(c) by Mark Dempsey [April 2, 2023]
Today's Sacramento Bee has a story with the headline "Social Security insolvency coming earlier than expected" (p.A10, by Tony Pugh, of Bloomberg). The story issues similar dire warnings about Medicare, too.
Apparently, the story's reporter believes dollars grow on billionaires--why the Federal government cannot produce dollars! Yet the U.S. has trillions for bank bailouts and trillions more for overseas wars, but grandparents will have to suck it up, because --Hey! we're out of money!
I wonder how many people resent this obvious scam. A similar mystery for the media: why people vote for a guy promising to sabotage the U.S. system of governance--Trump.
The Bloomberg story blandly states the grandparent-unfriendly solutions: "Congress has varied and assorted options -- like increasing taxes and reducing benefits -- that could reduce or eliminate both programs' long-term financing shortfalls."
But even Alan Greenspan ("The Maestro") debunks this myth:
After Paul Ryan, in a Congressional hearing, asks Greenspan about the "insecurity" of Social Security, touting private accounts as a remedy, Greenspan answers "I wouldn’t say that the pay-as-you-go benefits are insecure, in the sense that there’s nothing to prevent the federal government from creating as much money as it wants and paying it to somebody. The question is, how do you set up a system which assures that the real assets are created which those benefits are employed to purchase" [emphasis added]
One suggested solution to Greenspan's question: a real-asset-creating system would favor producing real, well-distributed goods and services over speculation in financial assets.
As "The Maestro" says, the genuine constraints on Social Security are not financial, they're related to the productivity of the whole economy. Nothing prevents the federal government from "creating as much money as it wants and paying it to somebody." Nothing prevents government from creating infrastructure that enhances productivity, either, but that's not been happening.
And let's not attribute this mythical thinking to Republicans only. In his book Listen Liberal, Thomas Frank says Bill Clinton and Newt Gingrich proposed something similar to Ryan's agenda--privatizing Social Security. This was just before the subprime/derivatives meltdown would have decimated such private accounts, but Monica Lewinsky put a halt to that. We owe her!
There's no indication the Bloomberg reporter appreciates the absurdity of juxtaposing Social Security's "insolvency" next to the stories of bank scandals. Bloomberg is apparently irony deficient.
Meanwhile, the Silicon Valley Bank bailout is now estimated to be $25 billion. President Bush created a $700 billion bailout fund more than a decade ago, and the Federal Reserve--the Fed is our central bank--extended $16 - $29 trillion in credit to the financial sector in 2007-8. That last figure is from a congressionally-mandated audit that the Fed resisted. Where did that money come from? What a mystery!
Now everyone knows that the money creation without limit can magically appear for the bankers but not for grandma's pension and healthcare.What's next? A report that the Bureau of Weights and Measures is running out of inches?
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