When will the U.S. government run out of U.S. dollars?

Seems like a simple question — “When will the U.S. government run out of U.S. dollars?” Sadly, the media writers, economists, and politicians don’t seem to know. Some claim “soon.” Some claim “eventually.” A few say “never.”

For instance, Scott Horsley:

Scott Horsley is NPR’s Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities. Horsley spent a decade on the White House beat, covering both the Trump and Obama administrations. Before that, he was a San Diego-based business reporter for NPR, covering fast food, gasoline prices, and the California electricity crunch of 2000. He also reported from the Pentagon during the early phases of the wars in Iraq and Afghanistan. Horsley earned a bachelor’s degree from Harvard University and an MBA from San Diego State University.

Mr. Horsley seems to believe the government will run out of money in 2033 or maybe in 2036. I say that because of the article he wrote:

The clock is ticking to fix Social Security as retirees face automatic cut in 9 years MAY 6, 2027:06 PM ET, Scott Horsley

Congress has less than a decade to fix Social Security before the popular program runs short of cash, threatening a sharp cut in benefits for nearly 60 million retirees and family members, according to a government report released Monday.

Social Security (SS) is an agency of the U.S. government. The only two ways SS can run out of dollars are:

If Congress and the President want it to run out, or
If the U.S. government runs out.

Can the government run out of its sovereign currency, which it created from scratch in the 18th century? For millions of years, there was no U.S., no U.S. laws, and no U.S. dollars. Then suddenly, in the late 1780s, a group of men created a government from thin air. This government passed laws, also from thin air. Some of the laws created the U.S. dollar, again from thin air. That government created as many laws as it wished, and those laws created as many dollars as the law-writers wished. It all was arbitrary. So, returning to the question, “When will the U.S. government run out of U.S. dollars?”

The report from Social Security trustees predicts the retirement program’s trust fund will be exhausted in November of 2033.

Despit what you repeatedly have been told, it isn’t a trust fund. It’s just a line item in a balance sheet. (See: “The phony trust fund controversy.“) The government can change those numbers to whatever it chooses at any time it chooses. Congress votes; the President approves; someone presses a computer key; and a one billion dollar “trust fund” instantly becomes a fifty billion dollar “trust fund.”

At that point, benefits would automatically be cut by 21%, unless lawmakers adopt changes before then.

Among the laws the government created were the laws creating Social Security. As an agency of the government, Social Security is funded the same way as every other agency: Congress votes, and the President approves. Congress and the President have unlimited freedom to decide how much any agency will receive:

Mandatory spending – funding for Social Security, Medicare, veterans benefits, and other spending required by law. This typically uses over half of all funding. (Congress and the President make the law)
Discretionary spending – federal agency funding. Congress sets funding levels for these each year. This usually accounts for around a third of all funding. (Congress and the President set the levels)
Interest on the debt – this usually uses less than 10 percent of all funding. Congress and the President decide how much interest to pay and tax).

In short, every penny of federal spending ultimately is decided by Congress and the President. It all returns to the fundamental question, “When will the U.S. government run out of U.S. dollars?” By now, I’m sure you know the answer: The U.S. government cannot unintentionally run short of U.S. dollars.

Lessons from the switch to Bernanke from Greenspan - MarketWatch — **People don’t realize that FICA doesn’t fund Social Security and Medicare and that those trust funds are fictions.**

Even if the government had to pay someone a billion, a trillion, or a billion trillion dollars today, it could do so simply by passing a law and pressing a computer key.

Former Federal Reserve Chairman Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency. There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody. The United States can pay any debt it has because we can always print the money to do that.”

Former Federal Reserve Chairman 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. It’s not tax money… We simply use the computer to mark up the size of the account.”

Statement from the St. Louis Fed: “As the sole manufacturer of dollars, whose debt is denominated in dollars, the U.S. government can never become insolvent, i.e., unable to pay its bills. In this sense, the government is not dependent on credit markets to remain operational.”

