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OpEdNews Op Eds    H1'ed 10/9/15

America Urgently Needs an Unbalanced Budget

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Consider: one of the biggest so-called "entitlements" -- which is really an example of deferred income -- is Social Security. But Social Security is not even an expense if you look at what it returns. How can this be? It is because of something called the Money Multiplier. That is, in the case of Social Security, we get back $1.80 - $2.00 for every dollar we spend on it, according to two independent studies by the AARP and the Southern Rural Development Center.

The Southern Rural Development Center writes:

Similarly, results of an economic impact analysis of OASDI payments at 2009 levels " indicated an output multiplier of about 1.8 in the U.S. economy. As such, every dollar paid in OASDI generated an additional 80 cents in the economy. To put it another way, the $675 billion paid in OASDI benefits during 2009 translated into an economic output of slightly over $1.2 trillion dollars in the U.S. economy.

Read the rest here:

So, this means that there is a net GAIN for every dollar spent on Social Security and, though this is somewhat controversial, it may be as high as double the input.

I don't know what Representative Buchanan's position on Social Security is, but Republicans in general often look to Social Security as a place to cut spending. But these studies show we would actually lose national income by cutting Social Security. Seniors spend their Social Security check, stimulating the economy, and as long as we don't increase that to the point where they start saving it instead, this will continue to produce a net gain.

Similar savings can be attributed to the next biggest item in the "mandatory spending" (a misnomer too, since Republicans keep trying to cut this) portion of the budget, Medicare. Medicare is cheaper than private insurance, including plans under Obamacare. Medicare for all, with the ability to negotiate lower drug prices would be cheaper still.

But even this is not the big picture. Consider:

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Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a blogger for Huffington Post, Daily Kos, and Global Economic Intersection.

His anthology of updated Opednews articles "America is Not Broke" was published by Tayen Lane Publishing (March, 2015) and may be found here:

Scott is a former President of Common Ground-NYC (, a Geoist/Georgist activist group. He has written dozens of articles for (more...)

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