My dear friends,
Gosh, we were having so much fun ruining the lives of immigrants, gays, and those who aren’t Christian; we forgot that cruelty knows no boundaries. If we elect leaders based on how cruel they can be, eventually, that meanness will bounce back to bite us.
Here, carry my import duties. Yes, I told you China would carry them, but — SUPRISE!–I lied. You’ll carry them as long as I am President. Thank you for voting for me.
We also seem to have forgotten that the American economy is the world’s largest business, and running a business so big takes level-headed talent and brains.
It certainly doesn’t call for a many-times business bankrupt, morally bankrupt, proven con artist.
Yet here we are, and here is what it will cost you.
I’ll bet you never thought of these when you cast your ballot for the Party of Hatred.
Excerpts from an articlethat appeared in my daily MSN feed. With slight edits, it describes just a few of the costs you will pay for Trump’s meanness and mismanagement.1. HomeownershipRising housing prices have already made buying a home difficult for many, but in the coming years, homeownership could become even more elusive. If large-scale deportations of undocumented workers occur, the construction industry will face higher labor costs, driving up the cost of building new homes.Increased tariffs on imported construction materials would also make housing more expensive, putting homeownership even further out of your reach.2. College EducationThe cost of higher education has been climbing for decades. While deportation and tariffs don’t directly impact tuition, economic ripple effects could still play a role. Undocumented immigrants are taxpayers too and collectively contribute an estimated $11.74 billion to state and local coffers each year via a combination of sales and excise, personal income, and property taxes.3. HealthcareHealthcare costs are expected to keep rising. If tariffs are applied to imported medical equipment and supplies, you’ll pay more for your healtcare.4. RetirementRising costs from tariffs on goods and services that affect everyday expenses may make it more difficult for you to set aside money for your future.5. Quality ChildcareDeporting undocumented workers, many of whom are employed in childcare roles, could reduce the availability of affordable options. This would increase demand and drive up prices, making quality care a luxury for you.6. GroceriesFood prices could climb even higher. The deportation of undocumented farmworkers, who make up a large part of the agricultural workforce, would lead to reduced food production, especially for labor-intensive crops like fruits and vegetables.Tariffs on imported food products and storage containers would further drive up prices, leaving you with fewer affordable, healthy food choices.7. Travel and VacationsTravel has become more expensive due to rising fuel costs and accommodation prices. Tariffs on imported goods in the travel industry, like airplane parts and automotive components, could increase these prices.Additionally, labor shortages in the hospitality sector, if exacerbated by deportation, may lead to reduced services and higher costs, making your vacations a rare treat.8. CarsThe cost of new cars, particularly electric vehicles (EVs), rise as tariffs on imported car parts drive up manufacturing expenses, making it harder for you to afford a reliable vehicle.9. Home Repairs and MaintenanceThe cost of maintaining your home is already high due to inflation and supply chain issues. Deporting undocumented workers, many of whom are employed in home repair and construction, could worsen labor shortages and drive up the prices you must pay.If tariffs are imposed on building materials, the expense of your necessary repairs would further increase, making home maintenance a serious financial burden on you.10. Assisted Living and Elder CareThe cost of elder care is expected to rise significantly as demand grows. Deporting undocumented caregivers would create labor shortages, driving up wages and the cost of caring for dad, mom, or you. Tariffs on imported medical supplies and equipment could also make assisted living facilities more expensive, putting quality elder care further out of your reach.
While we’re on the subject of being cruel to all those whose income is less than seven figures, we would be remiss if we didn’t mention Medicaid, the health insurance for people who cannot afford healthcare insurance.
In any contest to name the cruelest and most useless healthcare “reform” favored by Republicans and conservatives, it would be hard to beat the idea of applying work requirements to Medicaid. Yet, it’s back on the table, teed up by congressional Republicans as a deficit-cutting tool. In a rational world, this idea would have been consigned to the dumpster long ago, and forever. It’s billed as a way to reduce joblessness, but doesn’t. It’s billed as an answer to the purported complexity of Medicaid, but makes the system more complicated for enrollees and administrators. If they can’t work, they get no healthcare. Let them and their kids suffer and die.It’s billed as a money-saving reform, but adds to Medicaid’s costs. Democrats view Medicaid as a health insurance program that helps people pay for health care…Republicans view Medicaid as a government welfare program. House Budget Committee Chairman Jodey Arrington (R-Texas) gave the game away last week when he told reporters that a “responsible and reasonable work requirement” for Medicaid would produce about $100 billion in savings over 10 years, or $10 billion a year.
