Tag: Social Security bankrupt

–Fiscal Sustainability Teach-In and Conference

Mainstream economics has led us to an average of one recession every five years. People have been fed obsolete hypotheses for so long and so often, we now have knee-jerk agreement among the media, the politicians and some economists.

But deficits neither are normal nor inevitable. Many prominent economists have discovered a better way to foster economic growth. They will host a conference to discuss their ideas, and you are invited.
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April 28th: Fiscal Sustainability Teach-In and Conference
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“The Fiscal Sustainability Teach-In Conference will be the important event in Washington on April 28. This will feature important work by honest scholars. It deserves (your)attention, and […] respect.”
— James K. Galbraith, The University of Texas at Austin. [April 19, 2010 via email with permission]
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The deficit hawks are at it again: attacking Social Security and Medicare with obsolete economic notions. We offer a counter-narrative to the false but conventional notion that Federal deficit spending is harmful, that it is a burden to the next generation, that deficit spending risks insolvency — basically that the Federal Government Budget is some how analogous to a household budget when, in fact, it is quite different.

The Teach-In Conference on Fiscal Sustainability on April 28th, 2010 in Washington, DC aims to do just that with some real world, honest economics.

We can move beyond the false economic orthodoxy that got us into the current economic mess and that is now being promoted to attack Social Security and Medicare — and harming our nation and it’s people. You can participate.

The tentative program schedule: Interesting topics and excellent presenters as of 04/16/10:

8:30–8:45 AM Welcoming Remarks
8:45–10:15 AM What Is Fiscal Sustainability? Bill Mitchell, Research Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the University of Newcastle, NSW Australia, and blogger at billy blog

10:15–10:30 AM BREAK
10:30 AM–12:00 PM Are There Spending Constraints on Governments Sovereign in their Currency? Stephanie Kelton, Associate Professor of Macroeconomics, Finance, and Money and Banking, Research Scholar at The Center for Full Employment and Price Stability (CFEPS), University of Missouri – Kansas City, Research Associate at The Levy Economics Institute of Bard College, and blogger at New Economics Perspectives

12:00–12:15 PM BREAK
12:15–1:45 PM The Deficit, the Debt, the Debt-To-GDP ratio, the Grandchildren and Government Economic Policy Warren Mosler, International Consulting Economist, Independent Candidate for the US Senate in Connecticut, and blogger atmoslereconomics.com

1:45–2:00 PM BREAK
2:00–3:15 PM Inflation and Hyper-inflation Marshall Auerback, International Consulting Economist, blogger at New Deal 2.0 and New Economic Perspectives, and Mat Forstater, Professor of Economics, Director of CFEPS, Department of Economics, University of Missouri — Kansas City, Research Associate at The Levy Economics Institute of Bard College, and blogger at New Economic Perspectives

3:15–3:30 PM BREAK
3:30–5:00 PM Policy Proposals for Fiscal Sustainability L. Randall Wray, Professor of Economics, Director of CFEPS at the University of Missouri – Kansas City, and Senior Scholar at The Levy Economics Institute of Bard College; and Pavlina Tcherneva, Assistant Professor of Economics at Franklin and Marshall College, Senior Research Associate at CFEPS and Research Associate at The Levy Economics Institute of Bard College and bloggers at New Economic Perspectives

How you can participate:
1. Contribute to the cost of the Conference — Please click below and make a donation of $50 (or more if you want) to show support. It’s about strength in numbers (the entire budget is under $10,000).
Make Donation
2. Attend the Teach-In — watch these pages for location and other logistical information
3. Spread the word — write a blog post, talk with your friends.
4. Educate yourself — some great introductory resources are:
o Teaching the Fallacy of Composition: The Federal Budget Deficit, by L. Randall Wray
o Fiscal sustainability 101, by William Mitchell
o 7 Deadly Innocent Frauds, by Warren Mosler
o In Defense of Deficits, by James K. Galbraith
o A Quick Summary, by Rodger Malcolm Mitchell

Please do what you can to help bring the truth to light. Deficits are not normal. Social Security and Medicare can survive without benefit cuts.

Every little bit helps. Thank you.
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Rodger Malcolm Mitchell
http://www.rodgermitchell.com


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–Sabotaging health care

An alternative to popular faith

It has been a disgrace that the world’s leading, industrial nation, the proudest, most powerful nation in world history, has not provided health care for all its citizens.

Yes, I have voted more often for Republicans than for Democrats, because I felt they were better economists. But today I must give the Democrats credit for doing what is morally right, while taking the big political risk to start the ball rolling.

My Republicans, left to their own devices, would have done nothing. They never have been leaders for social improvements, whether Social Security, Medicaid, Medicare or human rights. While Republicans traditionally have been strong for business, they always have had to be dragged, kicking and screaming, into anything that smacks of human benefits for the less fortunate.

