What? Pharmaceutical companies are not part of the economy??

Seemingly, Mr. Josh Boak or the Trump White House believes that pharmaceutical companies are not part of the economy. How else can you explain the following headline?

Trump’s drugmaker deals may save economy $529B over 10 years, White House says

Story by JOSH BOAK

WASHINGTON (AP) — White House economists estimate that President Donald Trump’s deals with pharmaceutical companies to drop some of their U.S. prescription drug prices to what they charge in other countries could save $529 billion over the next 10 years.

If a U.S. pharmaceutical company drops its prices, how does that save “the economy” anything? Less money will come from American buyers and less will go to American businesses. Both are part of the economy.

It’s a net wash for the economy. It’s good news for drug users, but bad news for drug companies, their employees, and their suppliers.

The analysis obtained by The Associated Press includes the first economy-wide projections behind a policy at the core of Trump’s pitch to voters going into November’s midterm elections for control of the House and Senate. Democratic lawmakers have been doubtful about the savings claimed by Trump and these new numbers are likely to trigger additional questions about the data.

Now why would anyone question claims provided by Donald (“The war will end in a week”) (“It actually isn’t a war” “I hardly knew Epstein”) Trump?

Cost-of-living issues are at the forefront of voters’ concerns and higher energy prices tied to the Iran war have deepened the public’s anxiety. Trump has tried in part to address affordability concerns by focusing on his efforts to cut deals with companies so that the cost of prescription drugs in the U.S. would no longer be dramatically higher than in other affluent nations.

That’s good news for some sick people — or it would be good news if the Republicans were not doing everything possible to cut Medicare, Medicaid, Social Security, and almost every other federal benefit for the lower 99% income/wealth/power group.

(You’ll be pleased to know that tax benefits for the ultra-wealthy, like those that allowed billionaire Trump to pay less than $1,000 in taxes in some years, will remain in place.

“Now you have the lowest drug prices anywhere in the world,” Trump said at a Friday rally before a crowd of seniors in Florida. “And that alone should win us the midterms.”

Really? The lowest in the world? Uh, wait . . .

The analysis was done by administration officials for the White House Council of Economic Advisers. They also estimated that federal and state governments could save a combined $64.3 billion on Medicaid during the next decade because of what Trump calls his “most favored nation” policy on drug prices.

The words, “The analysis was done by administration officials,” are enough to make one doubtful. But combine them with the following, and you would have to be a MAGA to believe them.

Few of the details of the deals struck by the Trump administration and 17 leading pharmaceutical companies have been made public, making it hard to independently verify the projected savings.

The White House analysis sought to estimate the prospective savings as more medications come onto the market and fall under Trump’s framework — with one model in the report tallying the possible savings at $733 billion over a decade.

If the details were that impressive, Trump likely would have shared them by now.

Trump is a carnival barker. He wears a T-shirt with the word "GOVERNMENT" on it. He is a juggler tossing money from one ... — **I toss dollars from one hand to the other. The left hand loses money; the right hand saves money. It’s just another con.**

Let’s look at what we do know. The phrase “federal and state governments could save” stands out. State savings would just circulate back into the economy, essentially breaking even—money shifting from one pocket to another.

Federal savings, however, could actually harm the economy. That’s money taken from pharmaceutical companies, their workers, suppliers, and shareholders, and handed to the federal government. Federal savings pull from the economy, while federal spending injects money back in.

Essentially, it’s like taxing pharmaceutical companies, and like all federal taxes, it’s regressive. (That’s why tariffs, which consumers pay to the federal government, also are recessive.)

Trump and his Department of Health and Human Services have touted his drug-pricing deals as transformative and urged Congress to codify their principles into law.

Democratic lawmakers have challenged the administration’s claims of savings. Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and 17 Senate Democrats in April proposed a measure requiring the administration to disclose the terms of the agreements signed by pharmaceutical companies.

Wow! We actually need a law requiring Trump to disclose what he is bragging about!?

“If these deals are so great, why is the Trump administration afraid of showing them to the public?” Wyden said when announcing the measure. Health Secretary Robert F. Kennedy Jr. said his team would share details that didn’t include proprietary information or trade secrets.