Translation: “We want take $10 billion a year from our poorest Americans.”
That wouldn’t make much to defray the estimated $4-trillion 10-year cost of extending parts of the 2017 Republican tax cut for the rich, which is the ostensible reason for seeking out penny-ante savings in budget categories such as a social safety net.There are only two ways to extract even $10 billion in savings from Medicaid: Strip benefits from the program, or throw enrollees out.
This relies on the false assumption that Medicaid costs must be reduced.
But, the U.S. federal government, being Monetarily Sovereign, never can run short of dollars. Even if it didn’t collect a penny in taxes, it could fund 100% of Medicaid, forever.
Yes, the states pay a small share, and that too, is unnecessary and costly to taxpayers. While state taxpayers pay for state spending, federal taxpayers pay for nothing. All federal spending is funded by new dollars created by the Treasury. Not a penny of your taxes goes to fund the federal government.
My guess: Not one of you Republican voters knew that.
One other thing about imposing work requirements on Medicaid: It’s illegal. That’s the conclusion of federal judges who reviewed the idea the last time it was implemented, during the first Trump term.U.S. District Judge James E. Boasberg and a three-judge panel of the U.S. Court of Appeals for the District of Columbia found that work requirements didn’t serve the program’s objectives, specifically the goal of bringing health coverage to low-income Americans. Medicaid work requirements remain a beloved hobby horse of conservatives. The idea is a component of Project 2025, the right-wing road map to federal policy changes in a second Trump administration. Conservatives have an historic disdain for Medicaid. This derives, as Drew Altman of the health policy think tank KFF astutely observed, in part from the divergent partisan views of the program: Thinking of Medicaid as welfare serves another aspect of the conservative program, in that it makes Medicaid politically easier to cut, like all “welfare” programs. Ordinary Americans don’t normally see these programs as serving themselves, unlike Social Security and Medicare, which they think of as entitlements (after all, they pay for them with every paycheck).
Franklin D. Roosevelt, the creator of Social Security, also created FICA, not to fund Social Security (or later, Medicare), but to make people feel they are “entitled” to the benefit. That way, as Roosevelt said, “No damn politician could cancel my Social Security.”
Sadly, the damn politicians have found ways to cut SS payments by taxing them, and are trying to cut Medicaid. Notice the commonality: The cuts always hurt the poor. Never the rich.
The rich reap billions from tax shelters unavailable to you, but those shelters just keep growing.
From the concept of Medicaid as welfare it’s a short step to loading it with eligibility standards and administrative hoops to jump through; Republicans tend to picture Medicaid recipients as members of the undeserving poor, which aligns with their view of poverty as something of a moral failing. Work requirements, then, become both a punitive element and a goad toward “personal responsibility,” a term that appears in Project 2025’s chapter on Medicaid. The idea that work requirements for Medicaid can have a measurable effect on joblessness is the product of another misconception, which is that most Medicaid recipients are the employable unemployed. As is often the case with right-wing tropes, this is completely false. The Trump administration had approved Medicaid work requirements for 13 states and had approvals pending in nine others — all were under the control of Republican governors or legislatures or both — before the waivers ran into the court blockade and ultimately into the accession of the Biden administration. Enrollees who didn’t meet the requirement for three months were summarily excised from Medicaid and couldn’t reenroll until the following year. Evidence compiled by healthcare advocates suggested that administrative snafus largely prevented even employed enrollees from submitting evidence of employment. Work hour reports had to be made online, even though the reporting website was out of order for long stretches and many enrollees didn’t have adequate internet access. The effect of the policy on health coverage in Arkansas was calamitous. Medicaid enrollment fell by a stunning 12 percentage points. The percentage of uninsured respondents in the 30-49 age cohort, which was the first group targeted in a stepwise introduction of the requirement, rose to 14.5% in 2018 from 10.5% in 2016. Project 2025’s Medicaid chapter falsely states that the ACA “mandates that states must expand their Medicaid eligibility standards” to include all individuals with income at or below 138% of the federal poverty level.” The truth is that this was originally part of the ACA, but it was invalidated by the Supreme Court, which ruled that the federal government must give states the choice of whether to accept the expansion. That’s the state of affairs to this day. The Supreme Court decision came down in 2012, so the Project 2025 authors don’t have much of an excuse for their ignorance of the facts. Anyway, 10 states, most of them deep red, still haven’t accepted the expansion.
