by Ed Sawicki - August 2022
originally written February 2018
A word about Modern Monetary Theory (MMT)This report is not for you if you believe in the Modern Monetary Theory to the point of thinking the national debt is not an issue and the interest paid on that debt (currently over $450 Billion annually and expected to be $580 Billion in 2022) is not real money. You're not going to be happy with the language used here, just as you're unhappy with the language used by most economists and those governing the country.
Americans have been conned three times since World War II resulting in a national debt that's now over $31 trillion and climbing. These cons occurred during the administrations of Presidents Reagan, Bush, and Trump. I refer to them as the debtor presidents.
The first con was when the Reagan administration cut individual income taxes on the wealthy from 70 percent to 28 percent, promising that the theory of trickle-down economics would ensure that the wealthy would share their gains with those of us lower in the economic strata. The theory didn't work.
The second con was when the George W. Bush administration cut taxes on the wealthy using the promise of the failed trickle-down economics theory again. The third con was when the Trump administration cut taxes on the wealthy again in 2017 citing the twice-disproven theory.
When Trump was asked about the growing debt in 2017, he said, “Yeah, but I won't be here [to take the blame].”
The theory of Trickle-down economics states that the benefits of tax breaks for corporations and the wealthy will trickle down to everyone else. In the United States, the theory has never been known to have significant benefit for the poor and middle class when it was implemented.
Why would they do this?
For decades, the Republican strategy has been to greatly reduce or eliminate our social programs. The public won't agree to their Social Security and Medicare being cut, especially since they've paid into Social Security with their own money. By forcing this vast amount of debt on the public, Republicans can claim that we can no longer afford social programs. Never mind that we were able to pay for the needs of the country from World War II through the 1970s.
This video features Republican House Speaker Paul Ryan blaming our national debt on “entitlements”. He wants you to think of the word entitlement as meaning something you don't deserve; a handout. But you and your employer paid for your Social Security with your own money so you're entitled to it. Paul Ryan and the Republican Party want to redefine words in our dictionary. Don't let them.
Entitlements are not handouts.
Ryan says it's impossible to solve the debt problem without affecting Medicare, Medicaid, and Social Security but he fails to mention increasing government revenues by increasing taxation on the wealthy.
The money paid out as benefits for Social Security does not come from the federal government's general fund. It comes from a separate fund called the Social Security Trust Fund. Social Security does not impact government budgets or deficits. Here's Republican President Ronald Reagan confirming that Social Security has nothing to do with the government's deficit.
Ronald Reagan has exposed the Republican lies about Social Security. Still, it's his tax cuts that have driven up the national debt.