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View Diary: Protecting Social Security from Inaccurate Accounting with an Agenda (44 comments)

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  •  Fiscal limits: a logically absurd idea (1+ / 0-)
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    Again the MMT folks say we have no fiscal limits. This is an argument against saying we cannot afford to fund Social Security. Although people sometimes say this, it is a laughable claim when taken literally.

    No, what is laughable is that anybody can think that any sovereign government (or any issuer of liabilities) ever had or could have a fiscal limit on the amount of liabilities it could issue. What is limited is how meaningful these liabilities are, not their nominal amount. A fiscal limit is a preposterous delusion, that no state has ever held  when it came to war. Sovereign governments spend by simply printing the money. That's how we do it right now, with a lot of stupid tricks to pretend we don't.

    Nobody can change the basis on which we fund SS, because it is funded by issuing SS checks, printing money. We can only change the way we pretend to financially fund it. Perhaps the simplest and easiest one right now is Robert Eisner's suggestion of just having the bonds "in" the SS Trust Fund pay higher interest. Problem solved, horizon infinity and beyond. Get rid of FICA and then the trust fund altogether once people understand basic economics again, and then even better this time.

    For MMT is just genuine, Keynesian economics that everybody understood, though more and more vaguely, as Depression memories faded, from the 20s to until around 1970, when ancient superstitions dressed up in fake mathematics purged real economics. And in 1983, the dark age became dark enough that the destructive Greenspan, save-SS-by-destroying-it plan was passed. Before, everybody understood that SS taxes had nothing to do with SS payments, as FDR famously said.

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