If you live in Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, or Wyoming, your state has chosen not to expand Medicaid. This has left many low-income individuals in a “coverage gap” where they earn too much to qualify for Medicaid but not enough to afford private insurance.
There’s no financial reason for it. The federal government pays 90% of the cost, and those dollars actually would enrich your state. It’s just right wing cruelty.
Did you vote Republican in the last election? You get what you voted for.
Don’t be fooled. The Project 2025 folks and their adherents in the coming Trump White House don’t want to make Medicaid more efficient, as they claim. They want to make it less relevant and less effective — and cheaper, the better to preserve those tax cuts for the rich. Those 72 million enrollees? They’ll just be collateral damage.
The irony is that many of the poor and middle class voted for Trump, blithely assuming that all his cruelty and hatred was directed at “those other people, not at me.”
Sorry folks. Cruelty and hatred know no bounds. They seep out from under rocks, and before you realize it, they are drowning you.
Approve cruelty against your neighbor, and you will be next. Then you can whine crocodile tears, crying, “It isn’t fair. I’m not one of them. I never thought it could happen to ME.”
And this is only the beginning of your tribulations — call them “Trumpulations.”
Rodger Malcolm Mitchell
Monetary SovereigntyTwitter: @rodgermitchellSearch #monetarysovereigntyFacebook: Rodger Malcolm Mitchell;MUCK RACK: https://muckrack.com/rodger-malcolm-mitchell; https://www.academia.edu/
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The Sole Purpose of Government Is to Improve and Protect the Lives of the People.
When my wife died, I decided I didn’t need two homes, so I gave my Illinois home to my children and moved permanently to Florida.
Because we don’t have snow and ice, the weather here generally is more accommodating for us elderly than up north, though the occasional hurricane can be stressful.
An article in the South Florida Sun Sentinel describes a growing problem- local and national. Here are some excerpts:
As South Florida’s seniors grow older, experts warn of the ‘silver tsunami’ financial crisis By Lisa J. Huriash | lhuriash@sunsentinel.com, November 18, 2024 Aging experts unveiled a grim outlook for aging seniors who increasingly are impoverished and dependent on government help to get by. And in South Florida, they say the numbers are reaching more of a crisis level as the number of seniors grow, often with no pensions and not enough savings — relying instead on Social Security benefits. “If you aren’t being kept up at night by the impending ‘silver tsunami,’ then you aren’t paying attention,” declared Broward County Commissioner Steve Geller, who is also the chair of the South Florida Regional Planning Council.
Also, keep in mind the tsunami of misinformation and disinformation regarding the so-called “impending insolvency” of Social Security and Medicare, the two main federal benefits received by the elderly.
Commonly referred to as the “silver tsunami,” residents age 65 and older are projected to number more than 2.13 million in the seven-county region by 2050, reflecting an increase of 54.5% since 2021, according to the Planning Council.
While the article discusses South Florida, the situation is nationwide.
The U.S. population of 65 and older has grown significantly over the past decade.
From 2010 to 2020, this age group increased by 38.6%, from 40.3 million to 55.8 million, the fastest growth rate since 1880 to 1890.
Over the past decade, the increase of 15.5 million people in this age group is the largest-ever 10-year numeric gain. This rapid growth is largely driven by the aging of the Baby Boomer generation (those born between 1946 and 1964), who began turning 65 in 2011.
Of these residents, 520,000 will be 85 years of age or older, reflecting a projected increase of 133.6% from 2025 to 2050. A conference about “preparing for the silver tsunami” was held Friday at Florida Atlantic University in Boca Raton, presented by the South Florida and Treasure Coast Regional Planning Councils. There, experts shared what the future could look like, using figures from the U.S. Census, and studies by state agencies, the Federal Reserve Bank, and more:
— By 2034, Americans ages 65 and older will outnumber those 18 and younger for the first time.
— Nearly half of elderly unmarried women rely on Social Security for 90% of their income, compared to 22% of all seniors.
— Older Americans are carrying more debt into retirement.
— The age-85-and-older population in southeast Florida will more than double in 25 years, which means the need for more elder care.
— The median income for American adults is $50,290 while their average annual expenses are $57,818.
Social Security
The average monthly Social Security benefit is $1,907, or $22,884 a year. “There is a disconnect of how much people understand they have to save,” said Angela Antonelli, a research professor and executive director of the Georgetown University Center for Retirement Initiatives. One in five Americans rely on Social Security for 90% or more of their income, she said. “Social Security does not keep you out of poverty,” she said.