The White House said it has not shared the text of the agreements because they include highly sensitive data that could move financial markets.

Since when has Trump been afraid to move markets, especially if the information would make markets go up? And Trump spews “sensitive data” like a public fountain.

The potential savings estimated by the Trump administration would be substantial as Americans spent $467 billion on prescription drugs in 2024, according to the most recent government data available. The analysis is premised on the idea that foreign countries would also pay more for their prescription drugs, which would diversify drugmakers’ sources of revenue and preserve their ability to innovate with new treatments.

So, in essence, Trump wants his incompetent appointees to fix overseas prices as well as domestic prices. And of course, the pharmaceutical companies won’t respond by manufacturing overseas, right?

Outside economists have caveated that any savings might not flow directly to patients, many of whom already pay discounted prices for their drugs through their insurance coverage.

Would you really expect the political party that’s attempting to destroy Medicare and Obamacare, to provide savings to consumers? Hmmm . . .

The Congressional Budget Office in October 2024 estimated that a plan similar to what Trump ended up adopting could reduce prescription drug prices by more than 5%, though the decrease “would probably diminish over time as manufacturers adjusted to the new policy by altering prices or distribution of drugs in other countries.”

So, some (not all) prescription drugs that now cost say, $100, temporarily would cost $95, and that is the big news? That is what Trump is crowing about?

The scope of the savings claimed by the Trump administration are likely to intensify the scrutiny by Democrats, who counter that any price reductions would be offset by higher costs for prescription drugs not covered by the “most favored nation” framework.

One of their main critiques is that pharmaceutical companies have increased their profit margins while working with the administration.

In April, staff working for Sen. Bernie Sanders, I-Vt., released an analysis that looked at 15 of the companies that have agreed to this drug-pricing plan and found that their combined profits jumped 66% over the past year to $177 billion. The report noted that the tax cuts Trump signed into law last year “exempted or delayed many of the most expensive drugs” from price negotiations with Medicare.

Because Trump won’t release the details (those “highly sensitive data”) we only can surmise that the bill exempts the most expensive drugs, just like the last one did.

The Trump administration has countered that they consider Sanders’ critique to be flawed, saying that it’s based on the list prices for pharmaceutical drugs instead of the actual price that patients pay.

But that means the so-called “savings” would be less than expected.

And what are the “actual prices patients pay”? It’s a secret. And what are the drugs covered? It’s a secret. And how will that benefit the economy. It’s a secret. And which consumers will benefit? It’s a secret.

And who is trying to make healthcare insurance more expensive for everyone except the very rich, by increasing FICA taxes and decreasing benefits? That is no secret. Trump and his rich buddies.

There is a solution, however — a solution that would add growth dollars to the economy, save consumers billions of dollars, fund research and development of new drugs, and provide more doctors, nurses, hospitals and medical equipment, all while costing taxpayers $0.

That solution is a comprehensive, no deductible Medicare for every man, woman, and child in America regardless of age, combined with tax breaks for medical education, medical R&D, and medical equipment development and sales. Our Monetarily Sovereign federal government has the ability to fund it all without collecting a penny in taxes.

But that would narrow the income/wealth/power Gap between the very rich and the rest of us — and who wants that? Apparently, not the 99% lower income sheep, because you don’t hear them demanding it.

This November’s elections will demonstrate the intelligence (or lack thereof) of the American voter. So far, they’ve demonstrated a greater desire to deport innocent, hard-working, tax-paying immigrants, than assuring themselves and their children of good health care.

What does that tell you?

Rodger Malcolm Mitchell

Monetary Sovereignty

Twitter: @rodgermitchell

Search #monetarysovereignty

Facebook: Rodger Malcolm Mitchell;

MUCK RACK: https://muckrack.com/rodger-malcolm-mitchell;

https://www.academia.edu/

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A Government’s Sole Purpose is to Improve and Protect The People’s Lives.

MONETARY SOVEREIGNTY

Would you trust a baker who doesn’t know the differences between salt and sugar?

It often isn’t easy to determine whether information falls into the “miss-” (unintentional) category or the “dis-” (intentional) category. For instance, Fox News has promulgated faulty information of the “dis-” sort, while your addled neighbor usually mouths “mis-“.

