Again, Reason.com claims the US government can run out of US dollars. Liars or fools? You decide.

Here is an easy way to detect economics bullshit: If someone tells you that U.S. federal government spending — any U.S. federal government spending — is “unsustainable” without explaining why, you can be sure that person is a liar or a fool. No exceptions.

“Unsustainable” long has been the word of choice for those who spread fear about federal deficits, federal debt, Social Security, Medicare, Medicaid, aid to the poor, and everything else the rich don’t like.

But what exactly is “unsustainable” about federal spending? Will the federal government, which created the very first laws out of thin air, and will the laws that created the dollar out of thin air, suddenly be unable to create more dollars out of thin air?

Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”

When challenged, the liars and fools reluctantly admit, “No, the government can’t run out of dollars, but deficit spending causes inflation.”

We’ve debunked that myth so many times my typing fingers are worn down. See here, here, here, here, and here, and many other places.

The simple and obvious fact is that inflation is not caused by federal deficit spending. And inflation is not caused by interest rates that are too low. The cause of all inflations is scarcities of key goods and services, most notably oil and food.

So the cure for inflation is not to cut federal deficit spending, nor is it to raise interest rates. The treatment for inflation is to cure the scarcities of critical goods and services, most notably energy and food.

How does one cure those inflation-causing scarcities? Federal deficit spending to obtain and provide the scarce goods and services.

Sadly, the Libertarian Reason.com’s solution to all ills is to claim government spending is “unsustainable.”

Anarchist Movements | Cultural Politics — **Libertarianism = Anarchy**

Medicare? “Unsustainable.” Social Security? “Unsustainable.” Military spending? “Unsustainable.” Everything the federal government does? “Unsustainable.”

Never mind that we have been “sustaining” huge and growing federal deficit expenditures for more than 80 years, while the economy has grown massively.

When you’re a Libertarian, you hate the government. Period. You are an anarchist.

And here is an example of that, from Reason.com’s website:

Paul Krugman Says Social Security Is Sustainable. It’s Really Not.
Krugman sees benefit cuts as “a choice” but believes that implementing a massive tax increase on American employers and wo,rkers would be “of course” no big deal.
ERIC BOEHM | 2.23.2023 1Times’sM

For The New York Times’ Paul Krugman, the real crisis facing America’s entitlement programs is that the media isn’t working hard enough to ignore their impending collapse.

“I’ve seen numerous declarations f,rom mainst,ream media that of course Medicare and Social Security can’t be sustained in their present form,” Krugman wrote in a Times op-ed this week. “And not just in the opinion pages.”

Perhaps that’s because the unsustainable trajectories of Social Security and Medicare aren’t a matter of opinion.

They’re factual realities, supported by the most recent annual reports of the programs’ trustees and the independent analysis of the Congressional Budget Office central). Social Security’s main trust fund will hit insolvency somewhere between 2033 and 2035, according to those projeleadingns, while one of the main trust funds in Medicare will be insolvent before the end of this decade.

Have you ever wondered why you never hear worries about the “trust fund” for the military? Or the “trust fund” to support the Supreme Court?

And why no concern about “trust funds” to fund the White House, the Senate or the House of Representatives?

Federal Trust Funds Are Not Real Trust Funds

Here is what the Peter G. Peterson Foundation says about these “trust funds”:

Federal trust funds bear little resemblance to their private-sector counterparts, and therefore the name can be misleading.

A “trust fund” implies a secure source of funding. However, a federal trust fund is simply an accounting mechanism used to track inflows and outflows for specific programs.

In private-sector trust 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.

Further, the federal government owns the accounts and can, by changing the law, unilaterally alter the purposes of the accounts and raise or lower collections and expenditures.

Get it? Trust funds aren’t real funds. They are just accounting mechanisms to track inflows and outflows. The federal government owns the books and can change the books at will.

The federal government can change the purposes of the Medicare and Social Security “Trust Funds”; it can add or subtract dollars at will; it can continue to fund Medicare and Social Security in any desired way and in any desired amounts.

The government and its liars and fools wring their hands and claim the trust funds are in danger of insolvency. But no federal agency can become insolvent unless that is what the President and Congress want.

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.”

The federal government literally has the power to change the account books simply by passing a law. All the bleating and worrying about a federal agency becoming insolvent is a lie.

If the federal government wished, it instantly could add a trillion dollars to the Medicare “trust fund,” and eliminate FICA altogether. Keep in mind: The government owns the books.

When insolvency hits, there will be mandatory across-the-board benefit cuts—for Social Security, that’s likely to translate into a roughly 20 percent reduction in promised benefits.

“Mandatory,” until the government decides it isn’t mandatory.

Alan Greenspan: “The United States can pay any debt it has because we can always print the money to do that.”

Nevertheless, Krugman says he’s got a solution that “need not involve benefit cuts.”

His argument boils down to three points. First, Krugman says the CBO’s projections about future costs in Social Security and Medicare might be wrong.

Second, he speculates that they might be wrong because life expectancy won’t continue to increase.

Finally, if those first two things turn out to be at least partially true, then it’s possible that cost growth will be limited to only about 3 percent of gross domestic product (GDP) ov,er the next three decades and we’ll just raise taxes to cover that.

There never is a need to raise federal taxes. There is no funding need for federal taxes at all. The federal government destroys all tax dollars it receives, and creates new spending dollars, ad hoc.

When you pay your taxes, your dollars come from the M2 money supply measure. When they reach the Treasury, they cease to be part of the M2 money supply or any other money supply measure. They literally are destroyed.

When the federal government spends, it sends instructions (not dollars) to the creditors’ banks, instructing the banks to increase the balances in the creditors’ checking accounts.

This creates the new dollars that are added to the M2 money supply.

The banks clear the instructions through the Federal Reserve preserving the tidy, double-entry bookkeeping.