Social Security could and should keep you out of poverty. There is no excuse for a Monetarily Sovereign nation, with the infinite ability to create dollars, to allow its elderly citizens to fall into poverty.
Affordability is not a factor for a Monetarily Sovereign government. Even without collecting a penny in taxes, the federal government could fund a generous version of Social Security, which would keep you out of poverty. So why not?
On Friday, experts urged policymakers to use the information to try to think of ways to create change when it comes to crucial areas of health care, transportation, housing and finances.Nan Rich, a panelist, said “right now we have a crisis in our community when it comes to seniors,” especially as the condos they purchased in the 1970s now are in need of expensive repairs and maintenance.
Pallet shelters. Are these little boxes the solutions for your Grandma? Is this the best America can do for its elderly? “Pray it doesn’t rain, granny.”
Florida is monetarily non-sovereign. Unlike the U.S. federal government, Florida cannot create infinite money. It would need to levy taxes to fund senior healthcare, transportation, housing, and finances.
The federal government, by contrast, could and should do it without taxes.
There is also an expectation that more seniors are facing being homeless, and Rich said she’s trying to make headway there, too: The county is expected to soon make a decision on whether to build Pallet shelters, tiny transitional houses for the homeless. Miami-Dade County has nearly half a million residents age 65 and older. But poverty is the highest for seniors than any other age group, said Tyler Moroles, assistant division director of the Section 8 Housing Choice Voucher Program for Miami-Dade. While housing is expensive for everyone — the median rent is $2,100 which requires a salary of $75,600 to be affordable — it’s nearly impossible for the thousands of seniors in public housing. The average senior income there is $14,691 a year. The county is now redeveloping 1,800 public housing units to create more living spaces. This year, 137,000 applicants have applied for housing vouchers, he said, and only 5,000 of those were chosen. “It’s a national issue, we’re trying to deal with it,”he said.
There is no good reason why the states are left to deal with national issues where the fedeal government’s money provides a solution.
Among the issues that the experts pondered: What changes does government need to prepare for, such as “granny flats” to allow housing additions so multiple generations can live together “to encourage senior-friendly housing” and allow seniors to age in place.
“Senior friendly” Pallet shelters? Really? Is that where you would like t0 spend your remaining days?
Health careThere is a national shortage of 30,000 geriatricians, said Dr. Naushira Pandya, the chair of Geriatrics at NSU. “There will never be enough geriatricians for what we need,” she said. “The need is really great.” It’s an “intellectual challenge” to treat the host of medical issues, but it doesn’t get the same level of enthusiasm as other medical fields, she said.
Becoming a geriatrician requires 12-14 years of college and $200,000 – $350,00 in tuition, including undergraduate and medical school tuition, plus living expenses during residency and fellowship.
While the government may be unable to give you back the years, it can undoubtedly underwrite the costs.
That panel conversation sparked an idea to attract more doctors to specialize in geriatrics by state Sen. Gayle Harrell, R-Stuart, who noted how this year’s “Live Healthy” legislation assists in loan repaymentsfor doctors who work in underserved areas.
What a concept! Put them deeply in debt and then force them to work in low-remuneration areas, so paying off the debt will be especially difficult.
How about this: No loans. Have the federal government pay their all their expenses, and give them a supplemental salary if they work in “underserved areas.”
Transportation“Most adults will outlive their ability to drive by seven to 10 years,” warned panelist Laura Streed, the senior associate state director of AARP of Florida. Chris Stephenson, the transportation mobility director of the Senior Resource Association in Indian River County, which provides services including Meals on Wheels and adult day care: “Isolation can have profound health consequences. Yet if seniors don’t have adequate transportation they are homebound.}He shared a popular program in Palm Beach County that has adapted “to meet the needs of our senior population.” It uses Uber and other ride-sharing companies “to fill the gaps” to get seniors to public transit stations, which might be too far to reach by walking. Karen Deigl, president and CEO of Senior Resource Association urged policy makers to enhance public transit by creating routes that connect to neighboring counties, make transit accessible with wheelchair lifts and low floors, and a voice that calls out each stop, and allow same-day trip requests. Because “some people just shouldn’t drive,” she said. Lisa J. Huriash can be reached at lhuriash@sunsentinel.com. Follow on X, formerly Twitter, @LisaHuriash
CONCLUSION
The population is aging which leads to multiple problems. Many possible solutions have been proposed, almost all of which involve funding.