Uncle Sam is picking someone's pocket — **I have the infinite ability to create U.S. dollars just by pressing computer keys, but I want you to give me more dollars and keep fewer for yourself. Crazy, huh?**

The following article comes from the Associated Press, so I would put it in the misinformation category.

National debt: Trump’s big challenge Paying down $36T could limit his tax cuts, other policies By Josh Boak and Fatima Hussein Associated Press WASHINGTON — President-elect Donald Trump has big plans for the economy — and a big debt problem that will be a hurdle to delivering on them. Trump has bold ideas on tax cuts, tariffs and other programs, but high interest rates and the price of repaying the federal government’s debt could limit what he’s able to do.

High interest rates and debt do not prevent anything. The government has infinite money available to fund anything. And heaven forbid we ever begin to “repay” the federal debt (which isn’t federal and isn’t debt). The federal debt is the total of deposits in Treasury Security accounts, all wholly owned by the depositors, not the federal government. These accounts can be “repaid” simply by returning the dollars currently in the accounts to the depositors. This would not burden the government, taxpayers, or anyone else. The article’s authors believe that federal so-called “debt” should be reduced, which requires increased taxes and/or reduced deficits. This is what reducing federal debt causes:

Every U.S. depression has come on the heels of a federal “debt” reduction.

1804-1812: U. S. Federal Debt reduced 48%. Depression began 1807. 1817-1821: U. S. Federal Debt reduced 29%. Depression began 1819. 1823-1836: U. S. Federal Debt reduced 99%. Depression began 1837. 1852-1857: U. S. Federal Debt reduced 59%. Depression began 1857. 1867-1873: U. S. Federal Debt reduced 27%. Depression began 1873. 1880-1893: U. S. Federal Debt reduced 57%. Depression began 1893. 1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929. 1997-2001: U. S. Federal Debt reduced 15%. Recession began 2001.

The reason is simple. Federal debt reduction removes dollars from the economy, which causes the economy to shrink. By definition, a shrinking economy is a depression. There is no magic here. To grow, an economy must have a growing supply of spending money. The formula is:

GDP = Federal and Non-federal Spending + Net Exports

There is no way to avoid a recession or depression when the money supply shrinks. Basic mathematics.

Not only is the federal debt at roughly $36 trillion, but the spike in inflation after the coronavirus pandemic and Russia’s invasion of Ukraine have pushed up the government’s borrowing costs such that debt service next year will easily exceed spending on national debt.

Again, the AP writers demonstrate monumental ignorance about federal financing, which is quite different from the business financing Donald Trump and Elon Musk know. First, the federal government is Monetarily Sovereign and has the infinite ability to create U.S. dollars. So it has no need to borrow dollars and, indeed, doesn’t.

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.”

“Not dependent on credit markets” is Fed-speak for “doesn’t borrow.” Those T-bills, T-notes, and T-bonds mistakenly are called “borrowing,” though they are deposits into accounts similar to safe deposit boxes. The government never owns those dollars, so it does not owe them. Instead, it merely holds them in a secure place and returns them to their owners to repay the so-called borrowing. Second, “debt service” means interest payments, which the federal government can do endlessly without collecting a penny in taxes.

The higher cost of servicing the debt gives Trump less room to maneuver with the federal budget as he seeks income tax cuts.

Unlike state and local governments, the federal government has infinite “room to maneuver.” Even if the misnamed “debt” were double or triple its current size, the federal government could cut taxes to $0 and still pay all its bills simply by pressing computer keys.

It’s also a political challenge because higher interest rates have made it costlier for many Americans to buy a home or new automobile. And the issue of high costs helped Trump reclaim the presidency in November’s election.

The Fed raises interest rates to fight inflation. However, contrary to popular wisdom, those higher rates actually cause inflation. Almost every business must add interest to its cost of goods and services. Raising rates increases the cost of goods and services, which exacerbates inflation.

“It’s clear the current amount of debt is putting upward pressure on interest rates, including mortgage rates for instance,” said Shai Akabas, executive director of the economic policy program at the Bipartisan Policy Center. “The cost of housing and groceries is going to be increasingly felt by households in a way that are going to adversely affect our economic prospects.”

