Deficit Owls | Taxes Do Not Fund Social Security, Investment Does (very slow, with Spanish translation) @deficitowls5296 | Uploaded September 2016 | Updated October 2024, 1 hour ago.
Professor L. Randall Wray discussing the distribution of resources involved with Social Security. Although individuals can save some of their income in order to have money later, the economy as a whole cannot do this. Because the total income over the whole economy is equal to the total spending, if we try to "save" by spending less, this only reduces income, and doesn't actually result in savings. Money is not a finite, scarce resource in the same way that clothes and houses are. Any amount of money necessary can be created and given to people if that's necessary to fulfill a financial promise. What's less clear is how those dollars will exchange for real goods and services. If we have promised many dollars to an aging population, but have not also invested in the factories, training, and increases to productive capacity that's necessary to make the stuff that those people are going to buy, then there will be shortages, which will only lead to rising prices (inflation).
So, the way to prepare for an aging generation is NOT to raise taxes now. It is actually to spend MORE to build up our productive capacity so that we can supply the goods and services necessary to meet the needs of the elderly.
Another way to think about it is like this: if we have an aging population, then we have more people who are consuming without producing. This means that the remaining workers will have to produce MORE in order to produce both for themselves and for the additional retirees. So the necessary step to prepare for that is to bolster up those workers, make sure they have the skills and technology to be as productive as they can in order to meet the increased demand. There is no financial constraint, the federal government can always make any and all payments on-time, since the US government is the issuer of the US dollar, and it can't run out.
Watch the whole video here: youtube.com/watch?v=YxGGR62fh3k
Like Deficit Owls on Facebook: facebook.com/DeficitOwls
Professor L. Randall Wray discussing the distribution of resources involved with Social Security. Although individuals can save some of their income in order to have money later, the economy as a whole cannot do this. Because the total income over the whole economy is equal to the total spending, if we try to "save" by spending less, this only reduces income, and doesn't actually result in savings. Money is not a finite, scarce resource in the same way that clothes and houses are. Any amount of money necessary can be created and given to people if that's necessary to fulfill a financial promise. What's less clear is how those dollars will exchange for real goods and services. If we have promised many dollars to an aging population, but have not also invested in the factories, training, and increases to productive capacity that's necessary to make the stuff that those people are going to buy, then there will be shortages, which will only lead to rising prices (inflation).
So, the way to prepare for an aging generation is NOT to raise taxes now. It is actually to spend MORE to build up our productive capacity so that we can supply the goods and services necessary to meet the needs of the elderly.
Another way to think about it is like this: if we have an aging population, then we have more people who are consuming without producing. This means that the remaining workers will have to produce MORE in order to produce both for themselves and for the additional retirees. So the necessary step to prepare for that is to bolster up those workers, make sure they have the skills and technology to be as productive as they can in order to meet the increased demand. There is no financial constraint, the federal government can always make any and all payments on-time, since the US government is the issuer of the US dollar, and it can't run out.
Watch the whole video here: youtube.com/watch?v=YxGGR62fh3k
Like Deficit Owls on Facebook: facebook.com/DeficitOwls
