Almost $18, 000, 000, 000, 000.00 in the hole! A big government joke!

You wouldn’t have to argue definitions if you used the dictionary.

Well for starters, you have not answered my question. And two, your FDR nonsense is just nonsense. All those thousands who died in WWII and Korea didn’t get a dime from Social Security. And Medicare didn’t exist until the 60’s. And FDR couldn’t have known how much individuals would receive or how much they would pay in. IT’S INSURANCE, IT ISN’T AN INVESTMENT. What you get out of the program, if anything, is not commensurate with what it cost you. You just cannot get it through your head that Social Security and Medicare are insurance programs and not investment schemes.

And as for your so called facts;

-The average person who retired in 1960 got back 6.4x what he put in to SS.
-The average person who retired in 1980 got back 2.1X what he put into SS.
-The average person who retired in 2010 is promised to get back 0.9x what he put into SS

Where is your credible source to back up those numbers? Why have you failed to provide your sources? Two, they are not relevant as Medicare and Social Security are insurance programs and not investments. Some people get more than they put in, others get less. That's how insurance works.

 

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The source is provided in post #50. So please stop avoiding dealing with the statistics.

Did they teach you that a "safe" return is negative? Because that's what SS is!

In this case, it is the early adopters who get more and the later adopters who get less. Insurance doesn't work that way. Besides which - again - by either name, getting back less in SS than you put in is a terrible deal. Do you not care that people who lived years ago got a great deal and we're now having to pay for it and getting a terrible deal as a result?

Is there any cost/benefit ratio that you would consider bad? Is getting back half what you put in acceptable? A quarter? If SS didn't exist, people would have to save for their own retirement and would mostly do many times better. Doesn't that point to a big problem with SS?

How? Again: as measured by the cost/benefit ratio. It has fairly steadily declined throughout SS's history.And I'm fine with agreeing with you that your health insurance is also unstable. We apparently should agree: SS is not stable.

Well he should have. He or his advisers had to calculate a business case for why the program was a good idea and then selling that to the public. Telling people they'd get back 6x what they put in would be a pretty good sales pitch, wouldn't it?

Call it whatever you want - the label doesn't matter. Either way, it is a replacement for personal retirement savings. So to be a good deal, it has to perform similarly to personal savings. And the fact of the matter is that when it was started it did, but now it doesn't.

 

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LOL, my you have an active fantasy life. The only one avoiding dealing with statistics and reality around here is you my friend. The link in Post #50 doesn’t back up your post. Further, your link uses averages when it should be using median as averages are distorted by extremes. So not only were the authors of the paper you referenced apologizing for a previous error in their numbers, they are still using the wrong statistical measure.

And finally, this issue has been addressed many times in this thread and you my friend keep running away from it. You shut your eyes, cover your ears and chant rather than addressing the real issues here. Social Security and Medicare are not investments. So stop treating them like investments. But if you did that you wouldn’t have a case to make. Reality sucks when you are a right wing loon.

Ah, no it isn’t, any more than any of my other insurance contracts. Just because I don’t get more back in claims than I paid in insurance premiums, it doesn’t make my insurance policies investments.

As has been repeatedly pointed out to you many times, Social Security and Medicare are not investments. Mindlessly chanting falsehoods till the cows come home will not make them any less false. Just because I don’t get back all of the money I paid in premiums for my auto or homeowner insurance, it doesn’t mean they were poor investments.

And you are misusing the term early adapter. It’s a term applied to consumers and not tax payers and it’s used to identify trend setters. And what would you have us do with all the folks who are dependent on Social Security and Medicare? Would you put them in the street as they did back in the days before Medicare and Social Security?

Except that Medicare and Social Security are not investments. They are expenses. You should know the difference between the two. And no matter how much you chant, it will never turn Social Security and Medicare into investments.

And you keep ignoring the fact that life does not make it possible for some people to save enough for their retirement. You may be one of the few, the blessed who can. But not everyone has been blessed as you have. And one day you may wake up to a rude awakening and find out that you or your family suddenly unblessed. And if that day should happen, you would be very thankful for your social insurance.

And the point is Medicare and Social Security are fully funded for the next decade and more.

