The True, Accurate, and Only Answer to “How *Exactly* Will We Pay for Medicare for All?”

By Jeff Epstein, Editor-in-Chief of Citizens’ Media TV. Originally published at Citizens’ Media TV

So, how exactly do we “pay for” Medicare for All?

  • The same way that we just “paid for” $700,000,000,000 for a single year of military funding.
  • The same way that we just “paid for” $1,500,000,000,000 in tax cuts for the wealthy.
  • The same way that we “paid for” a $1,300,000,000,000 fighter jet in 2016.
  • The same way that the United States has always “paid for” all of the fantastically-expensive things that benefit the powerful: Immediately and without discussion. Because they want it.

In the richest country in the history of the world, with its abundant natural resources, and its millions of unemployed or unsatisfied citizens (waiting and willing, ready and able, and desperate to make it happen)…. It is time to stop talking about how we will “pay for” anything. If we can “afford” the fantastically-expensive programs that cater to the wealthy and the powerful, then we can sure as hell “afford” the moderately-expensive programs that the powerless need to survive, starting with Medicare for All.

Link to tweet

Spending even one more second discussing how we will pay for Medicare for All (or any program that benefits the powerless) is a supreme and cosmic waste of time. In fact, the entire “pay for” question is a sham and a scam, and a trap and a trick. It is cruel and unfair to the millions and millions of Americans that are suffering from ailments, stress, red tape, and bankruptcy.

Discussing how to “pay for” Medicare for All guarantees that we will never have Medicare for All. The “pay for” question is also a vast and intentional waste of time. The only thing we should be discussing is how to organize and march into the halls of Congress and demand that they give us Medicare for All — once and for all goddammit.


Appendix: An Economist Confirms Everything I’ve Just Said

Stephanie Kelton is one of the leading voices of MMT, Modern Monetary Theory. Among other things, Kelton was Chief Economist on the U.S. Senate Budget Committee, an Economic Advisor to Bernie’s presidential campaign, and a founder of the Sanders Institute. At the twenty-minute-twenty-second mark in the LOLGOP/Eclecta Blog podcastbroadcast on April 10, 2018, she says the following:

I am a strong advocate of encouraging Democrats to pick separate fights. [I believe they should stop linking] the fight of increasing taxes on the rich with the desire to increase spending on programs the Democrats like. For example, to say that you want to make public colleges and universities tuition free and the way we’re going to do that is through a tax on Wall Street speculation. Or we’re going to tax the rich to pay for Medicare for All. Or we’re going to close tax loopholes to do infrastructure. Or whatever the case may be.

I am absolutely in favor of dealing with disparities [such as] income and wealth inequality, and concentrations of wealth in the hands of a smaller and smaller few. It’s bad for democracy, it’s bad for the functioning of our economy. There are a whole bunch of reasons why I will make the case for increasing taxes on the wealthy.

I will not make the argument that we need to increase taxes on the wealthy in order to pay for crumbling infrastructure and take care of the elderly and so forth. Here’s the reason why: I think it’s cruel and unfair to the sick and the poor and the hungry and to our environment and everything else. To tie these fights together in a way that says, “unless and until.” Unless and until we can “win” on higher taxes, whether it’s carbon tax or [any other kind]. Unless and until we can get the money from “them,” we can’t take care of our people or communities or planet.

That drives me mad. I don’t think we have time to wait around while we try to pick a few [billions] off the billionaire class before we deal with the really serious threats that we face today. We have to decouple these fights. You fight for higher taxes by all means. Go and have that fight. But don’t link success on the other front to your success on [this one]. I’ve watched it fail and fail and fail.

She later says this, which even more directly confirms what I’ve written above:

[Senator Schatz from Hawaii] recently sat down for an interview at Vox. They asked him about his legislation for debt-free college. They asked him, “How are you going to pay for this?” [Schatz] said, “I’m not going to do that. I’m not going to play the Pay-For-It Game. It’s a trap. I’ll talk about why we need this kind of stuff, but I’m not going to let you wrap me up in a bunch of questions of where the moneys going to come from and all that kind of stuff.”

So how do we get to the point where voters understand that it’s okay to fight for and indeed demand that government be responsive? You’re looking at stuff that polls at sixty-plus percent. These are margins that go independent and Republican. They get majorities across party lines. So how do we make it okay for people to say that we want the government to do these things and we think they’re feasible. And that it’s OK that we are promoting these kinds of things, and that we don’t have to think that everything has to have a “pay for.”

Derived (cropped) from Elvert Barnes on Wikipmedia Commons (license)

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  1. Disturbed Voter

    You can’t have it all, but you can have some things, if you economize. The real problem isn’t how to pay for it, the problem is economizing elsewhere … nobody wants to do that. We want to have it all, now.

    1. Yves Smith Post author

      I don’t agree. Most patients do what their doctors tell them to do, test wise and procedure wise. They don’t demand unnecessary test, like the EKG that is standard in an annual physical (which BTW is also now widely acknowledged not to improve health outcomes but everyone in America is hectored to have one) when in fact they are warranted only if you are in the minority of the population that is at risk of heart disease. I say no to tests all the time.

      1. Rodger Malcolm Mitchell

        Look at the comments and you will see that your readers don’t get it.

        The federal government does not use tax dollars to pay for anything. It creates brand new dollars. This is called Monetary Sovereignty.

        No “save-on-this-to-pay-for-that.” The whole point of the article has been lost on your readers.

        1. saurabh

          While the monetary part of this is true, the productive output part is not. That is, the whole reason money matters at all is what it is spent on, viz., where does human labor go. In this case, doctors are finite in number. Drumming up another trillion dollars to pay them won’t increase their hours (although training more doctors will).

          In a nutshell, spending constraints might be a fiction for a government with a sovereign currency, but budgeting – how we apportion our productivity – is not.

          1. JohnnyGL

            “doctors are finite in number” – HUH?

            1) Create a visa program to bring in doctors from overseas. We already do this, but we could increase the numbers.

            2) Train more. Mandate medical schools expand to meet society’s needs.

            This is hardly insurmountable.

            1. saurabh

              I didn’t mean it was insurmountable, as I suggested we can train more doctors, build more hospitals, etc. But this effort, at some point, must come at the expense of building weapons and training people to build weapons. I.e., we can’t actually have it all – not because the money is limited, but because human productivity is.

              1. JohnnyGL

                You’re quite right and the importance of MMT is that it focuses on constraints on REAL resources, not false ones focused on fiat money.

                On an optimistic note, I see little evidence we’re anywhere close to running into constraints on real resources.

                And yes, my bad on your point about training. You already made it.

              2. aliteralmind

                But this effort, at some point, must come at the expense of building weapons and training people to build weapons.

                We are very very far away from that point. Based on the amount of resources currently available to us, we can indeed have both at the same time.

            2. Anon

              The issue with doctors and medical care is insufficient compensation and therefore numbers of primary care physicians (most are overworked). There are other options, as well. Many Nurse Practitioners and Physician Assistants can help meet the medical care workload, if allowed.

              Many of the medical issues extant in the US population could be resolved with early intervention (and the addition of dental care into Medicare for All). Dentists are more cost effective to improving early adult health than PCP’s.

              Once healthcare is widespread then productivity in a healthier and happier society will also become apparent.

              1. Elizabeth Burton

                We could also put an end to the restrictions demanded by US medical organizations that prevent perfectly qualified foreign physicians from practicing unless they undertake expensive “retraining” many if not most can’t afford because they’ve arrived as refugees. It’s the height of hypocrisy to talk about a “physician shortage” when there are perfectly capable doctors driving cabs and flipping burgers.

            3. Anonymized

              Do US states also limit the number of medical residencies? To keep doctors’ wages high, the Ontario College of Medicine severely restricts the number of medical residencies. This means that once practising MDs from other countries get in – and it’s comparatively easy because the (federal) immigration system favours them – they find that they can’t get a residency and therefore can’t qualify as an MD. Lots of them downgrade – for example, a heart surgeon becoming a naturopath, or getting a job as a medical writer for a drug testing company (not even as a doctor for said company) – or they become the proverbial doctor driving a taxi.

              Keep in mind that medical schools are still churning out graduates that foreign-trained doctors have to compete against. The local graduates also have a hard time finding residencies, often waiting years for a spot to open up. It’s a system that favours the well-connected. Meanwhile, there’s always articles lamenting the lack of primacy care physicians, especially for under-served areas (i.e. rural and/or poor).

        2. jrs

          How do other countries (you know all of those who *actually* have Medicare for All systems) pay for it?

