January 19, 2004

Is Social Security in crisis? You bet it is. But it’s not the crisis everyone else is talking about. And its not a crisis that will occur sometime in the future. It’s happening right now, today.

The crisis is a management that walks off with the money, steals the profits, spends these surpluses wherever it pleases and then demands that the taxpaying public replace them plus interest. Why do you think the Social Security trust fund is 22 percent of the national debt now standing at practically $1.7 trillion in debt markers that only the taxpaying public can redeem? And we are the people who provided this extra money in the first place. That’s double taxation no matter how you look at it.

Last year, fiscal 2004, Social Security produced a $71 billion surplus that the federal government misappropriated and spent elsewhere. The year before that it was $82 billion and the year before that it was $89 billion that the government claims to have borrowed. The first year of the Bush administration, 2001, the excess stolen was $98.7 billion. That’s $341 billion of your supplemental retirement money that the Bush administration has walked off with since taking office.

Because of the economy, job losses, people working for less, and so forth, these surpluses have been declining, but they’ll go back up as soon as the economy rebounds.

It’s a very healthy insurance program that generates these kinds of profits and it’s a very unhealthy management that has not used this extra income to improve the system to the benefit of its participants, especially when that management is an elected not-for-profit governmental organization.

The federal government is running a scam. It would be criminal in any other organization not above the law.

If you want to protect Social Security, the very first thing that should be done is STOP THE BLEEDING. Make the government stop taking and spending this dedicated money. Eliminate the entire farce that money can be both spent and saved.

During the nineties, the government tried to do this themselves with “lock boxes” that was a failed attempt before it even began because real trust funds are already lock boxes.

And what would it cost to set up a real trust fund for Social Security’s profits? Practically nothing. Ask any lawyer. There wouldn’t be any crazy “transitional costs” and we would have plenty of time to debate all the other issues, including where to invest the money.

If such a trust fund did nothing more than sit on the money, let it draw simple interest like your savings accounts at your local bank, did not invest the money in the stock market, home mortgages or anywhere else, we would still be 100 percent better off than we are now. In fact, had this been done years ago, we would today be sitting on nearly two trillion dollars to support Social Security in case of a shortfall in payroll taxes that wasn’t adjusted for.

Of course, the government doesn’t want to do this because it would cut off their largest slush fund of extra income from “off budget” sources and it also might trigger the fact that they run the very same scam with their own Federal Employees Retirement System (FERS), Military Retirement, Unemployment taxes, gas tax surpluses, and several other entitlements. Social Security is just the tip of the iceberg.

(Editor's Note: No matter how "healthy" Social Security would be without this additional theft, the whole thing is immoral and unconstitutional, if that matters to you. Every individual has the right to keep his earnings and property as well as the personal responsibility to provide for himself in times of sickness, unemployment and retirement. The "nanny state" convinced foolish and lazy people that they could do it better, and now we have neither one.

Oh, and don't hold your breath waiting for the economy to "rebound". The only way for government to continue to spend the billions and trillions they don't have is to continue to "borrow" and print worthless money. Eventually, and probably soon, the house of cards will begin to fall. For sound economic information, look at the Ludwig von Mises site. Here is a good example: How To Save The Dollar.)

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