If you remember just one thing from this post, remember that dollars are not physical things. They are legal, bookkeeping entries, and the federal government controls the laws and the books.

If the government wished, it could eliminate all federal trust funds, or add a trillion dollars to each of them, and it all would just be bookkeeping.

Alan Greenspan: “There is nothing to prevent the federal government from creating as much money as it wants and paying it to somebody.”

“America has the lowest taxes of any advanced nation; given the political will, of course we could come up with 3 percent more of G.D.P. in revenue,” he writes. “We can keep these programs, which are so deeply embedded in American society, if we want to.

Killing them would be a choice.”

Federal taxes do not fund the federal government. The purpose of federal taxes is to control the economy by taxing what the government wishes to discourage and giving tax breaks to what the government wishes to encourage.

The federal government could eliminate all federal taxes, yet continue to spend forever.

It’s notable that Krugman sees benefit cuts as “a choice” but believes that implementing a massive tax increase on American employers and workers would be “of course” no big deal.

But that hardly addresses the substance of what he gets wrong. Let’s take each of his three arguments in order and show why they’re incorrect.

First, he says the CBO’s projections about future costs for the two programs might be inaccurate because the agency is assuming that health care costs will continue to grow faster than the economy as a whole.

At best, that means postponing insolvency by a few years. The structural imbalance between revenues and outlays means that depletion of the trust funds is a question of “when” and not “if,” as this chart from the Committee for a Responsible Federal Budget makes clear.

The above would be true if the federal government were monetarily non-sovereign, like the states, counties, cities, euro nations, you and me.

We monetarily non-sovereign entities do not have the unlimited ability to create our sovereign currencies. We have no sovereign currencies.

But the U.S. government is absolutely sovereign over the U.S. dollar. It can create as many or as few dollars as it wishes.

It can give those dollars any values it wishes and it can change those values (which it has done many times) at will.

The U.S. dollar is a tool of the U.S. government.

The Reason.com Libertarians seem ignorant of the difference between Monetary Sovereignty and monetary non-sovereignty, and thus ignorant of economics

Krugman even concedes that despite a decline in the expected rate of growth in future health care costs, those costs are still expected to rise faster than the economy grows.

Combined with the aging of America’s population, this is a demographic and fiscal time bomb. Ignoring that reality is certainly not a sound policy strategy.

Even if healthcare costs were to triple tomorrow, the federal government could fund Medicare while not collecting a single penny in FICA taxes.

Second, he speculates that mortality rates might continue to drop. While that might be good news from an actuarial perspective, it seems both morally horrifying and incredibly risky to base a long-term entitlement program on the assumption that more people will die at a younger age.

Even if every American retired at 50 and lived to age 200, the federal government could fund Medicare for All, and a generous Social Security for All, again while not collecting a penny if FICA taxes.

In fact, Krugman gets this point exactly backward. Instead of banking on a decline in life expectancy, Congress ought to raise the eligibility age for collecting benefits from Social Security and Medicare.

That would create the same demographic benefits on the accounting side even as people live hopefully longer, better lives.

And there you have it. The Libertarian solution for all government problems is to cut benefits, especially those benefits that aid the poor and middle classes.

The Libertarians refuse to accept this vital truth: The sole purpose of any government is to protect and improve the lives of the governed.

How cutting benefits accomplishes that purpose has yet to be explained.

Krugman would no doubt see such a change as an unacceptable benefit cut, but in reality, it would restore Social Security to its proper role as a safety net for the truly needy, not a conveyer belt to transfer wealth from the younger, working population to the older, relatively wealthier retired population.

The so-called “conveyer belt” would only be true if federal taxes funded federal spending. But they don’t.

Federal taxes fund nothing. FICA could and should be eliminated, while Social Security benefits should be increased.

When Social Security launched in 1935, the average life expectancy for Americans was 61. That’s changed, so the program’s parameters should too.

Yes, Social Security parameters should change. Benefits are too low. FICA should be eliminated.

Finally, the blitheness of Krugman’s actual solution—a massive tax increase—ignores all the knock-on effects of that idea.

Keeping Social Security and Medicare whole will require a tax increase in excess of $1 trillion, which would have massive repercussions on wages, the costs of starting a business, and economic growth in general.

It’s far from an ideal solution.

Keeping Social Security and Medicare whole will require no tax increase at all. The programs are not funded by tax dollars, which are destroyed upon receipt. The programs are funded by laws, and Congress controls the laws.

Paraphrasing Reason.com’s claim, eliminating FICA would have massive positive effects on wages, the costs of starting a business, and economic growth in general.

In all, Krugman’s column amounts to an argument that his addiction to donuts is totally sustainable as long as someone else agrees to keep buying donuts for him (and as long as he ignores the long-term costs to his health).

Maybe the doctors are wrong about the projected consequences of eating too many donuts. Maybe it will turn out that living longer just isn’t all that great anyway.

But if all else fails, at least he’s got someone else willing to pay for his habit—and making any changes would be tantamount to killing a tradition deeply embedded in the Krugman morning routine. We must take that option off the breakfast table.

The above analogy might make some sense for monetarily non-sovereign governments, but it is completely false for the federal government.

Instead of lying to their readers and constituents, America’s thought and political leaders (not just President Joe Biden and Krugman but lawmakers and media commentators on all sides) should start acknowledging that America’s entitlement programs are not sustainable in their current form.

Instead of lying to their readers and constituents, Libertarians (not just Reason.com) should acknowledge the differences between Monetary Sovereignty and monetary non-sovereignty.

Without changes, they will wreck the economy or force many retirees to deal with sudden cuts to benefits they expected to receive. Maybe both.

Waiting to deal with this problem will only make it worse. If Krugman’s column is the best argument for the long-term sustainability of America’s two major entitlement programs, it should only underline how seriously screwed they are.