The federal government, being Monetarily Sovereign, has the infinite ability to fund anything without collecting taxes.
Strangely, the resistance to “big government” seems not to extend to big state and local government—just big federal government—though the federal government is the one entity that easily can fund all the solutions without burdening taxpayers.
Even more strangely, the resistance to” big government” comes primarily from the party that elevated a dictator wanna-be to the Presidency.
Go figure.
Rodger Malcolm Mitchell
Monetary SovereigntyTwitter: @rodgermitchellSearch #monetarysovereigntyFacebook: Rodger Malcolm Mitchell;MUCK RACK: https://muckrack.com/rodger-malcolm-mitchell; https://www.academia.edu/
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The Sole Purpose of Government Is to Improve and Protect the Lives of the People.
Today, we discuss an article that appeared in the November 12, 2024 Washington Post, describing good news that’s bad news and bad news that’s good news. Here are a few excerpts:
These tax cuts will go away without action by Congress and TrumpMany of the tax cuts enacted during Trump’s first term are set to expire at the end of 2025, but keeping them could add trillions to the federal debt.By Julie Zauzmer Weil, November 12, 2024 at 11:30 a.m. ESTMany tax cuts enacted during President-elect Donald Trump’s first term are set to expire at the end of 2025. That means taxes will rise for most Americans unless Congress acts to renew them.
That is really bad news.
I am the U.S. government. When you send me your dollars, it does nothing for me. I already have infinite dollars. When I send you dollars, it grows the economy and improves your life. BUT FOR SOME WEIRD REASON, THE POLITICIANS AND MEDIA WORRY ABOUT MY FINANCES, NOT YOURS !!
Our Monetarily Sovereign federal government neither uses nor needs tax dollars; they are destroyed upon receipt by the Treasury.
They are paid from the private sector’s M2 money supply measure, and when they reach the Treasury, they cease to be part of any money supply measure.
Effectively, they are destroyed by being added to an infinite and immeasurable money supply.
Trump has promised to extend almost all of the cuts, but that would come at a hefty price. By some projections, renewing the cuts would add $4 trillion or more to the federal debt over the next decade.
Translation: Renewing the cuts would keep 4 trillion or more growth dollars in the economy. Great news.
(The “federal debt” isn’t federal, and it isn’t debt. The dollars are deposits wholly owned by the depositors, not the federal government. The government never takes ownership of the dollars; it merely holds them for safekeeping. The closest corollary is safe deposit boxes.)
The 2017 law lowered tax rates, dropping the marginal tax rate for the highest earners to 37 percent from 39.6 percent, for example. Unless Congress acts, the rates will snap back in 2026. Extending current law would reduce revenue by $1.8 trillion.
Translation: Not extending the current law would cause the highest earners to pay $1.8 trillion more. This would be a $1.8 trillion loss for the economy (bad news), but all other things being equal, a narrowing of the income/wealth/power Gap between the rich and the rest would be good news.
The 2017 law almost doubled the standard deduction, one of several steps that greatly reduced the number of people who itemize deductions (currently 1 in 10 taxpayers). If the standard deduction reverted to pre-2017 levels, less money would automatically be shielded from taxes and more households would itemize.Extending current law would reduce revenue by $1 trillion.
Translation: Extendingthe current law would leave $1 trillion more growth dollars in the economy (good news). But with fewer deductions, the effect on charities, homeowners, and other borrowers is complex and negative.
On balance, the increased standard deduction may increase tax bills (bad news), especially for homeowners. This depends on whether tax rates go up to cover the increased deductions.
The 2017 law eliminated the personal exemption for each member of a household, which was $4,050 at the time. Without congressional action, that would return in 2026, which would allow people to shield more income from taxes.Extending current law would raise revenue by $1.6 trillion.
Translation: Extending the current law would remove $1.6 billion in growth dollars from the economy (bad news).
The maximum child tax credit doubled from $1,000 per child to $2,000. Extending current law to keep the $2,000 credit would reduce revenue by $592 billion.
Translation: Keepingthe $2,000 child tax credit not only would keep $592 billion growth dollars in the economy (good news), but those dollars would go to average families. Otherwise, the Gap between rich and the rest would widen (very bad news).
Under the 2017 law, everyone but members of the military lost the ability to claim a deduction for moving expenses. The law also took away the option for employers to reimburse workers tax-free for moving expenses or for up to $20 a month in bike commuting expenses. Those benefits are set to return in 2026.Extending current law would raise revenue by $15.5 billion for moving expenses and $136 million for bike commuting.
