The Dumb-dumb Continues

The U.S. federal government, unlike state and local governments, is Monetarily Sovereign. Its sovereign currency is the U.S. dollar.

Create meme "to be swimming in money pictures, a rich man , dude with the money" - Pictures - Meme-arsenal.com — **The federal government never can run short of dollars. So what is the purpose of federal taxes?**

The federal government never can run short of dollars. So what is the purpose of federal taxes?

It created the very first dollars out of thin air. The government arbitrarily gave each dollar a value, and continues to do the same, even now.
It does all this by arbitrarily passing laws. The federal government never can run short of dollars.
It pays all its bills by creating new dollars, ad hoc. Even if the federal government collected $0 taxes, it could continue spending forever.
Misnamed federal “debt” actually is the total of deposits in T-security accounts, which resemble interest-paying, safe deposit boxes.The federal government never touches those dollars, and upon maturity, the government “pays off” the debt (deposits) simply by returning the dollars in those accounts. No tax dollars are used.

All federal tax collections are destroyed upon receipt by the Treasury. They cease to exist in any money-supply measure.With the above in mind, let us examine the following article from the Washington Post:

THE FIX By Peter W. Stevenson President Biden’s White House is in the process of putting together a proposal for an enormous infrastructure and jobs bill — a bill that seems as though it could lead to the Democrats’ second use of the reconciliation process to pass a piece of major legislation without any Republican votes in the Senate. Biden’s team first dreamed up a bill that calls for about $3 trillion in new spending.
The first iteration of the plan would have been offset by about $1 trillion in new taxes.
But, The Washington Post’s Jeff Stein reports, the team second-guessed itself, worrying that simply left too big a spending deficit, which could, in turn, cause economic mayhem.

Why is the federal deficit “too big”? The net total of all deficits is about $25 trillion. The economy is doing very nicely, thank you, and 2021 promises to be excellent.

So what exactly makes the deficit “too big”? You will not find an answer to that question, at least not a truthful one.

Because the federal government is Monetarily Sovereign, it can support infinite deficits. In fact, federal deficits pump growth dollars into the economy. When deficits are too small, we have recessions and depressions, which are cured by — you guessed it — running deficits.

Unlike you and me, and the state and local governments, and businesses, the federal government never can run short of dollars. While state and local taxes do “offset” state and local spending, federal taxes offset nothing. Federal finances are nothing like state/local government finances.

So again, what is the problem with deficits? Ask your political representatives to answer that question. I assure you, they either won’t answer or will answer with a lie. The only problem with deficits is when they are too small to support economic growth.

The second version of the bill, expected to be unveiled this week, more than triples the taxes, to about $3 trillion — and boosts spending up to $4 trillion, Stein reports.
The revision is an acknowledgment of the limits of new spending, even for Democrats, who are eager to pass more signature legislation while they still control both houses of Congress.

There is no reason for taxes to rise. In fact, the sole purpose of federal taxes is to control the economy by taxing what the government wants to discourage and by giving tax breaks to what the government wants to encourage.

The purpose of federal taxes is not to provide the federal government with dollars. It already has the infinite ability to create dollars.

But will Congress be able to swallow tax hikes that big? The tax increases would affect businesses, investors and wealthy Americans, starting with a higher tax rate for corporations.
Biden has said that tax increases for individuals would not affect anyone making less than $400,000 per year. And in a move likely to please his supporters, those changes would come in part by largely reversing President Donald Trump’s 2017 tax cuts.

All federal taxes take dollars from the private sector (aka “the economy”) and destroy them. All taxes negatively affect businesses, investors, wealthy Americans, and not-wealthy Americans.

You can’t drain water from only one end of a bathtub. When tax dollars are taken from anywhere in the economy, everyone is affected.

Taxes on the rich are levied, not to acquire spending dollars, but rather to narrow the Gap between the rich and the rest of us.

Republicans are already signaling opposition. “The idea we should agree to some huge economy-crushing tax increase so the government can go on yet another spending binge is a nonstarter for me,” said Sen. Patrick J. Toomey (R-Pa.).

Toomey is correct about taxes; they do crush the economy. But he also would vote against a Democratic plan that didn’t include tax increases, because that would increase the deficit.