No, Krugman’s column is not the best argument for long-term sustainability.

Using the facts about Monetary Sovereignty is the absolute guarantee of long-term sustainability.

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

What Libertarians want you to believe

Cameron Craig: “Libertarians are non-interventionists and strong advocates for property rights, free immigration, legalizing all drugs and prostitution.
“Libertarians are against taxes, any form of social benefits and believe everyone must pull themselves up by their own bootstraps.
“The core tenet of libertarianism is that one’s liberty and right to own property should never be infringed upon.

Reason.com, is a voice of Libertarianism. Read what they say about the National “Debt.”

Libertarian Party vice presidential candidate talks about campaign on Action Line - KINY

Hey, Nancy Pelosi: ‘National Debt Should Be a Top Priority’
A bipartisan group of lawmakers are calling for two deficit-reduction ideas to be included in this year’s federal budget bill.
ERIC BOEHM | 2.23.2022 2:40 PM

Immediately, you see that Eric Boehm is spouting ignorance, and I’m not referring to his incorrect use of “are” rather than “is.”

The national “debt” isn’t a priority; it shouldn’t even be a mild concern.

In fact, it’s not “debt.”

It’s the total of deposits into Treasury security accounts, which resemble interest-paying, bank safe-deposit boxes.

When you invest in a T-bill, T-note, or T-bond, you deposit your dollars into your T-security account.

The federal government neither needs, uses, nor touches your dollars, and when your account matures, your dollars are sent back to you.

No tax dollars are involved.

As with the contents of safe-deposit boxes, the government doesn’t owe anyone the deposits in T-security accounts. Neither do you owe them. Nor do your grandchildren owe them. They are not a financial burden on anyone or anything.

So why would a thinking person tell you they are a “priority”?

And as for so-called “deficits,” they represent the net growth dollars our Monetarily Sovereign government pumps into the economy.

The U.S. government has infinite dollars to give; the economy needs growth dollars in order to grow. Without federal “deficits” we have recessions and depressions, all of which are cured by “deficits.”

Reductions in federal debt growth lead to inflation

Recessions (vertical bars) follow REDUCTIONS in deficit growth. Recessions are cured by INCREASES in deficit growth.

Mr. Boehm’s article begins with faulty premises, and only goes downhill from there. He asks:

How are we actually going to pay for all this?

“We” (you, and I, and the government) are not going to pay for “all this.” As each T-security account reaches maturity, the dollars that reside in those accounts will be transferred to the owners’ checking accounts, upon request.

It’s a simple dollar transfer. No new dollars are needed.

And even if the federal government did owe the money, it has infinite dollars with which to pay any financial obligation.

Mr. Boehm’s (and the rest of the Libertarians’) deficit/debt concern is based on the Big Lie that federal finances resemble state/local government finances and personal finances.

But the federal government uniquely is Monetarily Sovereign, while you, all local governments and all businesses are monetarily non-sovereign.

The Libertarians don’t want you to understand that a Monetarily Sovereign entity never unintentionally can run short of its own sovereign currency. Even if the federal government collected $0 taxes, it could continue spending, forever.

(The purpose of federal taxes is not to finance spending. The purpose is to control the economy. Taxes discourage what the government doesn’t want, and tax breaks encourage what the government does want.)

The federal government does not borrow dollars. The so-called “national debt” is not a debt to be repaid.

In a letter sent on Tuesday, 24 members of the House of Representatives called on Speaker of the House Nancy Pelosi (D–Calif.) to take some small but important steps to rein in America’s out-of-control national debt.

The misnamed “national debt” (that isn’t a debt), also isn’t “out of control” and doesn’t need to be “reined in.” The federal government controls to the penny, how many T-security dollars to accept from the public.

To prevent the public’s T-security account deposits from growing higher than desired, the federal government can lower interest rates. That discourages further deposits.

Or the Federal Reserve can use its infinite dollar-creation abilities to take the public’s place (what the uninformed would term “borrowing from itself.”)

Similarly, if in its wisdom, the Federal Reserve decides deposits should be higher, it can increase interest rates, or again, the Federal Reserve can increase deposits.

The source of Mr. Boehm’s disinformation is the wrongheaded belief that the federal government borrows when its tax income is insufficient to pay its bills.

That “income vs. borrowing” scenario is true of state and local governments. It also is true of businesses. And it is true of you and me. We borrow when cash at hand is insufficient.

It is not true of our Monetarily Sovereign, U.S. federal government. It has infinite cash at hand.

Here is what knowledgeable people say about Monetary Sovereignty:

Alan Greenspan: “A government cannot become insolvent with respect to obligations in its own currency.”

Ben Bernanke: “The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”

Quote from Ben Bernanke when, as Fed chief, he was on 60 Minutes:
Scott Pelley: Is that tax money that the Fed is spending?
Ben Bernanke: It’s not tax money… We simply use the computer to mark up the size of the account.

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.”

Press Conference: Mario Draghi, President of the ECB, 9 January 2014
Question: I am wondering: can the ECB ever run out of money?
Mario Draghi: Technically, no. We cannot run out of money.

Messrs. Greenspan, Bernanke, and Draghi, and the St. Louis Fed, were describing Monetary Sovereignty, the unlimited ability of a Monetarily Sovereign entity to create its own sovereign currency.

The U.S. government not only has this unlimited ability, but it also has the unlimited ability to determine, by fiat, the value of the U.S. dollar, an ability it has exercised many times over the years, when fixing the dollar to varying amounts of silver and gold.

Thus, the U.S. federal government has the absolute power to control inflation.

So why do T-bills, T-notes, and T-bonds even exist?

The federal government’s spending and income are recorded in what is known as the “General Fund.”