As has been told to you many times, Social Security and Medicare are not investments. Insurance is all about risk mitigation. It isn’t about savings and investment. And some people don’t want to be fiscally prudent and enjoy high risk profiles. But your enjoyment of risk and excessive risk taking should not adversely affect me, that is one of the reasons we have social insurance.

You may think that my health insurance and for that matter all health insurance for everyone in this country is unstable because rates change annually. But I don’t, nor do any of 50 state regulatory agencies that routinely audit them. It’s a corporate paid policy and in almost 30 years it has never failed to pay even once. But somehow you think that makes it unstable. And similarly Social Security has been around for nearly 80 years and Medicare has been around for a half century and neither has defaulted even once. Nor are they likely to in the future, assuming Republicans in Congress don’t intentionally cause a general debt default as they have repeatedly threatened to do since 2011 when they took control of the House.

Well FDR didn’t because in part it was something he could not know. Neither you nor anyone can tell with certitude how much someone will pay into the system and how much they will receive in benefits. Many of those early participants in Social Security didn’t get a dime, because they died before they reached age 65 and qualified for benefits.

No it isn’t a replacement for retirement savings. It’s a guarantee of a minimum income if you should reach age 65. It is a guarantee that your children and spouse will have some income should you die with dependent children and/or a spouse. It’s a guarantee that should you or family become disabled they will have some income and access to some medical care.

We have IRA’s, 401K’s and a few of us even have pensions for retirement savings. Social Security is not a retirement savings account. It’s an insurance of some level of base income if all the above fails.

 

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Joe, for all of your harping on "SS is not an investment", I challenge you to find even one example of where I claimed it is. You are just parroting words you are putting in my mouth that I didn't say.

If the downward trajectory of SS's cost/benefit ratio doesn't trouble you, so be it. Perhaps it is because you already paid-in all you are going to pay-in and don't care that people younger than you are getting screwed and have come to terms with the fact that you got screwed too and can't go back and fix it. Fair enough.

It is a free country, so you can bury your head in the sand and pretend the issue doesn't exist and all statistics you don't like are lies, but that won't make the issue go away. It was well publicized last year when this bad threshold was passed:
http://money.cnn.com/2013/04/14/news/economy/social-security-benefits/

Again: no amount of word games will change the fact that SS was a much better deal for people who retired in 1960 than it is for pretty much everyone alive today.

 

Unfortunately no, I am not. If you want me to stop harping about the fact that Social Security and Medicare are not investments, then stop arguing that they are poor investments as you quite consistently done throughout this discourse.

Social Security and Medicare costs have gone up, partly through inflation and partly through an expansion of benefits. But the programs remain affordable and I don’t think caring for our elders and the disabled is a bad thing. I don’t think you can quantify the emotional and spiritual value of keeping the elderly and the infirm off the streets and cared for.

The only one burying his head in the sand my friend is you. Just what is the problem you perceive? Is it the fact that someone gets a better deal than you? The people who purchased shares of Berkshire Hathaway 48 years ago got a better deal than I did when I purchased them 10 years ago. So what, am I supposed to resent them because they got a better deal than I? Some people in this country have received welfare and food stamps, I have not. Should I be resentful of them too? Some people were born into wealthy families, I was not. Should I be resentful of them too? So the problem is someone got something you didn’t get?

Statistics don’t lie, but people do and sometimes people make mistakes out of ignorance. Unfortunately some people don’t understand numbers and cannot work well with them. If you are going to use statistics, you should be able to use the right statistics and be able to interpret them correctly. And I haven’t even begun to tear into the assumptions those people are making.

As I have told you many times before, I think it is a good thing that we take care of our elders and disabled and those less able to care for themselves. I think taking care of each other creates opportunities for all of us. And that my friend is a good thing in my book. Opportunity creation is good for all of us, and not just some of us.