That said, the health care plan is far from ideal. Way too many questions to be answered. Consider it only a start, a prototype; you can expect hundreds of changes. My only hope is that the nay-sayers will not try to gut the bill for political advantage.

The question is, and always has been, who will pay for it? I believe the federal government should, and there exists massive evidence on this blog and elsewhere, to prove the government can afford huge deficit increases that will stimulate the economy, and without inflation.

But what if, despite all the evidence, taxes are increased? Economically, a bad idea, no matter what taxes they are. But, which Americans are willing to say, “I’ve got mine and I’m not willing to help those less fortunate than me?” If that’s your attitude, you’re not really an American, although ironically, it seems those who boast loudest about their patriotism often are least likely to extend a hand.

Now we need to see how the program can be improved for the benefit of all. We’ve taken two hundred years to get this far, because that first step always is the hardest. My Republicans, by trying to do everything to sabotage the plan, are on the wrong side of history.

I say now is the time to work with the plan, not against it. Our best minds, cooperating toward on goal, can make the improvements that will protect Americans for decades.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com

-New thinking from the New America Foundation


An alternative to popular faith

        Here is the text of an Email I sent to Steve Coll, President and CEO of the New America Foundation (http://newamerica.net/) (Offices in Washington, DC and San Francisco, CA). According to their web site, “The New America Foundation is a nonprofit, nonpartisan public policy institute that invests in new thinkers and new ideas to address the next generation of challenges facing the United States.” They publish 12 “Principles” by which they live.
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Dear Steve;
        Your principle #10, “Do not perpetuate budget myths” is excellent. In that regard you might wish to reconsider certain statements on your web site:

“In reality, the availability of debt financing is far from unlimited; in fact Japan and China have already begun to slow their purchasing of U.S. debt.”
        A myth. The federal government does not need to sell U.S. debt to Japan, China or to any other country or person. The government creates debt (T-securities) out of thin air, collateralized only by full faith and credit. It just as easily could create money out of thin air, also collateralized by full faith and credit, and eliminate the debt creation and sales step. Debt creation and sales is a relic of the gold-standard days.
See: How to eliminate federal debt, deficits and interest payments

        “While deficits can spur consumption and thus improve the immediate economic situation when there is slack in the economy, they lead to slower growth in living standards over the long run.”        
A myth. Federal deficits are necessary both for short term and long term growth. A growing economy requires a growing supply of money. Where else will the money come from to grow our economy?
See: I believe

        “Moreover, high deficits increase interest payments, which crowd out important tax and spending priorities and leave the budget with far less flexibility than it would otherwise.”        
Partly true, partly a myth. High deficits can increase interest payments. However the conclusion is circular reasoning. Interest payments can “crowd out” spending priorities only if the government is precluded from running deficits. To date, despite massive deficits for the past 30 years, interest payments never have crowded out anything.

        “Lastly, deficits shift the burden of paying for today’s spending to future generations, which may cause over-consumption by present generations at the expense of consumption by future generations.”
A myth: Today’s deficits are paid by future generations only if the future generations decide to run surpluses. When any generation runs a deficit, it’s tax payments do not even cover its current expenses, let alone past expenses. Deficits do not cost taxpayers money. Only surpluses cost taxpayers money.
See: It isn’t taxpayers’ money

        I have suggestions for a 13th and 14th principle:
13. Base all suggestions on supporting data, not on popular faith.
14. To accept new thinkers and new ideas, be prepared to let go of old thinkers with old ideas.”

Rodger Malcolm Mitchell

-Social Security bankrupt? Impossible.

An alternative to popular faith

      Which of the following federal agencies might go bankrupt, without a change in the law?

1. Bureau of Prisons
2. Centers for Disease Control and Prevention
3. Coast Guard
4. Central Intelligence Agency
5. Department of Justice
6. Department of State
7. Department of Labor
8. Department of Transportation
9. Department of the Air Force
10. Department of the Army
11. Department of the Navy
12. Department of the Treasury
13. Social Security Administration
14. Centers for Medicare & Medicaid Services
15. Department of Health and Human Services

       Answer: It is impossible for any federal agency to go bankrupt. None ever has; none ever will. Not even during the Great Depression did any federal agency go bankrupt nor did any federal check bounce.
      Then, in 1971, the federal government went off the gold standard specifically to give itself the power to create enough money to pay its bills, no matter how high.
      Think about this: “‘I come to you as a managing trustee of Social Security. Today we have no assets in the trust fund. We have promises of the good faith and credit of the United States government that benefits will flow.’—Paul O’Neill, Secretary of the Treasury, June 19, 2001″

He said there is no money in the trust fund, yet it has been paying benefits. How is that possible? Because, benefits are paid by our Monetarily Sovereign, U.S. government, not from a mythical trust fund.

      Now tell me again why Social Security and Medicare might go bankrupt.

Rodger Malcolm Mitchell
http://www.rodgermitchell.com