It’s not really a “fund.” It’s just a bookkeeping record. But for historical reasons, having to do with a young nation needing acceptance for its money, this record is not allowed to have a negative balance.

It’s an obsolete law. There is no current reason why the General Fund, or any bookkeeping item can’t have a negative balance. But the convoluted workaround for this obsolete law is to pretend to borrow by issuing Treasury securities, and allowing the public to invest in them, with the balance being purchased by the government itself.

It’s all bookkeeping hocus-pocus, to satisfy an obsolete set of rules, originally designed to prevent what mathematically cannot ever happen: Unintended federal insolvency.

Today, the functional purpose for issuing T-securities is to provide a safe interest-paying parking place for unused dollars, which helps to stabilize the value of the U.S. dollar.

The letter highlights the fact that policies enacted during the past five years—including pandemic relief, but also “Congress’ perennially broken budget process and fiscal policies”—have added $13 trillion to the projected levels of debt in 2031, at the end of the 10-year window Congress uses for budgeting.

Mr. Boehm is referring to $13 trillion federal growth dollars, without which the economy would fall into the deepest depression in world history.

“It has been over a decade since Congress enacted any legislation that significantly addressed these longstanding structural problems or improved the nation’s fiscal outlook,” the lawmakers wrote to Pelosi.

“Our national debt should be a top priority for both parties and addressed on a bipartisan basis.”

The misnamed “debt” neither is a structural problem, nor a “priority,” and it has nothing to do with a “fiscal outlook.” It’s all lies.

Yes, the letter represents the view of just 24 of the House’s 435 members. Still, any discussion of the debt and the need to address it is welcome.

It is encouraging that only 24 of the House’s 435 members are misinformed or dishonest enough to sign such a letter.

The Congressional Budget Office (CBO) now forecasts that the debt will be twice the size of the economy by 2051, while the Government Accountability Office (GAO) predicts that the debt will grow to four times the size of America’s economy before the end of the century.

Here, Mr. Boehm referred to the most ridiculous, nonsensical, meaningless ratio in all of economics: The debt/GDP ratio. It is a ratio that says nothing about the health of the economy (see Debt to GDP Ratio by Country 2022). It is a ratio that predicts nothing.

It isn’t even mathematically logical, because it describes different time sequences. “Debt” is the net accumulation of deficits during the past two centuries, while GDP refers to one year.

“U.S. fiscal policy today is not sustainable,” argue Veronique de Rugy and Jack Salmon, researchers at the Mercatus Center, a free market think tank, in a new report published Wednesday.

“Not only is our debt ratio at the highest level in peacetime history, but also our future budgetary outlook is even bleaker.”

The two researchers from the Libertarian Mercatus Center imply that the federal government can run short of its own sovereign currency, a fiscal impossibility. And the “not sustainable” trope has been disseminated, without evidence, since at least 1940.

See: “Your periodic reminder. After 80 years, the federal debt still is a ‘ticking time bomb.’

Libertarians were wrong then. They are wrong now. The federal “debt,” far from being a priority, or a problem or a burden on future generations, is an absolute necessity for economic growth — the larger the “debt” (i.e. net deficits), the faster the growth.

Perhaps it was the symbolic $30 trillion debt threshold that has prompted some lawmakers to call on Pelosi to take action.

But another factor is the high levels of inflation America is currently experiencing.

As Reason has previously explained, inflation and high debt create a trap for policymakers: higher inflation could lead the Federal Reserve raise interest rates, which would increase the payments owed on the debt.

Because Libertarians seem to think that all federal spending is excessive, the notion that the federal government would pay more interest into the economy upsets them.

In reality however, there is no downside to increased federal interest. The government has infinite dollars, and the economy benefits from additional dollars.

Contrary to the Libertarian philosophy of ignorance, federal spending is stimulative, and also contrary to popular wisdom, not inflationary.

Inflations never are caused by “too much money.” Inflations always are caused by shortages of key goods and services. Those shortages, and the resultant inflation, can be cured by increased federal spending to encourage the availability of the scarce goods and services.

Today’s inflation is an example: Current shortages of oil, computer chips, food, shipping, and lumber can be cured by federal aid to oil production, computer chips, farming, and lumber.

Current shortages of labor can be cured by the elimination of FICA and income taxes, which serve only to reduce the reward for work.

Fighting inflation with deficit reduction, would lead to recession.

Regardless of the reasons, the 24 lawmakers who signed this week’s letter are asking for two policies that are the lowest of low-hanging fruit.

First, they are seeking the creation of a bipartisan debt commission, similar to one implemented during President Barack Obama’s first term that helped trigger modest reductions in annual budget deficits following the Great Recession.

I’m not sure what economy Mr. Boehm lives in, but the Great Recession was cured by massive increases in federal deficit spending, which then returned to average levels, only to rise again to combat COVID.

Mr. Boehm closes his article with a summary of ignorance and disinformation:

Lawmakers are asking Pelosi to include in the budget changes to how the debt ceiling operates.

The proposed changes would allow the president to unilaterally lift the debt limit as long as Congress has passed a budget resolution that contains certain debt-reduction measures for the current year.

Raising the debt ceiling is not the same as adding to the debt. The debt ceiling merely authorizes the Treasury to borrow funds to pay for spending already approved by Congress.

Objections to increasing the debt ceiling amount to little more than a refusal to pay overdue credit card bills—a temper tantrum that doesn’t address the actual problem of overspending.

Mr. Boehm is correct that the debt ceiling doesn’t address anything, much less the mythical problem of “overspending.” Rather than recommending the end of this laughable anachronism, Mr. Boehm supports Presidential fiddling with the debt ceiling:

“(Deficit cuts) . . . won’t fix America’s fiscal mess, but they are “commonsense ideas” that “would be important steps in the right direction,” according to the Committee for a Responsible Federal Budget, a nonpartisan group that advocates for reducing the deficit.