Reality my friend is not a matter of word games. And you may not like that reality, but it doesn't make it any less real. People who began receiving Social Security back in 1960 may have gotten a better deal than someone retiring today. I don’t know. There are a lot of factors that must be considered. Social Security and Medicare have changed significantly over time. Most recently, about 8 years ago, Medicare was expanded to include prescription drug coverage. Back in 1960 retirees didn’t have Medicare as they do today. It wasn’t until 1965 that Medicare was created. So current retirees have more benefits than earlier retirees had. And current retirees are healthier and living longer than their predecessors. And now as a result of Medicare and Social Security, and those that went before, there is an infrastructure designed and built to cater to their special needs. So in some ways current beneficiaries are a lot better off than those who preceded them. You are being very myopic when you decide to look at only one number to the exclusion of all else. And I have yet to see a present value analysis, which is the correct way to analyze the value of benefits and contributions, nor have I seen any frequency analysis. The bottom line is there is no substitute for due diligence and reason. Unfortunately those who have little knowledge of statistics, finance, or logic are easily deceived with a number. Regrettably, simplicity makes for much better demagoguery.

My point is this is a very complicated matter and if you want to look at it honestly, you have to look at more than just one number. And even if your premise is true, that earlier beneficiaries received a larger benefit on average, so what? Social Security and Medicare are fulfilling a need and they have done a pretty good job of it. Are they perfect? Certainly not, but no one is stopping us from making them better. And here is one of the problems you have been running away from, you have not been able to find another system that does as well, that solves and addresses as many problems as the current system does. And that is why those programs are popular and have remained so through time.

 

Good post Joe. Some folks value community and ..... others sociopathy.

 

Heartily seconded by me.

 

JoePistole: From your Post #53.

Social Security is a Ponzi Scheme. The only reason it is not considered fraud & illegal is due to the fact that government by definition cannot be accused of fraud.

A Ponzi scheme uses money paid in by later investors to pay profits or benefits to early investors. It expects to continue to have enough later investors to payoff the early investors. The early investors typically do very well & later investors typically get less than they paid in.

This is exactly the methodology of social Security. When initially legislated, There were far more workers than retirees. The early retirees got much more than they paid in.​

See Post # 54 by Russ.

The above data might not be precise, but is at worst very close to reality. The above is typical of a Ponzi scheme.

The only reason Social Security is not illegal is by definition: Unless the Supreme Court rules otherwise, legislated methodology is not illegal.

As described in previous Posts, Social Security is not close to being insurance as provided by an insurance company.

An insurance company invests premiums (income) in mortgages, bonds, securities, et cetera. It does not use that money as current income. It has tangible assets intended for use in paying future benefits.

The government treats Social Security payments as current income for use in paying current expenses/benefits. Social Security is backed by Government IOU’s which are expected to be paid by taxes on our children. grandchildren, et cetera.​

 

Nor can you quantify the pain that would be caused by bankrupting our government.

SS/Medicare provides a lot of benefit for a lot of people. However, costs are growing, and going forward there is no plan to ever stop the cost increases or balance the books. (Due primarily to pure demographics.) This must be fixed.

However, we will likely never fix it - as evinced by what is happening right here. Once again we have a right winger and a left winger staking out extreme positions. Now someone is comparing it to a nearly criminal Ponzi scheme. Multiply that by all the people in Congress, the administration etc and you get the current lack of ability to do anything about the problem.

 

You know, when you have to ignore the dictionary and stare decisis (i.e. centuries of legal precedence) as you have done in order to justify your ideological positions, there just might be a problem with your ideological positions. I guess the pages of discussion were above your head. The Supreme Court has reaffirmed the legality and constitutionality of Social Security in multiple rulings some 70+ years ago.

You can cover your ears, shut your eyes and mindlessly chant, “I can’t hear you!”, as you have repeatedly done, until the cows come home. But it will not change the facts. It won’t make Social Security a Ponzi scheme nor will it change the fact it is a social insurance program.

Denial is not a substitute for evidence, fact and reason, my friend. Demagogues never like honesty.

 

Have you been paying attention to this discussion? There is no reason Medicare or Social Security should bankrupt the country. For starters, the only way the country can default on its obligations is if Congress refuses to pay its bills as Republicans have been threatening to do for the last few years.

You are setting up a false dilemma. You are repeating misinformation you have picked up most likely from Republican sources. And as for the rest, I suggest you go back and read this discussion.