The answer to the question, “When will the U.S. government run out of U.S. dollars?” is a resounding, NEVER, unless Congress and the President make that arbitrary decision. You and I are limited in our money supply. Your state, county, and city governments are limited. All businesses are limited. Banks are limited. Even euro nations are limited. All are monetarily non-sovereign. They were not the original creators of the U.S. dollar. By contrast, the U.S. government is Monetarily Sovereign. It was the creator of the dollar. It cannot unintentionally run short — not now, not in 2033, not in 2036, not ever. So why do writers like Scott Horsley think SS and Medicare, agencies of the federal government, will run short?

There’s some good news in the new forecast. Thanks to higher-than-expected worker productivity and a decline in expected disabilities, Social Security isn’t burning through cash as fast as trustees predicted a year ago.

Still, the long-term demographic challenges haven’t gone away.

A growing number of baby boomers are collecting benefits, while there are fewer people in the workforce paying taxes for each retiree.

Given today’s low birthrates, that mismatch is not expected to change for decades, although a surge in immigration helps.

Remember what Ben Bernanke said, “It’s not tax money… We simply use the computer to mark up the size of the account.” The federal government does not use your tax dollars to fund its spending. You (and Mr. Horsley) may be shocked to learn that every dollar you send to the U.S. Treasury is destroyed upon receipt. When you pay taxes, the dollars come out of your bank account, where they were part of the “M2 money supply measure.” When the dollars reach the Treasury, they instantly disappear from M2 and are not found in any money supply measure. They join the Treasury’s infinite money supply. Adding dollars to infinite dollars still yields infinite dollars. These dollars, which are not part of any money supply, no longer can be found. They have been destroyed. Why does the federal government collect taxes if not to fund spending?

To control the economy by taxing what it wishes to discourage and by giving tax breaks to what it wishes to reward.
To assure demand for the U.S. dollar by requiring taxes to be paid in dollars.
To make you believe dollars are limited by taxes, so you will not request benefits. (This doesn’t discourage the rich from requesting and getting tax benefits unavailable to you.)

Proposed Fixes Congress could fix the problem by raising taxes that support Social Security, reducing retirement benefits, or some combination of the two. But a politically palatable solution has been elusive.

Mr. Horsley can think of only two fixes: Raise taxes or cut benefits. Both fixes predictably would impact the middle and lower income groups, thereby widening the income/wealth/power Gap between the rich and the rest. This is exactly what the rich want because the wider the Gap, the richer they are. Increasing your taxes and lowering your benefits makes the rich richer. And that is precisely what the rich bribe the media, the economists, and the politicians to do. It’s not that Mr. Horsley himself has been bribed. He may simply be following the “party line” created by others who have been bribed — just going with the flow, and not thinking about the reality that the federal government can’t unintentionally run short of dollars.

“When you see the two major candidates running for president tripping over themselves to promise what they won’t do to fix the problem, you have to worry because those kinds of reforms really start at the top,” says Maya Macguineas, president of the Committee for a Responsible Federal Budget.

Ah, yes, the famous Maya Macguineas, who repeatedly implies that the federal government is running out of dollars — now there is a “reliable” source.

The Biden administration has pledged not to touch Social Security benefits.

“Seniors spent a lifetime working to earn the benefits they receive,” Treasury Secretary Janet Yellen, who leads the trustees, said in a statement.

“We are committed to steps that would protect and strengthen these programs that Americans rely on for a secure retirement.”

Yes, yes, blah, blah, blah. “Committed to steps,” “Protect and strengthen.” And more blah, blah, blah. But what exactly are those steps?

Congressional Democrats have proposed higher taxes on the wealthy to support Social Security.

Congressional Republicans have balked at that, instead calling for reducing the benefit formula and raising the retirement age for younger workers.

The classic Democrat/Republican false choices. The Dems want to soak the rich. The GOP wants to soak the rest of us.

“Those who want to cut Social Security couch it in affordability,” says Nancy Altman, who heads the advocacy group Social Security Works.