Translation: Extending the current law would take $15.636 billion growth dollars out of the economy, mostly from average families (very bad news).
The 2017 law capped at $10,000 the amount of state and local taxes — often abbreviated as SALT — each household can deduct from federal income taxes. The cap is unpopular in blue states with high taxes, but removing it would benefit primarily the wealthiest households. On the campaign trail, Trump said he favors letting this provision lapse so people everywhere can deduct all their state and local taxes again.The Congressional Budget Office did not specifically estimate the cost of extending the SALT cap in and of itself, but the Penn Wharton Budget Model estimated in September that lifting the SALT cap would cost the federal government as much as $1.1 trillion over the next decade.
Translation: Cancelling SALT would add $1.1 trillion in growth dollars to the economy (good news).
The law made changes to several other itemized deductions, including allowing people to deduct more charitable expenses, restricting the mortgage interest deduction for newly purchased homes to the first $750,000 of the mortgage instead of $1 million, blocking victims of theft from claiming their losses, and removing tax preparation fees and unreimbursed employee expenses as eligible deductions. All of those changes are set to expire.Extending current law would raise revenue by $908 billion.
Translation: Extending the current law would take $908 billion in growth dollars from the economy (bad news).
The 2017 law raised the threshold at which estates are subject to federal taxation when someone dies, increasing it from just over $5 million to just over $11 million. Since then, inflation adjustments have raised the threshold to more than $13 million. The threshold is set to snap back, with adjustments for inflation, to an estimated $7 million in 2026.
Extending current law would reduce revenue by $126 billion.
Hi, suckers, it’s me, your favorite uncle, Sam. I pretend I need your money, but I own a money-printing machine; I never can run short. Nevertheless, I whine about deficits and debt, and I tell you to send me more. It’s the greatest con the world has ever seen.
Translation: Allowing the threshold to snap back would take $126 billion in growth dollars out of the economy, mostly from upper-middle-class families, not from the rich, thereby widening the Gap between the rich and the rest (very bad news).
The 2017 law reduces the number of households subject to the Alternative Minimum Tax, a parallel tax system designed to ensure that wealthier households pay a minimum amount of income tax. The tax — often abbreviated as the AMT — has been criticized as overly complicated and hard to calculate. Many more households would be subject to this tax again if the provision expires.Extending current law would reduce revenue by $1 trillion.
Translation: Extending the current law would leave $1 trillion growth dollars in the economy, almost all of it in the hands of middle—and upper-middle-income families. The rich have found ways to avoid this law. (Extending the law would be good news)
The 2017 law created a generous deduction for business owners whose business income “passes through” to their personal income tax return (instead of being taxed as corporate income). The provision allows gig workers such as Uber drivers and dog walkers, partners in massive business interests, and others to deduct up to 20 percent of their business income. Some Republicans have concerns about the complex ways this deduction was structured and want to revise it in a 2025 tax bill. Others want to simply renew it to prevent it from expiring.Extending current law would reduce revenue by $548 billion.
Translation: If the calculation is correct, this would leave $548 growth dollars in the economy (on balance, good news).
SUMMARY
For reasons I cannot understand, the author, Julie Zauzmer Weil, and her peers seem to think that growth dollars coming out of the economy and going to the Monetarily Sovereign government that neither needs nor uses them is good news.
By simple formula, economic growth requires money growth, while the federal government creates all the dollars it needs by passing laws.
If someone can explain why a federal deficit is bad but an economic deficit is good, I would be delighted to publish your response.
I have been trying to unravel this mystery for over a quarter century, and today, I am no closer to an answer than ever.
Rodger Malcolm Mitchell
Monetary SovereigntyTwitter: @rodgermitchellSearch #monetarysovereigntyFacebook: Rodger Malcolm Mitchell;MUCK RACK: https://muckrack.com/rodger-malcolm-mitchell; https://www.academia.edu/
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The Sole Purpose of Government Is to Improve and Protect the Lives of the People.
What would you think if you received the following urgent notice?
YOU WILL VIOLENTLY CRASH THROUGH THE DOORS AND CONTINUE THROUGH THE BACK WALL, DESTROYING EVERYTHING IN YOUR PATH.Would you think, “That is the silliest thing I have ever seen”?Would you say to yourself, “I will simply slow down, come to a stop, open the doors, glide slowly in, and close the doors behind me? What’s the problem?”
