Our money supply is endless, how’s yours?

A reader sent me this article. It’s well worth a close read.

Progressive’s came out in the 2022 mid-terms ONE MORE TIME to demagogue over R’s supposed proposals to eliminate Social Security and Medicare. I’m surprised they didn’t reprise the political ad of a Republican shoving granny in a wheel chair over the cliff. (https://www.youtube.com/watch?v=OGnE83A1Z4U) In hindsight, that looks like part of a successful election strategy.

But can they live with what they asked for? Some Progressives have started to wonder whether commitments to fund ever-increasing entitlements (9% COLA anyone?) using the old saw of “corporations and rich should pay their fair share of taxes” might crowd out opportunities to “tax the rich” for other Progressive priorities (Climate Change, etc.)

Keep in mind that, as a group, seniors (age 65+) are America’s most wealthy cohort of the population, and the segment least likely to truly live in poverty. Remember that official government “poverty” statistics are a function of “income”, and generally avoid incorporating wealth (home equity, investments, etc.)

From a recent Daily Beast article:

“Thus, the key question for progressives is whether closing the Social Security gap is the best use of the limited remaining tax-the-rich revenues. Remember that Medicare still faces a massive $80 trillion funding gap. And progressives have wanted to tax the rich to fund new spending on family leave, child credits, Medicare-For-All, free college, more student loan forgiveness, climate, child care, K-12 education, infrastructure, and more anti-poverty benefits.”

Perhaps we have reached the limits of “don’t tax you, don’t tax me, tax the guy behind the tree.” However, maybe not. Perhaps the D’s and Progressives favor increasing marginal tax rates even if, dynamically, they lead to changes in employment and productivity which end up REDUCING TAX REVENUES.

We can all remember when President Obama told Charlie Gibson of ABC news (in a 2008 debate) that he would raise the capital gains tax rate even if it lowered tax revenues. See: https://taxfoundation.org/obama-and-gibson-capital-gains-tax-exchange/

D’s and Progressives should watch out, they may get what they have been asking for – ever increasing commitments to the elderly to effectively be shouldered by other generations as a means to buy votes – stupid, stupid, stupid as were the stupid promises of President Trump to get elected (https://www.politifact.com/truth-o-meter/promises/trumpometer/promise/1349/make-no-cuts-social-security/) and the decision by Bush II to add $10+ Trillion of unfunded liability via Medicare Part D in his re-election bid.

Jack

11 comments

  1. Why does Social Security continue to give funds to foreign seniors who have never contributed to the fund.
    Immigrated Families sponsor their elders to come live here-USA) and sign them up for Social security payments at 65!
    One of “our” freebies that bring thousands who have never or will never contribute to the fund.

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    1. That is NOT TRUE. You can’t just sign up for SS and you can’t get benefits is you have not paid SS taxes – unless you are a eligible dependent like a spouse or child.

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      1. Eligibility for Supplemental Security Income – part of Social Security – is not limited to those who paid into the system:
        Are at least age 65 or blind or disabled.
        Have limited income (wages, pensions, etc.).
        Have limited resources (the things you own).
        Are U.S. citizens, NATIONALS of the U.S., OR SOME NONCITIZENS.
        Reside in one of the 50 states, the District of Columbia, or the Northern Mariana Islands.

        Sounds like health reform’s “lawfully present in the United States” to qualify for taxpayer subsidized coverage in the public exchange. See: https://www.healthcare.gov/immigrants/lawfully-present-immigrants/

        Click to access EN-17-008.pdf

        For Health Reform, see:

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      2. However, The only people who can legally collect benefits without paying into Social Security are family members of workers who have done so. Nonworking spouses, ex-spouses, offspring or parents may be eligible for spousal, survivor or children’s benefits based on the qualifying worker’s earnings record.

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      3. Also. Social Security taxes collected under the Federal Insurance Contributions Act (FICA) or the Self-Employment Contributions Act (SECA) do not fund the SSI program.

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  2. Nope. Except in Georgia, it is now too late to buy votes in 2022. On the other hand, because the votes are in (well, many of them anyway), perhaps it is safe for a lame duck Congress to do what is needed to shore up funding without promising more benefits beyond the already unaffordable stuff we currently have. If they vote by say December 1st, we can blame the increased taxes, reduced benefits, etc. on those leaving Congress this year.

    And, it is unlikely that Biden and Trump will be 2024 nominees. On the other hand, the last time they updated Social Security and Medicare, 1983, those changes certainly didn’t hurt Ronald Reagan’s reelection bid in 1984!

    Who is leaving:

    As of November 10, 2022, the following House incumbents had lost re-election campaigns:
    Cindy Axne, IA 3rd; Carolyn Bourdeaux, GA 7th; Madison Cawthorn, NC 11th; ; Steve Chabot, OH 1st; Liz Cheney, WY; Rodney Davis, IL 15th; Mayra Flores, TX 34th ; Bob Gibbs, OH 7th ; Mondaire Jones, NY 10th ; Alfred Lawson, FL 2nd, Andy Levin, MI 11th ; Elaine Luria, VA 2nd, Tom Malinowski, NJ 7th, Carolyn Maloney, NY 12th; Sean Maloney, NY 17th ; David McKinley, WVA 2nd, Peter Meijer, MI 3rd ; Marie Newman, IL 6th; Tom O’Halleran, AZ 2nd; Steven Palazzo, MI 4th; Tom Rice, SC 7th; Kurt Schrader, OR 5th; Van Taylor, TX 3rd; Jaime Herrera Beutler, WA 3rd

    House members who retired or Quit:
    Christopher Jacobs, Fred Upton, Ted Deutch, Fred Keller, Kathleen Rice, Jim Cooper, Jerry McNerney, Jim Langevin, John Katko, Trey Hollingsworth, Ed Perlmutter, Brenda Lawrence, Bobby Rush, Albio Sires, Lucille Roybal-Allard, Stephanie Murphy, Alan Lowenthal, Peter DeFazio, G.K. Butterfield, Jackie Speier, Adam Kinzinger, Michael Doyle, David Price, John Yarmuth, Anthony Gonzalez, Ron Kind, Cheri Bustos, Kevin Brady, Ann Kirkpatrick, Eddie Bernice Johnson

    U.S. Senators (potentially) leaving (election results still being counted – TBD):
    Lisa Murkowski (TBD), Mark Kelly (TBD), Raphael Warnock (TBD), Roy Blunt, Catherine Cortez Masto (TBD), Richard Burr, Rob Portman, Pat Toomey

    No better time than right now – for those who are serious about funding the commitment.

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    1. Thank you for the in-depth study of the results.
      One shocker to me was the size of Alexandria Ocasio-Cortez win, with 70.6% of the vote. Her economic non-sense should make any 8th grader cringe but people love her BS. She is not the only one in Congress like that and that scares me. Just a little bit of critical thinking please.

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  3. I agree with Jack above. So many politicians are interested in taxing wealth to pay for their various big ideas. Too few seem to be interested in how that wealth was created or concerned about the possibility of less future wealth creation.

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  4. Whatever happen to the progressives pushing MMT? That could have paid for everything according to MMT. We are now seeing the results of printing money.

    On the bright side, Suze Orman (not that I am a follower of her) talked about how retirement will look different if the Congress doesn’t do something this week. Maybe if the financial heads start talking about it, Congress will get up the courage to act.

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