“But of course, there’s no question we can afford it. It’s really a question of values. And as polarized as we are, we’re not polarized over this.”

Altman is confident that lawmakers will find a solution before automatic cuts take effect.

“If they didn’t act, not only would they all be voted out of office,” she says. “They couldn’t even remain in Washington. They’d be chased down the street.”

Why aren’t they already being chased? Because the public has been fed so many lies by so many “reliable sources,” the people don’t realize they are being lied to. On first reading of this post, most people will think, “That can’t be true.” But it’s true. The federal government could fund a comprehensive, no-deductible Medicare for every man, woman, and child in America and a generous Social Security program for everyone, all without collecting a single penny in taxes. Yes, there’s no question we can afford it. So? So? AFFORD IT!

But the clock is ticking, and delay has already been costly.

“Every year the trustees warn us we have to make changes and the sooner we make them, the better and easier it will be,” says Macguineas. “And every year we fail to make those changes.”

Medicare and disability solvency While Social Security’s retirement program is in danger of running short of cash, a separate program that supports disabled people appears to be solvent for the long term, trustees said.

Medicare’s finances have also improved somewhat in the last year, thanks to a strong economy and lower-than-expected spending. Still, the program which provides health care for nearly 67 million people, is expected to face its own cash crunch in 2036.

You have been fed lie after lie after lie. Your information sources wring their hands in mock horror that one day soon, the federal government will run short of dollars, perhaps right after the universe runs short of stars and politicians become honest. Even the densest among us can see the solution: The federal government should pay for Social Security and Medicare, period. Eliminate FICA. It doesn’t fund SS or Medicare. It doesn’t fund anything. Those FICA dollars are destroyed upon receipt. FICA serves only as a convenient excuse (convenient for the rich) to limit and cut your SS and Medicare benefits, thus widening the income/wealth/power Gap and making the rich richer and you poorer. In technical terms, that pisses me off, and it should piss you off, too. What are you going to do about it? Rodger Malcolm Mitchell Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

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The Sole Purpose of Government Is to Improve and Protect the Lives of the People.

MONETARY SOVEREIGNTY

Here we go again. The rich can hardly wait to widen the Gap

The U.S. Supreme Court requests $90.4 million ($2.7 million for mandatory expenses and $87.7 million for discretionary costs) in FY 2020 for the Salaries and Expenses account.

For fiscal year 2013, it will cost an estimated $5.9 billion to operate Congress and the rest of the legislative branch.

The gap between the rich and the poor destroys the possibility of economic growth | by сергей лукин | Medium — The wider the income/wealth/power Gap between the rich and the rest, the richer they are.

Projected four-year costs of Biden’s White House payroll could top $200 million.

The FY2023 defense budget request will exceed $773 billion, according to the House Armed Services Committee chairman. By 9 March 2022, a bipartisan agreement on a $782 billion defense budget had been reached, thus avoiding a government shutdown.

Per Wikipedia:

As of 10 March 2023, the presidential budget request for the fiscal year 2024 was $842 billion.

In January 2023, Treasury Secretary Janet Yellen announced the US government would hit its $31.4 trillion debt ceiling on 19 January 2023; the date on which the US government would no longer be able to use extraordinary measures such as issuance of Treasury securities is estimated to be in June 2023.

On 3 June 2023, the debt ceiling was suspended until 2025. The $886 billion National Defense Authorization Act (NDAA) faces reconciliation of the House and Senate bills after passing both houses on 27 July 2023; the conferees must be chosen next.

As of September 2023, a Continuing Resolution was needed to prevent a Government shutdown. A shutdown was avoided on 30 September for 45 days (until 17 November 2023), with the passage of the NDAA on 14 December 2023.

The Senate will next undertake negotiations on supplemental spending for 2024.

The Supreme Court wants $90.4 million; Congress votes and poof! The money appears. Congress wants $5.9 billion to operate. It votes, and the money is created.