          1. aliteralmind

            By writing a few billion/trillion into a bill and voting into law. As long as they have the real resources to back it up (natural, animal, human, time) they can “afford” it and “pay for” it.

            You just fell for the pay for question. It’s a trap.

            It’s not a matter of how do we/they pay for it?, it’s a matter of do we want it? Is it right?

            It’s right. So it’s demand it.

            1. JohnnyGL

              I’ve seen Kelton argue that because Medicare for All will probably result in a net savings on overall health care spending because of stronger negotiating power pushing down prices leading to an overall reduction in spending in healthcare…..we actually might need TAX CUTS to improve aggregate demand!!!

              1. Rodger Malcolm Mitchell

                Stephanie talks about savings because she believes that is the only way to get people to agree to MfA.

                She knows full well that savings are not necessary for a Monetarily Sovereign government.

                1. voteforno6

                  I think it might be a little more nuanced than that. Taxes might have to go up (just not to pay for it). Regardless, for the taxpayers, there is a cost. The overall costs for people will be less under a Medicare-for-all system, though, then what we currently have.

        3. Jim Haygood

          So how do we get to the point where voters understand that it’s okay to fight for and indeed demand that government be responsive? You’re looking at stuff that polls at sixty-plus percent.

          At the same time, the Republican party is facing an electoral meltdown in November, not least because its base is appalled by “trillion dollar deficits forever.” A vote on making the recent tax cuts permanent had to be postponed this week — too much cognitive dissonance with the GOP’s anachronistic, fictitious “fiscally conservative” image.

          A majority of Americans simply do not believe in the stately ivory tower academic fiction that Mommy Gov can just keep kiting checks till the cows come home. Maybe shouting “you don’t get it” will bring them around. Free beer would work for me. :-)

          1. JohnnyGL

            …because its base is appalled by “trillion dollar deficits forever.”

            I’ve never met a single voter who’s foaming at the mouth, stark-raving mad over deficits.

            I’ve met plenty who feel that way about war and jobs and health care, though. I’m one of them!

            1. Kurtismayfield

              They are foaming at the mouth when the Democrats do it.. see tea party. There are still a few hard core deficit hawks on the Republican side that called out Trump on the Omnibus bill. They of course we’re nowhere to be found when the tax cuts were signed.

      2. Disturbed Voter

        The article was rhetorically addressing general government spending, not spending within the confines of health care. That is a separate issue (too many tests etc). Maybe the US is 100% too high per medical outcome.

        On the question of general government spending, if it is true that the Federal government is looking at a $1 trillion deficit permanently, I see no reason why that can’t be allocated to health care. Or free college education (perhaps a better investment in the future).

        It is, as noted elsewhere, a matter of choosing what to focus spending on. Essentially a political question, not an economic or medical one. I would vote instantly for any politician who would scrap the evil student loan program, and simply pay for all students admitted to the top 100 universities for instance.

        But we won’t hear from any plausible candidate who will promote that. Obama could have, Clinton could have, Carter could have. I wouldn’t expect a Republican to do so. That is why I used to be a Democrat, but am now Independent.

      1. paulmeli

        @Jen, it isn’t economizing we want here, it’s cost-shifting. Economizing lowers incomes.

        Cost-shifting is at least zero-sum, possibly better because it can shift costs associated with high profits.

        I am all for economizing if we can guarantee the rich/super rich lose instead of us.

      2. aliteralmind

        This is the author.

        This is exactly the kind of class warfare I am trying to avoid. We can have a ridiculously large military and also have Medicare for all (or any progressive program). At the same time. Side-by-side. Not on top of. Not additionally.

        I agree that we should have a smaller military. But suggesting that we should have a smaller military IN ORDER TO pay for progressive programs is really dangerous talk. This is exactly the kind of thing that my article is trying to get across: talking about getting money FROM something in order to pay for progressive programs is exactly what you should do if you never want to have those progressive programs.

        We should fight for the progressive programs and after we get them, then we can discuss how big the military should be or how much we should tax the wealthy or whatever.

        This is pretty clearly laid out in the article.

        1. aliteralmind

          This is exactly how the powerful win: get us talking about “cost shifting“ and “we should have smaller military” and “we should tax the rich” and “we want the rich to lose instead of us.“

          And now we are no longer talking about the progressive programs (Not their benefits and not how we should demand them) that we need to survive.

          When you pit the powerless against the powerful, the powerful always win. So stop talking about the powerful!

          1. JohnnyGL

            I also think an underrated, but entirely appropriate answer to “How you gonna pay for that is…”

            You want to lead the country? YOU go figure out how to pay for it. That’s YOUR job. Just get it done!!! I don’t really care how you get it done, just do it!!!

            1. nycTerrierist

              Obummer comes to mind,
              and his galling, pass-ag mantra: “make me do it”.

              A real leader leads!

              Amazed he was always excused, never called out for this
              utter lack of leadership.

        2. paulmeli


          My comment was intended mainly to point out the difference between economizing and cost-shifting, apologies if it came across as something different.

          Asserting my ‘druthers (as if I have the choice) in a throw-away comment is not to suggest we need the {family blog] money to fund anything.


          Economizing is being forced on us by the wealthy, it’s been going on for some time. I suppose you can avoid/ignore class warfare if you want but it’s happening in real time. To us, and we’re losing.

          I think we can do more than one thing at the same time.

          Apparently, only the establishment has the agency to play the class warfare card.

          1. aliteralmind

            I apologize for the misunderstanding.

            As far as “ignoring class warfare” I am saying nothing of the sort. Class warfare is very real, but it has nothing to do with The immediate goal of fighting for in the demanding Medicare for All. The problems of pay-for and class warfare need to be decoupled from the intent of getting progressive program such as Medicare for all. They are both very important but they have nothing to do with each other.

            What I mean to say is there is nothing related to class warfare that is stopping us from organizing in marching on Congress TODAY and demanding Medicare for All.

            If we don’t decouple and compartmentalize these issues, we will never have nice things.

            1. voteforno6

              People like to bring up the guns & butter spending from the ’60s, and the stagflation that followed, as a critique of large government programs. It might be helpful to discuss that within the context of MMT.

              1. jsn

                The popular narrative is that “guns & butter” created the “stagflation” in the 70s. What ended it wasn’t Volker and interest rates, though that was the opening shot of the current class war, what ended it was Carter de-regulating the domestic natural gas market.

                Wage price indexing in labor contracts may have been a factor in institutionalizing stagflation, and guns & butter were certainly the conditions from which it arose, but the OPEC oil embargo, blow back from the first 30 years of disastrous US Middle East policies, was the actual cause: energy cost propagated across the incredibly energy inefficient US economy of the time.

                While Volker and the Powel Memorists exploited the opportunity to permanently end labor power, the end of stagflation resulted from the de-regulation of natural gas.

            2. paulmeli

              I get that, but you may want to cut some slack wrt certain types of comments, so as not to miss the point entirely.

              It may have been somewhat off-topic, and I’m not speaking for the poster that suggested cutting military spending, but those of us (a lot of us anyway) that suggest cutting military spending do so because we are opposed to blowing things (and people) up all over the world, the goal is not saving money or economizing.

              In that context, we DO want to cost-shift, because to do otherwise would create excess and unwanted unemployment. It would hurt the economy.

              1. aliteralmind

                Point taken regarding “slightly off topic” and “missing the point.” That’s sincere.

                I think when you say “cost” shifting you actually mean resource shifting. That of course is true. In this context, the terminology distinction is important.

            3. Peter Maranci

              But is it really class warfare? War requires awareness of the conflict on both sides. In this case, the vast majority of the underclasses (meaning all but the elite) seem to be completely unaware of what is being done to them by the 0.1%. Class genocide would seem to be a more accurate description.

        3. MyLessThanPrimeBeef

          A ridiculously large military.

          And it’s not likely we will ever get a smaller one. All interested parties have rarely failed and will not often fail to take any opportunity to make it even larger.

          1. Peter Maranci

            The military will lose its sacred aura as soon as open warfare starts between the oligarchy and the 99%. Once soldiers are asked to shoot American citizens in large numbers, it’s very likely that most of them will turn their guns against their commanders.

            At that point, the elite will probably dispose of much of the military, converting “trusties” into private armies.

    2. RenoDino

      Adopt the same line the opposition uses to justify things like bogus tax cuts for the rich. “This will pay for itself.”

      Then point to other counties with single payer with lower costs, better outcomes, and longevity.
      Call it a money saver and a grand bargain to make the American worker more competitive with foreign competition. Make projections that show overall health care growth costs slowing down. Sell the goddamn dream, for Christ sakes, instead of moping around, hat and hand, saying things like this we need to add a surtax to make it work.

