Yet another article that relies on you being ignorant about federal finances and Social Security
It takes only two things to keep people in chains:
The ignorance of the oppressed
and the treachery of their leaders.
Let us begin with three, very simple, related facts:
- It is 100% impossible for the U.S. federal government to run short of dollars unless the President and Congress want it to.
- Thus, it is 100% impossible for any federal agency to run short of dollars unless the President and Congress want it to.
- Social Security is a federal agency.
Social Security cannot run short of dollars unless the President and Congress want it to.
Ignore all the crocodile tears about the Social Security “trust fund” running short of money.
Or, there not being enough FICA dollars to pay for future retirees.
Or, the “need” to cut benefits to certain groups, or to tax benefits to other groups.
They are all lies, there is no better way to say it — lies — designed to make you accept fewer benefit dollars, while the rich continue to grab more.
What set me off is the following article, that simply is loaded with the above-mentioned lies.
Will This New Social Security Proposal Gain Traction in Congress?
With Social Security facing a $12.5 trillion cash shortfall, this proposal aims to generate more revenue and reward those disadvantaged by the program.
By: Sean Williams Mar 10, 2018
Social Security, arguably the most important program in the country as more than 42 million retired workers receive a monthly payout, is in trouble.
Yes, Social Security indeed is in trouble, but not because of any shortfall in cash. Rather trouble lurks because the President and Congress want to screw you, on behalf of the rich, who run this country.
According to the 2017 report from the Social Security Board of Trustees, Social Security is expected to begin paying out more in benefits than it’s generating in revenue by 2022.
Just 12 years later, in 2034, the roughly $3 trillion in excess cash held by the program is forecast to be completely gone.
Based on the current payout trajectory, there’ll be an estimated $12.5 trillion budget shortfall between 2034 and 2091.
All of the above nonsense would be true if Social Security were a private enterprise, owned and operated by a private company — a monetarily non-sovereign company.
But it is absurd nonsense when describing an agency owned an operated by the United States government — a uniquely Monetarily Sovereign entity.
The federal government created from thin air, the laws that in turn created the very first dollars, also out of thin air. Today, it continues to own the laws that allow it to create dollars at will, simply by paying bills.
For that reason, the federal government needs no “revenue.” It always pays its bills by creating new dollars.
Think about this for a moment:
Federal spending has risen 37,500% (from $40 billion to $15 trillion) since 1940. Where did the $14, 960,000,000 additional dollars come from?
They can’t have come from federal borrowing. Where would those borrowed dollars have come from?
And the new dollars can’t have come from taxes. Tax dollars already exist.
Dollars are created in two ways and destroyed in two ways:
Created: Lenders create new dollars when they lend, and the federal government creates new dollars when it spends.
Destroyed: Dollars are destroyed when loans are paid down, and when the federal government collects taxes.
When the federal government pays an invoice, it sends instructions (in the form of a check or wire) to the creditor’s bank, instructing the bank to increase the balance in the creditor’s checking account.
The instant the creditor’s bank does as instructed, new dollars are added to the nation’s money supply. Thus, because the federal government creates dollars by spending, it never can run short of dollars.
This shortfall has a lot of people, including working Americans, pre-retirees, retired workers, people with disabilities, and survivors, very concerned.
Americans are concerned because writers like Sean Williams tell them to be concerned. The people seldom are told the facts, so in the absence of facts, the people believe the lies.
There’s good reason for that, as 62% of today’s retirees lean on Social Security for at least half of their monthly income, and a majority of future retirees are expected to rely on the program in some capacity to make ends meet.
Yet, the trustees’ report suggests that benefits could be cut across the board by up to 23% in order to preserve the solvency of the program through 2091.
How sweet. The people desperately need Social Security, while the lying politicians prepare excuses for cutting this already insufficient lifeline.
What sort of cruel minds would find this acceptable?
The silver lining is that Social Security can’t go bankrupt as a result of the payroll tax, which provides the bulk of its funding; but that doesn’t mean the current payout schedule is sustainable.
A lie. Social Security payouts are infinitely sustainable. The pols and the rich don’t want you to know that the federal government never can run short of its own sovereign currency — the currency it originally created by writing laws.
The only option for current and future retirees to avoid having their Social Security benefits slashed is through congressional action.
Yes, Congress and the President can set Social Security benefits and FICA taxes at any levels they choose. The first step should be to eliminate the FICA tax altogether, while increasing benefits.
Lawmakers in Washington, D.C., certainly aren’t denying that a problem exists. Unfortunately, they’ve been unable to come to an amicable solution.
However, a new Social Security proposal, laid out last week by Sen. Patty Murray (D-Wash.), is aiming to change that.
They are “unable” to come up with an “amicable” solution (i.e. a solution that would be approved by rich donors), simply because they don’t want a real solution.
They only want a “solution” that will further widen the Gap between the rich and the rest, exactly what their rich donors tell them to do.
Known as the Stronger Safety Net (SSN) Act, Murray’s proposal aims to modernize the 83-year-old program for women, children, people with disabilities, and survivors, while at the same time having those who can afford to pay more cover the long-term funding gap in the program.
“Modernize” is one of those deceptive words, like “reform” that implies improvement but actually means nothing.
Making anyone pay more does absolutely nothing to “cover the long-term funding gap.” It takes dollars from the private sector (aka, the economy), which is recessive.