In short, Toomey opposes all things proposed by Democrats.

“As long as it’s paid for,” Sen. Joe Manchin III (D-W.Va.) said of the bill’s price tag. “This country needs to rebuild itself.”

Manchin simply does not know what he is talking about.

The federal government always has “paid for” all its purchases. No creditor has been cheated. But by “paid for,” Manchin really means “Taxed by an amount equal to spending.”

If, however, the government takes as many dollars out of the economy as it puts in, we will have a recession. And if it keeps taking dollars out, we will have a depression.

Yes, the country needs to “rebuild itself,” and that requires adding federal dollars. A growing economy requires a growing supply of money, and federal deficit spending is an important source of new dollars.

With comments by Biden, Toomey, and Manchin, the dumb-dumb continues.

Rodger Malcolm Mitchell Monetary SovereigntyTwitter: @rodgermitchellSearch #monetarysovereignty Facebook: Rodger Malcolm Mitchell

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.The most important problems in economics involve:

Monetary Sovereignty describes money creation and destruction.
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: Ten Steps To Prosperity:

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.

MONETARY SOVEREIGNTY

This newspaper article is designed to fool you. Are you fooled?

Here is an article from today’s Chicago Tribune. It is designed to fool you. Let us count the ways: IDOT official says Peotone airport 'still alive' | Northwest Indiana Business Headlines | nwitimes.com

The boondoggle of giant infrastructure packages (can you say Peotone?)

The “Peotone” reference has to do with a proposed and unnecessary airport to be built near the small town of Peotone Illinois.

It would have been funded by the state of Illinois.

The state politicians bought the land around Peotone, hoping to make a big big killing.

The airport never was built.

It was a scandal in the state, but it has nothing to do with Biden’s infrastructure proposal.

The sole purpose of mentioning “Peotone” was to make you believe Biden’s proposal is a scandal.

After a year of blowout spending aimed at combating COVID-19 and its economic effects, the tab for taxpayers totals $4 trillion, financed with budget deficits larger than any seen since Americans were fighting World War II.

So you might think politicians would want to take a breather and look for ways to restore a modicum of fiscal discipline.

The author assumes you don’t know the difference between Monetary Sovereignty (the federal government’s financing system) and monetary non-sovereignty (Illinois’s financing system).:

He hopes you falsely believe that federal taxpayers fund federal spending. But keep this in mind”

State and local government spending is funded by state and local taxes. Federal spending is not funded by federal taxes.

The federal government, being Monetarily Sovereign, creates brand new dollars, ad hoc, every time it pays a bill. No taxes or taxpayers are involved.

That is one of the primary differences between federal financing and all other domestic government financing.

But no. President Joe Biden is preparing to go even bigger, with a package aimed at upgrading infrastructure and creating jobs that adds up to another $3 trillion.

That $3 trillion will go into the economy to help grow the economy.

A measure of the economy is called, “Gross Domestic Product” (GDP). The formula for GDP is:

GDP = Federal Spending + Non-federal Spending + Net Exports

Obviously, that $3 trillion increases the first term (Federal Spending), and as the dollars enter the economy, it also increases the 2nd term (Non-federal Spending).

So the infrastructure package absolutely, positively will grow the economy. That is simple algebra.

Infrastructure is one of those government obligations that requires regular investment and upkeep. No one wants to drive on potholed roads or sagging bridges. Aging buses and rail cars don’t make for the most pleasant of commutes.

But as with most outlays, frugal targeting is essential to avoid waste and excess. The bigger the package, the greater the chance that money will be misdirected.

The first paragraph understates the problem. It’s not just a matter of inconvenience and “No one wants to . . . ”

The very survival of the American economy depends on an updated infrastructure.

The second paragraph is just a meaningless warning against any big project. If the government spends nothing, no money will be “misdirected,” and the more that is spent, the more chance of misdirections. So?? Spend nothing??

The fact of Monetary Sovereignty if that even wasteful spending helps the economy grow, as the above formula demonstrates.

Even wasteful dollars flow through the economy, helping to create jobs and enriching the populace. And remember, since taxes don’t fund fedeal spending, “wasteful” spending (whatever that may be), costs you nothing.