And they are steps that the country will have to take, sooner or later. “We owe it to our children,”the lawmakers wrote to Pelosi, “to acknowledge our country’s unsustainable fiscal trajectory and work together, across the aisle, to address it over time.”

Yes, Boehm delivers a final dose of utter BS. The ideas neither are “commonsense” nor are they “important steps in the right direction.”

Our children do not owe, nor will they pay for the federal “debt.” Instead, if the debt is reduced our children will be punished by the resultant recessions and depressions.

And, the country’s “fiscal trajectory” (presumably, he means rising “debt”) is not “unsustainable.” It’s necessary. Here is what happens whenever we reduce the “debt.”

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.

Libertarians are the kissin’ cousins of Republican conservatives. Birds fly. Fish swim. Libertarians lie. Apparently, those are three constants in nature.

Why do the Libertarians lie about the federal “debt”?

Go back to one of the tenets of Liberalism: “Libertarians are against taxes, any form of social benefits and believe everyone must pull themselves up by their own bootstraps.“

Libertarians want the federal “debt” reduced, and the easiest way to accomplish that is to cut such social benefits as Medicare, Social Security, Medicaid, poverty aids, etc.

Rather than complain about social benefits, which the populace loves (and the government has the infinite ability to provide), Libertarians find it easier to complain about so-called “debt” and deficits.

By convincing the public that “debt” and deficits must be cut, the Libertarians are able to justify cutting benefits to the middle- and lower-income groups.

It’s the backdoor way of making the rich richer by widening the Gap between the rich and the rest.

Thus, Libertarians are Republicans in disguise, pretending to be a middle-ground compromise between liberals and conservatives, but in fact, being as right wing, pro-rich, anti-middle, anti-poor as any Republican, perhaps more so.

[Why would any sane person take dollars from the economy and give them to a federal government that has the infinite ability to create dollars?]

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.

The most important problems in economics involve:

Monetary Sovereignty describes money creation and destruction.
Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics. Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps:

Ten Steps To Prosperity:

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

MONETARY SOVEREIGNTY

There are some things only the government should do.

Liberals think the purpose of government is to protect the poor and powerless from the rich and powerful. Conservatives think the purpose of government is to protect the rich and powerful from the poor and powerless.

—————————-

We are social animals. Rules, laws, codes, and mores are the natural consequence of that shared life. We establish governments to organize and formalize those rules.

The fundamental purpose of governments is to improve and protect the lives of the governed.

Those of a libertarian bent decry government as being intrusive upon their freedoms. Yet, the very purpose of laws is to limit any individual’s freedom to do harm to society. For humans, anarchy tends to devolve into chaos.

For arch Libertarians, every law (or at least every law they dislike, today) is pejoratively defined as “Socialism,” and that supposedly ends the argument. They opt for “small government” which tends to translate into, less taxing of the rich and fewer benefits for the poor.

But Socialism, like most “isms,” neither is bad nor good, in of itself. The assessment depends on conditions and how the “ism” is applied.

When Ronald Reagan famously declared, “Government is the problem,” he was President of one of the more successful governments on this planet — successful in the sense that it oversaw one of the freest, wealthiest, most powerful nations in history. Clearly, Reagen was not a Libertarian when he uttered those words, which in any event have been misconstrued and twisted over time.

And as it turned out, Reagan was not a small-business President.

Today’s Libertarianism leans heavily toward a form of Conservatism that favors the rich over the poor, to the point where virtually any benefit for the poor is denounced as encroaching on “our” (meaning the rich’s) freedoms.

Despite the “Socialism!” howls of today’s Republicans, and the “Big Government!” screams of the Libertarians, some things truly are better left to the federal government. Three of these things are discussed at: The military, the nation’s banks, and healthcare.

**Sure you paid us insurance premiums, but do you really expect us to pay for your healthcare?**

When deciding what should be done by government and what should be done in the private sector, here are five of the key issues:

Coordination:
America is a huge nation, huge in area, huge in population, with huge demographic and legal diversity. Very few businesses are able to coordinate nationwide projects. National coordination is best handled by a national government.

Labor supply
Even the federal government doesn’t employ sufficient labor to handle large projects. Example: The National Highway System. But the federal government has the means and political power to hire, set the rules for, and supervise private contractors nationwide.

Expertise
Some projects require a wide range of technical expertise. The federal government, far more than any single business, benefits from the extensive military and non-military research projects it funds.

Affordability and financial risk
Here is where the federal government really shines. It literally can afford anything and when speculative projects don’t work, the government can afford to absorb the loss.

Profit motive
This may be the most important reason for the government, rather than the private sector, handling a project: The profit motive. The federal government doesn’t have one.

It can go “where no man has gone before.” It can try experiments. It can fail and try again. It can focus on the mission rather than on the profit.

When NASA was instructed to send a man to the moon, all its attention was on that mission, not on whether moon flights might be profitable. Subsequently, it has sent missions all over the solar system.

Now, fifty years later, private industry has decided there might be money to be made in sending a few rich people briefly into space, though not even yet to the moon. That is the difference between the federal government’s efforts and private industry’s.

Left to its own devices, private industry might never travel to the moon. The financial risk too great; the profit, too uncertain.

And in that vein, I give you the following article:

Major Insurers Running Billions of Dollars Behind on Payments to Hospitals and Doctors

Posted on October 10, 2021 by Lambert Strether: “We should bail them out. Obviously.”

Jay Hancock, of Kaiser Health News.

Anthem Blue Cross, the country’s second-biggest health insurance company, is behind on billions of dollars in payments owed to hospitals and doctorsbecause of onerous new reimbursement rules, computer problems and mishandled claims, say hospital officials in multiple states.

