Friday, May 15, 2009

My email to Terry Keenan of Fox News

Terry did a great job hosting the show today, and she alluded to the real issue when it comes to Social Security and insolvency, somethig no other television anchors understand. I sent her an email:


Under a non-convertible, floating FX regime, nations can spend any amount they want. Spending is not constrained by tax revenues or even the sale of securities. (The latter functions simply to maintain reserves at a level that supports a desired interest rate. It is not "borrowing," per se.)

Every few years we "run out of money" and Congress has to raise the debt ceiling. So they raise the debt ceiling and, guess what? We have money to spend again! It's all by decree.

The real debate we should be having in this country (and the one you alluded to in your comment about the currency) is whether or not the crediting of bank accounts to keep the checks from bouncing at some point down the road, will lead to a collapse in the foreign exchange value of the dollar or some kind of runaway inflation. And if so, do we care?

That is the real debate, but it is never discussed.

I personally know some accountants at the CBO and I have asked them why they keep talking about "insolvency" when under the current structure that is impossible.

They say it's because they have to consider the political risk (that Congress WON'T raise the debt ceiling or authorize that the checks get paid). The point is, we CAN do it to ourselves, but it would be like national suicide.

I had former Comptroller General David Walker on my radio show last October. I asked him if the nation is facing insolvency and he said, "No!" (The audio clip can be heard on my website,

So why is Walker going around spending millions telling everyone otherwise? He is a cynical, manipulative, propagandist and a very dangerous guy. If we follow his prescriptions to "fix" SS, we will have a legacy of widespread poverty to hand down to our kids and grandkids.

Good show!

-Mike Norman

All of you please support Terry as she is one of the most thoughtful and best Fox achors. Tell her she is doing a great job and that having me on is helping to foster real economic education and debunk myths and fallacies. Her email is, Thanks.

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