Words To Live By, July 4, 2023
July 4, Letters from an American, Prof. Heather Cox-Richardson (written July 3)
And on July 4, 1776, the Second Continental Congress adopted the Declaration of Independence, declaring:
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty and the Pursuit of Happiness.”
For all the fact that the congressmen got around the sticky little problem of Black and Indigenous slavery by defining “men” as “white men,” and for all that it never crossed their minds that women might also have rights, the Declaration of Independence was an astonishingly radical document. In a world that had been dominated by a small class of rich men for so long that most people simply accepted that they should be forever tied to their status at birth, a group of upstart legislators on the edges of a continent declared that no man was born better than any other.
America was founded on the radical idea that all men are created equal.
What the founders declared self-evident was not so clear eighty-seven years later, when southern white men went to war to reshape America into a nation in which African Americans, Indigenous Americans, Chinese, and Irish were locked into a lower status than whites. In that era, equality had become a “proposition,” rather than “self-evident.”
“Four score and seven years ago,” Abraham Lincoln reminded Americans, “our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.” In 1863, Lincoln explained, the Civil War was “testing whether that nation, or any nation so conceived and so dedicated, can long endure.”
It did, of course. The Confederate rebellion failed. The United States endured, and Americans began to expand the idea that all men are created equal to include Black men, men of color, and eventually women.
But just as in the 1850s, we are now, once again, facing a rebellion against our founding principle, as a few people seek to reshape America into a nation in which certain people are better than others.
The men who signed the Declaration of Independence on July 4, 1776, pledged their “Lives, [their] Fortunes and [their] sacred Honor” to defend the idea of human equality. Ever since then, Americans have sacrificed their own fortunes, honor, and even their lives, for that principle. Lincoln reminded Civil War Americans of those sacrifices when he urged the people of his era to . . .
“take increased devotion to that cause for which they gave the last full measure of devotion—that we here highly resolve that these dead shall not have died in vain—that this nation, under God, shall have a new birth of freedom—and that government of the people, by the people, for the people, shall not perish from the earth.”
Words to live by in 2023.
would be words to live by if the author did not insert a few words of her own to assert her moral superiority over the “white men” who started the whole idea. for what it’s worth, one of the “founders”, Jefferson’s vice president, very much considered the idea of women’s equality, and practiced law and politics in New York that protected “free” blacks and got men without property the right to vote. For his troubles he was slandered by Hamilton, and Jefferson tried to hang him on a false charge of treason, and “history”(and opera) remembers him as the villain of the piece..
oh, well, yes: and while she did not mention it, forgot that the original push to end slavery came from people who called themselves Christian. times change. people not so much. we can’t seem to live without finding some “identity group” to hate.
as far as i know, european countries, and some in asia who seem to be doing better at the democracy thing now than we are, got the idea from us. even if we had to enforce the idea a few years ago with a bloated military budget and military-industrial complex, as well as war itself.
and no, I am not a Republican, though I have been called a shill for the rich because i pointed out that working people could save Social Security forever just by taxing themselves an extra dollar per week without insisting “the rich pay their fair share” [which they already do].
Actually, Social Security does not need “saving”. The Treasury makes the payments, not the SS trust fund. A government (like the US) that issues its own currency can not run out of it. The trust fund is just an accounting exercise with the trustees being a bunch of highly compensated bean counters doing 4th grade math (actually data entry because computers do the math). Could the payments in excess of tax collection lead to inflation? Sure, but that’s not the argument being made; it’s having the money. As far as inflation being an issue, nobody knows what inflation will be 9 months from now let alone 9 years from now when the trust fund balance goes negative.
Think about it. Did anyone ask where the money came from for all the pandemic relief? Or the next war to come along? The Treasury can always make any payment it wants.