Flashy projects that don’t justify their costs may get funded instead of mundane but valuable ones.

To which “flashy project” is he referring? He never says. He’s just opposed to federal spending.

What he doesn’t tell you is that economic growth relies on federal deficit spending, without which we have recessions and depressions.

Debt growth reduction (blue line) leads to recessions

(vertical gray bars), which are cured by debt growth increases.

Now we come to a truly ignorant and deceptive comment:

Proponents claim that our roads and bridges are dissolving like a graham cracker in a glass of milk.

In fact, the great majority of them are in decent condition, and the biggest problems are concentrated in a relatively few states.

That’s why most infrastructure spending decisions are, and should be, decided at the state and local levels where the benefits are concentrated.

So, for instance, when referring to dams, let’s say there are 10,000 dams in America , of which “only” 3,000 are at risk of collapsing.

To the author this is not something for the federal government to worry about, because the “majority” are still in decent condition, today.

If Texas taxpayers don’t want to finance rail investments, maybe the rest of us should demur.

In short, the author tells you that if the Texan rail system falls apart, it won’t affect you, in the rest of the country.

Do you believe that? Apparently, the author does, or at least, he wants you to believe it.

And, of course, he fails to mention that when Texas spends, that really does cost Texas’s taxpayers, but when the federal government spends, it doesn’t cost you or them, anything.

Then, without realizing it, the author admits that federal spending helps grow the economy, but he tries to make it sound like a bad thing.

Residents of Illinois know that infrastructure can consume tax dollars but serve more as a bonus program for lawmakers who can brag of bringing home the bacon.

False. Federal spending does not consume tax dollars, but state spending does.

Organized labor loves an expensive infrastructure plan that puts union members to work.

And countless special interest groups, from asphalt and engineering firms to waste haulers and construction suppliers, lobby hard for infrastructure investment — and donate heavily to the campaigns of the elected officials in charge.

Yes, organized labor (as well as unorganized labor) — all labor, in fact — likes putting people to work. The author wants you to believe this is a bad thing.

And countless businesses (what the author misnames “special interest groups”) benefit from federal spending.

And benefiting business is supposed to be a bad thing, too??

Mass transit investments also deserve close scrutiny right now. Ridership on trains, buses and commuter rail has plunged.

Many people have moved out of cities because they no longer have to show up at their workplaces every day — if ever. Ride-sharing services had already lured away many transit customers.

What will the demand for mass transit be five years from now? That’s highly uncertain, which argues for holding off on major investments that may end up being ill-suited for the needs of the future.

The argument is: Because no one can predict the needs of the future, don’t repair mass transit now. So, he tells you, there is no need to repair roads, or bridges, or railroads, the future might be Zoom-based work-at-home. Or maybe not.

In any event, he proposes we wait until the roads, rails, bridges, dams are collapsing around us before we begin to fix them.

The Biden administration seems to think it can justify every outlay in the name of creating jobs.

But if the federal government borrows hundreds of billions of dollars to spend on infrastructure, those funds can’t be used to finance private investment that would also create jobs.

The federal government does not borrow. It has the unlimited ability to create dollars, so why would it ever borrow?

What is misnamed “borrowing” really is the acceptance of deposits into Treasury Security accounts (T-bills, T-notes, T-bonds). These accountsmost closely resemble safe-deposit boxes that pay interest.

The government never touches the dollars in these accounts. Instead, the money sits there, accumulationg interest, and upon maturity, the money is returned to the account owners.

The federal government never can run short of dollars, so the claim, “. . . those funds can’t be used to finance private investment” is utter nonsense.

Tax increases would also divert resources from the private sector.

And a nation doesn’t grow richer by paying people to work on lavish boondoggles.

There are no tax increases caused by federal spending. In fact, even if the government didn’t collect a single penny in taxes, it could continue spending, forever.

And ever though the author doesn’t mention any “lavish boondoggles” that supposedly might appear in Biden’s proposal, if there were any, they in fact, would help the nation grow richer by adding dollars to the private sector.

