Save us from our “friends,” again

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Two other posts on this blog were titled “Save us from our friends.”

In each, we saw examples of articles by people who, on the surface, seemed to be sympathetic to the plight of the working men and women — those good Americans who will live out their latter days in poverty or as financial burdens on their families, because of America’s insufficient healthcare and Social Security.

I say, “on the surface,” because the articles subscribe to the “Big Lie” that federal taxes fund federal spending. So the suggestions always are of the nature: “If we cut here or add there, we can keep Social Security and Medicare solvent.”

As readers of this blog know, Social Security, Medicare, the White House, Congress, the Supreme Court and the military branches et al are agencies of our Monetarily Sovereign federal government.

Unlike state and local governments, which are monetarily non-sovereign, the federal government cannot run short of its own sovereign currency, the dollar, which it invented.

It cannot become insolvent so none of its agencies can become insolvent unless Congress and the President will it.

I can’t tell for certain, whether the following are examples of innocent ignorance or clever deceit. You decide:

Don’t Eliminate the Link between Social Security Contributions and Benefits

Because of the way the Social Security program is funded — through a payroll tax on workers along with an employer contribution — many people believe there is an account for them at some government agency holding those contributions, or at least giving them credit for them, and that they will be able to collect their contributions when they retire.

It’s their money, collected from them monthly, and no matter their income level they have a right to get that money back when they retire.

First, Social Security is not funded through payroll taxes (FICA) any more than the other federal agencies are funded through a tax. They aren’t.

Even if there were no FICA, the federal government could, and should, provide Social Security benefits — higher benefits than today’s — for every man, woman, and child in America.

Contrary to popular myth, and public ignorance of federal financing, the federal government does not use tax dollars for spending. It destroys them.

Try telling them that they don’t. Even those people who understand that if their income is high enough they may not receive payments equal to all they put in get something back — it’s there for them no matter what — and this increases support for the program.

But if we change the funding so that payments for Social Security come out of the general fund — the money the government collects through taxes for all purposes — and impose means testing (i.e. phase out the payments once income is high enough), the link between contributions and benefits would be broken and I fear support for the program would be broken as well.

” . . . it’s there for them no matter what . . .” Wrong. It (meaning FICA deposits) are not there or anywhere. Once dollars are received by the federal government they cease to be a part of the money supply. They are destroyed upon receipt, and new dollars are created every time the federal government spends.

” . . . so that payments for Social Security come out of the general fund . . . “ I sometimes lazily have used this phrase myself, but strictly speaking, it is wrong. There are no dollars in any federal  “fund.”

Unlike you, me, and local governments, which do pay bills out of income and funds, the federal government creates fresh dollars each time it pays a bill.

” . . . the link between contributions and benefits would be broken and I fear support for the program would be broken as well.”

This is the “what-Franklin-Roosevelt-intended” belief.

President Roosevelt, realizing that FICA was not necessary, supposedly said, “We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program”

The contributions do not exist for financial reasons. They exist only for psychological reasons. That fact often is forgotten.

But nice try, Mr. President. The benefits have been cut many times, and today, the right-wing is determined to cut them even more. The whole thing even could be privatized (i.e. given to the rich) if the Republicans have their way.

When programs are supported through the general fund there is competition for funding, there is never enough money to go around, and it wouldn’t be long before the people in power, or with lots of influence over those in power (who don’t really need Social Security in most cases) would argue that the money is best used elsewhere.

” . . . there is never enough money to go around . . . “ This is known as the Big Lie, the lie that the federal government is supported by taxes and can run short of dollars.

There always, always, always is enough money. The U.S. dollar is created from thin air by federal laws that are created from thin air. So long as the federal government doesn’t run short of laws, it never will run short of dollars.

Here are some words from another of our “friends.”

GOP Plans to Gut Social Security
Posted on December 14, 2016,Yves Smith
By Dale Coberly. Originally published at Angry Bear

The  Republicans have opened a new assault on Social Security.  At present all I know about it is what I read  in a Talking Points Memo by Tierney Sneed.

Sneed quotes Paul Van de Water,  who is someone who actually knows that Social Security can be fixed entirely and forever by simply raising the payrolll tax one tenth of one percent per year until the balance between wage growth and growth in the cost of retirement is restored.

But somehow she doesn’t bother to mention this,  or maybe Van De Water forgot to mention it because he favors a “tax the rich” solution…  without understanding that that will turn Social Security into welfare as we knew it, and lead to its ultimate destruction by those rich who would then be paying for it.

Nobody pays for Social Security, not the rich, not the poor, not you and not me.

If Coberly, Sneed and Van de Water “know” their fix for Social Security,  they also must know the moon is made of cheese. Both statements are equally correct.

The CRFB  (Committee for a Responsible Federal Budget). an organization dedicated to the destruction of Social Security by misrepresenting the facts, is playing cute games like “use our calculator to find out how old you will be when SS runs out of funds.”

