Author Archives: J.D. Alt

Miscalculating Medicare-for-all

By J.D. ALT

A report from the Mercatus Center at George Mason University calculating the “cost” of Medicare-for-all has received much attention recently—first, because Bernie Sanders claimed the report concluded that Medicare-for-all would save the American people $2 trillion over a 10-year period. That claim was still warm when the report’s author, Charles Blahous, told the Washington Post that Bernie’s interpretation of the report’s conclusions were blatantly false. In fact, Blahous told the Post, he posited that savings scenario based on a set of assumptions which he subsequently proved were so highly unlikely as to be impossible.

The real conclusion of his report, Blahous said, was that Medicare-for-all will “raise government expenditures by $32.6 trillion” in the first decade—or, about $3.3 trillion per year. Blahous went on to say this: “For perspective on these figures, consider that doubling all currently projected federal individual and corporate income tax collections would be insufficient to finance the added federal costs of the plan.”

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How big does the fire need to be?

By J.D. ALT

I have written about this before, but it bears repeating now—and perhaps it bears repeating every week until somebody with more leverage than me picks the message up and carries it a step further: America (and the rest of the world, for that matter) has the resources needed to limit and mitigate the enormous damage and dislocations that climate-change is now beginning to impose. The “resources” I’m referring to are not dollars. They are materiel, labor, and human ingenuity. The only question is how and when we’ll stop simply raising warning flags and marshal those resources to take real action against the growing challenges.

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The Explicable Mystery of the National Debt

By J.D. ALT

America’s current “national debt” is tallied to be $21.5 trillion. When politicians and economic pundits talk (worry, fret, wring their hands, gnash their teeth) about this “debt” they implicitly assume—along with their listeners, readers, and potential voters—that this fantastic sum will eventually have to be paid back. That’s what happens with debts, right? Someone calls them due! Everyone also assumes the American tax-payer will have to do the paying. (Quick calculation to save you the trouble: Each one of us is in hock for $65,950!)

Depending on which political football is being tossed around, this “national debt” is either a crisis that must be addressed first (before anything else can be paid for!) or it’s something we can simply ignore for the time being—until the promised “economic growth” comes along that will somehow enable the federal government to collect that extra $65K from each of us. So long as we promise that Yes! someday we’ll pay it off, we can feel okay about going one more day, or month, or year without even starting to do so. In the meantime, of course, the “national debt” somehow keeps growing! At least that must stop, we declare! Our government must stop borrowing even more!

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The Five Stages of Money (and why we’re stuck at stage 4)

By J.D. ALT

Like everything else, money has evolved. It began in a primitive form and morphed into something more sophisticated, more successful. Then, probing and testing for an even better form, it morphed again. A simplified history of money’s evolution can be outlined in five stages:

STAGE 1: Money is a tangible thing of value—e.g. a gold coin.

At some point in the pre-history of humankind, the “invention” of money solved a time-gap problem in cooperative trade: I’ll give you my baby goat in exchange for your flint-knife—but you have not yet made the knife, so the exchange is stymied. To solve the impasse, you give me a token of gold to temporarily stand in place of the flint-knife, so you can take my baby goat. The gold token is a promise that the knife will be delivered, and that promise is secured by the fact that the gold itself is deemed equally valuable as the knife. In the meantime, I may find someone else with a flint-knife already made who will exchange it for the gold, thus completing the trade. The invention of this place-holder transformed the cooperative trade interactions of human society.

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Last Exit to the Road Less Traveled

By J.D. ALT

We now stand where two roads diverge. But unlike the roads in Robert Frost’s familiar poem, they are not equally fair. The road we have long been traveling is deceptively easy, a smooth superhighway on which we progress with great speed, but at its end lies disaster. The other fork of the road—the one less traveled by—offers our last, our only chance to reach a destination that assures the preservation of the earth.

Rachael Carson, Silent Spring 

What’s important to keep in mind in this quote from Rachael Carson’s 56-year-old warning shot over the bow of corporate civilization is that there are two roads being traveled now. We are no longer at a fork. The fork is half-a-century behind us. The goal is not to get the superhighway to somehow re-route itself and follow the path less traveled. It can’t. The superhighway will, and must, continue accelerating in its inevitable direction, simply because the greed and power of the people driving that highway will not allow them to alter course. But if there is any truth to Rachael Carson’s warning (and there seems to be growing evidence of it) the other path—the Road Less Traveled—will become the surviving branch of our evolutionary diagram. The present goal, therefore, should be to create as many exits from the superhighway as possible—and to encourage and enable as many people as possible to take those exits to explore and follow the other path.