The inability of our government to do the most basic functions of government was not caused by Social Security or Medicare. And I find it odd, that just because someone is not a right wing whack job, and can actually think beyond partisan nonsense and deal with real facts makes them a left winger. That is funny and at the same time very sad.

There is plenty of room to pay for the projected increases in projected Medicare and Social Security spending – it’s just the parties who have pocketed the Medicare and Social Security surpluses of the last 30 years don’t want to pay up. My heart bleeds for them…NOT.

 

What our conservative friends do not understand is that we do NOT let people die on the streets. Children, Elderly, Disabled, and the working poor will always receive assistance, one way or another.

These programs are either Fedrally funded or State funded and funds will be required, one way or another. The expenses for Entitlements will not diminish when we defund them, the expenses will remain, but defunding programs costs jobs and actually will make the situation even worse.
We need more revenue and the only way is to stimulate the economy with jobs or increase taxes.

Private corporations are not required to create jobs in a shrinking economy where demand for goods also shrinks the more people are unemployed and/or denied unemployment insurance, but demand for services to the poor will NEVER diminish unless we let these people die. This is a snake which devours itself. Is that so hard to understand?

If the Private Free Market is unable to unable to sustain the economy, public assistance will continue to rise and without sufficient revenue, either the Feds or the States must borrow these funds or increase taxes on those who can afford a 2 or 3 % increase in taxation. The middle class has been squeezed dry and the poor have no income at all. So who is the last resort?

If anyone has a solution to that problem, I'll vote for them to be my representative or even our President. Solutions anyone???

 

At its present rate we have three choices:

1) Reduce benefits
2) Increase taxes
3) Bankruptcy

Which most basic functions of government is it unable to do?

I am sure RussWaters thinks the same about himself. He's not a right-winger; he's a centrist and you are a partisan left-winger who buys all the liberal media lies about blah blah blah. (He thinks something similar about me BTW.) He's as right as you are.

 

OH hogwash. How can you go bankrupt when you can print money? These are the options:

1) Those who have pocketed the 2.5 trillion in Medicare and Social Security surpluses repay the trust funds. That means reverting to tax rates of the 1980’s. Current US tax rates are the lowest they have been for some 80+ years for the wealthiest among us. So there is plenty of room to increase taxes on the wealthiest among us.

When folks like Romney are paying no income tax or 9% and Warren Buffet is paying a 14% income tax and your average Joe and Jane are paying 25% to 35% of their income in income and payroll taxes, there is plenty of room to increase taxes on the wealthiest among us.

2) Reducing benefits is an option. But it isn’t needed. And I am going to relish watching you and your fellow conservatives telling the Tea Bagger element in your party that you are going to cut their Medicare and Social Security.

3) Bankruptcy is not possible. Because as I previously stated, sovereign nations can always create money. If individuals can always print more money, why would they ever go bankrupt? So the only way government can default is if they become incapable of acting responsibly (e.g. Republican threats to default the government by not raising the debt ceiling). Governments can always decide not to pay their bills. But they are not forced to do so. They can always print more money.


4) Improve the efficiency of our current systems. The US healthcare system is incredibly inefficient and as a result very expensive, more than twice as expensive as those in any other developed country. If the US can make its healthcare system as efficient and as effective as those in other developed nations it can cut its healthcare expenses in half. And healthcare expense is the real driver of Medicare costs. And with the implementation of Obamacare we are beginning to see some mitigation of healthcare costs.

Create responsible law and enacting appropriate fiscal policy. Since Republicans took over the House in 2010, we have yet to be able to create a responsible fiscal policy, leaving it all to the Federal Reserve to keep the economy moving along. The Federal Reserve was never intended to be a crutch for irresponsible fiscal policy.

LOL, yeah, LOL, I am not they guy that needs to rewrite the dictionary, history, the laws of mathematics and economics in order to make sense of an ideology.

 

Are you joking? (It's often hard to tell on forums.) If you are not, then printing money devalues all the other money out there, and has in the past led to hyperinflation, economic collapse and bankruptcy.

Yes, there is room. And taxing the wealthiest among us just doesn't do that much. Most of our tax money comes from the middle class. That's not because their taxes are so high, but because there are a lot of middle class.

