Friday, December 16, 2016

Social Security Increase! Yay! Er....

The good news is that Sue and I each got a Social Security cost-of-living raise for 2017. Wonderful! The bad news is that the Medicare premium that is deducted from our checks went up by exactly the amount of the raise. So our SS checks will not change at all. Basically, the increased Medicare premium accounts for the full increase in the cost of living.

This is especially egregious to me because I know, unlike most of you, that the Medicare premium is not a premium at all but a tax. The federal government does not need money in order to spend money, even on Social Security and Medicare. Every dime of Social Security and Medicare outlay is brand new money created by the federal government as it is spent. That's how it works. A dollar is simply a promise from the federal government to you. It cannot recycle that promise (money) any more than you can recycle a promise because the promise (tax dollars), once collected, ceases to exist. But the people who run the government, Congressmen, do not know this. They are dumbbells. They still think taxes pay for federal spending. The Treasury people know that's not the case, but they aren't saying anything because they are afraid of inflation and they think that by extracting dollars from the money supply and destroying it via taxation there will be less inflationary pressure on the economy. They too are dumbbells. And we are all dumbbells for letting both those groups continue to think that way.

SS and Medicare explained here.

Taxes explained here.

With thanks to Geoff Coventry for the links.

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