"The MMT Grand Bargain: Raise Social Security Benefits and Suspend FICA "
Crazy concept, but why not listen to people who keep being right about stuff? Warren Mosler (and heck, I'm just going to print the whole thing, it's so lucid and simple:
Fact: Every serious economic forecaster cuts his GDP and employment estimate with tax hikes and spending cuts. (AKA, the looming 'fiscal cliff'!)
Fact: Every serious economic forecaster would raise his GDP and employment estimate with tax cuts and spending increases.
Fact: All agree there would be no moral hazard or a waste and fraud issue with an increase in Social Security payments.
All agree that FICA is a highly regressive punishing tax on people working for a living, ideologically unacceptable to the 'left', and, of course, the 'right' is against any tax.
Fact: Even with the presumed "current unsustainable path of future spending" the Fed's long term CPI (a.k.a. "inflation") forecast remains at 2 percent, market participants via inflation indexed securities forecast equally low long term CPI increases, and there are no credible forecasts for any kind of "inflation" problem from excess aggregate demand.
Fact: The August 2011 debt ceiling debacle and downgrade of U.S. credit, at the "worst possible time," demonstrated that because the U.S. "prints its own money":
- the U.S. government can't run out of dollars;
- always has the unlimited ability to make any size dollar payment on a timely basis;
- is not dependent on and can never be dependent on dollar funding from foreigners, the IMF, or anyone else;
- pays interest rates based on rates voted on by the Federal Reserve; and
- is in no way is at any kind of risk whatsoever of "becoming Greece."
Conclusion: The MMT Grand Bargain for Prosperity:
- Raise the minimum Social Security payment to $2,000 per month, and
- Suspend FICA taxes
What's so hard about this?
Feel free to distribute, particularly to your Congressmen!!!
And let them know that I am here to answer any of their questions.