      This will pay for itself. Period.

      1. aliteralmind

        You’re right, but I think even saying “it will pay for itself“ only adds to the confusion. We need to get away from the entire concept of “pay for.“ We have the resources to make it happen.

        1. JEHR

          NC has been trying to educate us readers for some time. I am still learning new things about MMT and we all are getting closer to what it conveys for single payer healthcare. The present situation just shows how difficult it is to un-learn one thing that everyone “knows” is true (federal taxes pay for stuff) and to re-learn another thing; that is, single payer healthcare is within the means of any sovereign country. The culture of individualism also mitigates against healthcare that includes everyone. I often hear opponents state that they are fine with universal healthcare as long as the obese are not included; but really, universal healthcare is one of the best ways of dealing with obesity. Besides which, universal healthcare promotes prevention of disease as well as treatment of disease.

        2. MyLessThanPrimeBeef

          When the government can just spend, on more drones or more infrastructure, the people need something to guide them on whether to spend or not.

          1. we can pay with something other than money (maybe time, energy).

          2. we can be rewarded with something other than money.

          Keeping those in mind, it makes sense to ask, ‘will it pay for itself?’

          And we need to ask that question, when it comes to government spending.

          With universal health care, it’s obvious. But we shouldn’t forget to ask it.

          “Will this remote bridge pay for itself, when there are no one living on either side of it, now, nor in another 50 years? And we have an inflation problem today as well (not in 2018, but maybe say, 2057, assuming the world is still there.)’

          “Will more drones pay for themselves? Measure benefits in human dignity and world peace.”

        3. RenoDno

          Your honesty is killing me. As you can see here, what’s confusing is free stuff. Telling people something has paid for itself closes the loop. How it does it, when it does it, or even if it does it becomes meaningless. It totally removes the need to pay for anything because it pays for itself and is totally in keeping with what you’re getting at. Schools, infrastructure, and regulations all pay for themselves. No one is going to argue with that. It just happens.

          It may be heretical in MMT academic circles to utter the word “pay.” But you need to convince your brethren that this is a winning strategy and does not sacrifice the basic idea of MMT.

          It’s like you telling me I’m right and wrong at the same time. I’m OK with that. It’s Quantum Physics.

    3. Carla

      @Disturbed Voter — the very point of this article is spend NOW on the essentials: health care, education, low- and moderate-income housing (these are social infrastructure), as well as physical infrastructure–bridges, roads, fiber optic cable. These necessities of life will benefit ALL the people immediately, while also creating lots of JOBS and saving the ECONOMY.

      Then later, if — oops, we just can’t afford that war that somebody’s itching to get us into, that’s the time to economize.

      1. Disturbed Voter

        I agree, I shouldn’t have used “economize” … it conjures up the wrong image. Societies can’t have it all, but they can decide how to allocate what they can afford. We have, badly.

    4. Rodger Malcolm Mitchell

      I can see by the comments, that the entire point of the post was lost.

      The “pay for” question is a sham because the federal government, unlike state and local governments, pays for everything the same way: It creates dollars.

      The federal government is Monetarily Sovereign. Two hundred and forty years ago it created the first dollars from thin air. It still creates dollars from thin air.

      Even if it collected zero taxes, the federal government never will run short of dollars.

      That is why the “pay for” question is meaningless. The federal government pays for everything by creating new dollars. See: MONOPOLY

    5. paulmeli

      Economizing. In other words cut someone’s income. Economizing hurts us overall unless it comes at the expense of profits. Obviously that hasn’t been happening.

      I don’t think the 99% are happy with the consequences of that kind of cost-cutting, which has been going on for the past 40 years or so.

      People do realize that when the federal government funds something that it’s a direct contribution (an addition) to our income don’t they?

  2. Charles powell

    We spend too much on care that provides no value to a patients health or well being. eg the EKG blurb above, and ekg’s are cheap relatively speaking.

    This spending is at the behest of ignorant and/or greedy doctors and greedy health systems. And the medical industrial complex gets its share too.

    Look at “life’s simple 7”. Most of the 7 are patient driven. Also look up the “social determinants of health or SDOH”. Most of SDOH are patient and society driven. The measures outlined in 7 and SDOH are the MOST important determinants of a persons health. This is the main reason why USA state of health is poor and more expensive compared to similar nations. Similar nations spend less on healthcare (sickcare) and more on improving the factors in the 7 and the SDOH.

    With the 7 and SDOH comes patient self responsibility. That is another topic altogether.

    1. JTMcPhee

      And the whole SDOH part of your remark is all part of a seamless web, isn’t it? The powers that be want us, for their profit, to buy sugar-laden sodas and smoke cigarettes and eat junk food loaded with noxious “additives” and sit in front of our “screens” and get deeper in personal debt (cars, houses, student loans and the rest) and consume, consume, consume, and go along with the whole imperial enterprise of war and looting and financialization.

      And maybe I read your comment wrong, apologies if so, but it seems to me to imply, like the libertarians and the Oligarchs’ apologists do, that the key to breaking the looting cycle lies in “individual choices,” as in “patient responsibility,” presumably including “wise shopping” for “care” that is only price-wise and necessary. This in a political economy driven by manufactured demand, and manufactured consent, and where Big Data and well orchestrated Bernaysian manipulations are used to destroy “free will” and the entire and false notion of “liberty’n’freedom?” In a political economy that so clearly is an oligarchy, yet so fraudulently is called, with careful attention to consistent “branding,” a “democracy?” Where there really and demonstrably is no way ordinary people who are supposed to make those “wise choices” have any access to the “consumer information” that would let them properly price, as goo Homo Economici, and hence consumer-choose, appropriate and effective treatments and therapies from honorable providers? And where there is demonstrably NOT ANY WAY for ordinary mopes to compel the actual holders of power to adopt “policies” that, in any way, do anything other than accelerate the forced transfer of wealth from the many to the few, and frustrate the mopes’ ability to “choose wisely?”

      And to lay it off on “greedy doctors” (other than the relatively few who are in the management and ownership set) who mostly are nothing of the sort? More and more of whom are also forced into wage slavery and piece work, as functionaries for corporate “practice” and “group” and “hospitalist” ownerships? And driven, to keep their jobs and pay down their own student loans, to do Mechanical and Defensive Medicine, driven by algo-generated “protocols” to “meet their metrics” and participate in the coding-and-billing scams foisted on “the system” by Big UNsurance and the incentives of Big Pharma and the rest of the interlocked MEdical Industrial Complex? Maybe we should also want to also blame “greedy nurses,” who get ever less pay for more work, while the cut that the “executives” and “investors” in the UNsurance racket and Big Pharma and Big Corporate Hospital Owners takes reaches new records every quarter?

      From what I can see, if one follows the money, all the flows are into increasingly centralized, greed-driven corporate pockets of very few people. It’s not a “health care system,” it’s a looting-driven, wealth-transfer-by-socializing-costs-and-privatizing-gain racket, the goal apparently being for one person (real or corporate) to finally, in th end, “have it all” and own everything and rent it back and extract all “resources” until s/he or it can move on to another world to loot? All of a piece with whatever one wants to call the operating system of the globalized, flattened (actually increasingly prostrate) world political economy, where the US geographic area part is just a little bit ahead of the looting process that our supranational corporate overlords are putting in place globally.

      Who is the “we” who “spend[s] too much on patient care (sic) provides no value to a patients health or well being”? What “we” is assumed to have agency in this formulation? Us mopes have little to no say, where we have any “access to care,” about what gets spent on what.

      1. ChiGal in Carolina

        While it might be true that Americans are unhealthier than those in other OECD countries, this might drive poor outcomes, but not the exorbitant amount we spend on healthcare.

        An important study should change the discourse on this: we do not receive more healthcare or go to the doctor more than those in other countries. And to the extent that Medicare for All will emphasize wellness and (cheaper) preventive care it will combat more effectively the SDOH factors.

        What is true is that COSTS are too high, as you say a function of the current system. This includes provider costs and excess administrative (for-profit insurance, monopoly hospitals, PBMs, etc.) In approximately equal measure.

        1. Carla

          “What is true is that COSTS are too high, as you say a function of the current system. This includes provider costs and excess administrative (for-profit insurance, monopoly hospitals, PBMs, etc.) In approximately equal measure.”

          I would actually put the emphasis on the most obvious and important element: the HUMAN COSTS.

      2. makedoanmend

        JTMcPhee. Great comment. Many issues woven into a coherent and profound comment, if I may be so bold to say. Thanks.

