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By Mark Dempsey
Sacramento Bee 8/23/23 Headline: “Survey: Nearly half of Gen Zers think they won’t ‘get a dime’ in Social Security”
I’ve written about the “Eek! Social Security is out of money” scam before, but my point bears repeating. First, a few suggested alternative headlines:
“Scorekeeper at the ballgame almost out of points”
“Bureau of Weights and Measures says almost out of inches”
How deep is the denial that underlies this scam? Here’s from the U.S. Treasury itself:
The 75-year fiscal gap is a measure of how much primary deficits must be reduced over the next 75 years in order to make fiscal policy sustainable. That estimated fiscal gap for 2022 is 4.9 percent of GDP (compared to 6.2 percent for 2021).
This estimate implies that making fiscal policy sustainable over the next 75 years would require some combination of spending reductions and receipt increases that equals 4.2 percent of GDP on average over the next 75 years. The fiscal gap represents 26.0 percent of 75-year PV receipts and 21.2 percent of 75-year PV non-interest spending. [emphasis added]
The “sustainability” argument is predicated on the absurd notion that dollars grow on billionaires. It assumes the government is like a household, and “tax and spend” is the sequence of fiscal events. But where would taxpayers get the dollars they use to pay taxes if the government didn’t spend them first?
A “balanced” federal budget would mean spending and taxes would be equal—no dollars would be added to the economy. The inevitable result: deflation—something beloved by creditors, but which crushes debtors. It’s far more dangerous than inflation, too.
So the sequence of federal fiscal policy is actually “spend first, then retrieve some dollars in taxes.” The taxes make the dollars valuable, they don’t provision federal programs.
What do we call the dollars not retrieved in taxes? You know, the ones in your wallet and savings account?
First, we call them the dollar financial assets of the population. But, because of double-entry bookkeeping, we also call them “national debt.” This is analogous to your bank account. That’s your asset, but the bank’s liability. Marching down to the bank to demand it reduce its debt means it would reduce the size of your bank account. Not very sensible.
To add to the brilliant pseudo-economics blasting from every conceivable media outlet, now the “It’s Up To Us” organization—an alliance between the Clinton Global Initiative, the Peter G. Peterson Foundation, and Net Impact—is offering rewards to dozens of colleges and universities if the participants will come up with a plan for “sustainable” public fiscal policy—i.e. policy that reduces that “debt,” AKA the population’s dollar financial assets).
According to its website, this organization is “a nonpartisan initiative that provides young civic leaders with resources to learn about and advocate for a more sustainable fiscal future.
In its inaugural year, this case competition challenged teams of students nationwide to consider prompts addressing the rising national debt in the context of climate change, higher education affordability, or health care costs.” [emphasis added] Yep they’re hypnotizing…er, I mean “training” … yeah, that’s the ticket … the next generation of “fiscally responsible™” scrooges who will try to cut Medicare and Social Security.
Next, I say they need to offer scholarships for mathematicians who can determine the endpoint for the number line.
This is what enrages a lot of people, we are wasting so much money like sending billion$ upon billion$ of dollars to Ukraine to blow up things and spending untold billion$ on immigrants because of Biden’s open border policies but when it comes to making cuts the first thing the government wants to go after is SS and Medicare.