Marky
I wish I could agree with you, but the money for social security come from the workers themselves. as for Magicial Monetary Theory, I think..and even some MMT-ers agree. that you can’t just print money whenever you want some. Money is “merely” the medium of exchange, and to work it also needs to “store value” and be readily accepted as payment for all debts. MMT might get past the deficit crazies and liars, but immediatey runs into the problem of inflation, as well as “who gets the money so printed. Since these decisions will be made by the same people who are currently hysterical about the debt, nothing will change.
Fortunately we don’t need debt…real or imaginary… to fund Social Security. The workers pay for it themselves, and every dime is accounted for.
The Trust Fund balance cannot go negative. If it goes to zero, SS will still be paid out of the FICA tax paid by the people who are paying for their own future benefits.
At that time, without raising the tax, the benefits that can be paid under the existing tax rate will fall about 20% short of the current level of benefits. That can be fixed simply by raing the combined (employee and employer) tax 4%. how can this be? well, the liars don’t want you to realize that four percent of payroll being paid by 250 million workers is enough to pay 20% of benefits, which are about 30% of the payroll they replace, for about 125 million retirees. Arithmetic here is “rough” just to give you someting to think about.
btw
inflation falls out of the picture. future benefits and future taxes will be paid with the same inflated dollars
Mark:
Been super busy and was unable to answer you previously. You are correct. There is no big piggy bank or cash register where case receipts are deposited or cash disbursements are issued. Funds taken in are earmarked for certain uses if so designated and by basic accounting principles. I am guessing the transfer of funds from paychecks weekly, biweekly, and monthly are notational. Notational in the sense of pluses and minuses in personal accounts and also governmental.
Dale Coberly point is politicians are not recognizing the need to increase positive contributions to the account called Social Security thereby funding it notationally, avoiding a future deficit, and a need to print more paper dollars outside of SS notational funds via saved and taxes. He is right in that sense.
What makes it possible to run deficits is our status as a global currency. As long as our dollars are needed we can print more dollars outside of receipts. I believe economists get it wrong when we start to look at what does this country actually produce. Is it a banking service or do we produce things of value. If it is the former, we are vulnerable in time. If it is the latter, we should realize our manufacturing etc. is a valuable commodity.
@run,
It is important to note that it isn’t debt, but debt/GDP that matters. Japan’s debt/GDP is ca. 260%. They’ve been in that neighborhood for awhile and haven’t suffered from hyperinflation. US debt/GDP is ca. 130%. Hard for me to understand why we should hyperventilate about debt-driven inflation with that evidence. Calling US debt a “crisis” is just more GOP nonsense, like calling SS and Medicare “communism” or calling social justice “woke.”
Joel:
And you would be correct on Japan, etc. Many people are stuck on the numeric.
American constitutional history mirrors the history of democracy in the sense that changes have been incremental. In Magna Carta, democracy was the last thing the nobles had in mind. They were interested in their own property rights and liberty. Overtime, their actions were replicated by people “beneath them” to the point that all English citizens now have the vote. Similarly, in our country, “all men are created equal” has expanded from its original meaning, “all white men”, to now all persons of whatever race, ethnicity, or gender. That change did not come easily nor was it inevitable, but it bears acknowledgement and an appreciation of the fact that ideas have a way of asserting themselves over time despite the attitudes of those whose early statements and actions seemed narrow and self centered in their early expression. In short, the founders didn’t have to be without sin to be respected for starting something they couldn’t necessarily control, and didn’t. Happy 4th!
Coberly, when it comes to MMT, don’t confuse the policies espoused by them with their explanation of how the monetary system works. Their description of how a fiat money system works is 100% spot on. I like to use the analogy of the moon landings. There were several mission profiles proposed but you need to understand how gravity works for a successful outcome. MMT gets the “gravity” right but not necessarily the best mission profile.
Mark:
True and agreed on the last sentence.
I dislike the term “print money” because the treasury stopped paying for spending with printed money in 1971. From the private sector perspective, all government spending is money creation because the central bank credits the banking system with the funds to cover the spending (and the individual banks credit the account of the spending recipient). Taxes to the federal government are just the opposite and money is removed from the public sector. The difference if a deficit causes an increase in bank reserves which must be removed for the fed to control the FFR. That’s the real reason the treasury sells securities.