  3. TomDority

    Alt to Disturbed and powell.
    The thing most misunderstood about taxes…in my opinion,,.. is that taxes are not levied to pay for something but, are used to discourage something. We have taxed the shit out of good things and as a result have less good things. We have un-taxed anything parasitic and rentier income so those things are upon us like vultures. The corporate side is taxing us through monopoly…..bubble prices in real estate raise prices on everything and is a Hugh private tax. Private roads impose a private tax through tolls.
    Lastly, it is extremely Taxing to inform that federal spending is not funded by taxing.

    1. Disturbed Voter

      Exactly … taxes aren’t what they were for circa 1971. We are in an entirely different game now. There is actually little reason to have taxes at all, given “money” is just a means of having sufficient liquidity for the economic transactions we choose to do. Coins and even paper money, limited that. With electronic payment, that limitation is obsolete. Excess liquidity is like having extra cans of motor oil that aren’t in your car (it can only hold so much). The government should simply hand out liquidity into individual accounts, and let the consumer decide how to filter the result upward. Not put the liquidity into the corporate accounts and hope the hidden hand does good things with it. But that would be democratic, so it won’t happen.

      1. JTMcPhee

        Bad ideas 101: The government hands out liquidity to individual accounts, the vultures and vampire squids quickly figure out how to sucker the mopes, muppets and dumb money into forking it over.

        Maybe better idea is to lance and drain the purulrnt abscesses of Yuuuge Wealth, via tax or confiscation ( oooh you said confiscation!!!!—except that real wealth and the minimal means of living are confiscated from poor folks every possible way, like the robber municipal economy of Jefferson, MO and so many other places, tolls and fees and ever higher rents and prices, eminent domain and robo foreclosures and credit card interest and HST and so much more— that’s how a few individuals end up with 80% of EVERYTHING, all nice and legal,see?)

        Those vast concentrated piles of loot are one monstrous self-licking ice cream cone. It’s a ravening insatiable Beast, dang hard to kill or cage, and as long as there are humans there will likely be slicks always on the prowl to evade regulation and “the law” they can’t outright have written or erased to suit their pleasure-seeking and thirst for dominance.

      2. djrichard

        Unless the Fed Gov ditches sterilized spending, you still need a way for the Fed Gov to recycle currency. So if taxes are out, that means the Fed Gov has to fully resort to issuing treasuries to swap for currency. Nothing wrong with that, btw. Though to TomDority’s point, you still want to allow for taxes as a way to penalize various activities.

        And even in the case of the Fed Gov ditching sterilized spending, you still want it to recycle at least some currency. Otherwise the monetary base would balloon. Part of me wonders in that the surplus monetary base would simply be “dead money” in the hands of the entities that hoover it up from us plebs. But then my understanding is that the continental dollar was debased because the continental congress didn’t have the power of taxation – they simply kept printing. Perfect example of unsterilized spending. Of course, the British were counterfeiting it too, which made things worse.

  4. Steve Ruis

    The question of how to pay is spurious at best. Consider what we are paying now! We are paying 2X what anyone else is for care that varies from best in the world to almost valueless. We are overpaying for what we get (overhead of insurance companies is much greater than for Medicare).

    These funds alone, is redirected, should pay for Medicare for All, no?

    1. aliteralmind

      This is the author.

      Either I’m misunderstanding you or you’re misunderstanding the article. As in the four links in the article under “a sham and a scam, and a trap and a trick,” taxes at the federal level do not pay for anything.

      But it seems to me that you are conflating individuals paying for healthcare costs and the country “paying” for the implementation of the government program Medicare for All. The article only deals with the latter.

      1. st33ve

        Say what? I don’t think Steve Ruis was “misunderstanding” anything.

        Talking about the fact that government expenditures for healthcare will increase while ignoring the fact that the total amount Americans spend on healthcare is going to be dramatically slashed is a jaw-droppingly distorted way to frame the situation, and plays right into the hands of the opponents of Medicare for All.

        Medicare for All wouldn’t cost “us” money. It would save “us” spectacular amounts of money.

  5. nothing but the truth

    Or, the rest of the society just gives in to blackmail by the healthcare sector – and gives them the keys to the treasury.

  6. Mary Wehrhein

    The one historical image that seems most bored into the usually a-historical brain of the average American citizen brain, is that infamous photo from their 8th grade history book of the Wiemar republic guy and his wheelbarrow full of cash to buy a loaf of bread. Along with other common societal absolutes is the simple metaphor of government being akin to a household with its constraints on budget. The oligarchs know that is BS as Cheney himself said, “Deficits don’t matter.” But it is a nice excuse for why we can’t have nice things. You will have to rip that household budget analogy trap out of people’s heads. I don’t see the oligarchs who control the text book content going after that shibboleth any time soon.

    1. flora

      The Wiemar Mark was not the global reserve currency. As an aside: I’ve often wondered if MMT could work in any country who’s currency is not the global reserve currency, given that countries trade with each other and want some approximation of reliable exchange rates.

      1. JeffC

        Per MMT government is spending too much money into the economy, in the net, when inflation begins to be a problem. This is true whether or not the money is a global reserve currency. The difference is that a growing world economy can absorb a great deal more money, in the form of the reserve currency, before inflation hits than can a small economy with a small national currency that is little used elsewhere. The principle is the same. Having the reserve currency is a great privilege in that far more can be created and spent before hitting the inflation limit.

        1. oliverks

          I have been wondering where is the inflation limit. When I was growing up, we were told that governments overspending led to inflation. The evils of the 1970’s or the Weimar Republic were used as examples of governments overspending and creating inflation.

          However, looking at Japan it doesn’t seem to have happened there over the last 20 years. You could argue in the USA inflation has not exploded even with massive expansions of the M1 and M2 money bases by the FED since the GFC (you could argue we also measure inflation badly).

          I propose that printing money is a necessary condition but not a sufficient condition for inflation. So the question is what other conditions are needed to triggers inflation?

          1. aliteralmind

            Printing money with no consideration of the real resources available is what causes inflation. Everyone can have a pony as long as we take the time to breed them.

          2. Grumpy Engineer

            I would argue that we measure inflation badly. See

            And recall that many of the basics are much more costly in real income terms than they used to be. A reader who bought his first car in the 1960s pointed out how it took not all that many weeks for an average earner to buy a Volkswagen Beetle outright. Cars and housing are much more pricey in real income terms than they were when people who were born in the 1940s and 1950s were young. Even if you want or need to live modestly, the cheap options are pretty much non-existant if you can’t or won’t live with your folks or in your car. It follows that if you have trouble making ends meet, you won’t be in a position to save beyond at best a minimal buffer for emergencies.

            This situation (that Yves quite accurately describes) doesn’t sync with “low inflation”. Indeed, housing prices, prescription prices, medical insurance prices, and college tuition have all risen significantly faster than inflation. What has gotten markedly cheaper to offset these cost hikes?

      2. Enquiring Mind

        Protection of that reserve status is paramount. Without that, the house of cards crumbles. Dramatic reduction in use of offshore funds to support profligate lifestyles from MIC through Big Pharma all the way to suburbia. Other countries don’t have that flexibility, although they pay to be under the defense umbrella or to keep it from shading them.

    2. Carla

      “You will have to rip that household budget analogy trap out of people’s heads. I don’t see the oligarchs who control the text book content going after that shibboleth any time soon.”

      Look, if Bernie Sanders is afraid to say “Federal taxes do not fund federal spending” and he IS afraid to say it, what hope is there? Will Dennis Kucinich, now running for Governor of Ohio, say it? I highly doubt it, even though his wife Elizabeth has schooled him thoroughly in the way money works.

      Talk about a third rail. I tried explaining it to my brother-in-law and he stormed out of the house and wouldn’t speak to me until the next day. People get furious when you try to supply them with the facts. They just can’t take it.

      1. JEHR

        Yes, I have a storming husband too who says to me, How come you know this stuff and no one else does?

        1. anon y'mouse

          people then just decide that the speaker is crazy, and go back to the lied spewed on TV.

          it has happened to me too many times, and i use simple logic because that’s all i have, and i figured this stuff out years ago when my econ course couldn’t account for how money was created, giving me that “savings fund loans” bull.

          i am glad NC is finally catching up ;-}

      2. Grumpy Engineer


        If you say that “federal taxes do not fund federal spending”, then you must be prepared to explain why we’ve all been paying federal taxes our entire lives, sometimes at considerable pain to our personal budgets.

        Or are federal taxes entirely optional?

  7. Jeffrey Bennett

    I thought the whole point of the article was that Congress just makes up these huge amounts of money and adds these astronomical sums to the deficit so why can’t they do that with something like Universal Health Care.

