DISABILITY: Our government cannot run out of money
Re: ”Social Security disability running dry” (TNT, 7-23).
The trustees who oversee Social Security and Medicare say “the disability trust fund will run out of money in 2016.” A nation that issues its own fiat currency cannot run out of money. Depending on what government considers most important for its people, it will spend irrespective of tax receipts.
The bailout of the banks was not done “at taxpayer expense.” In 2009, then Federal Reserve Chairman Ben Bernanke said about money used to bail out the banks, “It’s not tax money. The banks have … accounts with the Fed… So, to lend to a bank, we simply use the computer to mark up the size of the account they have with the Fed.”
Bailing out huge banks was considered important by Washington; funding disability payments is apparently not as important.
Then Fed Chairman Alan Greenspan remarked in 2009: “A government cannot become insolvent with respect to obligations in its own currency. A fiat money system … can produce such claims without limit.”
This applies to military spending. There is no “trust fund” for the defense budget, which is not financed by taxes. No one worries that the military will “go broke.” How can essential social spending go broke?
This story was originally published July 28, 2015 at 3:49 PM with the headline "DISABILITY: Our government cannot run out of money."