But SS will never run out of funds as long as the workers are allowed to pay… in advance…for their own benefits. With no change at all in SS, SS will pay 80% of “scheduled benefits,”  but this is 80% of scheduled benefits which meanwhile have grown 25% in real value.

He’s right about the CRFB, whose entire existence is based on the lie that the federal government can run short of dollars and that deficits and debt are “unsustainable.”

. . .SS will never run out of funds as long as the workers are allowed to pay… in advance…for their own benefits.”  He should have said, “SS never will run out of funds as long as Congress and the President don’t sabotage it.” Workers do NOT pay for their benefits.

Meanwhile, something that calls itself “the Bipartisan Policy Center, says “Ultimately, we are going to need something that’s a little more balanced between benefits saving and revenue changes in order to get a proposal that could pass Congress and get approved by the president,” said Shai Akabas, director fiscal policy at the Bipartisan Policy Center.”

It’s hard to see how much cuts (“benefit savings”) make sense to balance a dollar a week increase in the payroll tax (revenue changes),  but that’s the kind of thinking that “Bipartisan” gets you.  “Hey folks,  we can save you a dollar a week just by gutting Social Security so it becomes meaningless as insurance so workers can retire at a reasonable age.”

I am getting too discouraged.  As long as no one is working to tell the people how this will work for them,  we are just going to stand around like sheep and watch them cut our throats.

I’m even more discouraged than you are, Mr. Coberly, when even our “friends,” who try to defend us, have no idea what they are talking about. Does anyone know how to reach Dale Coberly so we can educate him?

The list of pretend “friends” goes on and on. Simply Google “save Social Security” and you’ll find such nonsense as:

6 ways to save Social Security and keep it from going broke
By Jill Cornfield •

“Every group should feel like they’re sacrificing something,” says Polina Vlasenko, a senior research fellow at the American Institute for Economic Research in Baltimore. “No one group should feel that someone else is getting off free.”

Vlasenko, of the American Institute for Economic Research, offers these suggestions:

  • Raising the age for early retirement (and partial benefits) to 65, instead of the current 62.
  • Pushing the age for full retirement (and full benefits) to 70. It’s currently in the midst of a gradual rise from 65 to 67, depending on your birth year.

These are known as the “work ’til you drop” solutions, also the. “Only the rich deserve to retire while they are able to enjoy it” solutions.

And then this bit of ignorance: from Bloomberg

How the Next President Could Save Social SecurityBy Dave Merrill and Chloe Whiteaker October 26, 2016

The problem
Since 2010, the number of workers supporting a growing number of retiring baby boomers is not sufficient to pay all the benefits they are due.

‘Trust fund’ draw down
Since there are not enough payroll taxes being collected day-to-day, money is drawn from Social Security’s “trust fund” reserve to meet the shortfall.

A better way
Congress could restore solvency to the system by combining several smaller, less painful fixes. Actuaries at the Social Security Administration have analyzed more than 100 individual policy provisions and provided estimates of the financial effect of each on the long-range solvency problem.

While simply adding the financial effect of one provision to another does not give an exact measure of a combined proposal, it can give a back-of-the-envelope estimate of the size and scope of the provisions needed to keep Social Security afloat for at least 75 years.

Pick two
For example, adding together any two of these potent provisions eliminates the shortfall, with some left over to replenish the trust fund.

The above is known as the “death by a thousand cuts” solution. Snip a little here and snip a little there, and maybe the public won’t notice that they are less and less able to retire with dignity.

My suggestion: Contact Dave Merrill and Chloe Whiteaker and ask them to defend their completely unnecessary ways to make you poor in your old age.

And finally, the ever-reliable AARP, the insurance agency that pretends to be a lobbyist for the elderly:

Updating Social Security: 12 Proposals You Should Know About
Pros and cons of options on the table in Washington and on the campaign trail:

1. Raise the Full Retirement Age.
2. Begin Longevity Indexing
3. Recalculate the COLA
4. Increase the Payroll Tax Cap
5. Eliminate the Payroll Tax Cap
6. Reduce Benefits for Higher Earners
7. Increase the Payroll Tax Rate
8. Apply Payroll Tax to All Salary Reduction Plans
9. Cover All Newly Hired State and Local Government Workers
10. Benefit Improvements
11. Increase Number of Years Used to Calculate Initial Benefits
12. Begin Means-Testing Social Security Benefits

To see an outline of the proposals, click the article’s link.

This really should have been titled “Screwing the middle- and lower-income groups: 12 Proposals we don’t want you to understand”

But since you do understand, you will recognize that every proposal is based on one Big Lie: The lie that Social Security benefits are funded by FICA.

As long as your “friends” (even Bernie Sanders) tell you the Social Security and Medicare benefits are “paid for” by taxes, you will continue to see complex, convoluted, Rube Goldbergian “solutions” to a non-problem: The supposed impending insolvency of two of a thousand federal agencies.

Yes, you’re being raped, but so long as you don’t object, your politicians will assume you enjoy it.