    In the end the deficit is meaningless because we have every intention of paying it back although we never will . we leave that to our grandchildren

    1. aliteralmind

      This is the author.

      My point is definitely not “since we can afford astronomical amounts of money, we can obviously afford a little bit more.”

      My goal is to explain to those who have absolutely no conception of Modern Monetary Theory, that, in a fiat currency, a trillion dollars is no different than one dollar. It’s all meaningless points. Money doesn’t matter, only real resources matter.

      My point is that (again catering to those who have no idea), since we can obviously afford things that “cost” astronomical amounts of “money” (because money without resources is meaningless), we can obviously afford things that “cost” a moderate amount of “money.” At the same time. Side-by-side. Not additionally.

      You do realize that “leaving the deficit/debt as a burden for our grandchildren” is nonsensical and dangerous propaganda (for those who care about the powerless), right?

      1. cnchal

        My goal is to explain to those who have absolutely no conception of Modern Monetary Theory, that, in a fiat currency, a trillion dollars is no different than one dollar. It’s all meaningless points. Money doesn’t matter, only real resources matter.

        Are you sure there is no difference between a trillion dollars and one dollar? Hmmm. A trillion dollars get’s the government a bunch of fighter jets that do not fly very well, and a dollar get’s the government a bottle of pop, kind of proportional to the real resources the respective amounts command.

        1. aliteralmind

          I can’t quite put my finger on how to respond here.

          What you say is true for currency users, not currency issuers.

          $1 trillion does not “get“ the federal government a bunch of fighter jets. A dollar does not “get“ the federal government a bottle of pop.

          At the federal level, money means nothing without real resources. Real resources still exist whether or not the money does.

          You can’t tax the people until you create the money. Spending comes first.

          1. cnchal

            Below, Marym makes the point that the US federal government already spends enough to cover 60% of health care right now, the for profit system costs twice as much to run than single payer systems in other countries, so the inference is that were the US to move to a single payer system the cost of health care would go down in the US, by a lot, could be cut in half and due to the size and scale of the population even more. Were that to happen a lot of fat oxen would get gored, fat oxen that today bribe politicians to keep the system as is for their benefit.

            Trying to tell someone that believes for example, that the federal government finances is like a household by saying MMT is the answer and a trillion dollars is no different than one dollar and it’s about “real resources” will get you nowhere. Let’s refine that thinking.

            The federal government is a currency issuer and currency user. When it spends a trillion dollars on jets it uses it’s currency to pay for it. The resource bought, the jets, do not exist until put in service, and the government had to spent the money before the resource was created. Where did the money come from?

            The government goes to the central bank and they create a bond that get’s sold and the cash goes to the government so that the jet’s can be paid for. Literally, the jets were created out of the effort of thousands of people paid with money that re-enters the economy. Somebody gave up the use of their money to buy the bond, in effect putting it in storage that the government then borrows, to buy a resource.

            Jeepers, the more I think about it the less sense MMT makes from a federal government perspective.

    2. tegnost

      only in the sense that you are now paying for your grandparents deficit. The important thing to remember is that a surplus is worse than a deficit. There should always be a deficit because gov spends money into the economy, and then there’s money, not citizens give the gov money, then there’s money.

      1. aliteralmind

        When people talk about the surplus and the deficit and the debt, they’re only focusing on the federal government’s bank account. Completely ignoring the 99% of the country: state, municipal, households, businesses.

        It’s like looking at a family but only caring about the welfare of the parents. Completely ignoring the children and the family as a whole.

  8. templar555510

    Everybody needs money . That’s why they call it money . David Mamet Heist

    Of course he has it exactly right . All sovereign governments create money out of thin air , as do banks licensed on their behalf to do the same when they make ‘ loans ‘ to customers. There is no greater lie in this world than the lie that says that there isn’t enough money . But it’s a very big lie and as Adolf Hitler understood perfectly ‘ when you tell a lie, tell the big lie ‘ because the big lie always sort of makes sense to a lot of people . And this is how it is with money . Hence the ‘ how are you going to pay for it ‘ lie. Because people relate it to their own circumstances where for many money is scarce. But it is never scarce for government . Here’s the rub : eliminate from your mind the idea that money is a resource like oil, or water. It isn’t. Every human endeavour starts with an idea , followed by an action . Money only enters the picture NOT as the means to pay for the action , but as the necessary interaction of the participants with whatever it is they bring to the party . All that money, created as it always is nowadays, on a computer serves no greater purpose than to facilitate the exchange. So he’s right ; you want ‘ Medicare for All ‘ then demand it and don’t engage in the fakery of ‘ who’s going to pay for it ‘ .

    1. aliteralmind

      This is the author.

      Letting go of the pay-for question is a critical first step in getting away from class warfare. If we require ourselves to wait until we can “find” the money, In order to implement some big progressive program, then that implies taking it “from” the military (“You don’t care about defending this country!“) or “from” the wealthy (“Why do you want to penalize success!?”).

      That’s what I take from the first Kelton blockquote in the article. If we can’t decouple these two fights (how to get progressive programs, and how to “pay for” these programs) we will never get nice things for the powerless.

      Let the wealthy had their toys. They can have their toys and we can also have our progressive programs. After we get it, then we can start dealing with the injustices and obscenities of income inequality.

      1. tegnost

        Thanks for the post, I think you have it exactly right, using the pay for it formula is playing into our opponents hands and letting them frame the debate in a way that benefits them the most. We need to play our own game and make them react.

      2. Lee

        Having toys is one thing; having the means of production is another. They can have the toys because they have and take an outsized portion of the means of production—an ever greater portion being not earned but inherited. In so doing, they shape social priorities and control public policy.

        OTOH, I don’t object to reframing arguments in a manner that will engender popular support and even recruit defectors from the dominant class. Given that a majority already supports the position as do some of the very wealthy, this development is well established. However,I cannot but harbor the suspicion that there are some not insignificant number with significant power that will never be won over by appeals to logic and their humanity. Perhaps we don’t have to string them up but we will have to name, shame and vilify them, if not for their toys then for their inhumanity.

        1. aliteralmind

          Whatever the reality is, if we do not decouple and compartmentalize the pay-for/ income inequality issue from the immediate urgency of fighting for and demanding progressive policies, we will never have nice things.

          1. Brooklin Bridge

            Agreed, a very powerful idea, but the insurance companies and the arms manufacturers and the finance scam artists all know that as well. They will fight tooth and nail to keep their, “How you gonna pay for that?” salvos alive and well. Decoupling price from social necessity (or simply benefit) has to overcome two and a half generations of brain washing.

            Imo, Sanders does a remarkable job of that for a single individual. He’s actually able to rip the clothes off the price-tag emperor in a single speech, but the effect is not universal nor does it always last all that long (though it is cumulative). I know those who are inspired on the spot but then go back to the old “groves” they are used to soon after which is pretty understandable given the time and volume of exposure.

            Gaius Publius once wrote a wonderful article about what it might take to get people to recognize global warming for the threat it is, all at once. His example was Miami going underwater, full underwater, in a single storm. It might take an event of that magnitude, such as a plague our system can’t deal with, to decouple the expense boogyman from the social benefit of UHC all at once. The alternative may necessitate another generation of debunking elite-propaganda which as I see it is now largely disseminated by sites such as this one and articles such as yours before the public and the body politic is capable of action..

            1. MyLessThanPrimeBeef

              Another generation…

              That is a key issue.

              1. Another generation to debunk the expense boogeyman.


              2. Today, we can present the simple math – universal healthcare is a smaller percent of the GDP than we’re already paying collectively. It pays for it self. And argue for it from there.

      3. templar555510

        Exactly . The strategy is to disengage from ALL these nonsensical , but useful to the powerful, arguments and as a later commentator says just ‘ show up at the table ‘ and take what you want which is what the powerful do . They don’t say can tax cuts be afforded . They just demand them . Americans should demand healthcare for all and fix all that terrible infrastructure .

      4. Scott1

        I am not sure or not if we have to have class warfare. I’ve wondered if Paul Ryan is evil or ignorant. If I understand Modern Monetary Theory how come someone in such an important position doesn’t? If he is of a cadre, a cabal, who laugh at the lies they tell for the purpose of privatization, then class war is an imperative.
        It disturbs me that it could well be that the set up to continue with this lie of the righteous deficit hawk specifically to oppress and doom the majority to miserable lives of ignorance and insecurity.

        “Congress votes the bill and the Treasury provides the money.” -Economists of MMT.

        Whether it is gold or accountancy the money power your nation possesses must be spent wisely. There are two legitimate roles of any government: Defense & Education.
        I put the CDC in with the DOD, and what is so hard about accepting the duty of the government to protect all of the classes from diseases?