Yes. But this sounds like the "why not just stop paying artists to paint porn? That will balance the budget!" Might make people feel good to cut NEA funding (or tax the rich) but it doesn't really solve the problem.

You might be disappointed, then, since I'm not a conservative.

OK, so you weren't joking. Printing money is effectively a regressive tax. Printing money causes inflation, and that hits the poor hardest. When your $230 a week doesn't change but the cost of bread doubles, you are in trouble. The rich are generally not affected since their investments better compensate for inflation.

If that works - great. So far it is not working.

Really? I would have said things like maintenance of armed forces, maintenance of a justice system, maintenance of government services (patent office, FAA, CDC, USDA etc.) i.e. the things people actually need.

Well, you are rewriting economic law if you think "just print money" is any kind of a sane economic policy.

 

NO I AM NOT. It doesn’t change the fact that your assertion that bankruptcy was a possible solution was and remains hogwash – a much recycled demagoguery. Printing money can devalue a currency, but doesn’t mean it will. An expanded money supply does not automatically mean devalued money. Since 2009, the money supply has grown to the tune of trillions of dollars yet inflation remains extraordinarily low. Hyperinflation is more than money supply alone.

Oh, so 2.6 trillion doesn’t do much? That’s the value of the tax breaks afforded the wealthiest among us through the excess Social Security and Medicare taxes. According to the actuaries and Medicare and Social Security Trustees, it fully funds the programs through 2026.

The top 10% of income earners pay 70% of federal income taxes.

http://money.cnn.com/2013/03/12/news/economy/rich-taxes/

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What does that have to do with the fact that the wealthiest among us are paying less of their income in taxes than the poorer average Joe’s and Jane’s? Are you advocating that the poorer, the middle class should pay more of their income in taxes than the wealthiest among us?

Act like one, talk like one, you shouldn’t be surprised if people take you for one. You might be surprised and disappointed to know I am not a “liberal”.

Well no it doesn’t, as I said before, it’s a little more complicated than just printing money. The Federal Reserve has increased the money supply by 1.2 trillion dollars since December 2011. Do you see any significant inflation? No. And it doesn’t change the fact that your assertion that bankruptcy was a possible outcome of continued Medicare and Social Security spending was and remains false.

http://www.reuters.com/article/2014/01/16/us-usa-economy-jobless-idUSBREA0F0VF20140116
http://www.federalreserve.gov/releases/h6/current/

“money supply growth does not necessarily cause inflation” – Wikipedia

Well actually it is working and actually it is just getting started.

Affordable Care Act Update: Implementing Medicare Cost Savings
“This new law recognizes that Medicare isn’t just something that you’re entitled to when you reach 65; it’s something that you’ve earned. It’s something that you’ve worked a lifetime for, having the security of knowing that Medicare will be there when you need it. It’s a sacred and inviolable trust between you and your country. And those of us in elected office have a commitment to uphold that trust – and as long as I’m President, I will.
And that’s why this new law gives seniors and their family’s greater savings, better benefits and higher-quality health care. That’s why it ensures accountability throughout the system so that seniors have greater control over the care that they receive. And that’s why it keeps Medicare strong and solvent – today and tomorrow.”
- President Barack Obama, June 8, 2010
Introduction
The Affordable Care Act includes a series of Medicare reforms that will generate billions of dollars in savings for Medicare and strengthen the care Medicare beneficiaries receive. The new law protects guaranteed benefits for all Medicare beneficiaries, and provides new benefits and services to seniors on Medicare that will help keep seniors healthy. The law also includes provisions that will improve the quality of care, develop and promote new models of care delivery, appropriately price services, modernize our health system, and fight waste, fraud, and abuse. Implementing these changes extends the life of the Medicare Hospital Insurance Trust Fund by 12 years from 2017 to 2029, more than doubling the time before the exhaustion of the Trust Fund.

http://www.cms.gov/apps/docs/aca-update-implementing-medicare-costs-savings.pdf

Well without appropriate fiscal policies, those functions become unaffordable.

