Regarding your May 29 editorial “Medicare mythology,” when will the U.S. government go bankrupt? Those understanding economics know that the U.S. became monetarily sovereign in 1971, and a monetarily sovereign nation never can go bankrupt, i.e. run out of money. It has the unlimited ability to create money.
The only limitation on federal spending is not taxes or borrowing, but inflation, and the Federal Reserve easily cures inflation with interest rate controls. If federal taxes and borrowing fell to $0 or rose to $100 trillion, neither event would affect by even one dollar the federal government’s ability to spend.
Because the federal government never can go bankrupt, no agency of the federal government can go bankrupt. Congress, the White House, the Supreme Court, the Department of Defense, Medicare and Social Security are but a few of the 1,300 federal agencies. Not one of these agencies has gone bankrupt nor ever will. Even during the worst recessions and depressions, no agency of the federal government has gone bankrupt.
We do not read that the White House budget is unsustainable. It is a federal agency. We do not read that Congress’ spending must be cut. It is a federal agency. We do not hear the military soon will be insolvent. It is a federal agency. Yet that is what we do hear about Medicare and Social Security, both federal agencies.
The notion that a nation with the unlimited ability to create dollars, must allow two of its agencies to become insolvent is illogical and factually false. Even were FICA to drop to zero, Medicare and Social Security would not need to go bankrupt. They are federal agencies.
The public is being misled by those who do not understand post-1971 monetary sovereignty.
— Rodger Malcolm Mitchell, Wilmette
