Congress is currently debating ways to “save” Social Security and Medicare. As has been reported repeatedly, the programs’ trust funds will soon be depleted.
Should you be concerned? Absolutely, but not in the way you might think.
Social Security and Medicare comprise two trust funds each. The former has the Old-Age and Survivor’s Insurance (OASI) and Disability Insurance (DI) trust funds, while the latter has the Hospital Insurance (HI) and Supplemental Medical Insurance (SMI) trust funds. The first three of those are projected to “run out” at various dates. SMI is not. Why?
The law establishing SMI allows financing from general revenues if the trust balance goes negative. In other words, the government can keep funding SMI the exact same way it funds defense spending, bank bailouts, COVID relief, and everything else – it simply creates dollars using keystrokes on a computer at the Federal Reserve Bank.
That fact exposes two truths:
- The so-called trust funds are nothing more than accounting records. There are no lockboxes holding cash and Treasury bonds.
- Congress could quickly and easily eliminate the “crisis” by simply changing the law so that the other three trust funds operate the same way as SMI.
Politicians of both parties want you to think that they have to cut your benefits to “save” the programs. If you want the programs to remain robust for current and future retirees, let Congress know that you’re on to their deceit.
Read more at https://stephaniekelton.substack.com/p/what-fdr-and-two-former-fed-chairs