What you pay for ignorance of federal financing. Part II

Let’s quickly review the facts:

The U.S. federal government is Monetarily Sovereign. Even if all federal tax collections fell to $0, and expenses tripled, the government would not unintentionally run short of dollars.
The government unnecessarily charges you for such services as Social Security and Medicare.
Socialism is ownership and control, not spending.

Here are excerpts from an article that ran online today, 1/129/2022: Medicare Isn’t Free

Contrary to popular opinion, Medicare isn’t entirely free. In a video interview, Dana Anspach, the founder and president of Sensible Money, explained the components of Medicare and the costs associated with Part B and Part D. Medicare Part A, often referred to as hospital insurance, is free if you worked enough years in the U.S. to qualify. “Typically, if you’re eligible for Social Security benefits, you’re also eligible for Medicare Part A at no cost,” said Anspach.

This would be true if the federal government hadn’t socked you and your employer for FICA taxes, which purportedly fund Medicare and Social Security. In reality, these taxes fund nothing. The federal government creates new dollars ad hoc, every time it pays an invoice.

Quote from Ben Bernanke when, as Fed chief, he was on 60 Minutes: Scott Pelley: Is that tax money that the Fed is spending? Ben Bernanke: It’s not tax money… We simply use the computer to mark up the size of the account.

Medicare Part B covers other services and supplies, and it has a monthly cost that varies depending on your income.

The money deducted for Part B, like all other payments to the federal government, pay for nothing. All dollars received by the federal government are destroyed upon receipt.

When you pay federal taxes, dollars come out of your checking account. These dollars come from an money-supply measuren called “M1.”

When the Treasury receives your M1 dollars, they cease to be part of any money-supply measure. The reason: It is impossible to measure the amount of money the Treasury “has,” given that the government has the infinite ability to create its own sovereign currency, the U.S. dollar.

So those M1 dollars effectively are destroyed upon receipt.

And there is Part D, for prescriptions, and it is free if your income is low enough, but it has a cost once your income exceeds various threshold amounts.

The following chart outlines the payments — the unnecessary payments — you are forced to make in order to receive medical benefits from the federal government. The Four Parts of Medicare

You have been brainwashed into believing the federal government, which created the U.S. dollar from thin air, now somehow can short of the dollars it created. So, you are led to believe it financially is necessary for the federal government to receive your dollars, to pay for services. It isn’t. The federal government has neither the need nor the use for your dollars. It has the infinite ability to create new dollars. That is how it is able to sustain a debt of $25 trillion with no worries at all. You are swayed by reasonable-sounding complexity:

“Like so many things associated with retirement, it’s more complicated than you may think “First, the Social Security office references your tax return data from two years prior to determine your premium level, so if 2022 is your first year enrolling in Medicare, they will use data from your 2020 tax return.” “Let’s assume you are turning 65 in 2022, and your MAGI from 2020 is below $91,000 if single/$182,000 if married filing jointly; in this case, your Part B premiums are $170 per month and Part D will be free. (Your MAGI is calculated by adding back any tax-exempt interest income to your adjusted gross income (AGI).) ‘Now, if your MAGI exceeds additional threshold amounts, your premiums will be higher. ‘This is referred to as means testing and is technically called the IRMAA. You are notified of your premium amounts via a letter from the Social Security office called your Initial Determination Letter, said Anspach.

“Singles with MAGI greater than $142,000 or marrieds greater than $284,000 will pay $442 per month for Part B and $52 per month for Part D.

The largest premiums of $578 for Part B and $78 for Part D apply to MAGI greater than $500,000 for singles and $750,000 for marrieds. Now if you are not yet enrolled in Social Security, you will receive a quarterly invoice for these premiums, said Anspach. But if you are enrolled in Social Security, the premiums are deducted from your monthly Social Security payment.

So many caveats; so many details. And it’s all a lie. The federal government destroys your FICA dollars and deductions from Social Security the moment they are received. The federal government easily could and should pay for Medicare Part A, Part B, and Part D without charging you anything.

So why does the government force you to send it dollars that it destroys? The following chart, from the aforementioned article, contains a hidden clue: Part B premiums

Did you see the clue? Look at the last line. There is a ceiling on payments above a certain amount of income. That is, the person who makes a half million, or a million, or a hundred million dollars a year pays the same. The increases in payments stop at a certain level. This is the same trick the government uses when calculating FICA payments. In 2021, employees pay a 6.2% Social Security tax (with their employer matching that payment) on income up to $142,800. Any earnings above that amount are not subject to FICA tax.