And finally, the author seems to understand the abject ignorance of all he has written, he comes up with this pitiful, semi-apology:

We’re not opposed to all infrastructure investments. Some roads and bridges need attention. Measures to mitigate the effects of climate change are overdue. Clean energy ventures could help reduce our use of fossil fuels. But each item should have to pass a rigorous cost-benefit test.

An infrastructure push could produce a lot of capital improvements that will make our lives better.

But it’s not enough for Washington to spend. It has to spend wisely.

So after his long, misleading diatribe telling you all the reasons why the federal government should not spend, he summarizes with, in effect, “Spend wisely.”

As the headline of this post says, “This newspaper article is designed to fool you. Are you fooled?”

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.

The most important problems in economics involve:

Monetary Sovereignty describes money creation and destruction.
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.”

Ten Steps To Prosperity:

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.

MONETARY SOVEREIGNTY

Sen. Rick Scott “bravely” opposes wasteful federal spending, but even here, he’s wrong.

Sen. Rick Scott is a brave man. He wants to “reduce waste and save taxpayer dollars.”

Wow, what a courageous position. What next, Sen. Scott, laws favoring motherhood, apple pie, the Pledge of Allegiance, and the American flag?

DUMPSTER DIVING- SHE'S SAVING WHAT BIG CORPORATE STORES THROW AWAY - YouTube — **Dumpster diving can uncover some valuable stuff.**

Sadly, despite his cloying attempts at false patriotism (He didn’t criticize Trump for forceable attempts to overturn America’s Presidential election and for snuggling up to QAnon, Proud Boys, 3 percenters, et al), Scott is dead wrong about waste and taxpayer dollars.

Federal Waste
“Waste” is in the eye of the beholder.

To a Republican, anything that benefits the poor — Obamacare, food stamps, free school lunches, etc. — and any other Democratic spending proposal, constitutes “waste.”

So, to prevent such “waste,” Scott wants to:

1. Create a 13 member bipartisan Commission to review the efficiency and public need for each federal agency.
Require the Commission to review and report to Congress on all legislation introduced in Congress that would establish a new agency, or a new program to be carried out by an existing agency.
2. Require the Commission to annually recommend, in the form of legislation, whether the reviewed agencies should be abolished, reorganized, or continued and whether the responsibilities of agencies should be consolidated, transferred, or reorganized.
3. Require Congress to vote on the Commission’s timeline for the abolishment of agencies within a year of the bill’s passage.
4. Expedite the process for Congress to vote on a joint resolution either adopting or rejecting the recommendations of the Commission.

Here are some of the “bold” statements from Scott & Friends:

Senator Rick Scott said, “Our nation is on track to reach $30 trillion in debt and reckless, unaccountable spending by politicians in Washington has put us on a path of economic self-destruction.

The so-called “path of economic destruction” has been in existence for at least 80 years. In 1940, the federal debt was about $40 billion.

Today, it is about $25 trillion and as a result, our economy is the strongest in the world. We still await the “economic destruction.”

Senator Joni Ernst said, “Congress’s job is to hold federal agencies accountable and to work to prevent unelected bureaucrats from wasting hardworking taxpayer dollars.

Congress is elected. Would the commission be composed of Congresspeople or of “unelected bureaucrats”? If Congresspeople, why would they be trusted more than Congress itself? If unelected, why should they overrule our elected Congress?

Senator Mike Braun said, “When I built my business back on Main Street, if you weren’t constantly evaluating whether your money was being well-spent, you’d soon find yourself out of business. The federal government should do the same.

False comparison. The federal government, being Monetarily Sovereign, is nothing like Braun’s hypothetical, monetarily non-sovereign business back on Main Street.

Senator Mike Crapo said, “The federal government must be limited, and taxpayer dollars must be used efficiently to effectively help Americans.

Mike Crapo, not understanding economics, doesn’t realize that the federal government (unlike state and local governments) doesn’t spend taxpayer dollars. It creates new dollars, ad hoc, each time it pays a creditor.

Representative Michael Cloud said, “Hardworking American taxpayers have to make difficult decisions every day to make ends meet and so should Congress. It is vital we restore trust with the American people in how Congress spends taxpayer dollars.

