"The Case Against Intergenerational Accounting: The Accounting Campaign Against Social Security and Medicare"

The Federal Accounting Standards Advisory Board (FASAB) has proposed subjecting the entire federal budget to "intergenerational accounting"--which purports to calculate the debt burden our generation will leave for future generations--and is soliciting comments on the recommendations of its two "exposure drafts." The authors of this brief find that intergenerational accounting is a deeply flawed and unsound concept that should play no role in federal government budgeting, and that arguments based on this concept do not support a case for cutting Social Security or Medicare. The FASAB exposure drafts have not made a persuasive argument about basic matters of accounting, say the authors. Federal budget accounting should not follow the same procedures adopted by households or business firms because the government operates in the public interest, with the power to tax and issue money. There is no evidence, nor any economic theory, behind the proposition that government spending needs to match receipts. Social Security and Medicare spending need not be politically constrained by tax receipts--there cannot be any "underfunding." What matters is the overall fiscal stance of the government, not the stance attributed to one part of the budget.

Soft currency economics II : what everyone think that they know about monetary policy is wrong

v, 88 p. ; 25 cm

Credit cards and interest rates: theory and institutional factors--a critical view

When the government issues its own nonconvertible currency--also known as a flexible exchange rate policy--the central bank, as monopoly supplier of net reserves to its member banks, is the (exogenous) source of the risk-free yield curve. Furthermore, in the case of government member bank deposit insurance, the banking system is in no case reserve-constrained. In the context of Professor Stauffer's paper, this renders his entire analysis of available funds and demand for balances inapplicable. Only with a fixed exchange rate regime, such as a gold standard, a currency board, or government "peg" of some sort, are interest rates endogenous and subject to the forces Stauffer alludes to.Fed operations, interest rates, loanable funds theory, reserve accounting,