The White House wants $200 million, which will be available as soon as Congress votes. The military wanted $773 billion but decided it needed $782 billion. Congress made a bipartisan agreement, and the money became available. Congress also suspended the debt ceiling and passed a new NDAA.

Congress will discuss supplemental spending in 2024.

Notice anything missing? Nowhere is there a discussion about “Where will the money come from?”

Congress votes; the President signs. And the money appears. It’s the way all federal spending is handled. The money doesn’t come from anywhere. It appears at the touch of a computer key.

Now compare that to this:

The total cost of the Social Security program for the year 2022 was $1.244 trillion, or about 5.2% of U.S. GDP. Medicare spending grew 8.4% to $900.8 billion in 2021.

Raising the Social Security age? Ron DeSantis said no, and Haley said yes.

To raise Social Security’s retirement age or not — that was the question, and the only two Republican presidential candidates at CNN’s debate on Wednesday did not agree on the answer.

Florida’s governor, Ron DeSantis, said, at least for now, he would not raise the retirement age for Social Security. In contrast, former South Carolina governor Nikki Haley said she would for younger constituents.

“We have to keep our promises to seniors, but we also can’t keep our heads in the sand,” she said. “Social Security is on a path toward insolvency.

“If nothing is done to fix the problem, the trust funds that support the program are expected to run out of money in about a decade; at this point, beneficiaries will see a cut to their checks every month.

“Congress has never let Social Security falter, but legislators have yet to decide how to repair the program.”

Do you wonder why the SCOTUS, Congress, the White House, and the military budgets are handled simply by the House and Senate passing bills and the President signing?

Why does no one ask, “Where will the money come from?” when Congress passes a “Continuing Resolution.”

Do you wonder how the so-called federal “debt” could rise from $300 billion in 1970 to $29 trillion in 2023, and there is seldom talk about the federal government being insolvent? It can’t. Not now, not ever.

Instead, the worry is about two federal agencies, Social Security and Medicare, going bankrupt.

The federal government cannot become insolvent. As former Federal Reserve Chairman Alan Greenspan said, “There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.”

And if the federal government can’t unintentionally become insolvent, none of its agencies unintentionally can become insolvent.

Potential solutions include increasing the retirement age, raising taxes, eliminating the income cap for high-earning individuals, or combining those and other proposals.

The real solution is for Congress to create a bill that allocates more money to Social Security and Medicare and for the President to sign it. Period.

The current Full Retirement Age, or FRA, is 67 for people born in 1960 and later.

The last time the FRA was raised was in 1983, from 65 to 67, which resulted in a 13% benefit cut. Moving the FRA from 67 to 70, as some have proposed in recent years, would “effectively cut currently scheduled benefits by nearly 20%,” according to the Center on Budget and Policy Priorities.

The federal government can “create as much money as it wants. You can’t. So why do the politicians, the media, and even many economists worry that Social Security and Medicare will run short of dollars but don’t seem to fear that you will run short?

When beneficiaries claim Social Security benefits before their FRA, they receive a permanently reduced benefit. Raising the age could make those cuts feel even deeper.

Lower- and middle-income individuals would be worse off than their higher-earning counterparts, partly because they rely on Social Security more heavily and have not seen the same life expectancy increases as those with higher incomes, the CBPP said.

This isn’t the first time Haley has made her pitch to reform the Social Security program.

Tell it like it is, Haley. It’s not “reform.” It’s a benefit cut. You want to cut federal benefits going to the people who need it most, the poor and middle classes.

Under Haley’s proposal, younger Americans, such as those in their 20s, would have a higher retirement age, while older Americans near claiming age would see no change made.

Haley also noted DeSantis has voted to increase the retirement age for Social Security in the past. The Florida governor voted for proposals that included changes to Medicare and Social Security eligibility and full retirement ages in the early 2010s. However, he has said that his position “had shifted in more recent times,” according to Factcheck.org.

DeSantis said now is not the time to make any changes to the retirement age for Social Security. “The problem is, now, life expectancy is going down, so I don’t see how you can raise the retirement age when life expectancy is collapsing,” he said.