Rep. Cloud, also not understanding economics, doesn’t realize the federal government does not have to “make ends meet.” It has the unlimited ability to create its own sovereign currency, the U.S. dollar.

The problem is that we already have a bipartisan commission to evaluate laws and agencies. It’s called “Congress.” It’s a 541 member commission, elected by the U.S. voters.

In essence, Scott and his pals wish to substitute the will of our elected Congress with 13 elected or unelected (?) Commissioners who will decide whether Congress is right or wrong.

Perhaps, for efficiency, should we simply should do away with Congress and allow these 13 Commissioners to do the work? That would eliminate a great deal of waste in salaries and expenses, wouldn’t it?

Once we get past all the Scott & Friends cloying sophistry and economic ignorance, we only can conclude that Scott wants to take credit for a no-brainer, flag-waving piece of drivel.

After all, who would dare to argue against fighting federal waste?

Well, me for one.

Sure, we all love federal spending that accomplishes something we like, and we dislike federal spending that accomplishes something we hate.

I, for one, think making children stand and recite the Pledge of Allegiance is a waste of time, and the entire federal tax-collection is a monstrous waste of resources.

Those are my opinions. Put me on the Commission.

Except for one fact:

Federal “wasteful” spending is better than no spending at all.

Consider the infamous Gravina Island Bridge, commonly referred to as the “Bridge to Nowhere.” It was to connect Ketchikan, Alaska with Gravina Island, containing the Ketchikan Airport as well as 50 residents. The bridge was projected to cost $398 million.

Most people would have classified that as a colossal waste, except for two facts:

It would have cost taxpayers nothing. The federal government would have created the dollars at the touch of a computer key. No tax dollars would have been involved.
At least (probably more than) $398 million would have been pumped into the U.S. economy. Jobs would have been created in several industries.

No harm; no foul.

The project eventually was canceled, and that cancellation cost the economy the $398 million it would have received. So which was worse, the cancellation or the project itself?

A BIT OF HISTORY
Years ago, Senator William Proxmire created the “Golden Fleece Award,” a tongue-in-cheek criticism of what he considered federal wasteful spending.

It was great public relations for Proxmire, but sadly for America, some of the recipients of the Golden Fleece Award were research projects that later resulted in valuable results.

That’s the way it is with research. You don’t know where it will lead. Only later can you look back and determine whether if was worthwhile or “wasteful.”

By contrast with “wasteful,” there are some expenditures that are “harmful.”

I believe spending billions on the border wall was a harmful waste when the same billions could be used to vet and process valuable immigrants, while using the justice system to apprehend those that commit crimes.

And for what? To prevent the entry of drugs, the vast majority of which come in via legal channels.

With that wall, we do ongoing harm to innocent human beings and to the American economy. How many potential scientists, soldiers, teachers, business leaders, and consumers have we lost because of that wall.

IN SUMMARY
“Wasteful spending is in the eye of the beholder. What some consider waste, others consider practical.

Federal “wasteful spending” is not like private sector wasteful spending, i.e not like your wasteful spending nor mine, not like business wasteful spending, nor state/local government wasteful spending.

Private sector wasteful spending adds nothing to the economy. It doesn’t add money or accomplishment.

Taxpayers do not pay for federal spending. Sadly, federal taxpayers pay for nothing. Federal taxes are the ultimate wasteful spending.

Federal “wasteful spending” adds money to the economy, and if it is not actually harmful, so-called federal “wasteful spending” stimulates economic growth.

Dumpster diving can uncover some valuable stuff.

Rodger Malcolm Mitchell

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

Monetary Sovereignty describes money creation and destruction.
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.”

Ten Steps To Prosperity:

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.

MONETARY SOVEREIGNTY

The unspoken lie that is even bigger and more damaging than the “Big Lie.”

The “Big Lie” in economics is: Federal taxes fund federal spending.

12 Photos of Mitch McConnell Looking Sad — **Hell, we can change any law we want to. Don’t let the voters know the government can’t run short of dollars.**

State and local taxes fund state and local spending, because state and local governments are monetarily non-sovereign, while the federal government is Monetarily Sovereign.

But federal taxes do not fund federal spending. Even if all federal tax collections were $0, the federal government could continue spending forever.

