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2019-01-02 06:00 by Karl Denninger
in Federal Government , 2690 references Ignore this thread
Cut The Crap - NOW *
[Comments enabled]

I said NOW damnit.

 

12.4% tax for FICA, 2.9% for Medicare.

Total is 15.3%.  Of that 81% is FICA, 19% is Medicare.

The total in "Social Insurance and Retirement" taxes taken in (that is, the entirety) in the first two months of the fiscal year was $179 billion.  Of that $145 billion was Social Security tax and just $34 billion was Medicare tax.

Social Security paid out $167 billion.  That is more than $145 billion but there are bonds that are being cashed -- quite a lot of them in fact -- and the structural deficit for that program is $22 billion or 13% (that is, 87% of the payouts are offset by pay-ins.)  If you got rid of the disability scamming you'd close the gap materially; SSDI has paid out almost $24 billion in the last two months.

The point on Social Security is simply this and anyone saying otherwise is a damned liar:  A 13% structural deficit is fixable without a crazy amount of pain (either by lifting the salary cap, a 13% increase in the tax rate (to 14% total; 7 and 7) or some combination of the two, and that assumes no effort on reduction in disability scamming.)  Further, the load on the Social Security system from the boomers will start to fade as they begin to pass within the next 10 years.

MEDICARE, ON THE OTHER HAND, SPENT $129 BILLION BUT ONLY TOOK IN $34 BILLION.  IT HAS A 74% STRUCTURAL DEFICIT.  YOU WOULD HAVE TO QUADRUPLE, ROUGHLY, THE MEDICARE TAX TO BRING IT INTO BALANCE.

THE REAL OUTRAGE IS THAT TO THE MEDICARE FIGURE YOU MUST ADD MEDICAID WHICH MAKES IT MUCH WORSE AS THERE IS NO TAX FOR THAT COLLECTED AT ALL!  CMS (Centers for Medicare and Medicaid Services) HAS PAID OUT $270 BILLION THUS FAR THIS FISCAL YEAR AND WE ARE ONLY TWO MONTHS INTO FISCAL 2019!  THAT IS UP FIFTY BILLION OVER LAST YEAR'S RATE AT THIS TIME -- AN UNBELIEVABLE 24% INCREASE!  THE TOTAL SPENT BY CMS IS MORE THAN DOUBLE STRAIGHT MEDICARE SPENDING WHICH MEANS TO COVER IT ALL YOU'D NEED TO INCREASE MEDICARE TAXES NOT TO 400% BUT TO MORE THAN EIGHT HUNDRED PERCENT OF WHAT THEY ARE NOW.

While I suspect some of this increase was a result of game-playing with Treasury not paying people right near September 30th in an attempt to "cook the MTS" for the end of fiscal 2018 and thus "announce" a smaller deficit it is extremely unlikely that all of it can be attributed to that sort of gamesmanship.

There is no "entitlement crisis" in Social Security.  It is all in the medical side and it is going to bankrupt the nation and government both at the state and FEDERAL level unless it is stopped right here and now.

These are not my numbers or projections; they are the actual cash flow from the Treasury department.  They do not reflect what someone thinks will happen they reflect what actually has happened and is happening -- right here, right now.

The MTS is truth just as your bank statement is truth because the MTS, as a cash flow statement essentially is the Federal Government's check register!

You can tamper with asset values and you can make all sorts of projections and claims but if you have ever run, examined or done accounting for a business you know that cash flow is always truth.

Any media publication, "pundit" or politician who tries to spin this and claim that Social Security is a "difficult" part of it or that in some way they're connected must be pilloried and run out of town on a rail.  They are lying and intending to bankrupt you and this nation.  They are not only violating their oath of office they are deliberately destroying both you and the country as a whole.

If the government will not enforce the law (specifically, 15 USC Chapter 1), break all the medical monopolies and slay these jackasses with criminal prosecution immediately, driving medical costs down by 80% so the cash flow statement returns to something resembling balance then the only peaceful option remaining for the public is a full-on General Strike to compel the government to do so -- right here, right now, today and forevermore until the government takes that action.

The truth of the nation from a fiscal perspective is simply this: If the medical monopolist crap is not broken now fiscal collapse at local, state and federal levels is a certainty.  There is absolutely no possible way out of this box through higher taxes, cost-shifting, economic "growth", more borrowing or even all of them at once.  "Hide the sausage" games just flat-out don't work.

Time's up.