Anthem, like other big insurers, is using the covid-19 crisis as cover to institute “egregious” policies that harm patients and pinch hospital finances, said Molly Smith, group vice president at the American Hospital Association.

Hospitals are also dealing with a spike in retroactive claims denials by UnitedHealthcare, the biggest health insurer, for emergency department care, AHA says.

What is the underlying problem? Money, or more specifically, the profit motive.

While the primary mission of Medicare and Medicaid is to pay for medical expenses, the primary mission of private-sector health care insurance companies is to make a profit.

A government agency can be inefficient, uncaring, and downright ignorant. So can private insurance companies. The single biggest difference is the profit motive, or the lack thereof.

Disputes between insurers and hospitals are nothing new. But this fight sticks more patients in the middle, worried they’ll have to pay unresolved claims.

Hospitals say it is hurting their finances as many cope with covid surges — even after the industry has received tens of billions of dollars in emergency assistance from the federal government.

“We recognize there have been some challenges” to prompt payments caused by claims-processing changes and “a new set of dynamics” amid the pandemic, Anthem spokesperson Colin Manning said in an email. “We apologize for any delays or inconvenience this may have caused.”

“Any delays or inconvenience” sounds benign, but it is a serious, often existential problem. Nurses rely on their salaries. Doctors, too. Hospitals have creditors who rely on repayment. And patients suffer emotionally and medically from those delays and inconveniences.

When an insurer reneges on its payment responsibilities, a falling domino effect occurs, where thousands of people are injured, some permanently.

Virginia law requires insurers to pay claims within 40 days. In a Sept. 24 letter to state insurance regulators, VCU Health, a system that operates a large teaching hospital in Richmond associated with Virginia Commonwealth University, said Anthem owes it $385 million. More than 40% of the claims are more than 90 days old, VCU said.

For all Virginia hospitals, Anthem’s late, unpaid claims amount to “hundreds of millions of dollars,” the Virginia Hospital and Healthcare Association said in a June 23 letter to state regulators.

Clearly, Anthem values its own finances above the finances and health of many thousands of people.

Nationwide, the payment delays “are creating an untenable situation,” the American Hospital Association said in a Sept. 9 letter to Anthem CEO Gail Boudreaux. “Patients are facing greater hurdles to accessing care; clinicians are burning out on unnecessary administrative tasks; and the system is straining to finance the personnel and supplies” needed to fight covid.

Complaints about Anthem extend “from sea to shining sea, from New Hampshire to California,” AHA CEO Rick Pollack told KHN.

Substantial payment delays can be seen on Anthem’s books. On June 30, 2019, before the pandemic, 43% of the insurer’s medical bills for that quarter were unpaid, according to regulatory filings. Two years later that figure had risen to 53% — a difference of $2.5 billion.

Anthem profits were $4.6 billion in 2020 and $3.5 billion in the first half of 2021.

While Anthem thrives, everyone else suffers. The villain all of this is not just Anthem, but the profit motive. That is where the problem begins.

If Anthem were like the federal government and wasn’t concerned about profits, everyone would have been paid, and those payment dollars would have benefitted the entire economy.

Alexis Thurber, who lives near Seattle, was insured by Anthem when she got an $18,192 hospital bill in May for radiation therapy that doctors said was essential to treat her breast cancer.

The treatments were “experimental” and “not medically necessary,” Anthem said, according to Thurber. She spent much of the summer trying to get the insurer to pay up — placing two dozen phone calls, spending hours on hold, sending multiple emails and enduring unmeasurable stress and worry.

It finally covered the claim months later.

Apparently, the claim was a good one. Anthem paid it, not out of the goodness of their hearts, but because the claim should have been paid. The delay was unwarranted. The fundamental purpose of the delay was the profit motive.

“It’s so egregious. It’s a game they’re playing,” said Thurber, 51, whose cancer was diagnosed in November. “Trying to get true help was impossible.”

Privacy rules prevent Anthem from commenting on Thurber’s case, said Anthem spokesperson Colin Manning.

When insurers fail to promptly pay medical bills, patients are left in the lurch. They might first get a notice saying payment is pending or denied. A hospital might bill them for treatment they thought would be covered. Hospitals and doctors often sue patients whose insurance didn’t pay up.

Yes, there are times when Medicare refuses to pay, but those have to do with disagreements about the rules and coverages. The federal bureaucrats making those decisions are not constrained by profits or affordability.

They simply interpret the rules. They have no m oneyreason to lean away from the creditor.

Hospitals point to a variety of Anthem practices contributing to payment delays or denials, including new layers of document requirements, prior-authorization hurdles for routine procedures and requirements that doctors themselves— not support staffers — speak to insurance gatekeepers.

“This requires providers to literally leave the patient[’s] bedside to get on the phone with Anthem,” AHA said in its letter.

Ah, the old “prior authorization” insurance scam. How many millions of patients have been tripped up by that one?

A frightened, inexperienced patient is told he/she needs a procedure. In a panic about her health, her personal life, and the future, she neglects to tell the insurance company in advance. Payment is denied, not because the procedure isn’t proper, but simply because she didn’t go through the formality of prior authorization.

Gotcha!

Medicare seldom requires prior authorization.

Anthem often hinders coverage for outpatient surgery, specialty pharmacy and other services in health systems listed as in-network, amounting to a “bait and switch” on Anthem members, AHA officials said.

“Demanding that patients be treated outside of the hospital setting, against the advice of the patient’s in-network treating physician, appears to be motivated by a desire to drive up Empire’s profits,” the Greater New York Hospital Association wrote in an April letter to Empire Blue Cross, which is owned by Anthem.

Original Medicare aMedicare and Medigap do not use provider networks. With Original Medicare and Medigap you can use any healthcare provider that accepts Medicare-assignment.