“Federal debt” (which isn’t federal and isn’t debt) does not put pressure on anything. Interest rates are set arbitrarily by the Fed and are not forced by anything.

The so-called “debt” isn’t federal, because the dollars always remain the depositor’s property. It isn’t debt because the government never owned or owed the dollars; it merely held them for depositors in safe storage.

The government doesn’t need to accept T-security deposits. T-securities’ purpose is not to provide the government with spending money but rather to provide a safe place for dollar holders to store unused dollars. China, for instance, would much prefer to store its unused dollars in Treasury Security accounts than in any bank. This safety stabilizes the dollar, making it attractive as the world’s primary money choice.

Akabas stressed that the debt service is already starting to crowd out government spending on basic needs, such as infrastructure and education. About 1 in 5 dollars spent by the government are repaying investors for borrowed money, instead of enabling investments in future economic growth.

Because the federal government has infinite dollars, it does not borrow. So-called “debt service” is interest on T-security deposits. These payments do not “crowd out” spending. On the contrary, federal payments add growth dollars to the economy.

Bessent: I never knew that federal finances are different from business finances. Maybe that’s why President Trump chose me to be Treasury Secretary.
It’s an issue on Trump’s radar. In his statement on choosing billionaire investor Scott Bessent to be his Treasury secretary, the Republican president-elect said Bessent would “help curb the unsustainable path of Federal Debt.”

Federal “debt” growth is infinitely sustainable. Even if the “debt” were triple its current size, it still would be sustainable. See: Historical BULLSHIT Claims the Federal Debt Is a “Ticking Time Bomb”: From Sept. 26, 1940 to October 10, 2024

The debt service costs along with the higher total debt complicate Trump’s efforts to renew his 2017 tax cuts, much of which are set to expire after next year. The higher debt from those tax cuts could push interest rates higher, making debt service even costlier and minimizing any benefits the tax cuts could produce for growth.

Why is Elon Musk becoming Donald Trump's efficiency adviser? — **DT: Don’t tell anyone, but someone said federal finance is Monetarily Sovereign, while business finance is monetarily non-sovereign. I don’t know the difference, do you? EM: Never heard of it.**

Utter nonsense. Tax collections could be cut to $0, and the government could continue to spend, forever. Nothing “pushes” interest rates higher. They are set arbitrarily by the Fed.

“Clearly, it’s irresponsible to run back the same tax cuts after the deficit has tripled,” said Brian Riedl, a senior fellow at the Manhattan Institute and a former Republican congressional aide. “Even congressional Republicans behind the scenes are looking for ways to scale down the president’s ambitions.”

This is another classic example of ignorance about federal finance. They don’t understand the difference between Monetarily Sovereign (federal government) and monetary non-sovereignty (state and local governments).

Democrats and many economists say Trump’s income tax cuts disproportionately benefit the wealthy, which deprives the government of revenues needed for programs for the middle class and poor.

The tax cuts disproportionately benefit the wealthy but do not deprive the government of revenues. It has infinite revenues. The ignorance is appalling.

“The president-elect’s tax policy ideas will increase the deficit because they will decrease taxes for those with the highest ability to pay, such as the corporations whose tax rate he’s proposed reducing even further to 15%,” said Jessica Fulton, vice president of policy at the Joint Center for Political and Economic Studies, a Washington-based think tank that deals with issues facing communities of color.

Increasing the deficit adds growth dollars to the economy. Cutting corporate taxes helps the economy grow. The federal deficit is not a burden on the government or on taxpayers. Seemingly, the Joint Center for Political and Economic Studies doesn’t understand basic economics.

Trump’s team insists he can make the math work. “The American people reelected President Trump … to implement the promises he made on the campaign trail, including lowering prices. He will deliver,” said Karoline Leavitt, the Trump transition spokeswoman.

He won’t deliver if he increases import duties as he promises. American consumers pay those duties.

When Trump was last in the White House, the federal government was spending $345 billion annually to service the national debt. It was possible to run up the national debt with tax cuts and pandemic aid because the average interest rate was low, making repayment costs manageable even as debt levels climbed.

