Send a Tweet
Most Popular Choices
Share on Facebook 18 Share on Twitter Printer Friendly Page More Sharing
OpEdNews Op Eds    H1'ed 10/9/15

America Urgently Needs an Unbalanced Budget

By       (Page 2 of 3 pages) Become a premium member to see this article and all articles as one long page.     (# of views)   13 comments, 4 series
Follow Me on Twitter     Message Scott Baker
Become a Fan
  (80 fans)

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: srdc.msstate.edu/socialsecurity/files/2011_11_socsecurityimpact.pdf

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:

Next Page  1  |  2  |  3

 

Well Said 5   Must Read 3   Valuable 3  
Rate It | View Ratings

Scott Baker Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

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:
http://www.americaisnotbroke.net/

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

Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Follow Me on Twitter     Writers Guidelines
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

STAY IN THE KNOW
If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEdNews Newsletter
Name
Email
   (Opens new browser window)
 

Other Series: View All 28 Articles in "Sovereign Money"

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Obama Explains the FEMA Camps

Was Malaysian Flight MH370 Landed Safely in Afghanistan?

Let the Sun Shine on a State Bank in Florida

Batman, The Dark Knight Rises...and Occupy Wall Street Falls

The Least Productive People in the World

Detroit is Not Broke!