Anyway, printing money has no context in our current monetary system. It is a throwback to the time period from the civil war until 1971 and made legal in the supreme court’s case of Knox vs Lee.
Mark:
You may disagree; but most of us still carry paper blackish on one side and greenish on the other with various numbers on it.
Indeed, I tip with paper money as it has more value to a person then does an electronic transfer of a tip which goes to the employer, and then the waiter. They may have to account for those electronic transfers each year. There is a fee tied to that electronic transfer. I already agreed with you on the creation of money by the central banks and the transfer of funds. And taxes are a removal of money. and deficits are covered by treasuries.
You can still pay your taxes in paper money also. Jay Zagorsky of Boston University decided to pay his taxes in cash to the Internal Revenue Service for this year. After securing an appointment, he went down to a high-security federal building where it took him half an hour to make a payment.
You may think the Greenish and Black sided paper documents are a throwback but they are a throwback which will be arond for a long time to come regardless of the electronic system.
Those greenish and black papers are federal reserve notes. They are different from the notes that were issued by the treasury. Federal reserve notes are issued by the central bank in exchange for assets held by the public (typically treasury securities) in the same way bank reserves are created. A bank’s reserve are comprised of deposits at the federal reserve bank and the cash (greenish paper) a bank has on hand. So the money you carry in your wallet is a federal reserve note which is equivalent to government debt that earns no interest.
Markg
i am sure you know more than I do about the details of how the government manages the money supply (not the currency) as well as the value of the money [no doubt aided by the unique position of the yankee dollar as the world’s currency]. However I am not so sure you understand that the workers still pay for their own Social Security benefits and this is accounted for to the dollar. Nor do you seem to understand that the whole thing has to be accounted for, including debts, or everything stops working eventually. Even the money created by the Fed to bail out the banks had to be accounted for and “made good” in some way. The Republicans (mostly) lie about Social Security “debt”, but at least they are not living in a fantasy that you can just “print” money wheever you want. (here “print” means make an electronic entry in an account. You can go a long way on borrowed money (also “printed”), but you can’t get far once people begin to doubt your money represents anything they can buy. I am tryig not to sound lie I think I know more than I do, but my experience is that most of the people most of the time really don’t know what they are talking about.
“when it comes to MMT, don’t confuse the policies espoused by them with their explanation of how the monetary system works”
so how the hell am i supposed to know what they are talking about?
I read the recent book by some lady whose name i have forgotten that “explained” MMT and she got attention from the press, and I think briefly from congress. But she did not convince me that she undertood whar she was talking about, and it all cam down to her doing things with the money that the deficit hysterics didn’t want to do. The deficit hysterics will still be running things when MMT becomes official policy and nothing will change except “the inflation” will take the place of “the Debt.”
btw, as far as i know “printing” money has been going on for the last six thousand years. The British re-invented the idea in about 1700, and Hamilton taught it to Washington in about 1790, but they all kept track of ‘oo owed what to ‘oo. again, the idea was modernized when Keynes, I think, (with a lot of help from From Roosevelt, who seems to have understood it before Keynes explained it to economists, that a government could run a permanent deficit as long as the economy grew faster than the interest rate…. and a that jazz. social security is able to pay larger benefits than the worker paid in taxes because of this (growth in the economy) but SS does not depend on “larger benefits” to still be necessay to working people’s hopes of retirement. being sure of “enough” money is more important than “earning a profit.”
now, i wouldn’t claim to know for sure the historical details, but i am pretty sure I know how “it” works.
“some lady” ‘s name was Stephanie Kelton. the reviewer on google noted that she was not strong on MMT theory, but that was really an advantage because it made the book more accessible.