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Why America is not a Country-Club

By J.D. ALT

Everyone knows how a country-club works: Members pay dues, and the dues are used to pay for the expenses of running the country-club—maintenance and improvements, kitchen and service staff, golf-course mowing and landscaping, etc. Sometimes a big expense comes along (like putting a new roof on the main club-house) and the cash-flow from the monthly, or annual, dues isn’t enough to cover the one-time cost. In that case, the club would take out a bank-loan to pay for the new roof and the dues would then service the loan. It might be necessary, under those circumstances, to raise the dues to ensure that while the loan is being serviced the kitchen and dining services continue and the golf-greens are manicured. There would likely be a vote by a board of club-directors to determine if a due-increase was necessary.

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Framing a Job Guarantee

By J.D. ALT

Note: This essay was first posted on realprogressivesusa.com

Now that progressive leaders (Bernie Sanders, Kirsten Gillibrand and Corey Booker) have placed a proposed “Job Guarantee” program onto the mainstream political stage, it is essential they begin explaining the proposal’s underpinning macro-economic logic. Otherwise they lay themselves, and the proposal itself, wide open to scathing public ridicule—as exemplified by a recent Megan McArdle op-ed in the Washington Post (“A federal job for everyone?” April 25, 2018). But what should they be saying by way of explaining?

Perhaps a point-by-point response to Ms. McArdle’s arguments is a way to begin. First, her title itself is an intentionally misleading—and pejorative—portrayal of the proposal. The Job Guarantee (JG) program will use federal dollars to pay wages, but few (if any) of the wage earners would become part of a federal bureaucracy that most Americans believe is already over-bloated and inefficient. Think instead of all the private doctors and nurses paid federal dollars to provide health-care services to Medicaid and Medicare patients; think of all the private enterprise farmers, food-processors and distributors who are paid federal dollars to implement the SNAP (food-stamp) program; think of the millions of private defense contractor employees who build ships, planes, and missiles. Ms. McArdle is being disingenuous in planting the idea that everyone who is paid with federal dollars is a federal employee; it’s an idea that immediately discredits the JG program, and it should be proactively discredited itself.

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Framing the Progressive Platform

By J.D. ALT

This essay was first posted at www.realprogressivesusa.com

I keep reading the big challenge Democrats face in the 2018/2020 elections is that they have moved too far left, proposing a platform that includes “free” universal health care, “free” college tuition, “free” pre-school day-care—and a national infrastructure building and repair program paid for, not by the states, but by the federal government (i.e. “free infrastructure”). Progressives seem to genuinely wonder why mainstream Americans would object to these proposals. Why would American voters be put off by proposals they’d obviously gain so much real—and in many cases personal—benefit from?

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Doing What the Market Can’t

By J.D. ALT

What decides whether something is undertaken in America is the “market.” The way the market decides what is to be done is by determining whether people are willing to pay to benefit from the undertaking, how many people are willing to pay, how much they are willing to pay, and all this is then compared with the cost of the undertaking. If nobody is willing to pay for the benefit (no customers), the undertaking will not happen. If the number of people willing to pay, multiplied by the amount they are willing to pay, equals a dollar value less than the cost of the undertaking, the undertaking will not happen. If, in fact, that calculated dollar value is not some specified percentage GREATER than the cost of the undertaking (profit), the undertaking will not happen either. If the calculated profit is determined to be adequate, the undertaking will move forward and the cost of doing so will be invested in anticipation of harvesting the profit. These are the basic rules and dynamics of a Market Economy which is—for many good reasons—the chosen, championed, and cherished American economic model.

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The Big Three

By J.D. ALT

This essay was first published at www.realprogressivesusa.com

There is a lot more riding on our understanding of modern fiat money than we typically consider or discuss. Human society is now confronted with three epoch-defining challenges and, in each case, the understanding and strategic use of modern fiat money holds out the ONLY real possibility for constructively engaging the them.

The challenges are:

  1. Climate change & ecological collapse
  2. Assault on Democracy
  3. Mass migration

In each case, the challenges are, first, aggravated, amplified, and intertwined by our ignorant, unimaginative clinging to the old rules and norms of “commodity” money. These old rules and norms tell us, basically, that money is (a) a finite resource that people must compete to have a share of; and (b) that a sovereign democracy must collect some portion of its citizens’ “finite” money-share (as taxes) for democracy to have money to spend for its collective goals and needs.

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