An alternative to popular faith
The debt hawks claim to be concerned about your children and grandchildren, but their proposals actually will punish your heirs. The debt hawks say future taxpayers will pay for today’s federal deficit spending. This is factually wrong. Unlike state and local governments, the federal government does not spend tax money. It, in fact, destroys the tax money sent to it, and it creates new money, ad hoc, when it credits the bank accounts of creditors. Federal spending is not limited by, or related in any way to, federal taxes. Thus, taxpayers never have, nor ever will, pay for federal spending.
What the debt hawks fail to mention is that their solutions (raising taxes and cutting federal spending) to this non-existent problem will impoverish you, your children and your grandchildren. Here is a sampling of debt hawk proposals. Read them carefully, and think about each proposal’s effect on current and future generations.
Retirement:
Raise the normal retirement (Social Security) age to 68
Reduce scheduled Social Security benefits
Reduce Social Security spousal benefits
Increase taxes on Social Security benefits
Health care:
Tax insurance benefits
Tax employees for employer-paid premiums
Cut Medicare payments
Cut Medicaid payments
Raise Medicare premiums
Cut spending on graduate medical education
Raise the Medicare retirement age (again)
Cut federal Medicaid funding to states
Jobs:
Do not enact a new jobs bill
More taxes; higher taxes
Raise taxes on higher incomes
Increase the inheritance (“death”) tax
Increase the gas tax
Enact a VAT tax
Increase the payroll tax (FICA)
Eliminate the mortgage interest deduction
Eliminate state and local tax deductions
Tax life insurance benefits
Eliminate EITC (Earned Income Tax Credit for low and moderate income workers
Eliminate the $400/person making-work-pay credit
Eliminate the “American Opportunity” college tax credit
Add and excise tax on high-cost health plans
Military and Security:
Reverse the “Grow the Army” initiative (fewer paid soldiers)
Reduce purchases of weapons systems
Reduce veterans’ income security benefits
Reduce Homeland Security spending
Aid for the poor:
Cut food stamps
Cut average unemployment benefits
Cut temporary assistance to needy families (TANF) program
Cut funding for adoption and foster care
Education:
Cut federal funding of K-12 education
Cut school breakfast programs
Cut funding for the education of disadvantaged and disabled children
Infrastructure:
Cut federal highway funding
Cut funding for bridge repair
Research & Development:
Cancel NASA missions to the moon and Mars
States and Cities:
Cut mass transit funding
Cut federal funding to the states and cities
This is the world — a world of higher taxes and fewer benefits — the world the debt hawks propose for you, your children and your grandchildren.
And what is the federal debt the debt hawks worry over? The federal government spends by crediting the bank accounts of its vendors. Every credit demands a debit, and this debit on the government’s balance sheet is called “debt.” It more properly should be called, “money,” because the way the government creates money is by crediting bank accounts. That balance sheet merely is a score sheet, showing how much money the government has created.
You don’t owe it, nor do your children and grandchildren. It’s just a score sheet.
Rodger Malcolm Mitchell
http://www.rodgermitchell.com
No nation can tax itself into prosperity
#Monetary Sovereignty - Mitchell 