The SSN Act has four key proposals.
1. Divorced people over 62 who were married for at least five years would qualify, with a 10% step-down for each year below 10. A divorced person who was married for seven years would have a maximum spousal benefit of 70%, whereas someone who was married for nine years could max out at 90%.
Women often take care of children or loved ones who are sick. This means they take time out of the labor force, which can reduce their lifetime earnings and retirement benefit.
All this cockamamie rejiggering is “necessary” because of the myth that FICA pays for benefits and dollars are limited. The entire problem could be solved by simply giving every recipient the same, more-generous benefit. (See: Ten Steps to Prosperity: Step 3: Monthly bonuses for all)
2. Establish an alternative benefit for the surviving spouse where both husband and wife are retired workers.
The surviving spouse would be entitled to 75% of the sum of the survivor’s own work benefit and the primary insurance amount of the deceased spouse. This alternative benefit would be paid if it’s higher than what survivors would receive under the current law, and would begin in 2019.
More cockamamie rejiggering. Who could understand such nonsense, much less justify it?
The process resembles trying to feed a hundred people from one potato, by cutting the potato into a thousand pieces.
3. Under the current system, minor children have to be under the age of 18, or high school students under the age of 19, to qualify for benefits. But beginning in 2019, full-time students up to the age of 23 of retired, disabled, or deceased workers would be eligible to receive benefits.
Why age 18? 19? 23? Murray has no idea. It’s a complexity no one understands and no one needs.
Which leads us to this:
4. The SSN Act seeks to generate additional revenue for the Social Security Trust by imposing a 2% payroll tax on earned income in excess of $400,000. The current payroll tax of 12.4% does not apply to any income above $128,400.
The mythical Social Security “Trust Fund” doesn’t need additional revenue, especially since it is an accounting deception.
A Monetarily Sovereign nation can add to or subtract from any so-called “trust fund” at will. It’s all hocus pocus, smoke and mirrors, to make you believe the government can’t afford your benefits.
That said, taxing the rich to narrow the Gap between the rich and the rest is a good idea, even though those tax dollars disappear from the money supply.
The single most important problem in our economy and the world’s economies is the large and growing Gap between the rich and the rest.
I know what you’re probably thinking: “The rich aren’t reliant on Social Security, so they should pay extra tax to shore up the Social Security Trust.”
However, the $128,400 figure in 2018 — exists because there’s also a maximum monthly payout at full retirement age. It’s not “fair” to add a 2% payroll tax to an extra, say, $5 million in income if that individual won’t see an extra cent in Social Security benefits.
That’s not what I’m thinking. I’m thinking:
- The mythical “Trust Fund” doesn’t need “shoring up.” It needs to be eliminated as an excuse for not paying benefits.
- The government should increase benefits
- The benefits should be paid to every man, woman, and child in America.
- Taxing the rich more would narrow the Gap and benefit America (See: Ten Steps to Prosperity: Step 8: Tax the very rich more (dictatorship warning)
It’s unlikely that Republicans would go along with such a measure, and their votes will be needed in the Senate to pass the SSN Act.
I may be wrong, but I do not remember the Republican Party (the party of the rich) passing any legislation that was not designed to widen the Gap.
Undoubtedly, you have been told that Social Security (or Medicare, for that matter) will soon run short of money, and the “trust fund” will be empty.
And undoubtedly, you have been told your taxes must be increased and/or your benefits must be decreased.
And you will hear it from reliable sources with impeccable credentials:
The politicians, who have been bribed with campaign contributions and promises of lucrative employment when they leave office.
And the economists who have been bribed with university contributions and lucrative jobs with think tanks.
And the media, who are owned by the rich and have been bribed with advertising dollars.
It all is a lie, the biggest lie in economics. It is The Big Lie. So, next time you hear it, contact the liars and tell them you know: It’s a damnable lie paid for by the rich to widen the Gap between the rich and you.
Rodger Malcolm Mitchell
Twitter: @rodgermitchell; Search #monetarysovereignty
Facebook: Rodger Malcolm Mitchell
The most important problems in economics involve the excessive income/wealth/power Gaps between the have-mores and the have-less.
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.
2. FEDERALLY FUNDED MEDICARE — PARTS A, B & D, PLUS LONG TERM CARE — FOR EVERYONE (H.R. 676, Medicare for All )
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 A MONTHLY ECONOMIC BONUS TO EVERY MAN, WOMAN AND CHILD IN AMERICA (similar to Social Security for All) (The JG (Jobs Guarantee) vs the GI (Guaranteed Income) vs the EB (Economic Bonus)) 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 EVERYONE Five 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.
5. SALARY FOR ATTENDING SCHOOL
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.
6. ELIMINATE FEDERAL TAXES ON BUSINESS
Businesses are dollar-transferring machines. They transfer dollars from customers to employees, suppliers, shareholders and the federal government (the later having no use for those dollars). Any tax on businesses reduces the amount going to employees, suppliers and shareholders, which diminishes the economy. Ultimately, all business taxes reduce 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 business 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.
8. TAX THE VERY RICH (THE “.1%) MORE, WITH HIGHER PROGRESSIVE TAX RATES ON ALL FORMS OF INCOME. (TROPHIC CASCADE)
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.