No, you wouldn’t, at least not if you were to believe a ridiculous warning article published repeatedly, for years and years, by the Committee for a Responsible Federal Budget (CRFB) and by other self-appointed experts.
Here are excerpts from my least favorite liars—least favorite because they seem to have the ears of many in Congress while explaining why you should have less Social Security and more taxes — the fearmongering CRFB.
And what makes me even angrier. The public, especially those who need Social Security more and can afford tax increases less, believe the lies being promulgated by the rich — and do nothing. Or they don’t believe the lies, and still do nothing.
We believe that the federal government is running short of money, so please sheer us. Then eat us.
The Social Security and Medicare Trustees released their annual reports today on the financial status of the Social Security and Medicare programs over the next 75 years.
The latest Social Security projections show that the program is quickly approaching insolvency and highlight the need for trust fund solutions sooner rather than later to prevent across-the-board benefit cuts or abrupt changes to tax or benefit levels.
In other words, Social Security, which is 100% funded and controlled by the Federal Government,will run out of funds unless the Government adds dollars to the program, which it easily could do at the touch of a computer key. Crazy.
Before we detail the lies, here are the truths.
The U.S. Federal Government is Monetarily Sovereign. You can look it up here. The shorthand version is that it never can run short of dollars unintentionally. Even if it didn’t collect a single penny in taxes, it could continue spending forever—even at ten times the current rate.The government also has absolute control over the dollar’s value (i.e., inflation) and has arbitrarily changed the value many times. -1792: The Coinage Act of 1792 established a bimetallic standard, setting the dollar’s value at 371.25 grains of silver or 24.75 grains of gold, with a gold-to-silver ratio of 15:1. -1834: The Coinage Act of 1834 changed the gold-to-silver ratio to 16:1 by reducing the weight of gold coins. 1873: The Coinage Act of 1873 effectively demonetized silver, ending the bimetallic standard and making gold the sole standard. -1933: President Franklin D. Roosevelt took the U.S. off the gold standard domestically, allowing the dollar to float against gold. =1971: President Richard Nixon ended the dollar’s international convertibility into gold, marking the end of the Bretton Woods system and the transition to a floating value system.
Because the Federal Government cannot run short of dollars, no agency of the Federal Government can run short of dollars unless that is what Congress and the President want.
Social Security and Medicare are federal government agencies. As with all federal agencies, their expenses are paid not by taxes but by federal dollar creation. Here is the process:
The creditor’s invoice is approved by the federal agency, which has been told by the federal government how much it could approve.
Payment is made, not by dollars, but by instructions (check or wire), telling the creditor’s bank to increase the balance in the creditor’s checking account. This creates new dollars (no tax dollars are used), which are added to the M2 money supply measure.
To balance its books, the bank obtains approval of the transaction from the Federal Reserve, which has been told by Congress how much to approve.
Yes, they’re going to have us for dinner, but it’s way too much trouble to protest. Bah, bah, bah.
Returning to the CRFB article:
Social Security is approaching insolvency. Under current law, Social Security cannot guarantee full benefits to current retirees.
Note the words “current law.”
Nothing prevents the federal government from changing any law, which it does thousands of times each year.
Essentially, the CRFB says, “Your car will crash into your garage door unless you put on the brakes and/or open the door, which you do every evening when you come home.”
The Trustees project the Social Security Old-Age and Survivors Insurance (OASI) trust fund will deplete its reserves by 2033, when today’s 58-year-olds reach the full retirement age and today’s youngest retirees turn 71.
First, the so-called “Trust Fund” isn’t a trust fund. It’s just a bookkeeping line item:
A “trust fund” implies a secure source of funding. However, a federal trust fund is simply a bookkeeping mechanism used to track inflows and outflows for specific programs.
In private-sectortrust funds, receipts are deposited and assets are held and invested by trustees on behalf of the stated beneficiaries.
In federal trust funds, the federal government does not set aside the receipts or invest them in private assets.
Rather, the receipts are recorded as accounting credits in the trust funds and then combined with other receipts that the Treasury collects and spends.
Second, the federal government owns the accounts and can unilaterally alter their purposes and raise or lower collections and expenditures by changing the law.
Thus, Congress could solve the insolvency “problem” simply by passing a rule and clicking a computer key. The government does not need to collect a single tax penny or cut benefits.
It’s a fake problem.