The federal government is the creator and issuer of the U.S. dollar. It doesn’t need or use tax dollars. The sole purpose of federal taxes is to aid the government in controlling the economy by taxing what it wishes to discourage and giving tax breaks to what it wishes to encourage.

That’s why the federal government is able to pass multi-trillion dollar spending bills without worrying about “Who’s going to pay for it?” They just create the money.

State and local governments are merely users of the U.S. dollar. They do need and use tax dollars.

And that makes all the difference.

That Big Lie leads to wooly-brained concerns that the U.S. government can run short of the very dollars it creates, and that its agencies can become insolvent.

But as big and nutty as the Big Lie is, there is an even bigger, nuttier, and more damaging lie:

The unspoken lie:
The federal government does not have the power to change its own laws.

Who would believe that? Well, the Committee for a Responsible Federal Budget (CRFB) for one. Here is what they tell people:

Some of the nation’s most important government programs are financed with dedicated revenue sources using federal trust funds. Four of those programs are within 14 years of insolvency.
FY 2022: Highway Trust Fund (HTF)
FY 2026: Medicare Hospital Insurance (HI) Trust Fund
CY 2032: Social Security Old Age and Survivors Insurance (OASI) Trust Fund
CY 2035 Social Security Disability Insurance (SSDI) Trust Fund

By law, trust fund spending cannot exceed revenue once reserves are depleted. Insolvency would trigger a 7 percent cut to disability benefits, a 13 percent cut in Medicare payments, a 25 percent cut in highway spending, and an abrupt across-the-board 27 percent cut in Social Security retirement benefits.

This situation supposedly is so dire, the CRFB article repeats it, just to make sure you are sufficiently frightened:

Under the law, trust fund programs cannot spend in excess of their dedicated funding sources.

Once the trust funds are depleted, the programs may only spend incoming revenue. For the Highway Trust Fund, this means new projects will be immediately halted and spending ultimately reduced by one-quarter.

For Medicare, all payments will be cut by 13 percent or delayed by an equivalent amount upon insolvency.

“By law”? “Under the law”?

Whose law are they talking about? Do they mean Russia’s law? China’s law? The CRFB’s law?

No, they are talking about America’s law, you know, the law that is created by Congress and the President.

It is the law that is not chiseled into marble, but rather changed every month of every year, at the whim and behest of Congress and the President.

There is absolutely nothing to prevent Congress and the President from changing the law and allowing trust fund spending to exceed revenues. A federal clerk on a typewriter could do it.

The CRFB continues on its errant path, with lie after lie:

Policymakers must restore solvency to the major trust funds to avoid abrupt across-the-board benefit and spending cuts.

However, solvency solutions can also improve the sustainability of the national debt, increase economic output and income, and improve policy outcomes.

Whoops, there’s the CRFB’s favorite word: “Sustainability.” What does it mean? No one knows, but it surely must be something important.

In 1940, the federal debt was $40 billion. Today, it has grown to about $25 TRILLION! That’s a 62,500% increase. Let me pretend to put it in scare headlines, like the CRFB does.

OUR FEDERAL DEBT HAS INCREASED SIXTY-TWO THOUSAND, FIVE HUNDRED PERCENT IN EIGHTY YEARS!

And yet here we are, sustaining a debt that supposedly can’t be sustained, along with the strongest economy in the world.

The article continues:

CBO’s budget projections generally assume trust fund programs continue spending as scheduled after insolvency, as if lawmakers used general revenues to support the funds. Under CBO’s baseline, debt will double from a near-record 100 percent of GDP in 2020 to over 200 percent of GDP by 2051.

Wait! What? “Used general revenues”? What does that mean?

It means that with all the wailing and weeping about “unsustainable,” the CRFB acknowledges that the federal government simply can pay for the bills and not rely on phony trust funds.

(Although the CRFB erroneously says the government could use “general revenues” the federal government does not use revenues for anything.)

The federal government simply could write checks to support all the spending of the Highway Trust Fund, the Medicare Hospital Insurance Trust Fund, the Social Security Old Age and Survivors Insurance Trust Fund, and the Social Security Disability Insurance Trust Fund — or better yet, do away with those trust funds altogether and simply pay the bills.

