Saturday, December 3, 2016

What, me worry? - SS, Medicare, Medicaid

I know, I am weird.  I read federal government financial statements.

September 2016 has been released.  The quick look shows payroll taxes collected in September amounted to $93 billion.  Social Security outlays $77 billion.  Medicare outlays $69 billion.  Let me do the math for you.

$  93 billion in from Social Security and Medicare taxes
   -77 billion in Social Security outlays
  -69 billion in Medicare outlays
-146 billion out total
$ -53 billion

That is $53 billion more out than in.  Shortage.  Whatever.

Ok.  You say September was a fluke.  As it happens, September is the end of the federal government fiscal year.  So they have the 12 months in the statements also.

$1,115 billion in from SS and Medi taxes.  That reads, one trillion, one hundred fifteen billion dollars

   -916 billion out to Social Security
   -595 billion out to Medicare
-1,511 billion out for these two
$-396 billion

Do you mind if I round that up a little to $400 billion dollars short in fiscal 2016?  Do you know why you thought that the so called trust funds were solvent?

Down in the thick of the financial statements is the centers for Medicare and Medicaid spent $1.4 trillion for the year.  Last year they spent $1.3 trillion. That is a 7% increase.  Over the last couple of decades the annual increase has averaged 9% a year (according to Alan Greenspan).  So 2016 was better.

Lets say they can continue with only a 7% increase each year disregarding all the people turning 65 and going on Medicare, not to even mention the expanding Medicaid rolls due to the massive Mexican birth rate.

In 5 years the centers of Medicare and Medicaid will spend $564 billion more dollars in the year 2021.  If the trend is held at 9% then they will spend $754 billion more in the year 2021.

But not to worry.  Things always work out.  The increase can be paid for by increasing taxes, cutting the defense budget, or Magic ( ), or a combination of them all. And, the economy could grow really really fast over the next 5 years which would increase the tax income naturally.

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