April 13, 2004

When you have a subject that none of the responsible people are willing to talk about or discuss honestly, you might say that you are dealing with a conspiracy. When you have the major media, newshounds, investigators, reporters, watchdogs, and think-tanks throwing a cone of silence over the most obvious criminal wrong doing, then you might also say that you have a conspiracy.

When you have candidates running for office who are cherry-picked and seem sworn not to mention the subject, candidates who are all members of the same nonpartisan club, then you should also recognize how strong and widespread the conspiracy is.

I'm not talking about the illegal invasion of Iraq, a subject that required massive lies and propaganda on the part of the Bush administration. Thousands died while Congress and the American people were deceived, but many saw through the falsehoods. Although it's a subject where the guilty should be punished, it's not really a true conspiracy or at least it has turned out not to be a successful conspiracy.

I'm talking about economic fraud of the highest order—fraud that goes to the very basis of trust—fraud that revolves around the illegal use of trust funds.

At the close of fiscal 2003, the federal government was managing 159 trust funds, only 16 of which are real trusts dealing with the stewardship of property. That leaves 143 that are trust funds in name only, and only 24 of these account for almost half of the national debt currently standing at more than $7 trillion. These 143 trust funds make up the entire section of the national debt deliberately mislabeled as "Intragovernmental Holdings" and standing at almost $3 trillion in bogus nonmarketable bonds as debt markers.

In short, the federal government has for decades used the concept of trust funds to set up the pretense of "borrowing" entitlement surpluses—overcharges that, instead of going toward the purposes for which the public was taxed, have been stolen by the government and spent elsewhere. To carry out this pretense of borrowing, the government puts bogus bonds in equally phony trust funds and even adds annual interest to these accounts increasing public indebtedness. The interest is paid without money or cost to the government, but by simply depositing more bogus bonds in the respective accounts.

No part of the nation's debt can be paid off without using taxpayer money. That's what makes the honest sale of U.S. Treasury securities to investors, both foreign and domestic, the "safest investment in the world." That's also what makes the "Intragovernmental Holdings" phony trust funds a method of double taxing the public without legislation and, in most cases, without the taxpaying public even realizing that it's happening.

The largest of these 24 black hole debit accounts is the Social Security Trust Fund (the combination of the Federal Old Age & Survivors Insurance and the Federal Disability Insurance trust funds) currently standing at more than $1.5 trillion in bogus bonds and accounting for 22 percent of the total national debt.

The Beltway Bandits are so confident in their scam, they can even confess to the crime without much fear of retribution.

Listen to June O'Neill, former Director of the Congressional Budget Office (CBO) speaking at the Cato Institute's Conference for Women and Social Security:

"It (the Social Security trust fund) holds no real assets. Consequently, it does not generate funds to pay future benefits. These so-called trust fund 'assets' simply reflect the accumulated sum of funds transferred from Social Security over the years to finance other government operations."

If that isn't enough for you, listen to President William Jefferson Clinton in his Analytical Perspectives Section of the 2000 budget proposal:

"Trust Fund balances are available to finance future benefits...but only in a bookkeeping sense...they do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes or borrowing."

If that still isn't enough for you, read these and many other confessions by those in a position to know by clicking here, or you can listen to the many economists who, when pressed, have told us that turning to these entitlement trust funds means that the poor dears in Washington will be forced to choose between (1) raising taxes (2) borrowing honestly by selling Treasuries (3) cutting benefits to entitlements or annual discretionary spending, or any combination of these three.

These are not only the normal elements of government finance that would be choices whether there were trust funds or not, but are the means of double taxing the public with interest added and doing so without legislation. In a nutshell, that double taxation plus interest is the sole purpose of these "trust funds."

And where are the watchdogs of the "free press?" Where are the millionaire monitor readers of the media?

They are supporting the scam.

Just to take the most recent example, look at what the New York Times says in an editorial titled "Fixes For Social Security" Sunday, April 4, 2004:

"If Social Security is in crisis, it is a very slow-moving crisis. The trust fund will not be exhausted until 2042, and even after that the annual Social Security tax revenues could keep paying out some 70 percent of the promised benefits. What we are looking for here is a fix that could cover the other 30 percent. There are a range of ways to get there."

Can you believe that? There are hundreds of other examples just as ludicrous. When our "free press" should be demanding answers to how the Social Security trust fund became 22 percent of the national debt, they are instead supporting the trust fund scam.

In the last few weeks, you should also have heard that Medicare is going to be forced to turn to its trust fund unless something is done. More of the same.

Senator John Kerry, the great white hope of the "anybody but Bush" crowd has absolutely nothing to say on this subject and is not only a member of the Senate Finance Committee, but is also on the subcommittee on Health Care as well as the subcommittee on Social Security and Family Policy. In other words, he knows all about and is intimately involved in the scam.

In the final analysis, there's just you the taxpaying citizens. Can you refuse to pay excesses in payroll taxes, gas taxes that are supposed to go to highways, airline taxes that are supposed to go to air traffic controllers and maintenance, unemployment taxes where the trust fund is already being drawn down? Of course not.

Remember, there are 24 trust funds contributing to the scam. Even military personnel are caught in the same trap with the Military Retirement trust fund. So are the federal government's own employees with the Federal Employees Retirement System (FERS) trust fund. But these people are apparently willing to go along with the rip-off as long as they are guaranteed their benefits from you, the taxpaying public. (See Trust Fund list.)

There is little if any consolation in the fact that your representatives in government are raising revenue in this fraudulent manner simply because they are afraid to raise taxes honestly, even when necessary, or that they would get it from us anyway in one way or another.

Nor does it help to recognize the hypocrisy involved with the government's protecting corporations from their promises to provide retirement benefits to employees while most of these same corporations are "outsourcing" to other countries or are getting away with scams of a lesser degree than the government's.

We need honesty. The very foundation and moral fiber of this country requires it. We should be demanding that our representatives explain how things like the Social Security Trust Fund became 22 percent of the national debt. We should be demanding accountability from our democratically elected representatives and making certain their fraudulent behavior comes to a stop.

Real trust funds have always been lock-boxes. After years of debates and promises not to touch Social Security funds, Al Gore's jokes about lock-boxes are as tasteless as the Bush jokes about weapons of mass destruction.

Donald Duck could be elected President if he took on the subject of trust funds head on, especially since the solution is so easy. Stop stealing the money, then either give it back to the people or put it in a real trust fund where it can grow to increase benefits to the particular entitlement involved.

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What's The Rush? Count Votes By Hand

Wartime Debt. Can We Afford It?

Warning! Social Security Red Alert

Greenscam! Doing It To Us Again

Third Rail - Dilemma For The Pirates

Trust - Hopless In Washington

Missing - $89 Billion Trust Fund Mysteriously Disappears

Medicare - A Symptom Of The Disease

Covert And Collateral Damage

Spelling Problem - The Future of The Fifties

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