote, “Employers will cut back those wages when working-class people get a tax cut.”
Employees are a commodity for businesses and like all commodities, their cost relates to scarcity of the type of employee needed. Employers figure the cost of labor against net salary, FICA, healthcare insurance and other perks vs. the need.
It may be true that paying employees less tax dollars could reduce the total paid, but that ignores the effect on the economy. Remember that GDP = Federal Spending + Non-federal Spending + Net Exports. The Federal government spends what it wishes to regardless of taxes (thus the federal “debt”) but the Non-federal spending is highly influenced by what is left over after federal taxes.
In short, the more taxes the federal government collects, the less the private sector (aka the economy) has.
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He wrote, “But after decades of this ‘you should worry about tax increases the same way rich people do’ message being pounded into our brains by Republican politicians, working people think that tax cuts benefit them, and tax increases hurt them.
Federal tax increases of any kind hurt the economy by taking dollars out of the private sector. (State and local taxes don’t take dollars out of the economy because those dollars are stored in private banks and then spent. By contrast, federal taxes are destroyed upon receipt.
The point that Hartman neglects, yet one that skews his observations is: While lower paid people do pay the published tax rates, the rich do not pay the published tax rates. They pay far less, due to tax loopholes.
Cutting the published rate means far less to the rich than it does to the rest of us, because the rich never pay the published rate. The care about the loopholes. That is where the money is saved.
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He wrote, Tax cuts and tax increases on working class people are essentially irrelevant: tax cuts only help the morbidly rich, while tax reduce the national debt and help fund infrastructure and other programs that benefit working class people.
Taxes may reduce the national debt, but that is irrelevant. Federal taxes do not fund infrastructure or anything else. Whether the federal government collects $0 in taxes or $100 Trillion does not affect the government’s ability to spend. History shows that the larger the deficit (i.e. the difference between tax collections and spending) the stronger is GDP growth.
When deficits are too low, we have recessions, and when the federal government runs surpluses, we have depressions.
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He wrote,” To stabilize our economy and re-empower working people, we must bring back the top tax bracket that existed before the Reagan Revolution. It’ll also provide the necessary funds to rebuild our country from the wreckage of Reagan’s neoliberal policies, which are largely still in place.”
The top tax bracket is irrelevant if no one is paying it. I agree with the sentiment that the rich should be taxed more, only because this would narrow the Gap 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.
And again, Hartman doesn’t understand that unlike state/local taxes, federal taxes pay for nothing. That is the problem with ignorance of Monetary Sovereignty, the widespread belief that federal finances are similar to personal, state/local government, and business finances. The federal government is Monetarily Sovereign. All the rest are monetarily non-sovereign.
Someone should teach Hartman the difference.
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Thom Hartmann has interviewed Stephanie several times. I guess it went in one ear and out the other.
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Thank you for the reply. I agree with you 100%.
While I was reading Hartman, he seemed to be contradicting himself. I do understand that taxes just take spending money away from the working class and are destroyed upon receiving them.
My problem is the rich have to be taxed to control the gap between the ultra rich and the working class or by some other means.
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I have no problem with removing the tax loopholes only the rich can enjoy. In total dollars that would mean very little to the vast American economy, but it would significantly narrow the Gap.
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Indeed, and Bernie’s not a stupid man. Nor is he bought and paid for by Wall Street like the vast majority of politicians either. He is neither venal nor stupid. So why does he go along with the Big Lie, even if only to try to weaponize it towards the otherwise laudable goal of taxing the very rich more? Does he really see life as a zero-sum game? Is he just waiting until he becomes President to reveal the truth? Or is he afraid of what the powers that be will most likely do to him within his first 100 days if he publicly exposes the Big Lie and thus the little man behind the curtain” (see what ultimately happened to the last two Presidents who challenged the monopoly money power of the big banks: Lincoln and JFK).
More questions than answers, it seems.
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I’ll give you the answers.
I happen to know Stephanie Kelton. She is an MMTer who wrote a very good book titled, “The Deficit Myth.” As you know, MMT and MS run on essentially parallel tracks, with a few differences (Jobs Guarantee, the purpose of federal taxes, the cause of inflation).
When Bernie was running for President, Stephanie was the chief economist for the Democrats. She told Bernie, and anyone else who would listen to her, that Medicare for All (Bernie’s signature effort) did not rely on taxes.
While Bernie and others may (?) have believed her, everyone felt that the truth was a losing strategy, and telling people MfA would actually save money was more palatable for the ignorant public.
Reminds one of Galileo telling the Catholic Church the earth is not the center of the universe (or telling your wife she is not beautiful). Sometimes, one must be brave to tell the truth, and “brave” is not a word I would pin on today’s politicians.
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Very true.
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Indeed, the Big Lie that we must cut Social Security, Medicare or whatever else due to supposed scarcity of money is simply a whole-cloth fabrication, just like the more general Big Lie behind it. The Chicken Littles like MAGA Marco promoting it are thus very easy prey for the Foxy Loxy oligarchs who benefit from such lies. Crazy like a fox indeed!
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Social Security and Medicare are critical pieces of the retirement security safety net because capitalism isn’t able to handle them. Without our (indirect) socialism, all capitalists and capitalism would fail in front of everyone in the world. Capitalism is about self as opposed to service.
We continue the myth of American private enterprise for the benefit of the ultra-rich clubbers who wish to keep their club game rolling at the expense of US. Truth be known, they couldn’t make it w/o “we the people,” and the Marco Rubio sellouts.
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So true
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Indeed, anyone who thinks capitalism would do a better job handling Social Security and Medicare basically believes that Wall Street would somehow do a better job running the former, and the greedy private insurance industry the latter, because reasons. Neither are particularly known to be trustworthy, of course, but even if they were, there are very hard limits to what non-Monetarily Sovereign entities can achieve. Thus, such vital programs like those are far too important to leave to the private sector.
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You know better than to write to Rubio. Rolling in the mud with pigs only makes the pigs happy, there’s no point in it. Rubio can never be redeemed. All swamp creatures are venal actors.
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