With Original Medicare, you do not have to wander through the “in-network, out-of-network” jungle.

Anthem officials pushed back in a recent letter to the AHA, saying the insurer’s changing rules are intended partly to control excessive prices charged by hospitals for specialty drugs and nonemergency surgery, screening and diagnostic procedures.

A for-profit organization has to worry about “excessive prices. For the government, “excessive” prices merely mean that the federal agency will pump more stimulus dollars into the economy.

Claims have gotten lost in Anthem’s computers, and in some cases VCU Health has had to print medical records and mail them to get paid, VCU said in its letter. The cash slowdown imposes “an unmanageable disruption that threatens to undermine our financial footing,” VCU said.

“Lost” is the way a for-profit organization increases its profits.

United denied $31,557 in claims for Emily Long’s care after she was struck in June by a motorcycle in New York City. She needed surgery to repair a fractured cheekbone. United said there was a lack of documentation for “medical necessity” — an “incredibly aggravating” response on top of the distress of the accident, Long said.

The Brooklyn hospital that treated Long was “paid appropriately under her plan and within the required time frame,” said United spokesperson Maria Gordon Shydlo. “The facility has the right to appeal the decision.”

United’s unpaid claims came to 54% as of June 30, about the same level as two years previously.

When more than half of all claims are not paid, something is terribly wrong. There simply cannot be that many false claims.

When Erin Conlisk initially had trouble gaining approval for a piece of medical equipment for her elderly father this summer, United employees told her the insurer’s entire prior-authorization database had gone down for weeks, said Conlisk, who lives in California.

“There was a brief issue with our prior-authorization process in mid-July, which was resolved quickly,” Gordon Shydlo said.

“Brief issue” is private insurance-speak for “the longer you have to wait, the more money we make. Maybe you’ll just give up, altogether.”

When asked by Wall Street analysts about the payment backups, Anthem executives said it partly reflects their decision to increase financial reserves amid the health crisis.

“Decision to increase financial reserves” is insurance-speak for “decision to make more profits.”

“Really a ton of uncertainty associated with this environment,” John Gallina, the company’s chief financial officer, said on a conference call in July. “We’ve tried to be extremely prudent and conservative in our approach.”

Translation: “To be really prudent and conservative, we’ve decided not to pay claims. You’d be amazed at how that reduces our costs. But you better send in your premiums on time.”

Several health systems declined to comment about claims-payment delays or didn’t respond to a reporter’s queries. Among individual hospitals “there is a deep fear of talking on the record about your largest business partner,” AHA’s Smith said.

“Business partner” is a synonym for “the guy who is squeezing my reproductive organs in his fist.”

Alexis Thurber worried she might have to pay her $18,192 radiation bill herself, and she’s not confident her Anthem policy will do a better job next time of covering the cost of her care.

“It makes me not want to go to the doctor anymore,” she said. “I’m scared to get another mammogram because you can’t rely on it.”

And that is exactly what your insurance company wants. Plenty of premiums with no costs. An excellent business model.

That is where the profit motive can devolve in the health care business.

Health should be a recognized basic human right. In a Monetarily Sovereign nation, federal support of healthcare costs taxpayers nothing. Comprehensive, no-deductible Medicare for All is the correct solution.

But, until the public realizes it, it won’t happen. The politicians are too well-bribed by the insurance industry.
Rodger Malcolm Mitchell
Monetary Sovereignty
Twitter: @rodgermitchell
Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell

……………………………………………………………………..

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

The most important problems in economics involve:

Monetary Sovereignty describes money creation and destruction.
Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Ten Steps To Prosperity:

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

MONETARY SOVEREIGNTY

Should a big country with big needs have a big government? Why not?

REASON is a libertarian publication.

Libertarians oppose “big government.” The problem is, they never provide a reason why they oppose big government, and they never tell exactly what “big” means.

ᐈ Scolding stock images, Royalty Free scolding photos | download on Depositphotos® — **The Libertarians are content to act only as scolds**

You can search their website for the answers to these questions, as I have, and you will be disappointed.

Is a “big” government one that employs many people, and if so, how many? How many is too “big” and how many are just right?

Or is a “big” government one that has many departments and agencies, and if so, how many? How many is too “big,” and how many are just right?

Or is a “big” government one that spends a lot of money, and if so, how much? How much is too much and how much is just right?

One would expect that a group complaining about “too big,” “too many,” and “too much” at least would have the answers to those fundamental questions.

But, so far as I can discern, any number of government employees is too many for the Libertarians; any number of departments and agencies is too many, and any amount of spending is too much.

Seemingly, the Libertarians are content to act only as scolds. They seem to feel that as long as they simply complain, they have demonstrated prudence, acumen, and wisdom, and let someone else come up with real-world solutions to real-world problems.

Here is yet another article of that ilk. In red, is what REASON published, and in black is my commentary.

Will Joe Biden Destroy Trump’s Legacy of Deregulation?
Trump did more than any recent president to pare back regulatory red tape, but the incoming Biden administration is eager to add more.
Chrisitan Britschgi | 1.19.2021

Translation: Trump has many legacies, nearly all harmful. Trump did more than any recent president to pare back consumer protections.

During his first days in office, incoming President Joe Biden is planning to sign “dozens of executive orders, presidential memoranda” which will involve rejoining the Paris Climate Accords, expanding wilderness protections, and moving the country toward a 100 percent “clean energy” economy.

Translation: During his first days in office, incoming President Joe Biden is planning to . . . help reduce global warming and to protect our environment for our children and grandchildren.

“The priority of the Trump administration has been to reduce regulatory burdens,” says James Broughel, a senior research fellow at George Mason University’s Mercatus Center.

“The Biden administration is going to want to issue lots of new regulations. That’s a near certainty. We’re going from an era where reducing burdens was the goal to where burdens will be added in the name of achieving certain social goals.”

