Our two major entitlement programs, Social Security and Medicare, are facing solvency issues that must be addressed within the coming decade.
These programs are a product of law, as is the currency they will need to remain solvent. Laws can be changed within the limitations of our Constitution, which clearly states that Congress has a monopoly on currency creation with the mandate that it do so to provide for defense and the "common welfare (Article 1: Section 8).
This same article gives Congress the power to tax but makes no direct correlation between taxing and creating currency to fund the government and its programs. That is because no such correlation was intended and taxation has never been a funding mechanism for the monopoly issuer of the government's unit of account.
Since payment of federal tax obligations requires existing (previously created) currency, simple horse-before-cart logic would prove that taxes cannot fund anything. (Ditto for Treasury bonds.) Taxation serves other purposes, including driving demand for the government's currency so it can always fund itself via new currency creation without needing a revenue stream and regulating the money supply (national debt). The red ink of the government sector is the only net source of dollar-denominated black ink in the non-government sectors.
The US dollar starts its life as a tax credit that serves as the currency of commerce in the private sector and ends that life by satisfying the tax debt that it was created from. End of story for the dollar, so it cannot survive to "fund" future spending by the one entity that neither needs nor uses "funding" beyond its power to create new tax credits/currency.
Social Security and Medicare both expose the myth of "tax dollars" funding our government because both are included in our budgeting process despite the mistaken perception that they are funded with dedicated taxation and Treasury bonds. We could easily expand both programs while eliminating the payroll deductions that only serve to reduce the purchasing power of the working class.