For starters, I never advocated just printing money as a sane economic policy. I only referenced the ability of the government to print money to point out the silliness of your claims bankruptcy was a possible outcome. It isn’t. Inflation, perhaps, but inflation is not necessarily a bad thing. And inflation is just a little more complicated than you seem to think it is.

The government is always printing money and expanding the money supply. It has significantly expanded the money supply (i.e. printing money) in recent years to the tune of over 2 trillion dollars and we haven’t seen that much promised hyperinflation. By the way, the government can also shrink the money supply should it need to. It isn’t a one way street as many so called conservatives seem to think.

 

JoePistole:You apparently do not read remarks posted by others. I never claimed that Social Security was illegal or unconsitutional.

I actually mentioned that congressional legislation was by definition legal until/unless overruled by the Supreme Court.

I pointed out that it is run like a Ponzi scheme & would be declared illegal if a corporation ran a pension plan the same way.

I wonder if you are aware of the fact that Social Security unlike an insurance company annuity is not backed by any assets. Future taxes will be required to fund the payouts. Our children, grandchildren, et cetera are on the hook to pay for the benefits. With the retirees becoming a larger group, it is going to be difficult for our descendants to foot the bill.

 

LOL, yeah, unfortunately for you I read well. You have consistently called Social Security and Medicare Ponzi schemes which are illegal. And I went on to say, several times now, that the reason Medicare and Social Security are not Ponzi schemes, because they are not fraudulent. The Ponzi scheme is fraudulent. I have even given you the definition of fraud…something you have continued to ignore. People who run Ponzi schemes are not convicted under a Ponzi scheme statue. They are convicted under the fraud statutes. There is nothing fraudulent about Medicare and Social Security and no court in the land has ever ruled otherwise, including the US Supreme Court.

But hey, right wing nut case fantasy trumps reality every time!

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And it has been pointed to you several time now, that it’s isn’t a Ponzi scheme because it is not a fraud, nor is it a corporate pension. It is insurance, that’s why they call it Old Age, Survivor, and Disability Insurance and health insurance.

LOL, yeah like we haven’t had this discussion umpteen times before. Social Security isn’t an insurance company annuity. You keep comparing Social Security and Medicare to things they are not and are surprised to see differences. You may as well compare Social Security and Medicare to cows and be surprised that they don’t have fur.

Rather than me repeat all the reasons why your claims and evil machinations are not true yet again, how about you go back and read where your claims have already been debunked? You won’t have to look far.
http://www.sciforums.com/showthread...rnment-joke!&p=3153602&viewfull=1#post3153602

 

Zimbabwe tried to print money so they could continue to spend without raising taxes. Inflation hit 11000% a year before the economy collapsed and people began using foreign money as a means of exchange. So not only is it not hogwash - it has happened.

Yes, it does. Everything else being equal, doubling the money supply devalues the remaining money. That's basic economics. Again from Wikipedia: "There is strong empirical evidence of a direct relation between money-supply growth and long-term price inflation."

Yep. Recessions tend to reduce prices. In a way we're very fortunate that the economy is not recovering more quickly; if it were, inflation would be very high indeed. The fact that we DID have inflation during a serious recession indicates how much influence the money supply has had.

It has nothing to do with it, since your argument above is an emotional argument, not a fiscal one.

No. Even now they are paying a far lower percentage (on average) and a far lower total amount (on average) than the rich. No proposal I have ever heard will change that.

Good!

Ah, so you are doing a reductio ad absurdum. In that case, I agree; they could also just kill everyone who retires and solve the problem that way. Neither, of course, is a very good idea.

Agreed. It hammers the poor, specifically people who live paycheck to paycheck and those who keep their money either in cash or in standard savings accounts. Investors, however, can use inflation to their advantage, since they can choose stocks that are buoyed by high rates of inflation.

 

Yes, but that doesn’t change anything. The United States is NOT Zimbabwe, it has a different monetary system. It has a different economy. It has a different government. It has a different role in the world. It has a different a lot of things.

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No, it has nothing to do with all things being equal. It has to do with the very nature of inflation…the inflation equation. In the high profile cases of hyperinflation like the Weimar Republic and Zimbabwe there were other forces present, but people like to focus on the money supply. I guess it makes better press and it’s easier to demagogue. It wasn’t just an increase in the money supply which caused their hyperinflation.