The very rich are never satisfied. They always want to be richer.

“Rich” is a comparative. There are two ways to become richer: Obtain more for yourself or widen the income/wealth/power Gap between you and those below you by forcing them to receive less.

Because the very rich control the U.S. government, Congress and the President are only too happy to oblige by setting a ceiling on payments to the government.

As a share of disposable income, the rich pay far less than do you.

This effectively widens the Gap, thus making the rich richer.

2. It collects an unnecessary and huge FICA tax from salaried employees and their employers, not from dollars earned in non-salaried remunerations — more representative of the rich.

3. Employers count the FICA they pay as being part of salaries, thus reducing paid salaries.

4. Despite the fact that Social Security is quasi-insurance, ostensibly paid for by FICA, the government collects proportionately more taxes from lower-income people.

5. Lower-income people generally work for salaries that are taxed at the highest rates. Other forms of income, more usual for the rich, are taxed at lower rates or not taxed at all.

6. Wealth generally is not taxed.

7. Tax loopholes available primarily to the rich.

7. Tax complexity is intentional. It allows the rich, who can afford expensive tax accountants and lawyers, to take advantage of arcane tax laws, not understood by the general public.

8. Student loans. The rich can pay tuition. The not-rich are burdened by loans.

Keep in mind that all of the above taxation and fees, together with limits on federal benefits, are unnecessary. The federal government neither needs nor uses tax dollars, and its spending is not financially limited.

The rich want you to believe that federal finances, which are Monetarily Sovereign, are the same as state/local government finances, which are monetarily non-sovereign.

The fundamental difference is that the spending by state and local governments is limited by income from tax receipts and borrowing. Federal spending is not limited by any form of income.

The Federal government doesn’t need your hard-earned dollars. Ignorance is expensive.

Rodger Malcolm Mitchell Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell

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THE SOLE PURPOSE OF GOVERNMENT IS TO IMPROVE AND PROTECT THE LIVES OF THE PEOPLE.

The most important problems in economics involve:

Monetary Sovereignty describes money creation and destruction.
Gap Psychology describes the common desire to distance oneself from those “below” in any socio-economic ranking, and to come nearer those “above.” The socio-economic distance is referred to as “The Gap.”

Wide Gaps negatively affect poverty, health and longevity, education, housing, law and crime, war, leadership, ownership, bigotry, supply and demand, taxation, GDP, international relations, scientific advancement, the environment, human motivation and well-being, and virtually every other issue in economics. Implementation of Monetary Sovereignty and The Ten Steps To Prosperity can grow the economy and narrow the Gaps: Ten Steps To Prosperity:

The Ten Steps will grow the economy and narrow the income/wealth/power Gap between the rich and the rest.

MONETARY SOVEREIGNTY

The “Medicare for All” controversy

Because I have Medicare coverage, I received in the mail, my copy of “Medicare & You, 2021.” Feel free to read it by clicking the link.

Though it is a huge book, about 140 pages long, describing many Medicare rules and coverages, it is not comprehensive. Medicare rules are complex, and there is much more a person needs to know.

For instance, individual states have separate rules, so many questions need to be answered by individual state representatives. And all the costs must be found elsewhere.

There may be three people on earth who have read and understand all the Medicare laws — or maybe not even three.

Here is Medicare’s brief summary:

To Qualify For Medicare:
If you’re already getting benefits from Social Security or the Railroad Retirement Board (RRB), you’ll automatically get Part A and Part B starting
the first day of the month you turn 65.

If you’re under 65 and have a disability, you’ll automatically get Part A and Part B after you get disability benefits from Social Security or certain disability benefits from the RRB for 24 months.

If you live in Puerto Rico, you don’t automatically get Part B. You must sign up for it.

If you have ALS (amyotrophic lateral sclerosis, also called Lou Gehrig’s disease), you’ll get Part A and Part B automatically the month your Social
Security disability benefits begin.

