If you wondered why everyone keeps talking about Social Security and Medicare as if they have something to do with the National Debt, when they have been running surpluses for years and have a large trust fund – well this is the answer.

The trust fund is invested in Treasury bills, and when the revenues from the separate tax that pays for the program, no longer covers the costs of the program, those T-bills will be redeemed. By law, the system cannot run a deficit. The politicians don’t want to pay back all of the money they borrowed from the trust fund to hide the real size of the deficits they have been running.

The entire surplus that the Shrubbery gave away in tax cuts to the wealthy was from the Social Security trust fund, not from income taxes.

Just over a quarter [26%] of the debt is owed to the Social Security Trust Fund, and the retirement systems of the Civil Service and military, but all people want to talk about is the 7.5% that China holds.

“US taxes are too high, we have to cut them to compete.”

We compete with Australia in Olympic swimming – cutting taxes won’t help. After all of the terrible weather events that Australia has had recently, they will probably have to increase taxes to cover the costs, so the US will drop to the bottom of the rankings.

I hope everyone notices how much the super-low corporate taxes have helped Ireland. That really worked out well as a policy for development. 😈

The policy of “borrow and spend” becomes SOP [standard operating procedure] for the GOP [groveling operatives of the plutocrats].

The failed dogma of Supply-side “trickle down” economics is introduced under Reagan, and continued by Bush, père et fils [the Connecticut Yankees in cowboy hats].

Note: This is a post from April, 2011. I’m going to leave it at the top for a while to remind people.

When I wrote about fixing Medicare, I knew the solutions were too obvious not to be noticed by other people.

One of the people who noticed was Austin Frakt of The Incidental Economist, and he joined others to ask the question: What if Medicare’s drug benefit was more like the VA’s?

The short answer is that Part D would be 40% cheaper than it currently is, saving $14 billion per year, if the plan did nothing but accept the VA’s pricing. If there was a merger of the VA, DoD, and Medicare drug plans, the savings could certainly be expected to be more for all concerned.

Remember, no one is requiring the drug companies to sell to a merged buying group like this, but an entity buying at these quantities has a right to expect the best price available. No one sells to the local independent retailer at the same price that WalMart gets and everyone knows it.