Rodger Malcolm Mitchell
Monetary Sovereignty


The single most important problems in economics involve the excessive income/wealth/power Gaps between the rich and the rest.

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 The Ten Steps To Prosperity can narrow the Gaps:

Ten Steps To Prosperity:
1. ELIMINATE FICA (Ten Reasons to Eliminate FICA )
Although the article lists 10 reasons to eliminate FICA, there are two fundamental reasons:
*FICA is the most regressive tax in American history, widening the Gap by punishing the low and middle-income groups, while leaving the rich untouched, and
*The federal government, being Monetarily Sovereign, neither needs nor uses FICA to support Social Security and Medicare.
This article addresses the questions:
*Does the economy benefit when the rich can afford better health care than can the rest of Americans?
*Aside from improved health care, what are the other economic effects of “Medicare for everyone?”
*How much would it cost taxpayers?
*Who opposes it?”
3. PROVIDE AN ANNUAL ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA, AND/OR EVERY STATE, A PER CAPITA ECONOMIC BONUS (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB) Or institute a reverse income tax.
This article is the fifth in a series about direct financial assistance to Americans:

Why Modern Monetary Theory’s Employer of Last Resort is a bad idea. Sunday, Jan 1 2012
MMT’s Job Guarantee (JG) — “Another crazy, rightwing, Austrian nutjob?” Thursday, Jan 12 2012
Why Modern Monetary Theory’s Jobs Guarantee is like the EU’s euro: A beloved solution to the wrong problem. Tuesday, May 29 2012
“You can’t fire me. I’m on JG” Saturday, Jun 2 2012

Economic growth should include the “bottom” 99.9%, not just the .1%, the only question being, how best to accomplish that. Modern Monetary Theory (MMT) favors giving everyone a job. Monetary Sovereignty (MS) favors giving everyone money. The five articles describe the pros and cons of each approach.
4. FREE EDUCATION (INCLUDING POST-GRAD) FOR EVERYONEFive reasons why we should eliminate school loans
Monetarily non-sovereign State and local governments, despite their limited finances, support grades K-12. That level of education may have been sufficient for a largely agrarian economy, but not for our currently more technical economy that demands greater numbers of highly educated workers.
Because state and local funding is so limited, grades K-12 receive short shrift, especially those schools whose populations come from the lowest economic groups. And college is too costly for most families.
An educated populace benefits a nation, and benefitting the nation is the purpose of the federal government, which has the unlimited ability to pay for K-16 and beyond.
Even were schooling to be completely free, many young people cannot attend, because they and their families cannot afford to support non-workers. In a foundering boat, everyone needs to bail, and no one can take time off for study.
If a young person’s “job” is to learn and be productive, he/she should be paid to do that job, especially since that job is one of America’s most important.
Corporations themselves exist only as legalities. They don’t pay taxes or pay for anything else. They are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the government (the later having no use for those dollars).
Any tax on corporations reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all corporate taxes come around and reappear as deductions from your personal income.
7. INCREASE THE STANDARD INCOME TAX DEDUCTION, ANNUALLY. (Refer to this.) Federal taxes punish taxpayers and harm the economy. The federal government has no need for those punishing and harmful tax dollars. There are several ways to reduce taxes, and we should evaluate and choose the most progressive approaches.
Cutting FICA and corporate taxes would be a good early step, as both dramatically affect the 99%. Annual increases in the standard income tax deduction, and a reverse income tax also would provide benefits from the bottom up. Both would narrow the Gap.
There was a time when I argued against increasing anyone’s federal taxes. After all, the federal government has no need for tax dollars, and all taxes reduce Gross Domestic Product, thereby negatively affecting the entire economy, including the 99.9%.
But I have come to realize that narrowing the Gap requires trimming the top. It simply would not be possible to provide the 99.9% with enough benefits to narrow the Gap in any meaningful way. Bill Gates reportedly owns $70 billion. To get to that level, he must have been earning $10 billion a year. Pick any acceptable Gap (1000 to 1?), and the lowest paid American would have to receive $10 million a year. Unreasonable.
9. FEDERAL OWNERSHIP OF ALL BANKS (Click The end of private banking and How should America decide “who-gets-money”?)
Banks have created all the dollars that exist. Even dollars created at the direction of the federal government, actually come into being when banks increase the numbers in checking accounts. This gives the banks enormous financial power, and as we all know, power corrupts — especially when multiplied by a profit motive.
Although the federal government also is powerful and corrupted, it does not suffer from a profit motive, the world’s most corrupting influence.
10. INCREASE FEDERAL SPENDING ON THE MYRIAD INITIATIVES THAT BENEFIT AMERICA’S 99.9% (Federal agencies)Browse the agencies. See how many agencies benefit the lower- and middle-income/wealth/ power groups, by adding dollars to the economy and/or by actions more beneficial to the 99.9% than to the .1%.
Save this reference as your primer to current economics. Sadly, much of the material is not being taught in American schools, which is all the more reason for you to use it.

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