If you don’t want Part B, let us know before the coverage start date on your Medicare card. If you do nothing, you’ll keep Part B and will have to pay Part B premiums through your Social Security benefits. If you choose not to keep Part B but decide you want it later, you may have to wait to enroll and pay a penalty for as long as you have Part B

Summaries of benefits:

And this doesn’t even touch on the ten (!) different “Medigap” plans that cover some of what original Medicare doesn’t. The descriptions of these ten plans begin on page 71.

And then there are the numerous Medicare Part D (prescription drugs) plans. We won’t even get into the convoluted, complex rules, and various coverage alternatives described on pp 75-85.

Another of the big problems with the Medicare, Medicare Advantage, Medigap, and Part D program is: You cannot know which plan is best for you.

The reason: You don’t know what your health situation will be in the coming months and years. You are forced to guess. So if you choose a plan that doesn’t cover your future misfortune, you’re out of luck.

Further, if you have a serious condition, and wish to change Medigap plans, you may not be able to find one that will accept you.

There are a great many limitations on who and what the various Medicare plans will cover, and none of it is free. You supposedly pay for it as part of your payroll taxes. We say “supposedly,” because every penny you pay in any federal taxes — payroll, income, etc. — every penny is destroyed upon receipt.

So you pay needlessly for incomplete, complex plans. Additionally, Medigap and Part D require separate, out-of-pocket premiums.

In short, unless you are a rocket scientist who also can see the future, you probably can’t have the plan that’s best for you.

There is a better way. In addition to eliminating the useless and regressive payroll tax, Medicare itself can and should be improved.

Here is a suggested summary of a Medicare for All plan:

To Qualify for Medicare for All:
You are a citizen of the United States, or you have lived in the United States and its territories, for at least 6 months in the previous calendar year.

Summary of the benefits:
1. You can go to any doctor or hospital that is accepted by Medicare for All, anywhere in the world.
2. You do not need a referral to see a specialist.
3. All medical services, including doctor, hospital, medically necessary services, and pharmaceutical costs (including dental, vision, and periodical examinations and treatments are covered by Medicare for All. There are no co-pays, deductibles, or out-of-pocket costs.
4. No pre-approvals are necessary.
5. There are no cost-limits.

That’s it. There is no need to determine which plan is best for you. The one plan is comprehensive. The federal government will pay for everything.

And lest you think such a plan will be too costly, remember this: The U.S. federal government is Monetarily Sovereign. That means it has the unlimited ability to pay for anything. It never can run short of dollars.

Proof of that is occurring right now, as this year the federal government has pumped an additional $4 trillion+ into the economy to help America survive the economic costs of the COVID-19 virus.

The more the federal government spends, the more economic stimulus the economy receives.

And no, federal spending never causes inflation, which always is caused by shortages, usually shortages of food or energy. Those notorious Zimbabwe and Weimar hyperinflations were caused by scarcities, not the resultant money-printing.

Then, we come to Congressional fear of insurance companies. These companies are nothing but middlemen between you and your healthcare providers.

They bribe your Congressional representatives to maintain the status quo. They add nothing; they merely pass your money along, while extracting a piece for themselves.

Original Medicare eliminated some of the insurance middlemen. It now is time to eliminate the rest.

Finally, we come to the dreaded word, “socialism.” Although the vast majority of Americans favor Medicare and its benefits, any expansion and simplification of these benefits is immediately and wrongly attacked as “socialism.”

It isn’t socialism. Socialism is government ownership and control over resources, not government spending. Medicare and Social Security are not socialism. The biggest example of socialism in America is the U.S.

military. Shall we do away with the military?

The VA hospitals, the federal highway system, NASA, the FBI and CIA are socialism. Shall we do away with them?

The “socialism” epithet is a lie when applied to Medicare for All. It is a lie designed to keep you from having the same healthcare the rich have.

Bottom Line
The United States has one of the worst medical programs of any major nation. The reason solely is due to debt fear-mongers who falsely proclaim that federal spending is “unsustainable.”

Given the federal government’s unlimited access to dollars, a simpler, more comprehensive health-care plan, totally funded by the federal government, can and should be instituted.

The fact that America doesn’t have one is a disgrace. We have a whole suite of expensive, yet inferior, incomplete plans, foisted on us by Congressional and Presidential cowardice and ignorance.

You deserve better.

Rodger Malcolm Mitchell

Monetary Sovereignty Twitter: @rodgermitchell Search #monetarysovereignty Facebook: Rodger Malcolm Mitchell …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..