Hi Coberly,
I would suggest checking out wfhummel.net. It is a well written and fairly easy to understand series of articles explaining the workings of a fiat money system. There is no political bias. Hope you and others will check it out. Maybe one of Angry Bear’s contributors will post a link and open a discussion on the site.
Mark:
I added the link to your comment.
Mark:
If you wish to write something on the topic, I will put it up for you. I understand what you are saying.
Markg
I will check it out though I don’t expect much and am a little short of time. Just for the record, there are thousands of theories about everything that make perfect logical sense and are wrong. Having wasted my time with a half a dozen of them over my lifetime I don’t have much patience for another one. I went back and looked at your commetns here and they don’t make much sense to me and seem wrong…not about MMT which I know little about, but about SS which I think I know a lot about and have “done the math.”
Then I look at what I have written here and can see that they might not make much sense to you…it takes time to build up enough real world knowledge about something to make sense even mutually to other people who have also built up enough real world knowledge about what (might be) the same thing.
Markg
I looked at Hummel article on SS. says much the same as I do. no doubt SS could be paid for with funny money, and really no doubt it is productivity per person that counts (which is the problem with funny money). But you go wrong if you think 1) that “paying directly from Treasury as opposed to paying from Trust Fund Account makes any difference other than which box the cash is kept in, the important thing is that the TF is a box that keeps track of money paid in by workers FICA and Treasury as you seem to understand it regards all money as fungible. It might be. but money, the whole system depends on the faith people have that they will get paid (with those government iou’s which include the legal structure of SS) the value they paid for when they gave up the government iou’s they earned from their work..paid into SS for the promise of an adequate pension within the bounds of money paid in, effective interest from growth in the economy, parity from inflation by paying taxes and benefits in the same inflated currency and any one time, and according to an insurance formula so those who paid it little, out of small wages over time, would get an insurance boost to keep them out of the worst poverty…hasty summary of the program.
replacing that legal structure with “stock market investments” would not work for the reasons hummel discusses, but neither would “printed” money. money works only because people have faith in the “justice” of the exchanges it makes possible…and that appears to be what makes MMT such a hard sell. [and also make “the debt” lies such an easy sell.]
sorry if this is too brief to make sense to you, but the current “problem” for SS are the lies told by congress about its “deficit.” after a long time people might come to accept “government paid with MMT money” as a solution. but we just saw in France what that faith comes to in the end.
reread what i just wrote. almost impossible for you to understand..typos, poor syntax. and great leaps over required knowledge, and a long history of not understanding what money is by the people who use it and count it every day and count on it to be reasonably stable at least in the shortish term.
i don’t think we can get there from here.
America is first & foremost the Land of the Free.
The Declaration says ‘All men are created equal and endowed with certain unalienable rights: life, liberty, pursuit of happiness. Governments are instituted … to secure these rights.’
Some years later my ancestors (among others) decided that slavery was abhorrent, and not to be tolerated among their members. The idea caught on. It is obviously inconsistent to have slavery in the Land of the Free.
Along came the GOP, originally an Abolitionist party. Their standard bearer Abe Lincoln, born in a slave state, stated that As he would not be a Slave, he would not be a Master.
“This expresses my idea of democracy.”
And “A house divided against itself cannot stand. I believe this government cannot endure, permanently half slave and half free. I do not expect the Union to be dissolved – I do not expect the house to fall – but I do expect it will cease to be divided. It will become all one thing, or all the other.”
That, first & foremost, is what America is all about.
You know, I put up posts about my beliefs from time to time, and they just disappear.
This is getting annoying.
America is the Land of the Free. Abraham Lincoln made this true.
He was the first GOP standard bearer. What ever happened to them?
@Fred,
“What ever happened to them?”
Nixon flipped racist Democrats to the GOP in his Southern Strategy after LBJ pushed through Civil Rights and Voting Rights acts. Reagan and Gingrich pushed the party further right by convincing the White working class that the GOP would stand up for White supremacy.
Thus the party of Abraham Lincoln became the party of George Wallace & Strom Thurmond.