Thursday, June 30, 2022

What FDR and Two Former Fed Chairs Understood About Social Security — Stephanie Kelton

It’s a shame more people don’t understand that the entire debate over “solvency” is rooted in a flawed understanding of our monetary system and the mechanics of government finance....
he Lens
What FDR and Two Former Fed Chairs Understood About Social Security
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders

1 comment:

Konrad said...

The issue is not “misunderstanding,” but politics.

Is the U.S. government “broke”? Or can it create infinite dollars out of thin air? The answer depends on politics.

If politicians want something (e.g. billions for “Ukraine”) then they simply order the money created. If politicians don’t want something, they claim that the U.S. government is “broke.” They ask, “How will you pay for it?”

Democrats and Republicans both play this game. Democrats falsely claim that Social Security is “broke” in order to make people grovel to Democrats. Republicans tell this same lie order to justify privatization by companies like BlackRock.

It’s politics.

The so-called “gold standard” was likewise political. It was a sham; a pretense. Randal Wray discusses in his books how politicians repeatedly adopted the "gold standard" and then dropped it, then adopted it again according to changing politics. The “gold standard” never stopped the U.S. government from creating money (e.g. for the world wars).

The end of the “gold standard” in 1971 was merely the end of a farce.