        Far as the necessity of class warfare, it would be better if it could be ended instead of advanced.

    2. aliteralmind

      (That line from Heist is one of my all-time favorite movie quotes. To be clear, I never heard of MMT, beyond the name, before February.)

  9. Johnnygl

    We should pay for Medicare for All the same way we paid for the Iraq War….

    By cutting taxes and mailing everyone a check!!!

    1. Johnnygl

      I do wonder if there’s a kind of trap that can be laid for centrists, here.

      Perhaps we should propose to do something like raise the payroll tax 2% or something smallish. I can think of two advantages.

      1) since people are told they’re paying for it, they feel like they own it and deserve to get what they paid for. I think that’s a key pillar of social security’s long lasting durability.

      2) we can laugh at opponents twisting themselves in knots complaining about ‘fuzzy math’. Remember how effective it was for Al Gore during his campaign? :)

      1. JEHR

        Canada has single payer healthcare and yet people here still talk about their taxes paying for their healthcare. It can make people feel better about how they get their healthcare. That is true in the sense that all monies created by the government are spent into the economy, including the health system, for the use of its citizens.

        1. Mel

          Two points there that may be window dressing, or may not,
          1) some provinces have a special section of the Income Tax calculation that’s titled as a tax surcharge for medical care. That said, I’ve heard no anecdotes about people’s treatment being stopped because the Medicare program just ran out of money.
          2) Medicare is a provincial responsibility, and the provinces have to count on the federal government for any sovereign money creation.

      2. anon y'mouse

        no. increasing tax of any kind on any one is playing into “their” hands.

        also, perhaps secondarily or alongside, we need to decouple the rights that citizens of this country should hold to certain things (free education, health care, AND old age pensions) from having “paid for it”.

        as soon as you enter the “but i paid for this” debate, you get people who don’t want xyz to have whatever he/she/it “paid for” because they do not like the person for [insert reason here–fat, smoked cigarettes, from some objectionable class/race/gender background, makes lifestyle choices the bigot doesn’t agree with, etcetcetc]. as soon as you start going down that road, you make it about who paid for it, and then it becomes about “well, i will pay for ME & MINE, but i don’t want the bill for -those people-.

        as it is, we exclude people from SSI because they supposedly “paid for” something else and not into SSI, and we exclude those who didn’t “pay” for whatever reason (disabled, worked under the table, didn’t work for long enough, stayed at home to raise kids and keep the family but was not technically “married” to someone who did PAY FOR). we have all kinds of arcane rules about when you started, when you can collect, how much and different age groups are being treated differently, and what not. for WHAT? because those who signed the thing into law reasoned as you do–“if the public thinks they pay for it, then nobody can take it away”.

        and yet, every few years, regardless of people PAYING FOR IT, they try to take it away or limit it more.

        a parallel issue to the health care discussion, perhaps. but SSI should be for EVERY CITIZEN at a livable amount. too many elders are on SSI only and so destitute, they are in cat food danger and can’t buy medicine (solved with the main point of this article) because of it.

        1. PrairieRose

          Wonderfully said, anon y’mouse. Thank you. Do we really want to create a Righteousness Police? If one person is not free to make her own decisions, whether they’re stupid decisions or not, then none of us is free at all.

          1. HotFlash

            We already have a Righteousness Police, and whatever they decide is unworthy, goes. No appeal possible.

  10. sharonsj

    For every story of someone making themselves sick by smoking, drinking, not taking their meds, etc., I can give you a story of healthy people coming down with dread diseases. No one “chooses” to be sick. As for those who don’t take care of themselves, how would you force them?

    In any case, our health system is broken. At the doctor’s office yesterday, the HMO required him to ask me if I wanted a pneumonia shot, a flu shot, a Colonoscopy, etc. I said no to everything plus I stated that I didn’t believe in the efficacy of either a pneumonia or a flu shot, he said neither did he….

    1. o4amuse

      You might reconsider the colonoscopy. My generally healthy wife had her first at what we thought was a youngish 63 and was found to have a significant tumor. After an operation deemed clean and successful, more colon cancer tumors were detected following her first round of chemotherapy. She is now in a second round of chemo and looking for a clinical trial if that doesn’t work.

      I’ve never bothered with flu shots either, but I did take the pneumonia shot even if its not perfect because I’ve had pneumonia and don’t fancy a recurrence.

      1. JEHR

        At the suggestion of my family doctor, I have had all three: the yearly flu shot, the colonoscopy, and the pneumonia shot. All were done as preventative care and are part of our healthcare system.

  11. Dan

    I have an honest question. I’m a fan (I think) of MMT, but what is the answer to the issue of debt service payment? My understanding of it is that when the government creates money in the way MMT mentions that what they really mean is issuing bonds. Is that correct? If so does the issue of payments on the debt have any impact?


    1. aliteralmind

      I don’t know the answer, but I would like to interject that MMT is not a belief or a philosophy. It has no fans. MMT is a discipline no different than algebra or biology. You either understand it or you don’t. MMT also prescribes no policies, meaning it is the same reality whether you are a progressive, libertarian, or Republican.

      1. JEHR

        I think of MMT as a description of how money actually works in the economy. That is were I started when I was wondering why the financial crisis of 2008 happened.

    2. voteforno6

      I don’t think so – I’m certainly not a financial expert, but my understanding of it is that money is actually created by spending. The issuing of bonds takes money out of circulation (destroys it, in other words). So, this is essentially a swap of federal government assets. Payments on those treasuries creates money, just like any other government spending.

      As I understand this, the government is required by law to issue treasuries, any time spending exceeds revenues. So, if Congress really was concerned about decreasing debt, it could modify the law, to no longer require the issuing of debt. I think that would upset a lot of very large financial players, though.

      1. djrichard

        So, if Congress really was concerned about decreasing debt, it could modify the law, to no longer require the issuing of debt. I think that would upset a lot of very large financial players, though.

        Considering that deficit spending is one of the only two sources of corporate profit, I’d say yes. Their other source being private debt issuance, which is why Clinton was able to run a surplus during his tenure – there was more than enough private debt issuance to give the corporations the profit they needed, even though the Fed Gov was running a surplus.

      2. JohnnyGL

        “The issuing of bonds takes money out of circulation (destroys it, in other words).” – I think this is incorrect. Bonds can be used as collateral in repo contracts. It’s still assets on a balance sheet.

        Taxes destroy money, bonds are just money with a non-zero maturity. Conversely, money represents bonds with a zero rate and zero maturity.

        The idea that bonds ‘soak’ or ‘tie’ up cash is conventional thinking. Bonds don’t do that. Only taxes genuinely destroy money and destroy demand.

        I defer to others on this, but I think I got this down pat! :)

        1. aliteralmind

          Taxes are removed from the economy. Bonds are basically voluntary taxes. People choose to remove their money from the economy for X years in exchange for a small amount of interest.

          For example, during the war, car companies were dedicating their raw materials to the war effort instead of producing cars. People had too much purchasing power, so they were encouraged to “support the troops“ by purchasing war bonds.

          1. JohnnyGL

            What you’ve got above is true, but incomplete. That’s true for households, but they’re not the only, or even the primary, actors in the economy.

            Banks create money.

            How? They lend, and often times they use t-bonds as collateral. They also use MBS/ABS as collateral. Banks are not liquidity constrained. They are capital constrained, but often the federal regulators take it easy on that front, too.

            So bonds tie up money for households, but not for banks. That’s a big deal.

    3. djrichard

      I look at from the perspective of the treasury holders. Assume that the Fed Gov has to keep paying them increasing and increasing amounts of interest. Those bond holders have a couple of options: find something interesting to spend the interest on, or simply buy more treasuries with it. But if they had something interesting to spend the interest on, they wouldn’t be treasury holders in the first place, because treasuries are the yield of last resort. So in general, they’re simply plowing the interest back into treasuries. In essence they’re giving the Fed Gov the money (after the fact) to pay them the yield on their bonds that they had (before the fact). It may take a period of time for the accounts to settle. But they will settle and they don’t go unstable.

      For the most part, bond holders are buying treasuries because they have nothing better to do with their money. These are truly the winners in hoovering up all the currency from our economy: the banks, the buffetts and the bi-lateral trading partners.

      1. anon y'mouse

        it is guaranteed income stream to those who already have money. ultimate safe investment.

        in my fantasy world, the only ones who would be able to buy treasuries would be municipalities within the country, pension funds (highly regulated, perhaps state/other locality only), and individual citizens up to a certain amount.

        not knowing enough, i need to look into how well treasury interest matches with inflation. of course, the problem will be finding accurate measures of the latter, since the way it is currently accounted is nonsense to anyone who has bought a loaf of bread or a gallon of milk within the last few years.