As I said, inflation is a bit more complicated than you seem to be able to appreciate. Back in my college days, I had a professor who was fond of defining inflation thusly, “too many dollars chasing too few goods and services”, and that is a pretty apt definition. The reason we don’t have inflation today despite a huge multitrillion dollar increase in the money supply is the supply side of the equation. There are plenty of goods and services. And that is why businesses, investors and economists pay so much attention to the monthly unemployment rate. I don’t know if you are old enough or remember Reagan’s supply side economics. But that is what Ronald Reagan’s supply side economics was all about back in the 80’s when the nation really did have an inflation problem as a result of the oil embargos of the 1970’s.

Your assertion that simply increasing the money supply automatically equates to inflation is just flat out wrong, but all too common, especially among the right wing lunatic fringes. And that is why all those fools who a few years ago with the announcement of quantitative easing drove the price of gold up to $1,900+ per ounce. Today gold is selling between $1,100 and $1,250 per ounce. No inflation, and they cannot figure out what went wrong. They got the money side of the inflation equation, but they were ignorant of the supply side of the inflation equation. The fools and the partisans didn’t understand inflation…most people don’t and that is why the issue is so frequently used for demagoguery.

But none of this changes the fact that contrary to your previous assertions, that the US can go bankrupt. It cannot. It unlike you or me can always print money. It prints more money all the time. As the nation grows economically, it needs more money. Economic growth requires a growing money supply. So the bottom line is the nation can grow and has grown the money supply without causing inflation. It has, and it has been doing so for a very long time and more dramatically so since The Great Recession.

I have no idea as to why you think this is relevant or important to this discussion. I don’t know what you are trying to argue. No one is arguing the money supply isn’t important. What is at stake is your assertion that any increase in the money supply (i.e. printing money) automatically means inflation. And that simply isn’t true. And it appears you have reluctantly conceded as much.

The reason the Federal Reserve has dramatically expanded the money supply (tripled) during the recession was to ensure the economy could emerge intact from the liquidity trap we found ourselves in in 2008. And it was the right thing to do, and it did so with virtually no inflation. It gets back to that other often ignored aspect of inflation…the supply side.

http://en.wikipedia.org/wiki/Liquidity_trap

Ah, no, that is hogwash. The fact is that if middle class Joe’s and Jane’s can afford to pay 25% to 35% of their income in income tax and payroll taxes as is the case, there is plenty of room for the top 10% to pay a similar amount and per my previous post, it would have a significant effect on fiscal policy. Your assertion was there was no ability to increase taxes significantly. And that too is just untrue. Tax rates on the top income earners has dropped dramatically since the 80’s when payroll taxes were dramatically increased.

Again, that simply isn’t true as evidenced by previous material. Income taxes which are paid mostly by the wealthy have gone down and payroll taxes which are paid mostly by the middle class have gone up, as evidenced by previously provided material.

LOL, ah, no, the facts are contrary to your claim, the US government is not capable of default unless congress just decides one day it isn’t going to pay its bills. Government as we have discussed ad nauseum can always print money to pay its bills. So it can never default as you had claimed. It does print money. Recently it has tripled the money supply with virtually zero inflation. It didn’t even come remotely close to producing Zimbabwe style inflation nor is it likely to if we properly manage our economy. You my friend are laboring under some severe, but not uncommon for those with little business or economic education, economic misconceptions.

The wisdom printing unlimited amounts of money is another issue and one in which you are trying to use to obfuscate. As I have said many times before there is no substitute for rational fiscal policy - something we have yet to see from the Republican controlled House or the Republican controlled government prior to The Great Recession.

Inflation is like medicine, a little can be good, a lot can be bad. And contrary to your assertion, it affects everyone negatively. Stock prices are not buoyed by inflation because costs and revenues do not go up evenly across all sectors at the same time. It doesn’t hurt those dependent on government programs as much as those programs usually have cost of living adjustments automatically included in their entitlements. It negatively affects fixed income dependent folks be they rich or poor as it devalues their fix investment. So the bottom line is contrary to your assertion excessive inflation affects everyone negatively, rich and poor.