If
you have read my Modern Money Theory writing, you know that your
checking account is your asset, but the bank's liability, and that, in a
similar way, the liability we call National "debt" embodies the dollar
financial assets of the population. You know it now, anyway.
12/10/17 RE: Ramesh Ponnuru’s “How to protect Social Security for the Long Term” (Bloomberg)
Ramesh Ponnuru’s bases his article about Social Security on false premises: that the monopoly creator of dollars can somehow run out, and government funds its programs from tax revenues. But where do people get dollars to pay taxes if the government doesn’t spend them out into the economy first?
The federal government is the economy’s only fiscally unconstrained player. Pundits like Ponnuru forecast no monetary shortages when the U.S. spent trillions invading Iraq, or when the Federal Reserve extended $16 - $29 trillion in credit to the financial sector (the figures are from the Fed’s audit of 2007-8). Yet when it comes to grandma’s pension or medical care “We’re out of money, and must raise taxes!”
Money is not a commodity, it’s a social construct. We’ll run out of dollars when the scorekeeper at the ball game runs out of points. Conning the population into more austerity is despicable.
Meanwhile, the media campaign to promote the "Eeek! We're running out of dollars!" austerity continues. In this morning's Bee you can read Ramesh Ponnuru's editorial
about how to "solve" Social Security by increasing taxes or reducing
benefits. Those austerity measures are completely unnecessary, but
Ponnuru promotes them anyway.
Here's my letter responding:
Ramesh Ponnuru’s bases his article about Social Security on false premises: that the monopoly creator of dollars can somehow run out, and government funds its programs from tax revenues. But where do people get dollars to pay taxes if the government doesn’t spend them out into the economy first?
The federal government is the economy’s only fiscally unconstrained player. Pundits like Ponnuru forecast no monetary shortages when the U.S. spent trillions invading Iraq, or when the Federal Reserve extended $16 - $29 trillion in credit to the financial sector (the figures are from the Fed’s audit of 2007-8). Yet when it comes to grandma’s pension or medical care “We’re out of money, and must raise taxes!”
Money is not a commodity, it’s a social construct. We’ll run out of dollars when the scorekeeper at the ball game runs out of points. Conning the population into more austerity is despicable.
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