The Florida governor also said the cost of living, including prices for groceries and rent, is “through the roof,” and the cost-of-living adjustment under Social Security isn’t enough to cover those increases.

“I’m not going to mess with seniors’ benefits.” To that, Haley argued Florida is one of the hot spots for inflation.

When asked what the new retirement age would be or if workers in their 20s should plan on working until they’re 70, the former governor did not have a specific answer but did say they should expect an increase in the age.

“We have to start looking at how to get out of this,” she said during the debate. “We want to make sure everyone was promised and gets it, but we also want to ensure our kids have something when they get it too.

She wants to ensure everyone gets what was promised — by unnecessarily cutting benefits?

Social Security and Medicare cannot be insolvent unless Congress wants it to happen. Why would Congress want it? Because they are bribed by the rich.

The rich grow richer only by widening the income/wealth/power Gap below them. To widen the Gap, the rich must get more for themselves or make those below them have less.

That is why cutting Social Security benefits makes the rich richer. It widens the income/wealth/power Gap between them and us.

To make you compliant and willing to have your benefits cut, the rich bribe your critical sources of information: The politicians, the media, and the economists.

The rich bribe the politicians with campaign contributions plus promises of lucrative employment. The rich bribe the media with ownership and advertising dollars. The rich bribe the university economists with university donations and promises of employment at think tanks.

The rich even use the word “socialism” to discourage federal support for Social Security and Medicare. It is a lie. Socialism is government ownership and control, not merely funding. The VA hospital is socialism; a fully funded Medicare is not.

The other false claim that the rich use to discourage benefits is the false claim that federal spending causes inflation.

The cause of every inflation in history is not interest rates being too low, which is why raising rates doesn’t cure inflation. In fact, raising interest rates makes things more expensive. It is inflationary. The cause of inflation always is shortages of critical goods and services, most often oil and food. The cure for inflation is more government spending to increase the public’s access to the scarcities causing inflation.

Finally, some feel it’s “unfair” to benefit those who don’t pay for them. If federal support is “unfair,” what about all those tax loopholes available to the rich but not everyone else. All taxes are unfair in some way, with the regressive FICA tax being the least fair of all.

There are so many excuses for not giving you benefits: “Unaffordable,” “unsustainable,” “unfair” — all false, all promulgated to widen the Gap.

This is not to say that all politicians, media, and economists intentionally lie. A great many of them (most?) have been indoctrinated just like the public and sincerely believe that federal taxes fund federal spending and that Social Security and Medicare can become insolvent.

And that is the problem. The false belief is so ingrained that it’s difficult to dislodge. But the world is not flat, and even Einstein was wrong about quantum mechanics. That is how we progress.

SUMMARY

Neither Medicare nor Social Security can become insolvent unless Congress and the President want them to. They are agencies of a Monetarily Sovereign government that has the infinite ability to create U.S. dollars.

Even without collecting a penny in taxes, the federal government could continue spending forever. The sole purposes of federal taxes are not to fund spending but to control the economy, assure demand for the dollar, and to convince the public that dollars for benefits are scarce. ) City, county, and state governments are monetarily non-sovereign, so they need and use tax dollars to fund spending.

The U.S. government is controlled by the rich, who grow richer by widening the income/wealth/power Gap between them and those below. Falsely claiming that Medicare and Social Security benefits are unaffordable and unsustainable helps justify cutting benefits to those who are not rich, thereby widening the Gap.

Federal funding of Medicare and Social Security would not be “socialism,” the other epithet the wealthy use to discourage benefits.

Federal spending does not cause inflation, and federal support of benefits to those who don’t pay for them is not “unfair”. The federal government can, without collecting taxes, fund a comprehensive, no-deductible Medicare for people of all ages and a Social Security that provides a living wage.

Rodger Malcolm Mitchell Monetary Sovereignty

Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

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The Sole Purpose of Government Is to Improve and Protect the Lives of the People.

MONETARY SOVEREIGNTY

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