      2. JohnnyGL

        But it’s important to keep in mind that the treasury dept paying interest comes with a keystroke….genuine new money creation there.

        Later on, when the feds tally things up, inflows/outflows, they’ll look at the deficit/surplus and issue more bonds if needed to true things up because they like to match debt issuance with deficits.

        1. djrichard

          Later on, when the feds tally things up, inflows/outflows, they’ll look at the deficit/surplus and issue more bonds if needed to true things up because they like to match debt issuance with deficits.

          I don’t think this is a minor point. This basically means that Fed Gov spending is sterilized at the end of the day. If it was unsterilized spending, I think it would be more than fair to say that the Fed Gov is actually spending money into existence. In which case, all the decision makers (budget committees) would act differently in accordance with that reality. But the Fed Gov doesn’t engage in unsterilized spending. The Fed Gov always stays true to sterilized spending. And therefore the budget committees (and deficit hawks) act in accordance with that reality.

          If we truly want to change the public mind and mind of the budget committees, we have to change their perception of this “reality”.
          – Either disempower the deficit as the boogieman, e.g. by speaking of the deficit as simply reflecting the recycling of currency hoards by the winner back into the economy
          – Or actually liberate us from this sterilized approach by changing the rules to engage in unsterilized spending instead. Of course this would be unacceptable. The only way to pull that off is to sell it as getting rid of the Fed Reserve (and fractional reserve lending) so that the Fed Gov is the issuer of the currency (a la positive money adherents).

          I don’t see any other option.

    4. JohnnyGL

      I suspect you’re off slightly.

      MMT would suggest that the government doesn’t have any need to issue bonds and borrow in it’s own currency.

      MMT scholars would characterize bonds as a type of money. Money is basically, bonds of zero maturity that don’t bear interest.

      But keep in mind, the way the banking system works, bonds are fungible and can be repo’ed with other banks or with the fed (I think) and because of this ability to create additional leverage, you get, in effect, the creation of additional money by the private banking system when they make a loan or engage in a repo contract arrangement.

      You’ve just created assets/liabilities on everyone’s balance sheets that didn’t previously exist.

  12. Ellie

    Big Insurance and Big Healthcare will fight tooth and nail to keep their cash cow industries intact. To me that is the chief reason why universal government-paid health care has a long upward battle.

      1. JEHR

        When Canadian politicians of a third party and members of the public began advocating for universal healthcare, doctors were against it, insurance companies and some politicians were against it. Subsequently, one province created and introduced a medicare system for itself. Eventually, the two main political parties were forced to form a coalition with the third party, and hence, after much discussion, came the introduction of a single payer system. Now our doctors like the system very much (except those who want to privatize and profit for themselves from some procedures).

    1. djrichard

      I like to post the following in the comments section on Yahoo, usually without sarcasm indicators

      I love my insurance provider just like I love my last-mile ISP. Talk of nationalizing either of them is an outrage!

      I do this to get people to think about nationalizing ISPs. Because if they can get their head wrapped around that, it’s not too much of a jump to get them to think about nationalizing insurance providers. It’s the same logic at the end of the day.

      I think people would have an easier time understanding nationalizing the insurance providers just because ISPs are in their face on a more day to day basis, and everybody hates their ISPs. If they understood how much of a profit margin ISPs made, I think they would embrace this in no time: Instead, we’re inviting the ISPs to get more creative with their toll-gate function by gutting net neutrality, giving them the ability to pick winners and losers when it comes to fitting demand to supply. And by giving them permission to monetize our surfing habits to advertisers. Because they need more profit don’t you know. [As an aside, if we nationalized the ISPs, we would have an excellent make work program in getting fiber to the home rolled out more ubiquitously and/or copper services rehabilitated. Of course, that would be communism, so let’s not bring that up.]

      Anyways, insurance providers aren’t that much different. All they are are toll-gate functions between the consumer and what they want/need, picking winners and losers, with a guaranteed profit margin. It’s time to put them and us out of their misery and nationalize them.

      1. djrichard

        Bug fix: I think people would have an easier time understanding nationalizing the insurance providersISPs …

  13. blackerman

    I love this post and sent it to many friends. It’s not about facts, or economic realities, but about strategies and ways of thinking. That’s its beauty. And it’s thinking is simple: getting lost in arguments about ‘realities’ and ‘affordability’ is pointless and simply a concession to the notion that you’re powerless and must justify your needs. The powerful don’t justify, they just take, and don’t even think about it, and that’s a lesson we should be taking. They don’t say: if I can’t cut social security, I can’t have my F-35 program. They just shoulder their way in and take their place at the table, and say, I’m here. That’s what this piece is saying to us. We need to just take our place at the Medicare-for-all table WITHOUT forcing a showdown with the Pentagon beforehand. That’s a losing strategy.
    And–in response to some of the comments posted here–the table becomes too big, then at least we’re at the table as a political reality, and in the ensuing battle over resources, we’re a force to be reckoned with, particularly with programs as popular and necessary as universal health care, and whatever else we may achieve. I think there’s deep wisdom in this. We don’t need to be arguing about the nature of economics and reality or unreality of money before we do this; we can go out and forcefully and unapologetically put all our energies in a single direction.

    1. JohnnyGL

      I also think it’s worth refusing to take the ‘burden of proof’ on our end. It’s not our job to craft legislation for congress to pass.

      As citizens, we make demands from our reps, it’s their job to deliver on those demands and sort out the details properly.

      Me: “I want medicare for all”
      Lazy Congressional Rep: “How are you going to pay for that?”
      Me: “Stop making me do your job. You wanna be a leader? LEAD!”

      1. MyLessThanPrimeBeef

        Does the end select the means?

        If it is possible that getting it paid makes universal healthcare faster than demanding it along with a large military, do we show how it will be funded?

        And if demanding it side by side with a large military gets it done faster, do we go that route?

        Can we ask those questions?

        The answer to the second question, for many, is yes.

        But should we not ask those questions?

        As for burden of proof, there is another scenario:

        “Get us out of Syria, now.”

        “Not until at least we make sure children are safe. Can you tell me how can do that in one day?”

        “It’s your job.”

        Does it work like that? Or does it work when we vote that person out?

        Have we voted out those not for universal healthcare? Will we soon?

        1. JohnnyGL

          To your point, it’s debatable on how best to get medicare for all done. I suspect that…

          1) getting medicare for all passed is easier w/o ‘paying’ for it.

          2) making sure medicare for all never gets rolled back is easier if people can yell back, “that’s mine, I paid for it! Don’t steal it from me”

          1. MyLessThanPrimeBeef

            I still believe there is something to the argument that ‘you are already paying more than you would under Medicare For All,’ – that is, it’s paid for, if we do it by taking from what you are already paying now.

        2. JohnnyGL

          As for burden of proof, there is another scenario:
          “Get us out of Syria, now.”
          “Not until at least we make sure children are safe. Can you tell me how can do that in one day?”
          “That’s NOT your job. Your job is protecting AMERICAN children. Your constituents come first.”

          Fixed it for ya!

          I like the idea of us treating congressional reps like employees. We write the job description. We define the terms of employment. Very empowering :)

    2. djrichard

      That’s what this piece is saying to us. We need to just take our place at the Medicare-for-all table WITHOUT forcing a showdown with the Pentagon beforehand.

      But, but, but … DoD funding is at risk if we don’t cut entitlements don’t you know. All the wise owls at WaPo (in particular) and NYTimes tell us so. /sarc. It was actually those articles at WaPo and NYTimes that got me thinking that the DoD itself could actually be one of the players behind the campaigns to cut entitlements. I’m less cynical now. Now I simply figure it’s the appropriations committees in congress who peddle this stuff. Regardless, my position was that there was an easy win/win here. Simply increase the spending so that everybody gets the money they need.

      But we have a different battle in front of us now. Because now the battle is to rehabilitate the deficit as boogieman don’t you know. We’re seeing this in the hourly news: the GOP went way off the rails with their tax cuts … if only we could restore the status quo, seems to be the anguished cry. Of course, we all know what the status quo meant. The punch-and-judy good cop / bad cop show.
      The dems could pretend to want to spend money on public programs. And the GOP could pretend to be the responsible stewards of fiscal probity. “We’d love to spend money on public programs, but deficit. And besides, you don’t deserve it.” Ah good times. Which is why it’s so dangerous that Trump’s in power now; he’s destroyed all these norms that we’ve come to cherish.

    3. MyLessThanPrimeBeef

      They say, we want to cut Social Security and we want to spend more on the F-35 program…often on the same budget bill.