That’s what it does for every other agency of the government.

There is no need for the dire consequences of insolvency.

Recognizing that the phony trust funds represent important benefits to Americans, here are the CRFB’s “solutions” to the Highway Trust Fund’s fake impending doom:

Policy	10-Year Savings
Revenue Options
Increase gas and diesel taxes by 10 cents	$140 billion
Impose 1 cent per mile Vehicle Miles Traveled Tax on all vehicles	$150 billion
Impose 5 cent per mile Vehicle Miles Traveled tax on commercial trucks, only	$160 billion
Impose $5 per barrel per barrel tax on oil	$160 billion
Impose $25 per ton carbon tax in place of the gas tax	$700 billion

Spending Options
Freeze Highway Spending for Five Years	$60 billion
Replace Surface Transportation Block Grants with Matching Grants’	$70 billion
Cut Federal Transit Spending in Half	$60 billion
Reduce Federal Share of National Highway Performance Program by 15%^	$50 billion
Repeal Davis-Bacon Act	$20 billion

In short, the CRFB wants the federal government to remove $1.31 TRILLION from the economy as “revenue,” while adding $260 BILLION less than planned — a $1.57 trillion loss for the economy.

Do you think taking $1.57 TRILLION stimulus dollars from the private sector will affect economic growth? Who doesn’t think so?

Well, the CRFB doesn’t seem to think that’s a problem at all.

And here’s what the CRFB would like to do with Medicare Part A. (We should mention that the federal government simply pays for Medicare Part B. No trust fund, there. That’s exactly what they should do for Part A.)

Spending Options	Billion
Improve Medicare Advantage Coding Intensity Adjustments	$370
Establish Graduate Medical Education Fund Outside Medicar	$105
Modernize Medicare and Medigap Cost-Sharing Rules	$140
Eliminate Medicare Payments for Bad Debts	$80
Reduce and Reform Post-Acute Care Payments	$90

Revenue Options
Increase the HI Payroll Tax Rate by 0.5 Percentage Points	$455
Broaden the HI Payroll Tax Base to Cover Employer Health Benefits	$310
Expand the Base of the Net Investment Income Tax, Dedicate Half of all NIIT Revenue to the HI Trust Fund	$225
Apply the Payroll Tax to Business Income for Self-Employed Workers to Reduce Tax Avoidance	$200
Impose an Excise Tax on Sugar-Sweetened Beverages, Dedicate the Revenue to the HI Trust Fund	$80

Here, the CRFB wants to remove $2.055 TRILLION from the private sector. So between just two of the phony “Trust Funds,” the CRFB suggests removing $3.7 TRILLION from the economy in just ten years.

What effect do you think that would have?

And that doesn’t even count what they want to do with the Social Security “Trust Funds.”

The CRFB use the euphemism, Social Security “reforms.” If they were being honest, they would label the Social Security “benefit cuts and tax increases.”

And if all this wasn’t damaging enough, let’s move on to what the CRFB wants to do about the $25 trillion federal “unsustainable” debt. The CRFB thinks that’s too high. How many trillions should we remove from the economy to pay that off, even though the so-called “debt” is nothing more than the total of deposits into T-security accounts, which are paid off simply by sending the dollars back?

These deposits are similar to deposits into a bank safety-deposit box. Money goes in, and when you want it, you take the money out. It’s not real debt at all.

The bottom line of all this is: The federal government can change any laws it wishes to change. It has full power to:

Fund all federal benefits simply by issuing checks.
Eliminate all “debt” by returning the money currently in T-security accounts.

All this “woe-is-us” wailing and moaning about debt and solvency is meant to mislead you. Federal finance is similar to the Monopoly game in which the federal government makes all the rules.

Pass a couple of laws and the federal government would be “debt”-free and its agencies would be flush with spending money, and you wouldn’t have to worry about your Social Security, Medicare, and road funds disappearing.

All it requires is for you, the voter, to understand the realities of Monetarily Sovereign federal finance.

Rodger Malcolm Mitchell

THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

Monetary Sovereignty describes money creation and destruction.
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.”

Ten Steps To Prosperity:

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.

MONETARY SOVEREIGNTY

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