Returning to the misleading CRFB scare article:
Upon insolvency, all beneficiaries will face a 21 percent across-the-board benefit cut. Including the Disability Insurance (SSDI) trust fund, the theoretically combined trust funds will be insolvent by 2035 and beneficiaries would face a 17 percent cut.
Right, and tonight, when you return home, you will crash into your garage door, unless you park in the street — or, you simply could touch the brakes and open the door.
Social Security faces large and rising imbalances. According to the Trustees, Social Security will run cash deficits of $3 trillion over the next decade, the equivalent of 2.3 percent of taxable payroll or 0.8 percent of Gross Domestic Product (GDP).
Annual deficits will grow to 3.4 percent of payroll (1.2 percent of GDP) by 2050 and 4.6 percent of payroll (1.6 percent of GDP) by 2098. Social Security’s 75-year actuarial imbalance totals 3.5 percent of payroll, which is over 1.2 percent of GDP or nearly $24 trillion in present value terms.
Gee, you mean the federal government really can’t run short of dollars? Nobody told us that. Bah, bah, bah
All of the above is meaningless for a Monetarily Sovereign government agency, although it would be correct for monetarily non-sovereign state/local government agencies.
In short, the CRFB, whether by intent or ignorance, confuses Monetarily Sovereign problems with monetarily non-sovereign problems. It’s like telling you that eating a piece of chocolate is dangerous for you because it happens to be dangerous for dogs. Such is the ignorance being promulgated.
The nonsense continues:
Social Security’s finances have improved from last year but remain perilous. Its 75-year solvency gap was reduced from 3.61 to 3.50 percent of payroll due to stronger-than-expected economic performance and fewer expected disability applicants, partially offset by lower expected birth rates in future years.
Time is running out to save Social Security. Policymakers have only a few years left to restore solvency to the program, and the longer they wait, the larger and more costly the necessary adjustments will be.
Acting sooner allows more policy options to be considered, allows for more gradual phase in, and gives employees and employers time to plan.
What the CRFB really means by “time to plan” is “time to raise taxes and/or cut benefits, two wholly unnecessary options.
Who wants such terrible options? The rich, because those options will make the rich richer by widening the income/wealth/power Gap between the rich and the rest.
Cutting Social Security benefits and/or raising FICA taxes scarcely affect the rich, but they affect you, by making the rich richer. The CRFB is shilling for the rich at your expense.
The idiocy goes on and on:
Social Security’s retirement program is only nine years from insolvency, and action must be taken soon to prevent an across-the-board benefit cut for many current and future beneficiaries.
The action that “must be taken” is for the federal government simply to put dollars into the fake “trust fund.” Better yet, the government could eliminate the fake “trust fund” and just pay for Social Security the same way it pays for Congress’s salaries: By voting and budgeting.
Best yet, the federal government could and should provide generous Social Security benefits to every man, woman, and child in America (aka Universal Basic Income) and stop lying to the public.
The Trustees project the Social Security Old-Age and Survivors’ Insurance (OASI) trust fund will deplete its reservesby 2033; the SSDI trust fund is in much stronger shape and will remain solvent over the next 75 years. On a theoretically combined basis – assuming revenue is reallocated between the trust funds – Social Security will become insolvent by 2035.
Upon insolvency of the OASI fund, all retirees – regardless of age, income, or need – will face a 21 percent across-the-board benefit cut,which will grow to 31 percent by the end of the 75-year projection window. We previously estimated that a typical couple retiring in the year of insolvency would face a $17,400 cut in their annual benefits.
On a combined basis, insolvency would lead to a 17 percent initial cut, growing to 27 percent by the end of the window.
Everyone says we must be shorn and eaten, so it must be so. We care, but it’s too much trouble to protest.
The article goes on and on interminably, quoting misleading facts and figures and presenting ridiculous graphs, all designed to make you believe the federal government is running short of the dollars it creates every day from thin air.
We used to be sheep, but we decided it was too much trouble to do anything about . . . .
I won’t bore you with the rest, partly because I can’t handle the nauseating lies, and you shouldn’t be forced to.
IN SUMMARY
Suppose you decide it is too much trouble to protest to your Congressperson and/or even believe the lies. In that case, your benefits will be cut — unnecessarily, your taxes will be increased — unnecessarily — and you will only have yourself to blame.
If you’re angry that your favorite team’s quarterback throws to the wrong jersey color and your favorite singer wasn’t nominated for a Grammy, save some of that emotion for the fact that you are being royally screwed by the people you just voted for, and you aren’t doing a damn thing about it.