      Some say, let’s cut Social Security so we can have the F-35 program…also often on the same bill.

      The latter is shown here as not necessary.

      The equivalent to the former is then,

      1.. We want universal health care
      2. We want a smaller military.

      On the same bill.

    4. templar555510

      Great comment blackerman . A bit like Ecclesiastes: There is a time to engage and not to engage . And this is not the time to engage. As you so succinctly put it just show up at the table and say ‘ I’m here ‘ . Nothing less will do and ‘ they ‘ , the powerful will pay no attention. To extend your analogy no one knows how big the table is until we demand to see it.

  14. rd

    The US is completely missing the point that the rest of the world does not have costs close to ours.

    We pay for it the same way that US companies are increasing their profits: cut costs and squeeze providers.

    We pay 25% more than the next highest Western country (Switzerland) and pay almost double what Canada pays which is the closest country to the US for culture and costs. There is plenty of room for cost cutting.

    We actually spend more public money per capita on healthcare than almost any other country and yet have a huge private system on top of that without universal coverage. Huge opportunities for slashing waste and costs.

  15. Expat

    It’s not a question of money. There is more than enough money in the medical and pharma industry to fund Universal Healthcare. The US spends far more per capita than any other country and far worse outcomes.

    It’s all about American mythology. Being sick is a sign of weakness, so we should let the sick die. Being unable to pay for care is a sign of inferiority, so we should let the poor die. Universal (socialized) medicine is communism, and we would rather die than be communist. Doctors spend hundreds of thousands on getting their degrees so we must compensate them. Pharmaceutical companies spend billions on researching new drugs so we must compensate them.

    Americans don’t even need to cut the spending on the ridiculous guns, planes and spy systems in order to fund this. They just need to do the math…whoops. Americans can’t do math. But seriously, this debate has NOTHING to do with costs or funding. That is a straw man. The issue is more fundamental.

    Americans spend thousands a year on private healthcare because it makes insurance companies, HMO’s and pharmaceutical companies rich. Wall Street gets rich. Washington gets rich. People die. It’s good business.

    No one in the rest of the world understands American healthcare. Everywhere I go, they wonder why Americans hate themselves so much that they prefer to die or go broke rather than be healthy with universal coverage.

  16. marym


    60 Percent of Health Spending is Already Publicly Financed, Enough to Cover Everyone
    Americans already pay for national health insurance — they just don’t get it.

    In this 2002 Health Affairs paper, David Himmelstein and Steffie Woolhandler point out that the standard accounting miscategorizes two major public health expenditures as private: the tax credit for private health insurance and the cost of the Federal Employees Health Benefit Program.

    Still true in 2016:

    U.S. health system is already predominantly taxpayer funded

    Objectives: We estimated taxpayers’ current and projected share of US health expenditures, including government payments for public employees’ health benefits as well as tax subsidies to private health spending.

    Results: Tax-funded health expenditures totaled $1.877 trillion in 2013 and are projected to increase to $3.642 trillion in 2024. Government’s share of overall health spending was 64.3% of national health expenditures in 2013 and will rise to 67.1% in 2024.

  17. Brooklin Bridge

    The irony here is that while universal health is bedrock to a society, the items on the list of: “For the same reason as,” are horribly askew from any definition of being intrinsic social benefits. From that perspective, expenditures on an unnecessary or even harmfully aggressive military are bent out of shape as are tax breaks for the rich, or absurdly expensive military equipment that serves mainly to fill the pockets of the arms manufacturers.

    I get the point that price isn’t the point, but it’s still remarkable; that which is farthest removed from being asocial (health care for all) is relegated to the sphere of the most asocial bromides where a penny saved is a penny earned.

  18. Susan the other

    What a great post. Like a shot in the arm – veritable health care itself. Let’s not forget that Nancy Pelosi looks like she’s on her way out just like little Paul Ryan because she pontificated – just as Hillary did – that ‘we can’t have medicare-for-all because we are a capitalist country. This is gonna be interesting. No more (as Frank said about medical insurance) “adverse selection” so endemic in the current neoliberal ideology – not a conscious thought process, but just below the surface. Just give us health care please. It’s simple.

  19. HotFlash

    MMT is very, very hard to get one’s gut around, even if you understand it intellectually. I think it is like understanding that the earth goes around the sun (‘coz you learned it in school, with diagrams and models and all), but we still talk — and think — ‘sunrise’, and ‘when the sun goes down’. And that works just fine for most of us in our daily lives (unless you work for NASA or something). It is very hard work to track money as score-keeping into all its implications and ramifications, and the deficit simply as dollars spent into existence by the sovereign but not yet taxed back. I can sort of imagine the earth actually turning and revolving, but I am totally flummoxed by the phases of the moon.

    Fun to see all the people here doing there best to make it work with their current, most likely life-long understanding. Reminds me of the elephant fable.

    1. aliteralmind

      It’s only hard because of everything false and contradictory that we have been intentionally taught for our entire lives. If we were originally taught the proper way, it would not be such a mind bender.

      1. HotFlash

        I think too, that MMT seems counterintuitive, even perverse, to most of us since most of us are coming from a place where, as money users, we actually *are* households. Not only *do* we have to figure out how to pay for stuff with our limited $$, we actually spend a good part of our lives doing so, and for us the side of the elephant we see is not only like a wall, it *is* a wall. That sovereign money *issuers* have a totally different relationship to $$ is hard for us users to grasp, like futilely trying to figure out what God wants and ending up just making Him a Big-Daddy-in-the-Sky. Another ‘different relationships’ example would be food. Food is something all of us know. Most of us only eat it, but food is something that farmers grow (and sell), and it’s a raw material for chefs and food processors. Same stuff, different relationship.

        Appreciate your efforts, Jeff. My understanding of MMT is rudimentary (I boggle when it gets to foreign trade, that’s like phases of the moon to me). MMT is the solar-centric theory of our time, and IIRC, Galileo was placed under house arrest, turned in by his daughter; Giordano Bruno didn’t do so well, but they were right.

  20. Clark Landwehr

    10 billion heavily-armed humanoids. no food. no water. a dying planet. we can’t afford civilization. period.

    1. HotFlash

      Now that is definitely possible, but that is b/c we don’t have enough resources, not b/c we don’t have enough money. This is sort of the flip side of MMT, isn’t it?

      “A monetary sovereign can buy anything that is available in its own currency.”

      However, “No amount of money can buy that which does not exist.”

      1. oaf

        Maybe there’s not enough resources, maybe there is plenty. It is clear that distribution is an issue. Graphing population increase over *resource* growth should produce skewed lines. Its like a pyramid scheme…this fairy tale of market growth unlimited. If we ravage other world- we can brag about bringing more resources…for the select few…
        Perhaps there is no resource growth at all; only what is already here; and that pie gets sliced up smaller all the time. As long as everyone gets their fair share???

  21. baldski

    I recently lost my Primary care doctor. He decided to change his practice over to the “Concierge System” whereby he will limit his practice to just 600 patients who will come in anytime and be served, no appointment necessary. I could be one of the chosen few for the system for just $1600/year. Any additional treatment required would be extra.

    What astonished me was that he had no trouble getting the 600 patients. The rest of the doctors in the practice soon followed suit into the “Concierge System”. Do the math. My doctor is guaranteeing himself an income of $1 million/yr. This whole idea came from his business manager.

    What is going on?

  22. Third Time Lucky

    Wrong costs: Cost to get medicare for all is the same costs as got Obamacare, the difference is that Obamacare had drug companies, insurance companies and others all lining up to pay… to get a compliant Congress, staff the Executive Branch, and load the courts with their agents. Who’s going to do that for Medicare for All?

    1. HotFlash

      Ah, you see, this is how it works: They have $$$$, we have votes. If their dollars can’t buy our votes, we win.

  23. saj

    Assume the entire country pays around $2 Tn for healthcare per year – which is paid by employers, employees, VA, Medicaid and Medicare.This $2 Tn will go down quickly to $1 Tn or lower once single payer is implemented. It will be lower since 50% of the cost is due to the charges incurred by terminal patients who are a good dumping ground for all sort of tests and charges. Which essentially means employees, employers, VA, Medicaid, Medicaid will pay less. That is a savings to the economy and the people. The doctors, staff, hospital, pharma, insurers will suffer, but from a population perspective, it will be less expenses, lower bankruptcies, more opportunities for entrepreneurship, less stress, and better health. In short there is no merit in the question that who will pay for it? We will pay for it, with less than what we pay. For example, what employers, employees and tax payers pay will reduce, but these constituents will be the ones who will pay.

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