What you pay for ignorance of federal financing. Part II

Let’s quickly review the facts:

1. 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.
2. The government unnecessarily charges you for such services as Social Security and Medicare.
3. 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.

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:

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:

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.

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:

1. Monetary Sovereignty describes money creation and destruction.
2. 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:

1. Eliminate FICA
2. Federally funded Medicare — parts A, B & D, plus long-term care — for everyone
3. Social Security for all
4. Free education (including post-grad) for everyone
5. Salary for attending school
6. Eliminate federal taxes on business
7. Increase the standard income tax deduction, annually. 
8. Tax the very rich (the “.1%”) more, with higher progressive tax rates on all forms of income.
9. Federal ownership of all banks
10. Increase federal spending on the myriad initiatives that benefit America’s 99.9% 

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

MONETARY SOVEREIGNTY