Translation: “The priority of the Trump administration has been to reduce regulatory burdens” on polluters and dishonest businesses, while increasing burdens on consumers and on the earth itself. In reality, the priority of the Trump administration was Trump himself — his wealth, his power, his re-election.

Those “certain social goals” of the Biden administration have to do with the health, safety, and well-being of Americans and of the world.

The guiding light of the Trump administration’s deregulatory efforts was Executive Order 13771. That 2017 order instituted the famous rule that regulators issue two deregulatory actions for every new regulatory action.

. . . the infamous “rule that regulators issue two deregulatory actions for every new regulatory action” without regard to the benefit of the regulations or to the effect of the cuts. It is the most simplistic, childish solution to the perceived problem of overregulation.

It also created a system of . . . regulatory budgets that limited the costs of new regulations they could impose, and often required them to find regulatory savings.

. . . while ignoring the social, environmental, and legal costs of cutting protective regulations, willy-nilly, just to save dollars.

Using this measurement of regulatory savings, the Trump administration has been modestly successful at its goal of deregulating the economy, claiming $198 billion in eliminated regulatory costs.

From fiscal years 2017–2019, the administration claims to have eliminated 3.6 rules for every new rule added. That ratio is 3.2 for fiscal year 2020.

“. . . successful at its goal of deregulating the economy, claiming $198 billion in eliminated regulatory costs,” while completely ignoring the costly damage caused by cutting regulations that protect the nation, the public, and the environment.

The irony is: The Trump administration rightly complained that “defund the police” was a stupid idea. But it’s a classic, senseless, cut-the-budget, Libertarian idea. It would have saved a great deal of money for local governments, which being monetarily non-sovereign could use the savings.

Trump’s cuts were equally senseless, and they saved money for the federal government, which being Monetarily Sovereign, didn’t need the savings. It creates unlimited dollars, at will.

Further, because Gross Domestic Product = Federal Spending + Non-federal Spending + Net Exports, Trump’s cuts immediately took billions from the economy, and more if you consider the economic damage they caused.

Using other measurements, the Trump administration has been less successful. In some areas, they’ve done more to slow the growth of the administrative state without significantly reducing it.

The length of the Code of Federal Regulations stayed essentially flat during Trump’s time in office, hovering at around 185,000 pages.

The Mercatus Center’s tracker of restrictive words in the federal regulatory code comes to a similar result, finding that these words grew from 1.08 million at the beginning of Trump’s term to 1.09 million as of January 1, 2021.

Trump “leaves us with fewer regulations than Hillary Clinton would have—though not many fewer regulations than we had before,” summarizes Robert Verbruggen in a November National Review article.

It’s not clear what exactly “the administrative state is” or why it is bad, but counting the number of words in the federal regulatory code cannot possibly be an intelligent procedure for anything.

Could it be that all the Libertarians really want is an editor who will make sentences shorter? What next for the Libertarians: A coloring book version of the federal regulations?

One can expect this limited progress to be more than reversed under the new administration. Biden has already announced plans to reinstate Obama-era regulations that were pared back by the Trump administration.

Oh, woe. Biden will resume protections for the public and the environment. How awful.

Politico reports that he’ll likely try to revive the Obama administration’s Clean Power Plan—which regulated carbon dioxide emissions from power plants—that the Trump administration had replaced in 2019. Biden’s housing platform calls for a revival of the 2015 Affirmatively Furthering Fair Housing Rule that Trump gutted in July 2020. The Trump administration’s replacement of the Obama administration’s clean water rules will also likely be ditched.

More woe. We’re going to have cleaner power production, less carbon dioxide emissions, fairer housing, and cleaner water. To the Libertarians, it’s outrageous that Biden won’t force our children to breathe polluted air, drink polluted water, and live in a world damaged by global warming.

Doesn’t Biden know that the real goal of the President is to make the Code of Federal Regulations shorter?

In order to facilitate new rules, large and small, Biden will almost certainly rescind Executive Order 13771 and all the limits it imposed on new red tape.

The Libertarians wrongly equate “red tape” (i.e. inefficiency) with the existence of rules. One assumes that speed limits, food and drug protections, saving lakes and rivers from pollutions, etc. are all classified as “red tape.”

“All the cost caps will probably be eliminated,” says Broughel, as will the regulatory budget the Trump administration used to account for the costs of new rules. Doing so would be a “slap in the face at trying to estimate the effects of the regulatory system.”

Nevertheless, the fact that the Trump administration was able to adopt a regulatory budget at all proves that it can be done. Other future administrations might be more able and willing to pick it up again.

“I suspect in some form the regulatory budget will come back,” says Broughel. “The Trump administration showed that it was workable.”

The Trump administration proved that any idiot could say, “Cut two rules for every new one, without regard to effect.” How about an improvement on that. Make it “cut three rules for every new one,” or even better, cut ten rules for every new one.

Or just let everyone run wild and eliminate all rules.

There, in fact, is no record of the Libertarians objecting to the cut of any rule, no matter how beneficial that rule had been or how damaging the cut. In truth, the Libertarians have no objection to anarchy. It is their model of success.

Throughout his presidential campaign, Biden promised Americans a return to normalcy after the unusual, often unsettling administration of Donald Trump. There could be nothing more normal than the federal government issuing a steady stream of red tape without bothering to account for its costs.

Since the Libertarians have not demonstrated any concern about social, environmental, and health costs, and only are concerned about governmental spending, why would anyone take them seriously?

More importantly, why do the Republicans object to Biden’s newly proposed stimulus spending?

Rodger Malcolm Mitchell

Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..

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

The most important problems in economics involve:

Monetary Sovereignty describes money creation and destruction.
Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Ten Steps To Prosperity:

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

MONETARY SOVEREIGNTY

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