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Stephanie Kelton provides two video clips to underscore the point that until quite recently, Greenspan made the point that MMT types do: that the US as a currency issuer, can always pay its debts (it might incur too much inflation, but with the economy having as much slack as it does, that’s far from a pressing worry).
What I found striking was the clip of Paul Ryan pressing the man formerly known as Maestro when he was still the Fed chairman to agree that private retirement accounts would be more stable than a government sponsored program. That’s such a Big Lie I’m amazed anyone can peddle it with a straight face.
And Greenspan reiterated his position that the US can always meet its obligations late last year:
After 20 years of demonizing government debt and pushing for government in miniature, billionaire Pete Peterson and his allies have managed to get the public fixated on their message rather than their motives, and the Ryan con job serves as a useful reminder.
One long-standing effort has been to “privatize” Social Security, so that Wall Street could charge fees for managing the money. Note that some countries, like Australia, mandate that a big chunk of wage payments be invested in superannuation accounts (I’m not current on the law, but when I lived in Australia, it was 9% of pay, and I believe it has risen since then. The ATO’s pages on this are too layered to get a quick answer). And even if they don’t get a mandated contributions regime, merely reducing Social Security payments will force people to save and invest more, and will similarly enrich the brokerage and investment management industries.
But the other rationale is more basic: the rich want taxes lower, period. They want to roll the clock back to the 1890s. If you visit the “cottages” that the wealthy built in Newport, Rhode Island, it isn’t just the scale that is striking. It’s the amount of ornamentation. It took God-only-knows-how-many hours of work by skilled craftsmen to produce the woodwork, the masonry, the gilding. And you can afford that kind of ostentation only if there is a gargantuan chasm between the pay levels of the super wealthy and everyone else. This is our future unless ordinary people wake up and oppose it. Not surprisingly, Greenspan, who was never on the side of little people, has officially cast his lot in with it.