The federal government doesn’t pay for debt; it merely returns depositors’ money. In any event, the federal government has the infinite ability to pay for anything without collecting taxes. The sole purposes of taxes are to:

Control the economy by taxing what the government wishes to discourage and by giving tax breaks to what the government wishes to reward and
To assure demand for the U.S. dollar by requiring taxes be paid in dollars.

Federal taxes do not provide the federal government with spending money.

Congressional Budget Office projections indicate that debt service costs next year could exceed $1 trillion. What fueled the increased cost of servicing the debt? Higher interest rates.

Translation: The federal government will pump more than 1 trillion growth dollars into the economy at no cost to anyone.

A political leader not knowing the differences between Monetary Sovereignty and monetary non-sovereignty is like a baker not knowing the differences between salt and sugar.
In April 2020, when the government was borrowing trillions of dollars to address the pandemic, the yield on 10-year Treasury notes fell as low as 0.6%. They’re now 4.4%, having increased since September as investors expect Trump to add several trillions of dollars onto projected deficits with his income tax cuts.

The federal government never borrows dollars. It has the infinite ability to create dollars. Treasury securities do not represent borrowing. They are deposits, easily returned simply by sending them back to their owners. The Fed arbitrarily determines interest rates, which could be 0% if it chooses to.

Democratic President Joe Biden can point to strong economic growth and successfully avoiding a recessionas the Federal Reserve sought to bring down inflation. Still, deficits ran at unusually high levels during his term. That’s due in part to his initiatives to boost manufacturing and address climate change, and to the legacy of Trump’s previous tax cuts.

Federal deficits are income for the economy. Without federal deficits, the economy would not grow, and the greater the deficits, the greater the growth.

People in Trump’s orbit, as well as Republican lawmakers, are already scouting out ways to reduce spending to minimize the debt and bring down interest rates.

The Fed could bring down interest rates simply by lowering the base rate. Reducing federal debt causes depression.

Elon Musk and Vivek Ramaswamy, the wealthy businessmen leading Trump’s efforts to cut government costs, have proposed simply refusing to spend some of the money approved by Congress. It’s an idea that Trump has also backed, but it would likely provoke challenges in court as undermining congressional authority.

Musk and Ramaswamy are showing pure ignorance. They seemingly don’t understand that our Monetarily Sovereign government has the infinite ability to create dollars. The so-called “debt” does not burden the government or taxpayers. Refusing to spend money is refusing to insert growth dollars into the economy.

Russell Vought, the White House budget director during Trump’s first term and Trump’s choice to lead it again, put out an alternative proposed budget for 2023 with more than $11 trillion in spending cuts over 10 years to potentially generate a surplus.

Translation: Russell Vought proposed costing the economy $11 trillion.

Trump has also talked up tariffs on imports to generate revenues and reduce deficits, while some GOP lawmakers have discussed adding work requirements to trim Medicaid expenses.

Tariffs on imports are identical to taxes. Thus, Trump wants to increase taxes and reduce economic income. SUMMARY Our leaders’ ignorance of the difference between federal and business finance is like a baker’s ignorance of the difference between salt and sugar. Decisions based on ignorance cause massive damage. Try baking a cake using salt instead of sugar. The facts are:

The U.S. federal government is uniquely Monetarily Sovereign. It creates dollars simply by pressing computer keys. It never can run short of dollars.
The U.S. economy is monetarily non-sovereign. During recessions and depressions, it can and often does run short of dollars.
Being Monetarily Sovereign, the federal government never borrows dollars. Treasury bonds are fundamentally different from corporate bonds. Treasury bonds are a safe storage device, while corporate bonds are used to obtain spending dollars. The same word, “bonds,” describes two completely different functions.
While state government taxes provide states with spending money, federal taxes have a different purpose — to control the economy and assure demand for the U.S. dollar.

In short, confusion arises when words like “bond,” “note,” “debt,” “owe,” and even “tax” have different purposes and functions when applied to federal finances vs. personal finances. It’s one thing for the public not to understand the differences. It’s far worse when our political leaders don’t. Rodger Malcolm Mitchell Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: 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.

MONETARY SOVEREIGNTY

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